Marc Celestin, 34, of Miami, Florida, was charged today by indictment with eight counts of wire fraud and eight counts of making a false claim against the United States, announced United States Attorney Zane David Memeger. The indictment alleges that from January 2011 to May 2012, Celestin used the stolen identities of a number of people to fraudulently prepare tax returns directing that the tax refund checks be direct deposited to bank accounts opened and controlled by Marc Celestin.
If convicted the defendant faces a maximum possible sentence of 200 years of imprisonment, three years of supervised release, a $4,000,000 fine, and a special assessment of $1,600.
The case was investigated by the Internal Revenue Service and the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Laurie Magid.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Showing posts with label false claims. Show all posts
Showing posts with label false claims. Show all posts
Friday, March 7, 2014
Friday, February 14, 2014
Staten Island Man Charged in Manhattan Federal Court in Multi-Million-Dollar Scheme Related to Purchase of Maxim Magazine
Preet Bharara, the United States Attorney for the Southern District of New York; Steven G. Hughes, the Special Agent in Charge of the New York Office of the United States Secret Service; and George Venizelos, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (FBI), announced that Calvin Darden, Jr. was arrested yesterday in connection with two schemes in which he defrauded victims of more than $8 million and attempted to defraud another victim of approximately $20 million. In one scheme, Darden tricked several lenders into providing more than $8 million in financing for the potential acquisition of Maxim Magazine and related assets. In the other scheme, Darden obtained $500,000 from a Taiwan-based company by falsely claiming that he was arranging for the New York Knicks to play an exhibition game in Taiwan. Darden surrendered yesterday to the Secret Service and is expected to be presented later today in Manhattan federal court before U.S. Magistrate Judge Andrew J. Peck.
Manhattan U.S. Attorney Preet Bharara said, “As alleged, Calvin Darden, Jr. sought to mislead and deceive his victims at virtually every opportunity, and he used the full spectrum of fraudulent devices, including false documents, ’spoofed’ e-mails, and outright impersonation. This office has zero tolerance for those who allegedly engage in this type of conduct, especially when it is to the tune of millions of dollars.”
Secret Service Special Agent in Charge Steven Hughes said, “Partnerships fostered by the Secret Service’s Electronic Crimes Task Force have allowed our agency to focus resources and respond quickly to criminal activity such as this. The investigation and subsequent arrest in this case is another example of how the Secret Service strives to combat fraud and provide a secure cyber environment.”
FBI Assistant Director in Charge George Venizelos said, “Like we’ve seen time and time again, the defendant was up to the same worn-out tricks in an elaborate scheme of fake e-mails, fictitious bank accounts, and fabricated statements all to rip off unwitting investors. Everyone deserves the right to make an honest living, but not by lying, cheating, or at the expense of others. Today, Mr. Darden finds himself under arrest and in trouble with the law.”
According to the allegations contained in the criminal complaint unsealed today in Manhattan federal court:
Darden carried out two separate schemes in which he concocted an elaborate set of lies that included, among other things, phony e-mails, fabricated bank account statements, and his repeated impersonation of his father (a former corporate executive who sits on the board of directors of several publicly traded corporations in the United States) during phone calls and in e-mails to defraud multiple victims of more than $8 million and to attempt to defraud another victim of approximately $20 million.
The Maxim Fraud Scheme
In connection with the potential purchase of Maxim Magazine (Maxim) by a media company (the media company) associated with Darden and his father, Darden attempted to secure financing from various lenders, lying extensively to them to trick them into funding the media company’s purchase of Maxim.
As part of the scheme, in order to trick one of the lenders into believing they would receive sufficient collateral for their loan, Darden provided the lender with a fabricated bank account statement. The fabricated statement purported to be for an account held by his father and purported to show his father’s holdings in the stocks of at least three publicly traded companies for which Darden’s father serves as a director. His father’s alleged stock holdings in these companies were supposed to serve as collateral for the loans. In truth, however, the bank account statement was fake. In addition, Darden created and sent to a lender a phony e-mail that purported to be from an employee of a bank verifying his father’s stock holdings.
