CAMDEN, NJ—A former insurance broker admitted today to conspiring to defraud purchasers of commercial liability insurance by overcharging for policies, as well as issuing some customers bogus policies, U.S. Attorney Paul J. Fishman announced.
Thomas M. Grubb Jr., 58, of Voorhees, New Jersey, pleaded guilty before Chief U.S. District Judge Jerome B. Simandle in Camden federal court to an indictment charging him with one count of conspiracy to commit mail fraud and wire fraud.
Grubb was originally arrested on April 14, 2008, and charged by complaint with one count of obstruction of justice. On November 5, 2008, Grubb failed to appear in court and a warrant was issued for his arrest. Special agents of IRS-Criminal Investigation apprehended Grubb in Port Charlotte, Florida, on December 6, 2011.
According to documents filed in this case and statements made in court:
Grubb was employed at Aconorate Insurance Agency in Hammonton, New Jersey, when Aconorate engaged in a scheme to defraud its clients by overcharging them for commercial liability insurance and selling them policies that were not issued by a legitimate insurance carrier. Grubb—along with the individuals identified in court documents as “CC-1,” the owner of Aconorate, and “CC-2,” an information technology employee at Aconorate—procured insurance for Aconorate commercial liability insurance clients through an insurance broker in Texas, identified as “GM.” Many of the clients were bars, restaurants, and nightclubs.
Grubb and the owner of Aconorate substantially inflated the premiums that they charged these customers, sometimes increasing the quote that GM provided by as much as 700 to 800 percent. Between June 2004 and July 2006, Grubb and the owner of Aconorate collected more than $1 million in premiums for commercial liability insurance procured through GM and kept over $597,000 of the premiums for themselves.
Grubb and others also took steps to create the appearance that the insurance companies purportedly issuing the policies were legitimate, including creating websites, mailing addresses, and telephone numbers for the insurance companies and setting up their own mechanism to pay claims.
The mail fraud and wire fraud conspiracy charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for July 30, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, Newark Field Office, with the investigation leading to today’s guilty plea.
The government is represented by Attorney in Charge R. Stephen Stigall of the U.S. Attorney’s Office Criminal Division in Camden.
Showing posts with label mail fraud. Show all posts
Showing posts with label mail fraud. Show all posts
Wednesday, April 2, 2014
Friday, March 28, 2014
Solon Man Charged with Defrauding Parker Hannifin of $1.5 Million
A 15-count criminal indictment was filed charging a Solon man with defrauding his former employer of nearly $1.5 million, law enforcement officials said.
John A. Miller, 53, was charged with one count of conspiracy to commit mail fraud, nine counts of mail fraud, three counts of tax evasion, and two counts of money laundering in connection with a scheme to defraud Parker Hannifin Corp.
“This defendant is accused of running a scheme in which he stole nearly $1.5 million from his employer,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio. “This type of self-dealing is not fair to workers or shareholders and will not be tolerated.”
Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Office, said: “Mr. Miller put a lot of effort into orchestrating and maintaining this seven year fraudulent scheme. Law enforcement will continue efforts to follow the money trial to ensure financial fraudsters are brought to justice.”
“Fraud and embezzlement schemes harm everyone,” said Kathy Enstrom, Special Agent in Charge, IRS-Cincinnati Field Office. “As we often see, the victims are not only the taxpayers, but also the individuals and entities who suffer financial harm.”
Miller worked at Parker Hannifin Corp. (PHC) for 25 years, where he directed work to outside contractors. In 2002, he approached his neighbor, Nancy Seaman, to do IT work for PHC, according to the indictment.
To do this, Seaman established Digital Design Services Inc., which she operated out of her residence in Solon. In 2004, Miller approached R.K. (not charged herein), who owned and operated a billing company in Pennsylvania that had previously been a subcontractor for PHC. Miller requested that R.K. and his billing company prepare invoices and billings for PHC, and R.K. agreed to do so, according to the indictment.
Beginning around 2004, Miller engaged in a fraudulent scheme to increase the payment he was receiving from PHC by using subcontractors Seaman and R.K. to funnel payments to himself. He did his despite having a salaried position at PHC and without the knowledge or consent of PHC, according to the indictment.
Miller did this by falsely inflating the invoices submitted by Digital Design and Seaman and by asking R.K. to process payments and to pay subcontractors as designated by Miller. Under this arrangement, Miller submitted invoices in the names of Miller’s wife and son, even though neither had done any of the work submitted in these invoices nor were they even aware that Miller was using their names to submit such billings to PHC, according to the indictment. Miller caused a loss to PHC of approximately $1,489,494 between 2004 through 2011, according to the indictment.
Seaman was aware that additional amounts, over and above her Digital Design billings, were being sent to her. Miller instructed Seaman to pay these additional funds to him in cash, less a 30 percent commission to Seaman, according to the indictment.
Seaman previously pleaded guilty in U.S. District Court to conspiring with Miller to conceal Miller’s tax liability from the Internal Revenue Service and to conspiring with Miller to commit wire fraud in a scheme to defraud Parker Hannifin. She is awaiting sentencing.
Miller is also charged with money laundering for using the funds he stole from Parker Hannifin Corporation to pay his tax liabilities to the IRS and to pay for his son’s tuition at Cornell University, according to the indictment.
Miller is also charged with tax evasion for calendar years 2009 to 2011. During the calendar year 2009, Miller received approximately $192,042 in taxable income, and owed approximately $30,568 in income tax; during the calendar year 2010, Miller received approximately $378,571 in taxable income, and owed approximately $93,745 in income tax; and during the calendar year 2011, Miller had received approximately $217,060 in taxable income and owed approximately $43,488.00 in income tax, according to the indictment.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigations in Cleveland and is being handled by Assistant U.S. Attorney Christian H. Stickan.
If convicted, the defendants’ sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
John A. Miller, 53, was charged with one count of conspiracy to commit mail fraud, nine counts of mail fraud, three counts of tax evasion, and two counts of money laundering in connection with a scheme to defraud Parker Hannifin Corp.
“This defendant is accused of running a scheme in which he stole nearly $1.5 million from his employer,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio. “This type of self-dealing is not fair to workers or shareholders and will not be tolerated.”
Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Office, said: “Mr. Miller put a lot of effort into orchestrating and maintaining this seven year fraudulent scheme. Law enforcement will continue efforts to follow the money trial to ensure financial fraudsters are brought to justice.”
“Fraud and embezzlement schemes harm everyone,” said Kathy Enstrom, Special Agent in Charge, IRS-Cincinnati Field Office. “As we often see, the victims are not only the taxpayers, but also the individuals and entities who suffer financial harm.”
Miller worked at Parker Hannifin Corp. (PHC) for 25 years, where he directed work to outside contractors. In 2002, he approached his neighbor, Nancy Seaman, to do IT work for PHC, according to the indictment.
To do this, Seaman established Digital Design Services Inc., which she operated out of her residence in Solon. In 2004, Miller approached R.K. (not charged herein), who owned and operated a billing company in Pennsylvania that had previously been a subcontractor for PHC. Miller requested that R.K. and his billing company prepare invoices and billings for PHC, and R.K. agreed to do so, according to the indictment.
Beginning around 2004, Miller engaged in a fraudulent scheme to increase the payment he was receiving from PHC by using subcontractors Seaman and R.K. to funnel payments to himself. He did his despite having a salaried position at PHC and without the knowledge or consent of PHC, according to the indictment.
Miller did this by falsely inflating the invoices submitted by Digital Design and Seaman and by asking R.K. to process payments and to pay subcontractors as designated by Miller. Under this arrangement, Miller submitted invoices in the names of Miller’s wife and son, even though neither had done any of the work submitted in these invoices nor were they even aware that Miller was using their names to submit such billings to PHC, according to the indictment. Miller caused a loss to PHC of approximately $1,489,494 between 2004 through 2011, according to the indictment.
Seaman was aware that additional amounts, over and above her Digital Design billings, were being sent to her. Miller instructed Seaman to pay these additional funds to him in cash, less a 30 percent commission to Seaman, according to the indictment.
Seaman previously pleaded guilty in U.S. District Court to conspiring with Miller to conceal Miller’s tax liability from the Internal Revenue Service and to conspiring with Miller to commit wire fraud in a scheme to defraud Parker Hannifin. She is awaiting sentencing.
Miller is also charged with money laundering for using the funds he stole from Parker Hannifin Corporation to pay his tax liabilities to the IRS and to pay for his son’s tuition at Cornell University, according to the indictment.
Miller is also charged with tax evasion for calendar years 2009 to 2011. During the calendar year 2009, Miller received approximately $192,042 in taxable income, and owed approximately $30,568 in income tax; during the calendar year 2010, Miller received approximately $378,571 in taxable income, and owed approximately $93,745 in income tax; and during the calendar year 2011, Miller had received approximately $217,060 in taxable income and owed approximately $43,488.00 in income tax, according to the indictment.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigations in Cleveland and is being handled by Assistant U.S. Attorney Christian H. Stickan.
If convicted, the defendants’ sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Wednesday, March 26, 2014
Attorney Sent to Prison for Her Role in Mortgage Fraud Scheme
RALEIGH—The United States Attorney’s Office announces that in federal court yesterday, Chief United States District Judge James C. Dever, III sentenced former attorney AMY ROBINSON, 36, of Rolesville, to 18 months’ imprisonment followed by three years of supervised release. The court further ordered ROBINSON to make restitution of $2,613,046.37 to various banks and other victims.
The criminal information and other evidence showed that between 2002 and 2006, James Thomas Webb (previously sentenced to 237 months in prison) was operating a company identified as Alpine Properties, LLC. Webb promised investors that he and Alpine Properties would use investor money to purchase homes at a low value, renovate the homes, and then sell them to first-time home buyers for a higher value. During that time period, ROBINSON was a licensed North Carolina attorney who closed real estate transactions for Webb and his investors.
Evidence established that ROBINSON and Webb systematically falsified the HUD-1 settlement statements associated with numerous sales of properties from Alpine Properties to Webb’s investors. The HUD-1s contained numerous false statements and misrepresentations, including the amount of money the borrower brought to closing, the payment of closing funds to secondary, prior lien holders, and the amount of money actually paid to Webb. Each HUD-1 also contained a false certification by Webb and ROBINSON that the settlement statements were true and accurate reflection of all receipts and disbursements made by or on behalf of the parties to the transactions. ROBINSON transmitted the false documents to the lenders and banks by mail and wire. The banks and lenders relied upon the statements in issuing loans for the sale of properties from Webb’s companies to his investors.
Ultimately, after the collapse of Alpine Properties, many of the loans on the properties went into default, resulting in millions in losses to various banks and lenders. At the sentencing, the court held ROBINSON accountable for $2,613,046.37 in losses and ordered ROBINSON to make restitution to the victims of the offense.
ROBINSON pleaded guilty on May 3, 2010 to conspiracy to commit wire, mail, and bank fraud, in violation of Title 18,United States Code, Section 371.
