Yearly Archives: 2018

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Investment Fraud: Edward I. Campbell Sentenced For Charges Related to a $1.4 Million Investment Fraud Scheme

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Reynoldsburg Man Sentenced for Defrauding 44 Clients out of More Than $1.4 million

Defendant pretended to be former Navy SEAL

COLUMBUS, Ohio – Edward I. Campbell, 41, of Reynoldsburg, Ohio, was sentenced in U.S. District Court today to 60 months in prison for charges related to a $1.4 million investment fraud scheme that defrauded at least 44 individuals.

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, and Ryan L. Korner, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation announced the sentence handed down today by U.S. District Judge Michael H. Watson.

According to court documents, between July 2011 and June 2013, Campbell operated an investment business known as Rosewood Consulting LLC in Baltimore, Ohio. Campbell told victims their contributions would be invested through Rosewood Consulting into two types of investment programs: historical bonds issued by China and the exchange of Bougainville Kina – illegal currency from the autonomous region of Bougainville, Papua New Guinea – into U.S. dollars.

Campbell represented that he had access to a trading platform in which he could monetize gold-backed bonds issued by China in 1913 for a very high return. Campbell offered to sell the historical bonds to investors for $10,000 to $15,000 each for a promised return on investment of anywhere from $50,000 to upwards of possibly $10 million per bond within 10 to 60 days.

Campbell also offered to exchange the Bougainville Kina, which he allegedly possessed, into U.S. dollars if the investors hired him for a $100,000 fee. The investors were supposed to receive a return of $1.5 million or more within 10 to 120 days.

Campbell told investors that their investments were refundable if the returns were not paid within the provided timeframes. In addition, he told investors that he had prior success with these investment programs, was a former Navy SEAL, once worked in an investment house, had traveled internationally closing deals and he had nearly 600 investors.

The investigation revealed that none of the investors received the returns on their investments that Campbell had promised. Only a few of the 44 investors have been refunded the money they paid for his services and those refunds were paid for with other investors’ funds.

Campbell usually depleted the funds he received from investors shortly after receiving them, by using the funds for personal expenses, including the purchase of two automobiles and expenses at hotels and restaurants.

To appease investors regarding delays in paying them the returns on their investments, Campbell represented that their money was being held up by various United States agencies and or catastrophes to his family or other individuals who were important for these deals to be completed.

For example, Campbell told investors his niece was a student and had been shot at Sandy Hook Elementary School, but later changed his story when the names of the school-shooting victims were released to the public. He also fabricated that his attorney’s daughter had been in a motorcycle accident.

Campbell pleaded guilty on September 21, 2017 to charges of money laundering and wire fraud. As part of his plea agreement, Campbell agreed to pay $1,408,854 in restitution.

“Campbell blatantly and repeatedly lied to and violated the trust placed in him by the individuals who invested with him,” U.S. Attorney Glassman said. “Besides falsely representing experience and expertise, he told contemptable lies about a tragic incident.”

“When you knowingly mix deceit and trickery into the financial well-being of individuals, you create a recipe for devastation that could last a lifetime,” said Ryan L. Korner, Special Agent in Charge, IRS, Criminal Investigation, Cincinnati Field Office. “Today’s sentencing demonstrates how federal law enforcement will band together to help put an end to the criminal behavior of those who prey on investors for their personal financial gain. IRS Criminal investigators will continue to use their financial expertise to identify and trace laundered funds in these types of investor fraud schemes.”

U.S. Attorney Glassman commended the investigation of this case by the FBI and IRS, as well as Assistant United States Attorney Jessica H. Kim, who represented the United States in this case.

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Loans

How to Avoid Personal Loan Scams

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Financial scams are only increasing in the United States. All manners of financial scams exist and one of the more insidious scams out there are those dealing with personal loans.

Personal loans are unsecured loans from a lender which can be used for various types of consumer expenses, but most known for debt consolidation. Because they don’t have any collateral, they can sometimes come with higher interest rates than a secured loan.

They’re often marketed to those who lack collateral, or who have less than perfect credit—and borrowers who can’t get traditional loans based on creditworthiness or collateral are often easily victimized by personal loan scams.