Further, after one of the lenders put approximately $5.5 million in escrow pending the transfer of collateral, Darden paid a Russia-based e-mail “spoofing” service to send an unauthorized and fraudulent e-mail to the escrow agent to secure the release of the funds. Specifically, Darden had the spoofing service send an e-mail that appeared to come from the lender’s e-mail account and that authorized the escrow agent to release the escrow money. As Darden well knew, however, the lender did not send the e-mail and did not authorize the release of the funds. Based on its receipt of the e-mail, the escrow agent released approximately $4.9 million of the lender’s money towards the media company’s purchase of Maxim.
Darden also provided certain lenders with bogus e-mails purporting to be from senior executives of certain companies, including at least one publicly held corporation for which Darden’s father is a member of the board of firectors. In one bogus e-mail, the senior executive purportedly verified the stock holdings of Darden’s father that were supposed to be provided as collateral for the loan. Separately, when another lender conditioned its $20,000,000 loan on the creation of a cable channel based in part on Maxim, Darden provided the lender with a bogus e-mail purporting to be from a senior executive of a cable television company confirming that the company was interested in creating a cable channel in connection with the media company’s purchase of Maxim. In fact, both e-mails were completely fabricated and had not been authored or authorized by either of the executives who purportedly wrote them.
Additionally, as a part of the scheme, Darden repeatedly impersonated his father during phone calls and in e-mails and forged his father’s signature on documents related to the potential purchase of Maxim.
The NBA Fraud Scheme
In a separate scheme, Darden tricked a particular company located in Taiwan into paying him $500,000 by falsely and fraudulently representing that, through a particular company purportedly operated in part by his father, he would arrange an NBA exhibition game in Asia involving the New York Knicks.
As part of that scheme, Darden falsely represented to the victim company that he and his father had meetings and discussions with, among others, the owners of the New York Knicks and NBA officials about an exhibition game in Asia. As he did in the Maxim fraud scheme, Darden also impersonated his father in multiple e-mail communications with the victim company and forged his father’s signature on documents.
Mr. Bharara praised the outstanding investigative work of the Secret Service and FBI.
The case is being prosecuted by the Office’s Complex Frauds Unit. Assistant U.S. Attorney James Pastore, Jr. is in charge of the prosecution. Assistant U.S. Attorney Andrew Adams is handling the forfeiture aspects of the case.
The charges contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Manhattan U.S. Attorney Preet Bharara said, “As alleged, Calvin Darden, Jr. sought to mislead and deceive his victims at virtually every opportunity, and he used the full spectrum of fraudulent devices, including false documents, ’spoofed’ e-mails, and outright impersonation. This office has zero tolerance for those who allegedly engage in this type of conduct, especially when it is to the tune of millions of dollars.”
Secret Service Special Agent in Charge Steven Hughes said, “Partnerships fostered by the Secret Service’s Electronic Crimes Task Force have allowed our agency to focus resources and respond quickly to criminal activity such as this. The investigation and subsequent arrest in this case is another example of how the Secret Service strives to combat fraud and provide a secure cyber environment.”
FBI Assistant Director in Charge George Venizelos said, “Like we’ve seen time and time again, the defendant was up to the same worn-out tricks in an elaborate scheme of fake e-mails, fictitious bank accounts, and fabricated statements all to rip off unwitting investors. Everyone deserves the right to make an honest living, but not by lying, cheating, or at the expense of others. Today, Mr. Darden finds himself under arrest and in trouble with the law.”
According to the allegations contained in the criminal complaint unsealed today in Manhattan federal court:
Darden carried out two separate schemes in which he concocted an elaborate set of lies that included, among other things, phony e-mails, fabricated bank account statements, and his repeated impersonation of his father (a former corporate executive who sits on the board of directors of several publicly traded corporations in the United States) during phone calls and in e-mails to defraud multiple victims of more than $8 million and to attempt to defraud another victim of approximately $20 million.
The Maxim Fraud Scheme
In connection with the potential purchase of Maxim Magazine (Maxim) by a media company (the media company) associated with Darden and his father, Darden attempted to secure financing from various lenders, lying extensively to them to trick them into funding the media company’s purchase of Maxim.