Investigation of this case was conducted by the Federal Bureau of Investigation, the United States Postal Inspection Service, the United States Department of Housing and Urban Development Office of the Inspector General, and the Federal Deposit Insurance Corporation Office of the Inspector General, with the assistance of the North Carolina State Bar. Assistant United States Attorney William M. Gilmore represented the United States.
The criminal information and other evidence showed that between 2002 and 2006, James Thomas Webb (previously sentenced to 237 months in prison) was operating a company identified as Alpine Properties, LLC. Webb promised investors that he and Alpine Properties would use investor money to purchase homes at a low value, renovate the homes, and then sell them to first-time home buyers for a higher value. During that time period, ROBINSON was a licensed North Carolina attorney who closed real estate transactions for Webb and his investors.
Evidence established that ROBINSON and Webb systematically falsified the HUD-1 settlement statements associated with numerous sales of properties from Alpine Properties to Webb’s investors. The HUD-1s contained numerous false statements and misrepresentations, including the amount of money the borrower brought to closing, the payment of closing funds to secondary, prior lien holders, and the amount of money actually paid to Webb. Each HUD-1 also contained a false certification by Webb and ROBINSON that the settlement statements were true and accurate reflection of all receipts and disbursements made by or on behalf of the parties to the transactions. ROBINSON transmitted the false documents to the lenders and banks by mail and wire. The banks and lenders relied upon the statements in issuing loans for the sale of properties from Webb’s companies to his investors.
Ultimately, after the collapse of Alpine Properties, many of the loans on the properties went into default, resulting in millions in losses to various banks and lenders. At the sentencing, the court held ROBINSON accountable for $2,613,046.37 in losses and ordered ROBINSON to make restitution to the victims of the offense.
ROBINSON pleaded guilty on May 3, 2010 to conspiracy to commit wire, mail, and bank fraud, in violation of Title 18,United States Code, Section 371.
Investigation of this case was conducted by the Federal Bureau of Investigation, the United States Postal Inspection Service, the United States Department of Housing and Urban Development Office of the Inspector General, and the Federal Deposit Insurance Corporation Office of the Inspector General, with the assistance of the North Carolina State Bar. Assistant United States Attorney William M. Gilmore represented the United States.
Brighton Man Sentenced for Defrauding Investors
ROCHESTER, NY—U.S. Attorney William J. Hochul, Jr. announced today that John Zdanecis, 79, of Brighton, New York, who was convicted of mail fraud, was sentenced to five years’ probation by U.S. District Judge Charles G. Siragusa. The defendant was also ordered to pay $82,500 in restitution to victims.
Assistant U.S. Attorney John J. Field, who handled the case, stated that the defendant solicited investors to participate in a commodities trading pool, Comtra Limited, that he controlled. Zdanecis then used most of the money for personal and business expenses and did not invest it in commodities as promised. To conceal his scheme, the defendant sent his investors periodic account statements that were false and misrepresented the true condition of the investments. As a result of the fraud, investors lost more than $160,000.
At sentencing, the defendant was subject to a recommended sentencing guideline range of 33 to 41 months in prison.
The sentencing is the culmination of an investigation on the part of special agents of the Federal Bureau of Investigation.
Assistant U.S. Attorney John J. Field, who handled the case, stated that the defendant solicited investors to participate in a commodities trading pool, Comtra Limited, that he controlled. Zdanecis then used most of the money for personal and business expenses and did not invest it in commodities as promised. To conceal his scheme, the defendant sent his investors periodic account statements that were false and misrepresented the true condition of the investments. As a result of the fraud, investors lost more than $160,000.
At sentencing, the defendant was subject to a recommended sentencing guideline range of 33 to 41 months in prison.
The sentencing is the culmination of an investigation on the part of special agents of the Federal Bureau of Investigation.
Monday, March 24, 2014
Collin County Man Sentenced in Foreclosure Rescue/Drug Distribution Scheme
SHERMAN, TX—A 34-year-old McKinney, Texas man has been sentenced to federal prison in connection with a combination foreclosure rescue and drug distribution scheme in the Eastern District of Texas, announced U.S. Attorney John M. Bales.
Jarrod Williams pleaded guilty on August 21, 2013, to conspiracy to commit mail and wire fraud and was sentenced to 57 months in federal prison today by U.S. District Judge Marcia Crone. Williams was also ordered to pay over $1.4 million in restitution.
According to information presented in court, from February 2007 to June 2012, Jarrod Williams, Julius Williams, and Charles Williams controlled and operated Applied Investment Strategies Inc. (AIS), which marketed itself as a foreclosure rescue service offering assistance to homeowners at risk of foreclosure. However, once a homeowner detained AIS, the defendants fraudulently used the customer’s personal identification information to prepare and send false military orders to banks and lending institutions in order to claim relief from foreclosure under the Servicemember’s Civil Relief Act. AIS would then lease out the home and collect rental payments for AIS’ benefit. The scheme involved approximately 38 homes throughout North Texas and also extended to interfering in the repossession of automobiles. After at least one of the fraudulently acquired properties was vacated, Charles Williams, Christopher Carter, and Sean Harrell turned it into a marijuana grow operation that housed approximately 1,300 marijuana plants that were intended for distribution. A federal grand jury returned an indictment on July 11, 2012, charging the defendants with federal violations.
Charles Williams, 39, of McKinney; Christopher Carter, 34, of Leicester, England; and Sean Harrell, 38, of Dallas, are each currently serving prison sentences ranging from 41 to 50 months. Julius Williams, 43, of McKinney faces up to five years in federal prison at sentencing.
This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Shamoil T. Shipchandler.
Jarrod Williams pleaded guilty on August 21, 2013, to conspiracy to commit mail and wire fraud and was sentenced to 57 months in federal prison today by U.S. District Judge Marcia Crone. Williams was also ordered to pay over $1.4 million in restitution.
According to information presented in court, from February 2007 to June 2012, Jarrod Williams, Julius Williams, and Charles Williams controlled and operated Applied Investment Strategies Inc. (AIS), which marketed itself as a foreclosure rescue service offering assistance to homeowners at risk of foreclosure. However, once a homeowner detained AIS, the defendants fraudulently used the customer’s personal identification information to prepare and send false military orders to banks and lending institutions in order to claim relief from foreclosure under the Servicemember’s Civil Relief Act. AIS would then lease out the home and collect rental payments for AIS’ benefit. The scheme involved approximately 38 homes throughout North Texas and also extended to interfering in the repossession of automobiles. After at least one of the fraudulently acquired properties was vacated, Charles Williams, Christopher Carter, and Sean Harrell turned it into a marijuana grow operation that housed approximately 1,300 marijuana plants that were intended for distribution. A federal grand jury returned an indictment on July 11, 2012, charging the defendants with federal violations.
Charles Williams, 39, of McKinney; Christopher Carter, 34, of Leicester, England; and Sean Harrell, 38, of Dallas, are each currently serving prison sentences ranging from 41 to 50 months. Julius Williams, 43, of McKinney faces up to five years in federal prison at sentencing.
This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Shamoil T. Shipchandler.
Two Indicted in 20,000-Victim Credit Card Fraud
SACRAMENTO, CA—A federal grand jury returned a 23-count indictment Thursday against Mihran Melkonyan, 33, of Sacramento, and Androuslan Akhmerov, 39, of Los Angeles, for wire fraud and mail fraud in a scheme to defraud American Express account holders, United States Attorney Benjamin B. Wagner announced.
According to court documents, Melkonyan and Akhmerov were involved in a scheme to defraud more than 20,000 credit card holders by making false charges on their accounts. To do this, Melkonyan and Akhmerov created fictitious businesses with legitimate sounding names and then charged the victims’ accounts small amounts in the range of $15-30. By using many small charges, the defendants made it less likely that the credit card holders or the credit card companies would discover the fraud.
This case is the product of an investigation by the Federal Bureau of Investigation and the United States Secret Service. Assistant United States Attorney Michael D. Anderson is prosecuting the case.
Akhmerov was arrested on March 5, 2014, and is currently released on bail. An initial appearance for him in Sacramento is set for March 27, 2014, at 2:00 before U.S. Magistrate Judge Kendall J. Newman. Melkonyan remains at large.
If convicted, Melkonyan and Akhmerov face a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
According to court documents, Melkonyan and Akhmerov were involved in a scheme to defraud more than 20,000 credit card holders by making false charges on their accounts. To do this, Melkonyan and Akhmerov created fictitious businesses with legitimate sounding names and then charged the victims’ accounts small amounts in the range of $15-30. By using many small charges, the defendants made it less likely that the credit card holders or the credit card companies would discover the fraud.
This case is the product of an investigation by the Federal Bureau of Investigation and the United States Secret Service. Assistant United States Attorney Michael D. Anderson is prosecuting the case.
Akhmerov was arrested on March 5, 2014, and is currently released on bail. An initial appearance for him in Sacramento is set for March 27, 2014, at 2:00 before U.S. Magistrate Judge Kendall J. Newman. Melkonyan remains at large.
If convicted, Melkonyan and Akhmerov face a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Tuesday, March 11, 2014
Former Energy Director for the City of Rockford Sentenced on Fraud Charges
ROCKFORD—The former energy director for the city of Rockford was sentenced today in federal court by U.S. District Judge Frederick J. Kapala for mail fraud. Mark E. Bixby, 58, of Rockton, Illinois, was sentenced to 14 months in federal prison, to be followed by three years of supervised release, and was ordered to pay restitution in the total amount of $41,618.33 to the two victims. Judge Kapala immediately remanded Bixby to the custody of the U.S. Marshals Service to begin serving his sentence.
Bixby pled guilty on November 21, 2013, admitting that between December 2006 and March 2010, he defrauded a heating contractor and window contractor, both of whom did work under the weatherization program for the city’s energy division, by causing them to provide funds and benefits to him through false representations and pretenses. According to the written plea agreement, Bixby, as the energy director, managed the city of Rockford’s energy division. The energy division operated the Illinois Home Weatherization Assistance Program in Winnebago and Boone Counties. The purpose of the weatherization program was to help low-income residents save energy and money by providing services that included repairing and replacing heating systems, windows, and doors.
According to the plea agreements, the funds and benefits Bixby obtained from the two contractors included the following: (1) use of a new 2007 red two-door convertible Pontiac Solstice; (2) a total of $18,440 in donations to “charities,” which were deposited into bank accounts controlled by Bixby and a family member and which were used to pay their personal expenses; (3) $2,980 for the “sale” of cemetery plots by Bixby to the heating contractor; and (4) a $2,000 “loan” from the window contractor, which Bixby never repaid.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation. The Winnebago County State’s Attorney’s Office and the Rockford Police Department assisted in the investigation.
The government was represented by Assistant U.S. Attorney Mark T. Karner.