Types of Scams

There are several different types of personal loan scams, and it’s important to understand them so you can better recognize them to remain financially secure.

Upfront Fee/Loan Collateral Scam

If you’re trying to get a personal loan and you’ve been turned down by other banks, sometimes it’s tempting to see an offer from a lender that says they’ll lend you the money you need—if you pay a fee or “collateral” in the form of a wire transfer from your bank account or transaction from your debit card.

The scammer might tell you that they won’t use the money; they just want to make sure you have money set aside and can make payments on the loan.  In reality, they’re going to take that money from you and disappear, never to be heard from again.

No Credit Check Loan Scams

You’ll often see ads or signs for personal loans announcing that they don’t do credit checks. If you have less than perfect credit, this can sometimes sound like a chance at obtaining a loan. They may claim that there is a special, proprietary software or technology allowing them to estimate how much money you’re able to be approved for just by having you answer other questions or even filling out a survey.

Not only do you not actually get approved for a loan—usually after you’ve paid fees—but chances are you’ve given them some of your personal information, which they can use to scam you further or even steal your identity.

Email Scams

We’ve all seen the “Nigerian Prince” scam in which someone emails you to tell you they’re a prince or a dying old woman and they want to leave you all of their money, if you will only pay the wire transfer fees. The new email scams are a bit less preposterous, but just as dangerous.

Now, you may get emails that appear to be from a well-known lender, such as LendingTree, or even from a company like PayPal. They announce that you’ve qualified for a new loan product they’re about to start offering, specifically for people like you. All you need to do is click the link to apply.

There’s just one problem—they’re either about to steal all of your personal information, or they’re about to install malicious software on your computer. If you use your device to log into your bank, sometimes they can steal the password for your accounts.

How to Tell a Scam from a Legitimate Offer

While there are far too many different scams to cover completely here, there are a few ways you can tell the scammers from the legitimate offers.

  1. Look for grammar and spelling errors. These are clues that someone outside the U.S. is trying to scam you.
  2. Look up the bank’s information independently and see if there are complaints against them. Pay special attention to whether they’re even licensed to do business in your state.
  3. Contact them without using information from the letter or email and see if they have a record of sending you an offer.
  4. Find out if they have a physical address. Scammers usually don’t.
  5. Don’t ever follow up on emails or mailings you receive about personal loans unless they’re from a bank you recognize, and you can personally talk to one of their representatives.

You don’t have to be a victim. Learn the signs of a scam, and protect yourself.

 

Andy Kearns is a Content Analyst for LendEDU and works to produce personal finance content to help educate consumers across the globe.  When he’s not writing, you can find Andy cheering on the sub-par Lakers, or somewhere on a beach.

Fraud News From World

Financial Fraud: Clifford Keith Gwinn Pled Guilty To Embezzling From The Teays Valley Volunteer Fire Department

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Former Cabinet Secretary Pleads Guilty to Embezzling Fire Department Funds

He stole over $178,790 between 2013 and 2016 from Teays Valley Fire Department

In Separate Embezzlement Scheme Wife Embezzles over $75,000 from the Same Fire Department

HUNTINGTON, W.Va. – A Hurricane man and former West Virginia Cabinet Secretary pled guilty today to embezzling $178,790 from the Teays Valley Volunteer Fire Department, as well as to a related tax crime, announced United States Attorney Mike Stuart. Clifford Keith Gwinn, 64, formerly the Cabinet Secretary of the West Virginia Department of Veterans Assistance, faces up to 15 years in prison, a $500,000 fine, 3 years of supervised release and a $200 special assessment when he is sentenced on September 17, 2018. He has agreed to pay restitution to the Fire Department in the amount of $178,790 and to the Internal Revenue Service in the amount of $68,281. U.S. Attorney Stuart commended the investigative efforts of the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, the Office of Inspector General for the U.S. Department of Homeland Security, and the West Virginia Commission on Special Investigations.

“Egregious criminal conduct,” said United States Attorney Mike Stuart. “To steal from our first responders, those that save our lives and protect our homes, for personal greed is beyond comprehension. It’s disappointing to say the least that a former public official serving at the highest levels of West Virginia state government would steal from first responders, the very folks who would run into danger to save him. It’s tragic. My team stands ready to aggressively prosecute elected officials who violate the basic public trust of honest service.”