As part of the scheme, in order to trick one of the lenders into believing they would receive sufficient collateral for their loan, Darden provided the lender with a fabricated bank account statement. The fabricated statement purported to be for an account held by his father and purported to show his father’s holdings in the stocks of at least three publicly traded companies for which Darden’s father serves as a director. His father’s alleged stock holdings in these companies were supposed to serve as collateral for the loans. In truth, however, the bank account statement was fake. In addition, Darden created and sent to a lender a phony e-mail that purported to be from an employee of a bank verifying his father’s stock holdings.
Further, after one of the lenders put approximately $5.5 million in escrow pending the transfer of collateral, Darden paid a Russia-based e-mail “spoofing” service to send an unauthorized and fraudulent e-mail to the escrow agent to secure the release of the funds. Specifically, Darden had the spoofing service send an e-mail that appeared to come from the lender’s e-mail account and that authorized the escrow agent to release the escrow money. As Darden well knew, however, the lender did not send the e-mail and did not authorize the release of the funds. Based on its receipt of the e-mail, the escrow agent released approximately $4.9 million of the lender’s money towards the media company’s purchase of Maxim.
Darden also provided certain lenders with bogus e-mails purporting to be from senior executives of certain companies, including at least one publicly held corporation for which Darden’s father is a member of the board of firectors. In one bogus e-mail, the senior executive purportedly verified the stock holdings of Darden’s father that were supposed to be provided as collateral for the loan. Separately, when another lender conditioned its $20,000,000 loan on the creation of a cable channel based in part on Maxim, Darden provided the lender with a bogus e-mail purporting to be from a senior executive of a cable television company confirming that the company was interested in creating a cable channel in connection with the media company’s purchase of Maxim. In fact, both e-mails were completely fabricated and had not been authored or authorized by either of the executives who purportedly wrote them.
Additionally, as a part of the scheme, Darden repeatedly impersonated his father during phone calls and in e-mails and forged his father’s signature on documents related to the potential purchase of Maxim.
The NBA Fraud Scheme
In a separate scheme, Darden tricked a particular company located in Taiwan into paying him $500,000 by falsely and fraudulently representing that, through a particular company purportedly operated in part by his father, he would arrange an NBA exhibition game in Asia involving the New York Knicks.
As part of that scheme, Darden falsely represented to the victim company that he and his father had meetings and discussions with, among others, the owners of the New York Knicks and NBA officials about an exhibition game in Asia. As he did in the Maxim fraud scheme, Darden also impersonated his father in multiple e-mail communications with the victim company and forged his father’s signature on documents.
* * *
Darden, 39, of Staten Island, New York, is charged with two counts of wire fraud, each of which carries a maximum term of 20 years in prison.Mr. Bharara praised the outstanding investigative work of the Secret Service and FBI.
The case is being prosecuted by the Office’s Complex Frauds Unit. Assistant U.S. Attorney James Pastore, Jr. is in charge of the prosecution. Assistant U.S. Attorney Andrew Adams is handling the forfeiture aspects of the case.
The charges contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Thursday, January 30, 2014
Defendant Pleads Guilty to Submitting False Claims to the Federal Government
GRAND RAPIDS, MI—U.S. Attorney Patrick A. Miles, Jr. announced today that James Francis Ortman, 58, of Maple Rapids, Michigan, pled guilty to a felony information filed on January 8, 2014, that charged him with submitting false claims to the U.S. Department of Housing and Urban Development (HUD) in conjunction with grants awarded to him in 2008 and 2009. The grants were administered by the city of St. Johns and the Michigan State Housing Development Authority (MSHDA).
“When used appropriately, HUD grants encourage development and new job opportunities in our local communities,” said U.S. Attorney Miles. “This office will vigorously pursue those who seek to line their own pockets by diverting from their intended purpose scarce grant monies that are funded by the hard-working taxpayers of this district.”
Ortman admitted at his change of plea hearing before United States Magistrate Judge Ellen S. Carmody that in 2008, the cty of St. Johns awarded him a federal grant as part of a Downtown Façade Project for his building located at the corner of North Clinton and East Walker streets. In order to receive the grant, Ortman represented to the city that the façade improvements would cost $416,999 and that the project would ultimately create four permanent jobs for low and moderate-income persons. The grant provided that if the project truly cost that amount, and if Ortman invested $216,999 of his own funds into the project, HUD would fund the remaining cost of $200,000. Ortman admitted at the hearing that he did not invest his own funds as represented and that he submitted false documents to the federal government to make it appear as if his actual costs equaled the projected amount. As a result, he received the full amount of the grant ($200,000), when he should have received less than half of this amount.