Bixby pled guilty on November 21, 2013, admitting that between December 2006 and March 2010, he defrauded a heating contractor and window contractor, both of whom did work under the weatherization program for the city’s energy division, by causing them to provide funds and benefits to him through false representations and pretenses. According to the written plea agreement, Bixby, as the energy director, managed the city of Rockford’s energy division. The energy division operated the Illinois Home Weatherization Assistance Program in Winnebago and Boone Counties. The purpose of the weatherization program was to help low-income residents save energy and money by providing services that included repairing and replacing heating systems, windows, and doors.
According to the plea agreements, the funds and benefits Bixby obtained from the two contractors included the following: (1) use of a new 2007 red two-door convertible Pontiac Solstice; (2) a total of $18,440 in donations to “charities,” which were deposited into bank accounts controlled by Bixby and a family member and which were used to pay their personal expenses; (3) $2,980 for the “sale” of cemetery plots by Bixby to the heating contractor; and (4) a $2,000 “loan” from the window contractor, which Bixby never repaid.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation. The Winnebago County State’s Attorney’s Office and the Rockford Police Department assisted in the investigation.
The government was represented by Assistant U.S. Attorney Mark T. Karner.
Thursday, March 6, 2014
California Man Guilty in $7 Million Fraud Scheme Concerning Purported Alternative Energy Technology
LOS ANGELES—A Northern California man has been convicted of federal fraud charges for his involvement in a $7 million investment scheme that lured investors with false promises relating to the development of an alternative energy technology, Richard S. Hartunian, the United States Attorney for the Northern District of New York, announced today.
Richard M. Rossignol, 63, who now resides in Shingle Springs, California, was convicted on February 28 of one count of conspiracy to commit mail and wire fraud. The jury took less than six hours to render its verdict on the sole count.
United States District Judge Audrey B. Collins presided over the seven-week trial in United States District Court in Los Angeles. Following the verdict on Friday, Judge Collins scheduled a sentencing hearing for June 16. At sentencing, Rossignol faces a sentence of up to 20 years in federal prison.
Rossignol and a co-defendant—William A. Stehl, 69, of Ventura—were arrested in Oxnard, California, four years ago in connection with an indictment filed in the Northern District of New York. Both men were charged with conspiracy to commit mail and wire fraud. Additionally, Stehl was charged with several tax charges and lying to federal agents.
The conspiracy count alleged that from 2001 up to the time of the indictment in March 2010, Stehl, Rossignol, and others induced victims to invest money in companies that were purportedly developing or utilizing an alternative energy source Stehl claimed he had developed. Investors were told that one of Stehl’s applications related to the processing of precious metals allegedly contained in a slag pile in Silver City, New Mexico.
Stehl and Rossignol were charged with fraudulently obtaining money from investors by making false representations about the status of the process, claiming that contracts and licensing agreements had either been signed, or were about to be signed, and would result in significant financial returns for the investors. Stehl and Rossignol obtained more than $7 million from more than 300 victims. None of the investors received the returns promised by Stehl and Rossignol, and most of the money obtained was used for personal expenditures by Stehl and Rossignol.
Stehl was living near Saranac Lake in New York when the scheme started. Stehl moved to Southern California in late 2005, and Rossignol was convicted of conspiring with Stehl and others up to the time of the indictment. Fraud victims lived across the nation, including in Sacramento, California; Los Angeles; Charleston, West Virginia; and New York.
The indictment was originally filed in the Northern District of New York, but in October 2012, the case was transferred to the Central District of California to accommodate Stehl, who received injuries in an explosion occurring in a building in Sylmar, California, on August 9, 2011.
In November 2013, Judge Collins granted a request by Stehl’s attorneys to have a separate trial. Stehl is now scheduled to go to trial on July 22. Rossignol is free on bond.
The investigation in this case was conducted by Special Agents of the Internal Revenue Service Criminal Investigation, New York Field Office, and the Federal Bureau of Investigation, Albany, New York Field Office. The case is being prosecuted by Assistant United States Attorney Kevin P. Dooley of the Binghamton branch office in the Northern District of New York. Additional inquiries can be directed to AUSA Dooley at (607) 773-2887.
Richard M. Rossignol, 63, who now resides in Shingle Springs, California, was convicted on February 28 of one count of conspiracy to commit mail and wire fraud. The jury took less than six hours to render its verdict on the sole count.
United States District Judge Audrey B. Collins presided over the seven-week trial in United States District Court in Los Angeles. Following the verdict on Friday, Judge Collins scheduled a sentencing hearing for June 16. At sentencing, Rossignol faces a sentence of up to 20 years in federal prison.
Rossignol and a co-defendant—William A. Stehl, 69, of Ventura—were arrested in Oxnard, California, four years ago in connection with an indictment filed in the Northern District of New York. Both men were charged with conspiracy to commit mail and wire fraud. Additionally, Stehl was charged with several tax charges and lying to federal agents.
The conspiracy count alleged that from 2001 up to the time of the indictment in March 2010, Stehl, Rossignol, and others induced victims to invest money in companies that were purportedly developing or utilizing an alternative energy source Stehl claimed he had developed. Investors were told that one of Stehl’s applications related to the processing of precious metals allegedly contained in a slag pile in Silver City, New Mexico.
Stehl and Rossignol were charged with fraudulently obtaining money from investors by making false representations about the status of the process, claiming that contracts and licensing agreements had either been signed, or were about to be signed, and would result in significant financial returns for the investors. Stehl and Rossignol obtained more than $7 million from more than 300 victims. None of the investors received the returns promised by Stehl and Rossignol, and most of the money obtained was used for personal expenditures by Stehl and Rossignol.
Stehl was living near Saranac Lake in New York when the scheme started. Stehl moved to Southern California in late 2005, and Rossignol was convicted of conspiring with Stehl and others up to the time of the indictment. Fraud victims lived across the nation, including in Sacramento, California; Los Angeles; Charleston, West Virginia; and New York.
The indictment was originally filed in the Northern District of New York, but in October 2012, the case was transferred to the Central District of California to accommodate Stehl, who received injuries in an explosion occurring in a building in Sylmar, California, on August 9, 2011.
In November 2013, Judge Collins granted a request by Stehl’s attorneys to have a separate trial. Stehl is now scheduled to go to trial on July 22. Rossignol is free on bond.
The investigation in this case was conducted by Special Agents of the Internal Revenue Service Criminal Investigation, New York Field Office, and the Federal Bureau of Investigation, Albany, New York Field Office. The case is being prosecuted by Assistant United States Attorney Kevin P. Dooley of the Binghamton branch office in the Northern District of New York. Additional inquiries can be directed to AUSA Dooley at (607) 773-2887.
Wednesday, February 26, 2014
Clifton Insurance Adjuster Charged with Defrauding New Jersey Turnpike Authority and Insurance Companies of More Than $200,000
NEWARK—The owner of a New Jersey-based insurance adjusting company was arrested today for allegedly defrauding the New Jersey Turnpike Authority and certain insurance companies of more than $200,000, U.S. Attorney Paul J. Fishman announced.
Robert Napolitano, 54, of Clifton, New Jersey, the owner of Dawn to Dusk LLC, an insurance adjusting company that investigated and provided adjusting services to property and casualty insurance carriers in New Jersey, was arrested by special agents of the FBI and charged by complaint filed February 19, 2014, and unsealed today with one count of mail fraud. Napolitano is scheduled to make his initial appearance before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court later today.
According to the complaint:
From October 2011 to June 2013, Napolitano obtained by fraud more than $200,000 from the New Jersey Turnpike Authority (NJTA) and certain insurance companies in several ways, including instructing insurance companies whose motorists caused damage to the New Jersey Turnpike to issue checks payable to Dawn to Dusk. After the checks were mailed to Dawn to Dusk, Napolitano did not forward the payments to the NJTA and instead shared the money with his previously charged conspirator, Gerardo A. Blasi, an NJTA claims manager.
Blasi, 55, of Clifton, pleaded guilty December 11, 2013, before U.S. District Judge Kevin McNulty to an information charging him with using the mails to facilitate a scheme and artifice to defraud the NJTA and certain insurance companies in connection with his theft of more than $1.5 million from the authority and the insurance companies. He is scheduled to be sentenced March 19, 2014.
The fraud count with which Napolitano is charged is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI Newark Field Office, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney David L. Foster of the U.S. Attorney’s Office Special Prosecution’s Division.
Robert Napolitano, 54, of Clifton, New Jersey, the owner of Dawn to Dusk LLC, an insurance adjusting company that investigated and provided adjusting services to property and casualty insurance carriers in New Jersey, was arrested by special agents of the FBI and charged by complaint filed February 19, 2014, and unsealed today with one count of mail fraud. Napolitano is scheduled to make his initial appearance before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court later today.
According to the complaint:
From October 2011 to June 2013, Napolitano obtained by fraud more than $200,000 from the New Jersey Turnpike Authority (NJTA) and certain insurance companies in several ways, including instructing insurance companies whose motorists caused damage to the New Jersey Turnpike to issue checks payable to Dawn to Dusk. After the checks were mailed to Dawn to Dusk, Napolitano did not forward the payments to the NJTA and instead shared the money with his previously charged conspirator, Gerardo A. Blasi, an NJTA claims manager.
Blasi, 55, of Clifton, pleaded guilty December 11, 2013, before U.S. District Judge Kevin McNulty to an information charging him with using the mails to facilitate a scheme and artifice to defraud the NJTA and certain insurance companies in connection with his theft of more than $1.5 million from the authority and the insurance companies. He is scheduled to be sentenced March 19, 2014.
The fraud count with which Napolitano is charged is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI Newark Field Office, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney David L. Foster of the U.S. Attorney’s Office Special Prosecution’s Division.
Friday, February 21, 2014
Barbour County Sheriff Admits to Fraud, Resigns Position
ELKINS, WV—The Barbour County sheriff admitted to insurance fraud on Thursday in federal court and resigned his position as the chief law enforcement officer in the county.
United States Attorney William J. Ihlenfeld, II announced that JOHN W. HAWKINS, 47 years of age, of Philipi, West Virginia, entered a guilty plea to a felony Information charging him with mail fraud. HAWKINS admitted to staging an automobile accident in April of 2013 and then, with the assistance of one his deputies, fabricating a report for submission to Nationwide Insurance Company so that his claim would be approved. HAWKINS asserted that while driving his 2004 GMC Envoy, he accidentally drove off Jerusalem Church Road in Philipi and ran into a tree. However, a review of the claim file revealed inconsistencies in HAWKINS’ story. Photographs taken by the insurance adjuster and information from the vehicle’s data recorder contradicted HAWKINS’ version of events. Witnesses familiar with the scheme advised investigators that the story provided by HAWKINS was false.
HAWKINS used the United States mail to make a fraudulent claim in the amount of $8,262.65, which was paid to him by Nationwide last year. HAWKINS also used his official Barbour County e-mail account to communicate with Nationwide regarding his false claim.
“The defendant used his position as sheriff to take advantage of the insurance claims process and to receive a substantial financial benefit,” said U.S. Attorney Ihlenfeld. “The false accident report that he ordered his deputy to create helped to substantiate his claim, as did the fact that he was a law enforcement officer himself. By abusing the authority of his position, Sheriff Hawkins violated the trust that the citizens of Barbour County placed in him when he was elected.”