Gwinn admitted that as Vice President and fiscal officer of the Fire Department, he was in charge of the financial affairs of the Fire Department and exercised significant control over the Fire Department’s finances. He admitted that his duties included reporting income and expenditures to the Fire Department, preparing and submitting taxes for the Fire Department, and assisting with applications and reimbursements for federal grants, among other duties. He further admitted that he, without authorization from the Fire Department, opened a Fire Department bank account where only he had signature authority, transferred funds into that account without the knowledge or authorization from the Fire Department, ensured certain health care insurance company reimbursements were deposited into that account, and wrote himself checks and checks to cash out of that account, which he then typically cashed. He admitted that he further instructed the Fire Department’s Treasurer to write him checks from other Fire Department bank accounts and further misrepresented the amount of bank account balances to the Fire Department officers and board members. He also admitted that he structured withdrawals out of the Fire Department’s accounts in series of transactions below $10,000, to prevent the banks from filing Currency Transaction Reports. While he admitted that he systematically deposited cash into Fire Department bank accounts, his overall withdrawals and payments received significantly overwhelmed the amount of any deposits. He also admitted that he had no authorization to write himself checks or receive and cash checks from the Fire Department, and was not entitled to any compensation.

During the period from 2013 through 2016 that Gwinn embezzled $178,790 in Fire Department funds, the Teays Valley Volunteer Fire Department received grants from the Federal Emergency Management Agency (FEMA), an agency of the United States Department of Homeland Security. These grants allowed the Fire Department to pay firefighters and to purchase and maintain equipment.

Furthermore, Gwinn admitted that that while he was Vice President and fiscal officer for the Fire Department, the Fire Department withheld taxes from its employee’s paychecks, including federal income taxes, Medicare, and social security taxes, together known as payroll taxes. He admitted that he knew that he had the corporate responsibility to collect, truthfully account for, and pay over the Fire Department’s payroll taxes. Gwinn admitted that from October 31, 2015 through April 30, 2017, while Gwinn was a responsible person for payroll taxes, Fire Department failed to account for and pay over approximately $61,421.31 in payroll taxes.

Gwinn further admitted that when he filed his personal income tax returns with the IRS, those returns were false because they failed to account for the funds he had embezzled from the Fire Department.

In a related prosecution, but separate embezzlement scheme, Gwinn’s wife, Kathy Sue Gwinn, 52, was sentenced yesterday for embezzling over $75,000 from the Teays Valley Volunteer Fire Department. Kathy Gwinn was ordered to jail for a weekend a month for five months, ten months home confinement, and 3 years supervised release, plus probation.

Gwinn formerly served as the Treasurer of the Teays Valley Volunteer Fire Department. As Treasurer, she generated payroll checks for firefighters and signed the payroll checks on a Fire Department bank account. Gwinn volunteered for the Fire Department, and had no authority to write herself checks, nor was she entitled to wages, salary, or compensation for her role as Treasurer. Beginning in October 2014, and continuing through March 2017, she printed and wrote herself unauthorized checks from the Fire Department’s payroll account, noting on the memo line of the checks that the checks were for payroll, overtime, or tax preparation. Gwinn moved money from one fire department bank account into the bank account primarily used for payroll, and when she transferred those funds, she inflated the amount of the transfer to include enough to cover the unauthorized checks she planned to write to herself. Over the course of her scheme, she embezzled $75,356.70. Gwinn was ordered to pay this amount in restitution.

During the period Gwinn embezzled funds, the Teays Valley Volunteer Fire Department received grants from FEMA, an agency of the United States Department of Homeland Security. These grants allowed the fire department to pay firefighters and to purchase and maintain equipment.

Assistant United States Attorney Meredith George Thomas was in charge of the prosecutions. United States District Judge Robert C. Chambers presided over the hearings.