Ortman further admitted that he committed fraud in conjunction with a Rental Rehabilitation Grant that the city awarded to him in 2009. The terms of that grant required Ortman to construct apartments for income-qualified individuals in various buildings that he owned in St. Johns. Ortman admitted that he submitted claims for grant payments to the federal government for work that he did not actually complete and that he diverted those grant payments to other business ventures that were in financial trouble. As a result, many of the income-based apartments were never completed. Ortman caused a combined loss of over $200,000 to the federal government in conjunction with the façade and rental rehabilitation grants.
“HUD’s Office of Inspector General, working with the U.S. Attorney’s Office, will relentlessly hunt for predators who, despite their best efforts to conceal their theft, have swindled the taxpayer and hurt Michigan’s neediest families,” said Barry McLaughlin, Special Agent in Charge, HUD-OIG Region V. “Theft of HUD grant funding amounts to stealing from hard-working taxpayers,” added Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The FBI, in concert with our law enforcement partners, remains dedicated to pursuing those who selfishly misappropriate public funds intended for the public good.”
Ortman is awaiting his sentencing hearing, at which time Ortman will face a maximum term of imprisonment of five years, a fine of up to $250,000, and will be ordered to pay restitution to HUD. The Detroit Office of the U.S. Department of Housing and Urban Development-Office of Inspector General, along with the Lansing Resident Agency of the FBI, investigated the case. The prosecution of the case is being handled by Assistant U.S. Attorney Ronald M. Stella.
“When used appropriately, HUD grants encourage development and new job opportunities in our local communities,” said U.S. Attorney Miles. “This office will vigorously pursue those who seek to line their own pockets by diverting from their intended purpose scarce grant monies that are funded by the hard-working taxpayers of this district.”
Ortman admitted at his change of plea hearing before United States Magistrate Judge Ellen S. Carmody that in 2008, the cty of St. Johns awarded him a federal grant as part of a Downtown Façade Project for his building located at the corner of North Clinton and East Walker streets. In order to receive the grant, Ortman represented to the city that the façade improvements would cost $416,999 and that the project would ultimately create four permanent jobs for low and moderate-income persons. The grant provided that if the project truly cost that amount, and if Ortman invested $216,999 of his own funds into the project, HUD would fund the remaining cost of $200,000. Ortman admitted at the hearing that he did not invest his own funds as represented and that he submitted false documents to the federal government to make it appear as if his actual costs equaled the projected amount. As a result, he received the full amount of the grant ($200,000), when he should have received less than half of this amount.
Ortman further admitted that he committed fraud in conjunction with a Rental Rehabilitation Grant that the city awarded to him in 2009. The terms of that grant required Ortman to construct apartments for income-qualified individuals in various buildings that he owned in St. Johns. Ortman admitted that he submitted claims for grant payments to the federal government for work that he did not actually complete and that he diverted those grant payments to other business ventures that were in financial trouble. As a result, many of the income-based apartments were never completed. Ortman caused a combined loss of over $200,000 to the federal government in conjunction with the façade and rental rehabilitation grants.
“HUD’s Office of Inspector General, working with the U.S. Attorney’s Office, will relentlessly hunt for predators who, despite their best efforts to conceal their theft, have swindled the taxpayer and hurt Michigan’s neediest families,” said Barry McLaughlin, Special Agent in Charge, HUD-OIG Region V. “Theft of HUD grant funding amounts to stealing from hard-working taxpayers,” added Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The FBI, in concert with our law enforcement partners, remains dedicated to pursuing those who selfishly misappropriate public funds intended for the public good.”
Ortman is awaiting his sentencing hearing, at which time Ortman will face a maximum term of imprisonment of five years, a fine of up to $250,000, and will be ordered to pay restitution to HUD. The Detroit Office of the U.S. Department of Housing and Urban Development-Office of Inspector General, along with the Lansing Resident Agency of the FBI, investigated the case. The prosecution of the case is being handled by Assistant U.S. Attorney Ronald M. Stella.
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