As part of his plea agreement, HAWKINS must make full restitution to Nationwide Insurance Company. HAWKINS also is required to resign as the sheriff of Barbour County, to relinquish his West Virginia law enforcement certification, and to agree to never again serve as a law enforcement officer.
The United States Attorney’s Office agreed not to pursue other investigations into the conduct of HAWKINS, including his alleged mishandling of an estate in his official capacity as sheriff, allegations of missing funds from the sheriff’s tax office, and potential civil rights violations.
The investigation into others who may have been involved in the scheme is ongoing, according to Ihlenfeld.
HAWKINS faces up to 20 years and a fine of up to $250,000 when he is sentenced. Under the Federal Sentencing Guidelines the actual sentence imposed will be based upon the seriousness of the offense and his prior criminal history, if any.
This case was prosecuted by Assistant United States Attorney John C. Parr and was investigated by the U.S. Attorney’s Office Public Corruption Unit. Agents and officers from the Federal Bureau of Investigation and the West Virginia State Police led the inquiry into HAWKINS. Assistance was provided by the West Virginia Insurance Commission, Fraud Investigations Division.
Ihlenfeld urges anyone with information regarding public corruption in their community to call the West Virginia Public Corruption Hotline at 855-WVA-FEDS (1-855-982-3337), or to send an e-mail to wvafeds@usdoj.gov.
United States Attorney William J. Ihlenfeld, II announced that JOHN W. HAWKINS, 47 years of age, of Philipi, West Virginia, entered a guilty plea to a felony Information charging him with mail fraud. HAWKINS admitted to staging an automobile accident in April of 2013 and then, with the assistance of one his deputies, fabricating a report for submission to Nationwide Insurance Company so that his claim would be approved. HAWKINS asserted that while driving his 2004 GMC Envoy, he accidentally drove off Jerusalem Church Road in Philipi and ran into a tree. However, a review of the claim file revealed inconsistencies in HAWKINS’ story. Photographs taken by the insurance adjuster and information from the vehicle’s data recorder contradicted HAWKINS’ version of events. Witnesses familiar with the scheme advised investigators that the story provided by HAWKINS was false.
HAWKINS used the United States mail to make a fraudulent claim in the amount of $8,262.65, which was paid to him by Nationwide last year. HAWKINS also used his official Barbour County e-mail account to communicate with Nationwide regarding his false claim.
“The defendant used his position as sheriff to take advantage of the insurance claims process and to receive a substantial financial benefit,” said U.S. Attorney Ihlenfeld. “The false accident report that he ordered his deputy to create helped to substantiate his claim, as did the fact that he was a law enforcement officer himself. By abusing the authority of his position, Sheriff Hawkins violated the trust that the citizens of Barbour County placed in him when he was elected.”
As part of his plea agreement, HAWKINS must make full restitution to Nationwide Insurance Company. HAWKINS also is required to resign as the sheriff of Barbour County, to relinquish his West Virginia law enforcement certification, and to agree to never again serve as a law enforcement officer.
The United States Attorney’s Office agreed not to pursue other investigations into the conduct of HAWKINS, including his alleged mishandling of an estate in his official capacity as sheriff, allegations of missing funds from the sheriff’s tax office, and potential civil rights violations.
The investigation into others who may have been involved in the scheme is ongoing, according to Ihlenfeld.
HAWKINS faces up to 20 years and a fine of up to $250,000 when he is sentenced. Under the Federal Sentencing Guidelines the actual sentence imposed will be based upon the seriousness of the offense and his prior criminal history, if any.
This case was prosecuted by Assistant United States Attorney John C. Parr and was investigated by the U.S. Attorney’s Office Public Corruption Unit. Agents and officers from the Federal Bureau of Investigation and the West Virginia State Police led the inquiry into HAWKINS. Assistance was provided by the West Virginia Insurance Commission, Fraud Investigations Division.
Ihlenfeld urges anyone with information regarding public corruption in their community to call the West Virginia Public Corruption Hotline at 855-WVA-FEDS (1-855-982-3337), or to send an e-mail to wvafeds@usdoj.gov.
Former Director of Cleveland and Dayton VA Medical Centers Pleads Guilty to Taking Money While Steering VA Work to Design Firm
The former director of the Cleveland and Dayton VA Medical Center pleaded guilty today to a scheme to enrich himself by working as a consultant for and taking money and other things of value from a design firm bidding on VA jobs and sharing confidential information about construction projects while still employed by the VA, law enforcement officials said.
William D. Montague, 61, of Brecksville, pleaded guilty to 64 counts, including Hobbs Act conspiracy, conspiracy to commit honest services mail fraud, violating the Hobbs Act, money laundering, multiple counts of wire fraud, mail fraud, disclosing public contract information, and other charges.
Montague is scheduled to be sentenced on May 20. He agreed to pay more than $390,000 to satisfy restitution and forfeiture requirements
“As a Veterans Affairs Medical Center Director, William Montague misled staff and misused his position to enrich himself and businesses pursuing contracts with the agency,” said Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Field Office. “We are pleased with the acceptance of responsibility by Mr. Montague, along with the significant forfeiture amount to be returned to the Department of Veteran’s Affairs.”
“Today’s guilty plea is the result of a two-year investigation conducted by special agents of the Cleveland Veterans Affairs Office of Inspector General and the Federal Bureau of Investigation,” said Gavin McClaren, U.S. VA Office of Inspector General, Resident Agent in Charge, Cleveland. “We will continue to protect taxpayers against those who would enrich themselves at the expense of our nation’s veterans.”
Montague served as director of the Cleveland VA Medical Center from 1995 until February 3, 2010. On March 11, 2011, Montague began working as director of the Dayton VA Medical Center, a position he held through December 17, 2011, according to the indictment.
The superseding indictment details interactions between Montague and a company identified as Business 75, an integrated design firm with offices throughout the United States, including New York, Illinois, Virginia, Missouri, and California. The company performed work for the VA directly and through its participation in joint ventures and other teaming agreements, according to the indictment.
From January 2010, Montague, Business 75, and employees of the company conspired to defraud the VA of its right to the honest and faithful service of Montague through bribery and kickbacks and to defraud the VA and other potential VA contractors by means of false and fraudulent pretenses, according to the indictment.
Montague secretly used his position as Dayton VA Medical Center director to enrich himself and his designees (including House of Montague, a financial services company Montague operated) by soliciting and accepting gifts, payments, and other things of value from Business 75 in exchange for favorable official actions, according to the indictment.
Montague solicited money and a consulting contract from Business 75 in exchange for information related to VA contracts and projects, which would benefit Business 75, Business 75’s principal and their designees, according to the indictment.
This was done to give Business 75 an advantage in obtaining VA contracts and projects. Montague gave false and misleading information to VA employees about his reasons for requesting VA documents and information, according to the indictment.
For example, on March 1, 2011, Business 75 issued a $20,000 check payable to Montague, which he deposited into the House of Montague’s account. Ten days later, Business 75’s principal sent an e-mail to some employees with Montague’s consulting agreement explaining: “His job is to help us bring in more work from the VA, in part by helping us access key decision makers,” according to the indictment.
On March 14, 2011, Business 75’s principal sent another e-mail to some employees stating that Business 75 will end the current “$15 [million VA] IDIQ contract with just slightly over $12M in sales. $3M in fee, therefore, will be left on the table…[O]ne of MONTAGUE’s jobs will be to fill up the bucket by directing task orders toward our contract, Going forward, we have two $15M buckets to fill (Central and Eastern regions). That’s a lot of shoveling to get to $30M…BILL has the relationships to help us maximize the contracts…On the VA ‘major construction’ front here is the list of medical centers and their approximate construction cost in the pipeline: West Los Angeles, CA: $750M; San Francisco, CA: $125M, Reno, NV: $115M, Alameda, CA: $225M. Montague told us about these before they were advertised, which has allowed us to get an early start in developing the team. If we bring him on board, he can help us pull in one or two of these large projects,” according to the indictment.
On May 26, 2011, Montague traveled to Washington, D.C. on official VA business. On June 17, 2011, he caused to be submitted a government expense report seeking reimbursement for $1,204 for hotels, parking, per diems, and other expenses. On June 12, 2011, Montague caused to be sent a $2,741 invoice to Business 75 for “consulting services” for work performed at “Wash/Cleve/Dayton.” The invoice included $211 for hotel and $30.60 for hotel taxes incurred on May 26, 2011, according to the indictment.
The case was prosecuted by Assistant United States Attorneys Antoinette T. Bacon and Justin J. Roberts following an investigation by the FBI and United States Department of Veterans Affairs-Office of Inspector General.
William D. Montague, 61, of Brecksville, pleaded guilty to 64 counts, including Hobbs Act conspiracy, conspiracy to commit honest services mail fraud, violating the Hobbs Act, money laundering, multiple counts of wire fraud, mail fraud, disclosing public contract information, and other charges.
Montague is scheduled to be sentenced on May 20. He agreed to pay more than $390,000 to satisfy restitution and forfeiture requirements
“As a Veterans Affairs Medical Center Director, William Montague misled staff and misused his position to enrich himself and businesses pursuing contracts with the agency,” said Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Field Office. “We are pleased with the acceptance of responsibility by Mr. Montague, along with the significant forfeiture amount to be returned to the Department of Veteran’s Affairs.”
“Today’s guilty plea is the result of a two-year investigation conducted by special agents of the Cleveland Veterans Affairs Office of Inspector General and the Federal Bureau of Investigation,” said Gavin McClaren, U.S. VA Office of Inspector General, Resident Agent in Charge, Cleveland. “We will continue to protect taxpayers against those who would enrich themselves at the expense of our nation’s veterans.”
Montague served as director of the Cleveland VA Medical Center from 1995 until February 3, 2010. On March 11, 2011, Montague began working as director of the Dayton VA Medical Center, a position he held through December 17, 2011, according to the indictment.
The superseding indictment details interactions between Montague and a company identified as Business 75, an integrated design firm with offices throughout the United States, including New York, Illinois, Virginia, Missouri, and California. The company performed work for the VA directly and through its participation in joint ventures and other teaming agreements, according to the indictment.
From January 2010, Montague, Business 75, and employees of the company conspired to defraud the VA of its right to the honest and faithful service of Montague through bribery and kickbacks and to defraud the VA and other potential VA contractors by means of false and fraudulent pretenses, according to the indictment.
Montague secretly used his position as Dayton VA Medical Center director to enrich himself and his designees (including House of Montague, a financial services company Montague operated) by soliciting and accepting gifts, payments, and other things of value from Business 75 in exchange for favorable official actions, according to the indictment.
Montague solicited money and a consulting contract from Business 75 in exchange for information related to VA contracts and projects, which would benefit Business 75, Business 75’s principal and their designees, according to the indictment.
This was done to give Business 75 an advantage in obtaining VA contracts and projects. Montague gave false and misleading information to VA employees about his reasons for requesting VA documents and information, according to the indictment.