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Financial Fraud: LUIS DIAZ JR. and LUIS JAVIER DIAZ Sentenced For Their Roles In Funneling $100 Million Through The U.S. Financial System

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Owners Of Miami Export Business Sentenced For $100 Million Unlicensed Money Transmitting And International Money Laundering Scheme

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that LUIS DIAZ JR. and LUIS JAVIER DIAZ were sentenced to eight months and four months in prison, respectively, for their roles in funneling more than $100 million through the U.S. financial system on behalf of various foreign businesses based predominantly in Venezuela. They did so through their Miami-based import/export company, which, for nearly five years, the defendants also used to operate an unlicensed money transmitting business. LUIS DIAZ JR. and LUIS JAVIER DIAZ were convicted of operating an unlicensed money transmitting business and international money laundering following a jury trial in November 2017 before U.S. District Judge William H. Pauley III, who also imposed today’s sentences.

U.S. Attorney Geoffrey S. Berman said: “This father-and-son duo used their small for a large-scale illegal money transmission and money laundering operation. By skirting the anti-money laundering safeguards required of licensed institutions, the defendants moved more than $100 million through U.S. financial institutions. Today’s sentence is a sign of the seriousness of these crimes and our Office’s commitment to prosecute them.”

According to the Indictment, other filings in Manhattan federal court, and the evidence presented at trial:

Between 2010 and 2016, LUIS DIAZ, JR., and LUIS JAVIER DIAZ used Miami Equipment and Export Company (the “Company”), a company they owned in Doral, Florida, to effect the transmission of at least $100 million on behalf of entities outside the United States, mostly located in Venezuela, to bank accounts in the United States and elsewhere, in exchange for a fee. During this time, the Company was not registered with the State of Florida or the Financial Crimes Enforcement Network (FinCEN), a component of the United States Department of the Treasury, as required by both state and federal laws applicable to money transmitting businesses.

Using unlicensed money transmitting businesses like the Company enables entities and individuals to move money into and through the U.S. financial system while avoiding licensed U.S. financial institutions that monitor for suspicious activity and report it to U.S. authorities, including through suspicious activity reports, or SARs. Instead, by going through unlicensed entities like the Company, foreign businesses ensure that suspicious patterns of transmissions will not be detected and reported as potential money laundering activity or other financial crime.

Through their unlicensed money transmitting business, LUIS DIAZ JR. and LUIS JAVIER DIAZ enabled a number of foreign businesses to move money into and around the United States. For instance, the defendants used the Company to transmit over $100 million into the United States on behalf of KCT, a large Venezuelan consortium of construction companies, and other entities located in Central and South America. After they received these funds from KCT or other companies, the defendants received instructions concerning where to send the money as well as fake invoices and contracts purporting to set forth a valid business reason for these payments. The fake invoices and contracts made the payments appear connected to legitimate business services being provided to the Company, such as consulting or engineering services. In this manner, the defendants sent money on behalf of KCT and other companies to U.S. and foreign bank accounts of shell companies located around the world, Venezuelan government officials, KCT employees in Venezuela, and others who had no relationship with the defendants or the Company. For all of these transmitting activities, the Company received over $1 million in fees.

In addition to the prison terms, LUIS DIAZ JR., 76, and LUIS JAVIER DIAZ, 51, both of Miami, Florida, were sentenced to two years of supervised release. The amount of forfeiture will be determined at a later date.

Mr. Berman praised the outstanding investigative work of HSI, DEA, the Englewood, New Jersey, Police Department, and the Border Enforcement Security Task Force.

The case is being prosecuted by the Office’s Money Laundering and Asset Forfeiture Unit. Assistant U.S. Attorneys Edward B. Diskant, Daniel M. Tracer, and Benet J. Kearney are in charge of the prosecution.

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Health Care Fraud: Ronald Grusd And His Corporations Sentenced For Fraudulently Bill Insurance Companies Over $22 Million For Medical Services

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Beverly Hills Doctor Sentenced to 10 Years in Custody for Massive Workers’ Comp Scheme

SAN DIEGO – Beverly Hills Radiologist Ronald Grusd and two of his corporations, California Imaging Network Medical Group and Willows Consulting Company, were sentenced in federal court today after a jury trial in December resulted in convictions on 39 felony fraud counts.