For example, on March 1, 2011, Business 75 issued a $20,000 check payable to Montague, which he deposited into the House of Montague’s account. Ten days later, Business 75’s principal sent an e-mail to some employees with Montague’s consulting agreement explaining: “His job is to help us bring in more work from the VA, in part by helping us access key decision makers,” according to the indictment.
On March 14, 2011, Business 75’s principal sent another e-mail to some employees stating that Business 75 will end the current “$15 [million VA] IDIQ contract with just slightly over $12M in sales. $3M in fee, therefore, will be left on the table…[O]ne of MONTAGUE’s jobs will be to fill up the bucket by directing task orders toward our contract, Going forward, we have two $15M buckets to fill (Central and Eastern regions). That’s a lot of shoveling to get to $30M…BILL has the relationships to help us maximize the contracts…On the VA ‘major construction’ front here is the list of medical centers and their approximate construction cost in the pipeline: West Los Angeles, CA: $750M; San Francisco, CA: $125M, Reno, NV: $115M, Alameda, CA: $225M. Montague told us about these before they were advertised, which has allowed us to get an early start in developing the team. If we bring him on board, he can help us pull in one or two of these large projects,” according to the indictment.
On May 26, 2011, Montague traveled to Washington, D.C. on official VA business. On June 17, 2011, he caused to be submitted a government expense report seeking reimbursement for $1,204 for hotels, parking, per diems, and other expenses. On June 12, 2011, Montague caused to be sent a $2,741 invoice to Business 75 for “consulting services” for work performed at “Wash/Cleve/Dayton.” The invoice included $211 for hotel and $30.60 for hotel taxes incurred on May 26, 2011, according to the indictment.
The case was prosecuted by Assistant United States Attorneys Antoinette T. Bacon and Justin J. Roberts following an investigation by the FBI and United States Department of Veterans Affairs-Office of Inspector General.
Thursday, February 20, 2014
Texas Oil Executive Indicted in Scheme to Commit Wire and Mail Fraud
SAN JOSE—A federal grand jury in San Jose returned a 16-count superseding indictment charging a Texas-based oil executive with undertaking a scheme to commit wire and mail fraud, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.
According to the indictment, which was unsealed earlier today, Dwayne Kent Singleton, 51, a resident of Texas, is named as the sole defendant in eight counts of mail fraud and eight counts of wire fraud between approximately 2008 and 2009.
According to the superseding indictment, Singleton was one of the founders and senior executives of a business known Santana Energy Services LLC (Santana), which has its administrative offices in Santa Clara, California, and whose primary focus was re-entry drilling of existing oil wells that had been abandoned by larger oil concerns but had potential oil reserves. Singleton resided in Texas and assumed the role of site operations manager for the oil drilling sites. Among his duties, Singleton also submitted Santana’s contractor and vendor payment requests via telephone or e-mail to Santana’s offices in California. Relying on these requests, Santana’s executives in California signed the checks drawn on its business account in Santa Clara. The signed vendor checks were then sent via Federal Express to Singleton in Texas.
Beginning in early 2008, according to the superseding indictment, Singleton began requesting payments from Santana for work purportedly performed or equipment/infrastructure furnished by vendors at Santana’s drill sites in Texas. Singleton, either directly or through his assistant in Texas, e-mailed Santana’s offices in Santa Clara requesting that payments be made payable to certain entities. Typically, the e-mails were cryptic and appeared to be requesting payments to be made payable to vendors. Based on Santana’s understanding that the payments were being made to third-party vendors for work performed on Santana’s drilling sites, Santana’s employees in Santa Clara would prepare and execute checks drawn on a Santana-controlled business account at a bank in Santa Clara. Santana then transmitted those checks via Federal Express mailings to Singleton’s offices in Texas.
According to the allegations, Singleton did not, in fact, use the checks provided by Santana to pay the third-party vendors that he had identified in e-mails to Santana’s Santa Clara offices. Instead, the checks were made payable to companies that Singleton himself had created and controlled, and the checks were deposited into bank accounts Singleton alone controlled.
According to the superseding indictment, many of these accounts were in the name of shell companies with names similar to—and only slightly different from—genuine contractors and vendors who had actually been retained to perform services for the benefit of Santana. These shell companies had no employees, vouchers, credit, or expenses associated with Santana. The money deposited into these accounts was not used for Santana expenses, as Singleton had represented in his e-mails and other communications with Santana. Instead, it was transferred or spent by Singleton for unauthorized, personal matters.
As a result of this scheme, Singleton eventually diverted well over $1,000,000 in corporate funds for purposes unauthorized by and unrelated to Santana, including his mortgage, a private jet, and his hunting ranch in North Texas.
After first appearing in federal court in Texas earlier this month and ordered to travel to San Jose, the defendant made his initial appearance in federal court in San Jose earlier today before the Honorable Howard R. Lloyd, United States Magistrate Court Judge, who unsealed the indictment. Singleton is currently out on bond. His next scheduled appearance is on March 11, 2014, at 1:30 p.m., in San Jose before the Honorable Howard R. Lloyd for review of terms of bond and for status and further setting on April 2, 2014, at 9:30 a.m., before the Honorable Lucy H. Koh, United States District Court Judge in San Jose.
The maximum statutory penalty for each count of the indictment is 20 years’ imprisonment; a fine of $250,000 or twice the amount of gain or loss, whichever is greater; and restitution, if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Timothy J. Lucey is the Assistant United States Attorney who is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Please note, an indictment contains only allegations against an individual and, as with all defendants, Dwayne Kent Singleton must be presumed innocent unless and until proven guilty.
According to the indictment, which was unsealed earlier today, Dwayne Kent Singleton, 51, a resident of Texas, is named as the sole defendant in eight counts of mail fraud and eight counts of wire fraud between approximately 2008 and 2009.
According to the superseding indictment, Singleton was one of the founders and senior executives of a business known Santana Energy Services LLC (Santana), which has its administrative offices in Santa Clara, California, and whose primary focus was re-entry drilling of existing oil wells that had been abandoned by larger oil concerns but had potential oil reserves. Singleton resided in Texas and assumed the role of site operations manager for the oil drilling sites. Among his duties, Singleton also submitted Santana’s contractor and vendor payment requests via telephone or e-mail to Santana’s offices in California. Relying on these requests, Santana’s executives in California signed the checks drawn on its business account in Santa Clara. The signed vendor checks were then sent via Federal Express to Singleton in Texas.
Beginning in early 2008, according to the superseding indictment, Singleton began requesting payments from Santana for work purportedly performed or equipment/infrastructure furnished by vendors at Santana’s drill sites in Texas. Singleton, either directly or through his assistant in Texas, e-mailed Santana’s offices in Santa Clara requesting that payments be made payable to certain entities. Typically, the e-mails were cryptic and appeared to be requesting payments to be made payable to vendors. Based on Santana’s understanding that the payments were being made to third-party vendors for work performed on Santana’s drilling sites, Santana’s employees in Santa Clara would prepare and execute checks drawn on a Santana-controlled business account at a bank in Santa Clara. Santana then transmitted those checks via Federal Express mailings to Singleton’s offices in Texas.
According to the allegations, Singleton did not, in fact, use the checks provided by Santana to pay the third-party vendors that he had identified in e-mails to Santana’s Santa Clara offices. Instead, the checks were made payable to companies that Singleton himself had created and controlled, and the checks were deposited into bank accounts Singleton alone controlled.
According to the superseding indictment, many of these accounts were in the name of shell companies with names similar to—and only slightly different from—genuine contractors and vendors who had actually been retained to perform services for the benefit of Santana. These shell companies had no employees, vouchers, credit, or expenses associated with Santana. The money deposited into these accounts was not used for Santana expenses, as Singleton had represented in his e-mails and other communications with Santana. Instead, it was transferred or spent by Singleton for unauthorized, personal matters.
As a result of this scheme, Singleton eventually diverted well over $1,000,000 in corporate funds for purposes unauthorized by and unrelated to Santana, including his mortgage, a private jet, and his hunting ranch in North Texas.
After first appearing in federal court in Texas earlier this month and ordered to travel to San Jose, the defendant made his initial appearance in federal court in San Jose earlier today before the Honorable Howard R. Lloyd, United States Magistrate Court Judge, who unsealed the indictment. Singleton is currently out on bond. His next scheduled appearance is on March 11, 2014, at 1:30 p.m., in San Jose before the Honorable Howard R. Lloyd for review of terms of bond and for status and further setting on April 2, 2014, at 9:30 a.m., before the Honorable Lucy H. Koh, United States District Court Judge in San Jose.
The maximum statutory penalty for each count of the indictment is 20 years’ imprisonment; a fine of $250,000 or twice the amount of gain or loss, whichever is greater; and restitution, if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Timothy J. Lucey is the Assistant United States Attorney who is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Please note, an indictment contains only allegations against an individual and, as with all defendants, Dwayne Kent Singleton must be presumed innocent unless and until proven guilty.
Tuesday, January 28, 2014
Fourth Defendant in Ticket-Fixing Conspiracy Pleads Guilty
PHILADELPHIA—William Hird, 68, of Philadelphia, Pennsylavania, pleaded guilty today to taking part in a fraud scheme involving judges at the former Philadelphia Traffic Court. Hird, who was director of Records at the time, pleaded guilty to 18 counts, including conspiracy, wire fraud, mail fraud, and lying to the FBI when questioned about ticket-fixing at Traffic Court. Hird is the fourth defendant to plead guilty in the fraud conspiracy that the government alleges involved frequent and pervasive ticket-fixing at the Philadelphia Traffic Court. U.S. District Court Judge Robert F. Kelly has not yet set a sentencing date. Hird faces a possible advisory sentencing guideline range of 12 to 18 months in prison, before variances or departures.
Former traffic court judge Fortunato Perri, Sr., who pleaded guilty on March 13, 2013, would receive traffic citation numbers, the names of offenders, or the actual citations to arrange fixing the ticket and would convey the information to William Hird. Hird, in turn, allegedly conveyed the request to the assigned judge or the judge’s staff. Hird was extremely loyal to Perri given that Perri helped Hird move up the ladder to a high-level administrator at Traffic Court. Recorded conversations demonstrate that Hird acceded to Perri’s requests to fix certain tickets. Given Hird’s position at Traffic Court and access to the judges, Hird was able to facilitate requests for ticket fixing for Perri.
As part of the scheme, tickets were fixed by either being dismissed, finding the ticket holder not guilty, or finding the ticket holder guilty of a lesser offense. In many cases, the ticket holder did not even appear in Traffic Court, yet his/her ticket was fixed. As a result, the ticketholders paid lesser or no fines and costs and evaded the assessment of points on their driver’s record. This widespread ticket-fixing defrauded both the Commonwealth of Pennsylvania and the City of Philadelphia of funds and allowed potentially unsafe drivers to remain on the roads.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Denise S. Wolf and Anthony J. Wzorek.
Former traffic court judge Fortunato Perri, Sr., who pleaded guilty on March 13, 2013, would receive traffic citation numbers, the names of offenders, or the actual citations to arrange fixing the ticket and would convey the information to William Hird. Hird, in turn, allegedly conveyed the request to the assigned judge or the judge’s staff. Hird was extremely loyal to Perri given that Perri helped Hird move up the ladder to a high-level administrator at Traffic Court. Recorded conversations demonstrate that Hird acceded to Perri’s requests to fix certain tickets. Given Hird’s position at Traffic Court and access to the judges, Hird was able to facilitate requests for ticket fixing for Perri.
As part of the scheme, tickets were fixed by either being dismissed, finding the ticket holder not guilty, or finding the ticket holder guilty of a lesser offense. In many cases, the ticket holder did not even appear in Traffic Court, yet his/her ticket was fixed. As a result, the ticketholders paid lesser or no fines and costs and evaded the assessment of points on their driver’s record. This widespread ticket-fixing defrauded both the Commonwealth of Pennsylvania and the City of Philadelphia of funds and allowed potentially unsafe drivers to remain on the roads.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Denise S. Wolf and Anthony J. Wzorek.
Monday, January 27, 2014
Three Charged with Operating Online Counterfeit Credit Card Retailer Responsible for Estimated $34.5 in Fraud
Three men who allegedly ran a one-stop online shop selling counterfeit credit cards and holographic overlays to be used by criminals to make fake identifications face federal charges in an ongoing investigation that has already resulted in 11 additional arrests, including a customer facing federal charges.
U.S. Attorney Anne M. Tompkins for the Western District of North Carolina and New Jersey U.S. Attorney Paul J. Fishman announced the charges today.
Sean Roberson, 39, of Palm Bay, Florida, who allegedly ran the site, is charged in an amended complaint, unsealed today in the District of New Jersey, with conspiracy to commit wire fraud; conspiracy to traffic in counterfeit goods or services; and conspiracy to commit fraud and related activity in connection with authentication features. A superseding indictment returned today in the Western District of North Carolina charges Roberson’s two conspirators, Vinicio Gonzalez, 30, of Melbourne, Florida, and Hugo Rebaza, 31, of Palm Bay, Florida, with conspiracy to traffic in counterfeit goods and conspiracy to commit mail fraud, wire fraud and bank fraud. The superseding indictment also charges a customer of the website, Nashancy Johnny Colbert, 27, of Charlotte, North Carolina, with one count of conspiracy to commit mail fraud, wire fraud, and bank fraud. All four men are expected to appear this week in U.S. District Courts in Newark and Charlotte to face the charges. Roberson is expected to appear in Newark federal court this afternoon before U.S. Magistrate Judge Mark Falk. The North Carolina court dates have not yet been set.
U.S. Postal Inspection Service (USPIS) and the FBI assumed control of the website fakeplastic.net on December 5, 2013, and made more than 30 controlled deliveries of ordered materials—not allowing those materials to leave law enforcement control. Those controlled deliveries have resulted in 11 additional arrests of alleged fakeplastic customers, including Colbert, being handled by federal, state, and local prosecutors across the United States.
U.S. Attorney Tompkins stated, “This ring of computer criminals ran an online one-stop shop where counterfeit credit cards were a mouse-click away. As consumer fraud becomes more sophisticated, law enforcement and prosecutors across the country are joining forces to pull aside the veil of cyberspace anonymity and take down criminal enterprises that pilfer the identities of innocent victims for personal gain.”
“According to the complaint, Sean Roberson and his conspirators ran a large-scale, online operation filling custom orders for counterfeit cards,” said U.S. Attorney Fishman. “This made-to-measure service provided the last link in the chain necessary for criminals to make money from stolen credit card numbers and identities.”
Inspector in Charge Keith Fixel of USPIS in Charlotte stated, “Protecting the integrity of the nation’s mail system is a top priority for the Postal Inspection Service. Even though these defendants went to great lengths to avoid detection, their scheme was uncovered by postal inspectors committed to enforcing the laws that protect the mail from illegal use and bringing to justice those who attempt to compromise the public’s trust in the mail.
“This investigation is yet another example of the unrelenting pursuit of cyber criminals by federal law enforcement,” said Newark FBI Special Agent in Charge Aaron T. Ford. “The FBI and its law enforcement partners will continue to identify and investigate individuals that try to hide in the supposed anonymity of Internet crime organizations in order to steal from innocent parties.”
According to the amended complaint unsealed today in Newark federal court and charging documents filed in the Western District of North Carolina:
USPIS and the FBI, assisted by the U.S. Secret Service, have been investigating the online retail shop, fakeplastic.net, since January 2013. The site specialized in selling high-quality, custom-made counterfeit credit and debit cards (collectively, “payment cards”), as well as holographic overlays used to create fake driver’s licenses.
Roberson began selling counterfeit cards and related items as early as April 2011 and launched the fakeplastic website in June 2012. Roberson owned and operated the site with the assistance of Gonzalez and Rebaza. Since April 2011, Roberson and his conspirators fulfilled orders for approximately 69,000 counterfeit credit cards—both embossed and unembossed—more than 35,000 holographic stickers used to make counterfeit cards appear more legitimate and more than 30,000 state identification card holographic overlays. The orders—more than 3,600 parcels—were shipped through the U.S. mail.
Gonzalez was primarily responsible for manufacturing the counterfeit payment cards, packaging the contraband for mailing, and placing U.S. Express Mail envelopes in the mail for delivery to the fakeplastic customers. The conspirators used a storage facility in Florida to store supplies and to manufacture the counterfeit payment cards, and Gonzalez frequently visited the storage unit to create the custom-embossed cards and to prepare mail packages. Law enforcement arrested Gonzalez on December 4, 2013, while he was in the storage space—seizing computers, printers, counterfeit cards, an embosser, and other contraband.
Rebaza was a “runner” for the criminal operation, responsible for picking up packages containing criminal proceeds and supplies from a “mail drop” for the fakeplastic website.
Colbert was a members-only customer of the website who placed and received orders of counterfeit payment cards delivered to him through the mail. Law enforcement executed a search warrant on January 3, 2014, at Colbert’s Charlotte residence seizing, among other things, 41 counterfeit payment cards embossed with Colbert’s name or the names of other individuals. Law enforcement also recovered a discarded U.S. Express Mail envelope sent from the fakeplastic website.
Using a conservative estimate of loss of $500 associated with each counterfeit payment card (derived from the federal sentencing guidelines estimation of loss associated with stolen payment card information), law enforcement estimates the losses associated with just the counterfeit payment cards trafficked by Roberson and his conspirators at more than $34.5 million. Roberson personally made more than $1.7 million from the scheme.
The fakeplastic website was used by various groups of criminals across the country often referred to as “carding” or “cash out” crews. These crews buy stolen payment card numbers and related information—referred to as “track data” or “dumps”—which typically appear on the magnetic stripe on the back of legitimate payment cards. Illegal vendors of that information usually get it through hacking or skimming operations involving the installation of specialized equipment at ATM locations or point-of-sale terminals. The stolen data is ultimately put on a blank card and used to make unauthorized transactions.
More sophisticated cash out operations use custom-made counterfeit payment cards embossed with the same account numbers that have been encoded on the back of the card, and often acquire fake identification cards in order to reduce the likelihood of detection from law enforcement.
The criminal underground has evolved from fractured, regional operations to an Internet-based market where buyers and sellers across the globe can advertise, purchase, and transmit stolen track data. The fakeplastic website brought the physical tools needed by cash out operations to the world of e-commerce, as it eliminated the need for crews to purchase expensive hardware.
By December 2013, the site had more than 400 members. Members with access to the fakeplastic website and seeking to purchase counterfeit payment cards could browse the website’s available counterfeit card templates. Members could then choose whether to input specific information to be embossed on the cards and whether they wanted additional authentication features—such as holographic stickers.
At one time, the website accepted Liberty Reserve online currency, but shortly after federal charges against Liberty Reserve were made public in the Southern District of New York in May 2013, the fakeplastic website stopped accepting that currency and began accepting Bitcoin, a cryptographic-based digital currency. As set forth on the site’s “news” section, Bitcoin was viewed as a “safe” and “anonymous” method of payment for contraband.
The charges and maximum potential penalties for each count are as follows:
U.S. Attorney Tompkins also thanked Chief Kevin Lovelace and the Rutherfordton, North Carolina Police Department for the department’s vital role in this case. Chief Lovelace stated, “I would like to commend the efforts of all of our officers involved with this case in ensuring that the information they obtained was shared with the appropriate agencies. Communication between law enforcement agencies plays a vital role in resolving many cases.”
The government is represented in the Western District of North Carolina by Assistant U.S. Attorneys Tom O’Malley and Ben Bain-Creed and in the District of New Jersey by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section and Assistant U.S. Attorney Andrew Kogan, both of the office’s Economic Crimes Unit, and Barbara Ward of the office’s Asset Forfeiture and money laundering unit; and in Washington by CCIPs Trial Attorney Evan Williams.
The charges and allegations contained in the various charging instruments are merely accusations, and the defendants are considered innocent unless and until proven guilty.
U.S. Attorney Anne M. Tompkins for the Western District of North Carolina and New Jersey U.S. Attorney Paul J. Fishman announced the charges today.
Sean Roberson, 39, of Palm Bay, Florida, who allegedly ran the site, is charged in an amended complaint, unsealed today in the District of New Jersey, with conspiracy to commit wire fraud; conspiracy to traffic in counterfeit goods or services; and conspiracy to commit fraud and related activity in connection with authentication features. A superseding indictment returned today in the Western District of North Carolina charges Roberson’s two conspirators, Vinicio Gonzalez, 30, of Melbourne, Florida, and Hugo Rebaza, 31, of Palm Bay, Florida, with conspiracy to traffic in counterfeit goods and conspiracy to commit mail fraud, wire fraud and bank fraud. The superseding indictment also charges a customer of the website, Nashancy Johnny Colbert, 27, of Charlotte, North Carolina, with one count of conspiracy to commit mail fraud, wire fraud, and bank fraud. All four men are expected to appear this week in U.S. District Courts in Newark and Charlotte to face the charges. Roberson is expected to appear in Newark federal court this afternoon before U.S. Magistrate Judge Mark Falk. The North Carolina court dates have not yet been set.
U.S. Postal Inspection Service (USPIS) and the FBI assumed control of the website fakeplastic.net on December 5, 2013, and made more than 30 controlled deliveries of ordered materials—not allowing those materials to leave law enforcement control. Those controlled deliveries have resulted in 11 additional arrests of alleged fakeplastic customers, including Colbert, being handled by federal, state, and local prosecutors across the United States.
U.S. Attorney Tompkins stated, “This ring of computer criminals ran an online one-stop shop where counterfeit credit cards were a mouse-click away. As consumer fraud becomes more sophisticated, law enforcement and prosecutors across the country are joining forces to pull aside the veil of cyberspace anonymity and take down criminal enterprises that pilfer the identities of innocent victims for personal gain.”
“According to the complaint, Sean Roberson and his conspirators ran a large-scale, online operation filling custom orders for counterfeit cards,” said U.S. Attorney Fishman. “This made-to-measure service provided the last link in the chain necessary for criminals to make money from stolen credit card numbers and identities.”
Inspector in Charge Keith Fixel of USPIS in Charlotte stated, “Protecting the integrity of the nation’s mail system is a top priority for the Postal Inspection Service. Even though these defendants went to great lengths to avoid detection, their scheme was uncovered by postal inspectors committed to enforcing the laws that protect the mail from illegal use and bringing to justice those who attempt to compromise the public’s trust in the mail.
“This investigation is yet another example of the unrelenting pursuit of cyber criminals by federal law enforcement,” said Newark FBI Special Agent in Charge Aaron T. Ford. “The FBI and its law enforcement partners will continue to identify and investigate individuals that try to hide in the supposed anonymity of Internet crime organizations in order to steal from innocent parties.”
According to the amended complaint unsealed today in Newark federal court and charging documents filed in the Western District of North Carolina:
USPIS and the FBI, assisted by the U.S. Secret Service, have been investigating the online retail shop, fakeplastic.net, since January 2013. The site specialized in selling high-quality, custom-made counterfeit credit and debit cards (collectively, “payment cards”), as well as holographic overlays used to create fake driver’s licenses.
Roberson began selling counterfeit cards and related items as early as April 2011 and launched the fakeplastic website in June 2012. Roberson owned and operated the site with the assistance of Gonzalez and Rebaza. Since April 2011, Roberson and his conspirators fulfilled orders for approximately 69,000 counterfeit credit cards—both embossed and unembossed—more than 35,000 holographic stickers used to make counterfeit cards appear more legitimate and more than 30,000 state identification card holographic overlays. The orders—more than 3,600 parcels—were shipped through the U.S. mail.
Gonzalez was primarily responsible for manufacturing the counterfeit payment cards, packaging the contraband for mailing, and placing U.S. Express Mail envelopes in the mail for delivery to the fakeplastic customers. The conspirators used a storage facility in Florida to store supplies and to manufacture the counterfeit payment cards, and Gonzalez frequently visited the storage unit to create the custom-embossed cards and to prepare mail packages. Law enforcement arrested Gonzalez on December 4, 2013, while he was in the storage space—seizing computers, printers, counterfeit cards, an embosser, and other contraband.
Rebaza was a “runner” for the criminal operation, responsible for picking up packages containing criminal proceeds and supplies from a “mail drop” for the fakeplastic website.
Colbert was a members-only customer of the website who placed and received orders of counterfeit payment cards delivered to him through the mail. Law enforcement executed a search warrant on January 3, 2014, at Colbert’s Charlotte residence seizing, among other things, 41 counterfeit payment cards embossed with Colbert’s name or the names of other individuals. Law enforcement also recovered a discarded U.S. Express Mail envelope sent from the fakeplastic website.
Using a conservative estimate of loss of $500 associated with each counterfeit payment card (derived from the federal sentencing guidelines estimation of loss associated with stolen payment card information), law enforcement estimates the losses associated with just the counterfeit payment cards trafficked by Roberson and his conspirators at more than $34.5 million. Roberson personally made more than $1.7 million from the scheme.
The fakeplastic website was used by various groups of criminals across the country often referred to as “carding” or “cash out” crews. These crews buy stolen payment card numbers and related information—referred to as “track data” or “dumps”—which typically appear on the magnetic stripe on the back of legitimate payment cards. Illegal vendors of that information usually get it through hacking or skimming operations involving the installation of specialized equipment at ATM locations or point-of-sale terminals. The stolen data is ultimately put on a blank card and used to make unauthorized transactions.
More sophisticated cash out operations use custom-made counterfeit payment cards embossed with the same account numbers that have been encoded on the back of the card, and often acquire fake identification cards in order to reduce the likelihood of detection from law enforcement.
The criminal underground has evolved from fractured, regional operations to an Internet-based market where buyers and sellers across the globe can advertise, purchase, and transmit stolen track data. The fakeplastic website brought the physical tools needed by cash out operations to the world of e-commerce, as it eliminated the need for crews to purchase expensive hardware.
By December 2013, the site had more than 400 members. Members with access to the fakeplastic website and seeking to purchase counterfeit payment cards could browse the website’s available counterfeit card templates. Members could then choose whether to input specific information to be embossed on the cards and whether they wanted additional authentication features—such as holographic stickers.
At one time, the website accepted Liberty Reserve online currency, but shortly after federal charges against Liberty Reserve were made public in the Southern District of New York in May 2013, the fakeplastic website stopped accepting that currency and began accepting Bitcoin, a cryptographic-based digital currency. As set forth on the site’s “news” section, Bitcoin was viewed as a “safe” and “anonymous” method of payment for contraband.
The charges and maximum potential penalties for each count are as follows:
- Roberson: charged with conspiracy to commit wire fraud; penalty: 30 years and $1 million fine or twice the gain or loss from the offense
- Gonzalez, Rebaza, and Colbert: charged with conspiracy to commit mail fraud, wire fraud and bank fraud; penalty: 30 years and $1 million fine or twice the gain or loss from the offense
- Roberson, Gonzalez, and Rebaza: charged with conspiracy to traffic in counterfeit goods or services; penalty: 10 years and $2 million fine or twice the gain or loss from the offense
- Roberson: charged with conspiracy to commit fraud and related activity in connection with authentication features; penalty: 20 years and $250,000 fine or twice the gain or loss from the offense
U.S. Attorney Tompkins also thanked Chief Kevin Lovelace and the Rutherfordton, North Carolina Police Department for the department’s vital role in this case. Chief Lovelace stated, “I would like to commend the efforts of all of our officers involved with this case in ensuring that the information they obtained was shared with the appropriate agencies. Communication between law enforcement agencies plays a vital role in resolving many cases.”
The government is represented in the Western District of North Carolina by Assistant U.S. Attorneys Tom O’Malley and Ben Bain-Creed and in the District of New Jersey by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section and Assistant U.S. Attorney Andrew Kogan, both of the office’s Economic Crimes Unit, and Barbara Ward of the office’s Asset Forfeiture and money laundering unit; and in Washington by CCIPs Trial Attorney Evan Williams.
The charges and allegations contained in the various charging instruments are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Wednesday, January 22, 2014
Rogers Businessman Pleads Guilty to Fraud and Money Laundering Charges
FORT SMITH, AR—Conner Eldridge, United States Attorney for the Western District of Arkansas, announced today that James W. Bolt, 60, of Rogers, pleaded guilty to one count of wire fraud, one count of mail fraud, and one count of money laundering. The plea took place before the Honorable Robert T. Dawson in United States District Court for the Western District of Arkansas in Fort Smith.
U.S. Attorney Eldridge stated, “This case involves serious fraud, including forgery and a course of deceitful conduct designed to steal money from others. Today, defendant Bolt has been convicted and held accountable for this criminal conduct. Our office remains committed to pursuing and prosecuting fraud, wherever it manifests itself.”
According to documents filed in the case, in August 2012, the FBI launched an investigation into suspicious activity involving Bolt’s company, Situs Cancer Research Center, located in Rogers, Arkansas. The investigation revealed that Bolt had committed mail and wire fraud by preparing and sending fraudulent documents containing forged signatures and false authentication features to various entities and individual persons in order to persuade them to send him unclaimed property and assets from defunct companies held by the state of California for Community Medical Group of Corona Inc. The Community Medical Group had never authorized any transfer of its property to Situs.
The defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense, and the characteristics of the violations. The sentence will not exceed the statutory maximum, and in most cases will be less than the maximum. In this case, Bolt faces a maximum sentence of 10 years in prison for the fraud charges and a maximum sentence of 10 years in prison for money laundering.
This case is being investigated by the FBI and IRS. Assistant U.S. Attorneys Glen Hines, Kyra Jenner, and Benjamin Wulff are prosecuting the case for the United States.
U.S. Attorney Eldridge stated, “This case involves serious fraud, including forgery and a course of deceitful conduct designed to steal money from others. Today, defendant Bolt has been convicted and held accountable for this criminal conduct. Our office remains committed to pursuing and prosecuting fraud, wherever it manifests itself.”
According to documents filed in the case, in August 2012, the FBI launched an investigation into suspicious activity involving Bolt’s company, Situs Cancer Research Center, located in Rogers, Arkansas. The investigation revealed that Bolt had committed mail and wire fraud by preparing and sending fraudulent documents containing forged signatures and false authentication features to various entities and individual persons in order to persuade them to send him unclaimed property and assets from defunct companies held by the state of California for Community Medical Group of Corona Inc. The Community Medical Group had never authorized any transfer of its property to Situs.
The defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense, and the characteristics of the violations. The sentence will not exceed the statutory maximum, and in most cases will be less than the maximum. In this case, Bolt faces a maximum sentence of 10 years in prison for the fraud charges and a maximum sentence of 10 years in prison for money laundering.
This case is being investigated by the FBI and IRS. Assistant U.S. Attorneys Glen Hines, Kyra Jenner, and Benjamin Wulff are prosecuting the case for the United States.
Monday, January 13, 2014
Former Sacramento-Area Loan Officer Pleads Guilty in Mortgage Fraud Scheme
SACRAMENTO, CA—Alexander A. Romaniolis, 48, of Irvine, pleaded guilty today to mortgage fraud, United States Attorney Benjamin B. Wagner announced. A federal grand jury returned the three-count indictment on March 21, 2013, charging Romaniolis with mail fraud.
According to court documents, Romaniolis recruited five straw buyers to purchase eight California residential properties in Rocklin, Roseville, and San Clemente. Romaniolis assisted the straw buyers in providing false information to lenders about their employment, income, assets, and intent to occupy properties as primary residences. In most cases, the straw buyers claimed to be executives of companies created and controlled by Romaniolis. He was responsible for the origination of more than $5 million in residential mortgage loans in the scheme. All of the properties were foreclosed on, resulting in a total loss of more than $2 million.
This case is the product of an investigation by the Federal Bureau of Investigation and the California Attorney General’s Mortgage Fraud Task Force. The Huntington Beach Police Department assisted in the arrest. Assistant United States Attorney Jean M. Hobler is prosecuting the case.
Romaniolis is scheduled to be sentenced on March 27, 2014. He faces a maximum statutory penalty of 30 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
According to court documents, Romaniolis recruited five straw buyers to purchase eight California residential properties in Rocklin, Roseville, and San Clemente. Romaniolis assisted the straw buyers in providing false information to lenders about their employment, income, assets, and intent to occupy properties as primary residences. In most cases, the straw buyers claimed to be executives of companies created and controlled by Romaniolis. He was responsible for the origination of more than $5 million in residential mortgage loans in the scheme. All of the properties were foreclosed on, resulting in a total loss of more than $2 million.
This case is the product of an investigation by the Federal Bureau of Investigation and the California Attorney General’s Mortgage Fraud Task Force. The Huntington Beach Police Department assisted in the arrest. Assistant United States Attorney Jean M. Hobler is prosecuting the case.
Romaniolis is scheduled to be sentenced on March 27, 2014. He faces a maximum statutory penalty of 30 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Monday, December 16, 2013
Virginia Man Pleads Guilty to Mail Fraud in Scheme That Cost His Employer More Than $100,000
WASHINGTON—James R. Revell, 47, of Springfield, Virginia, pled guilty today to mail fraud for scheming to cheat his employer of more than $100,000, announced U.S. Attorney Ronald C. Machen, Jr.; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Revell pled guilty in the U.S. District Court for the District of Columbia. The Honorable Ketanji Brown Jackson scheduled sentencing for March 5, 2014. The charge carries a statutory maximum of 20 years in prison. Under federal sentencing guidelines, the likely range is a sentence of 12 to 18 months in prison and a fine of up to $30,000.
According to the government’s evidence, Revell carried out a scheme between at least November 2011 and January 2012 to defraud his then-employer, the Advisory Board Company. At the time, Revell was the firm’s director for information technology. Without informing any member of the Advisory Board Company’s staff, he incorporated another company, GTM Tech. This company was set up solely to send software to the Advisory Board Company.
From November 2011 through January 2012, Revell initiated three separate and unnecessary purchase orders on behalf of the Advisory Board Company to GTM Tech that totaled $104,642. None of the programs actually provided any service or benefit.
Revell has since paid $104,642 in restitution to the company.
In announcing the plea, U.S. Attorney Machen, Assistant Director in Charge Parlave, and Chief Lanier commended the work of those who investigated the case from the FBI and MPD. They also acknowledged the efforts of those who worked on the case for the U.S. Attorney’s Office, including Paralegal Specialist Donna Galindo and Assistant U.S. Attorney Phil Selden, who is prosecuting the case.
Revell pled guilty in the U.S. District Court for the District of Columbia. The Honorable Ketanji Brown Jackson scheduled sentencing for March 5, 2014. The charge carries a statutory maximum of 20 years in prison. Under federal sentencing guidelines, the likely range is a sentence of 12 to 18 months in prison and a fine of up to $30,000.
According to the government’s evidence, Revell carried out a scheme between at least November 2011 and January 2012 to defraud his then-employer, the Advisory Board Company. At the time, Revell was the firm’s director for information technology. Without informing any member of the Advisory Board Company’s staff, he incorporated another company, GTM Tech. This company was set up solely to send software to the Advisory Board Company.
From November 2011 through January 2012, Revell initiated three separate and unnecessary purchase orders on behalf of the Advisory Board Company to GTM Tech that totaled $104,642. None of the programs actually provided any service or benefit.
Revell has since paid $104,642 in restitution to the company.
In announcing the plea, U.S. Attorney Machen, Assistant Director in Charge Parlave, and Chief Lanier commended the work of those who investigated the case from the FBI and MPD. They also acknowledged the efforts of those who worked on the case for the U.S. Attorney’s Office, including Paralegal Specialist Donna Galindo and Assistant U.S. Attorney Phil Selden, who is prosecuting the case.
Con Artist Who Craved a Life of Luxury Sentenced in White Plains Federal Court to Six Years in Prison for Operating Long-Term Fraud Scheme
Preet Bharara, the United States Attorney for the Southern District of New York, announced that Alicia Holmes was sentenced today in White Plains federal court by United States District Judge Kenneth M. Karas to six years in prison for defrauding individuals and businesses of hundreds of thousands of dollars in accommodations, goods, services, and money. Holmes pled guilty on March 1, 2013, to one count of wire fraud, one count of mail fraud, and one count of providing a false address in furtherance of fraud before Judge Karas.
Manhattan U.S. Attorney Preet Bharara stated, “Many of us would enjoy some of the finer things in life—a lavish home, luxurious hotel suites—and would work for those goals. Alicia Holmes took a huge shortcut with her fraudulent schemes. With today’s sentence, her next address will far more basic.”
According to the Indictment and documents filed in court proceedings:
Holmes’ scheme spanned from approximately April 2007 through May 2011. To attain a life of luxury, Holmes told scores of lies to real estate brokers, property builders, home owners, hotel managers and staff, and school administrators, among others, including lies about her net worth, about where she lived, and about having access to a vast “overseas trust” within a short period of time. To live in hotels with her husband and two sons, Holmes had the bills paid for by friends who trusted her and by real estate brokers who believed she would soon be purchasing multi-million-dollar homes, which would lead to large commissions for the brokers. Holmes also conned hotel employees into letting her and her family stay at their hotels for months at a time without payments. To keep the scheme going, Holmes impersonated lawyers, bankers, and an FBI agent. Additionally, Holmes instructed victims not to cooperate with federal law enforcement agents who were investigating her scheme.
Mr. Bharara praised the outstanding investigative work of the United States Postal Inspection Service and the Federal Bureau of Investigation.
The case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Ilan Graff and Lee Renzin are in charge of the prosecution.
Manhattan U.S. Attorney Preet Bharara stated, “Many of us would enjoy some of the finer things in life—a lavish home, luxurious hotel suites—and would work for those goals. Alicia Holmes took a huge shortcut with her fraudulent schemes. With today’s sentence, her next address will far more basic.”
According to the Indictment and documents filed in court proceedings:
Holmes’ scheme spanned from approximately April 2007 through May 2011. To attain a life of luxury, Holmes told scores of lies to real estate brokers, property builders, home owners, hotel managers and staff, and school administrators, among others, including lies about her net worth, about where she lived, and about having access to a vast “overseas trust” within a short period of time. To live in hotels with her husband and two sons, Holmes had the bills paid for by friends who trusted her and by real estate brokers who believed she would soon be purchasing multi-million-dollar homes, which would lead to large commissions for the brokers. Holmes also conned hotel employees into letting her and her family stay at their hotels for months at a time without payments. To keep the scheme going, Holmes impersonated lawyers, bankers, and an FBI agent. Additionally, Holmes instructed victims not to cooperate with federal law enforcement agents who were investigating her scheme.
* * *
In addition to the prison term imposed on Holmes, 49, Judge Karas ordered Holmes to forfeit $542,343.51, to pay restitution to her victims in the amount of $894,205.01, and to serve three years of supervised release.Mr. Bharara praised the outstanding investigative work of the United States Postal Inspection Service and the Federal Bureau of Investigation.
The case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Ilan Graff and Lee Renzin are in charge of the prosecution.
Friday, December 6, 2013
New Jersey Man Charged in Fraud on Family Trust
Gregory Fresta, 45, of Cherry Hill, New Jersey, was charged today by indictment with mail fraud in connection with a scheme to defraud a family trust, announced United States Attorney Zane David Memeger. A $1 million testamentary trust was established in a will created by Fresta’s father for the benefit of Fresta’s younger brother, who was a minor at the time of the father’s death. According to the indictment, Fresta used the United States mail in furtherance of the fraud scheme to send multiple requests for funds from the trust under the guise that the funds were going to be used for the benefit of the trust beneficiary. Upon receiving the money, the defendant used the funds for his own personal use.
If convicted, Fresta faces a maximum possible sentence of 280 years of imprisonment, a fine of $3.5 million, a special assessment of $1,400, and three years of supervised release.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Floyd J. Miller.
An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
If convicted, Fresta faces a maximum possible sentence of 280 years of imprisonment, a fine of $3.5 million, a special assessment of $1,400, and three years of supervised release.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Floyd J. Miller.
An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Friday, November 22, 2013
San Antonio Businessman Pleads Guilty to Role in $133 Million Real Dollar Loss Fraud and Tax Case
In San Antonio this morning, 61-year-old businessman Charles Pircher pleaded guilty to his role in what is believed to be the largest real dollar loss fraud and tax related case ever prosecuted in the Western District of Texas, announced United States Attorney Robert Pitman, FBI Special Agent in Charge Armando Fernandez and IRS-Criminal Investigation Special Agent in Charge Steve McCullough.
“This was a wide ranging and complex scheme, whose simple purpose was to steal money from company payroll by diverting tax and insurance payments all for personal enrichment. Pircher cheated clients and the taxpayers for years,” stated United States Attorney Robert Pitman.
Appearing before United States Chief District Judge Fred Biery, Pircher pleaded guilty to a Klein tax fraud conspiracy charge and a mail fraud conspiracy charge. According to the factual basis filed in this case, from 2002 to 2008, Pircher managed a series of professional employer organizations (PEOs) based in San Antonio, including Service Professionals, which entered into staff leasing agreements with various client companies to manage their payroll and insurance programs. By pleading guilty, Pircher admitted that he and other co-conspirators stole more than $133 million directly from their client companies’ programs.
Pircher faces up to 20 years in federal prison on the mail fraud conspiracy charge and up to five years in federal prison on the Kline tax fraud conspiracy charge. Sentencing has yet to be scheduled.
This investigation, conducted by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation, has resulted in guilty pleas by five defendants—Pircher; John D. Walker, II; John Bean; Mike Solis; and Pat Mire. A sixth defendant, San Antonio businessman Larry W. Kimes, is scheduled for jury selection and trial on January 23, 2014. Kimes is charged by federal grand jury indictment with one count of Klein tax fraud conspiracy, two counts of mail fraud conspiracy, one count of money laundering conspiracy, and one substantive count of money laundering.
Assistant United States Attorney Thomas J. McHugh is prosecuting this case on behalf of the government.
“This was a wide ranging and complex scheme, whose simple purpose was to steal money from company payroll by diverting tax and insurance payments all for personal enrichment. Pircher cheated clients and the taxpayers for years,” stated United States Attorney Robert Pitman.
Appearing before United States Chief District Judge Fred Biery, Pircher pleaded guilty to a Klein tax fraud conspiracy charge and a mail fraud conspiracy charge. According to the factual basis filed in this case, from 2002 to 2008, Pircher managed a series of professional employer organizations (PEOs) based in San Antonio, including Service Professionals, which entered into staff leasing agreements with various client companies to manage their payroll and insurance programs. By pleading guilty, Pircher admitted that he and other co-conspirators stole more than $133 million directly from their client companies’ programs.
Pircher faces up to 20 years in federal prison on the mail fraud conspiracy charge and up to five years in federal prison on the Kline tax fraud conspiracy charge. Sentencing has yet to be scheduled.
This investigation, conducted by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation, has resulted in guilty pleas by five defendants—Pircher; John D. Walker, II; John Bean; Mike Solis; and Pat Mire. A sixth defendant, San Antonio businessman Larry W. Kimes, is scheduled for jury selection and trial on January 23, 2014. Kimes is charged by federal grand jury indictment with one count of Klein tax fraud conspiracy, two counts of mail fraud conspiracy, one count of money laundering conspiracy, and one substantive count of money laundering.
Assistant United States Attorney Thomas J. McHugh is prosecuting this case on behalf of the government.
Subscribe to:
Posts (Atom)