U.S. District Judge Cynthia A. Bashant imposed a sentenced of 10 years in custody and a fine of $250,000, and remanded Dr. Grusd into custody. His companies, California Imaging Network and Willows Consulting Company, were each required to pay a $500,000 fine, and an additional $15,600 in special assessments.

According to evidence presented at trial, Dr. Grusd and his companies paid kickbacks for patient referrals from multiple clinics in San Diego and Imperial counties in order to fraudulently bill insurance companies over $22 million for medical services.

Dr. Grusd negotiated with various individuals, including a primary treating physician, the payment of kickbacks for the referral of workers’ compensation patients for various medical services, including MRIs, ultrasounds, Shockwave treatments, toxicology testing and prescription pain medications. After the patients were referred for the treatment or service, one of Dr. Grusd’s companies, California Imaging Network Medical Group, would fraudulently bill insurance companies for the procedures, concealing from both the patients and the insurers that substantial kickbacks had been paid in violation of California law. Another of Dr. Grusd’s companies, Willows Consulting Company, funneled the kickback payments to those directing the referral of the patients from the various clinics. Records presented at trial showed that Dr. Grusd paid over $100,000 in bribes to secure the billings for hundreds of patients, with bribes paid on a per-patient or per-body-part formula.

Dr. Grusd and the corporations were originally indicted by a federal grand jury in November 2015, when the U.S. Attorney’s Office and the San Diego District Attorney’s Office, working in conjunction with the Federal Bureau of Investigation and the California Department of Insurance, announced multiple arrests arising from a long-term, proactive health care fraud investigation targeting corruption and fraud in the California Workers’ Compensation system.

Grusd’s practice, California Imaging Network Medical Group, operated clinics throughout California in San Diego, Los Angeles, Beverly Hills, Fresno, Rialto, Santa Ana, Studio City, Bakersfield, Calexico, East Los Angeles, Lancaster, Victorville and Visalia.

In imposing sentence, District Judge Bashant expressed concern that by paying incentives, Dr. Grusd applied pressure on the referring physician, and “made it highly questionable if all services were necessary,” a harm that the laws were designed to prevent.

Judge Bashant found that Dr. Grusd “clearly knew what he was doing.” Dr. Grusd, who had testified as to his extensive education, training, and expertise as a highly-decorated radiologist, claimed on the witness stand at trial that he was confused and did not know that what he was doing was illegal. Judge Bashant rejected this view, stating that Dr. Grusd was someone who decided to “find a way to defraud…then act dumb on the witness stand” when he got caught. She imposed a sentencing penalty for Obstruction of Justice, finding that Grusd unequivocally committed perjury and lied at trial. The judge said she was concerned about the need for both general and specific deterrence: general, because health care fraud is an area where criminals are rarely caught, requiring a significant consequence in order to deter other would-be criminals. In this case, specific deterrence was also applicable, because, in her view, there was a risk that Dr. Grusd could engage in further unlawful conduct in the future. “Dr. Grusd,” she noted, was someone who would “act smart enough to pull the wool over everyone’s eyes.”

“A patient entrusts his life to his physician,” said U.S. Attorney Adam Braverman. “A doctor’s medical decisions should be based on the best interest of the patient, not the highest bidder. The court recognized that Dr. Grusd perverted that sacred relationship by buying and selling patients – oftentimes on a per-body-part basis – to fuel his personal lifestyle.”

U.S. Attorney Braverman commended the efforts of the Federal Bureau of Investigation and the California Department of Insurance to investigate these offenses, and thanked San Diego District Attorney Summer Stephan and her office for collaborating with the United States Attorney’s Office on this investigation.

San Diego FBI Special Agent-In-Charge John A. Brown applauded today’s sentence as indicative of how the insidious malignancy embodied by the payment of illegal bribes to and from medical providers seriously degrades the patient-physician relationship and places patients at risk. “Operation Backlash exemplifies the positive impact the Federal Bureau of Investigation, working side by side with our investigative partners, the California Department of Insurance, and the San Diego District Attorney’s Office, can have against those medical service providers who so easily replace honest patient care with greed. The FBI will continue to leverage these partnerships to expose these schemes and hold physicians and allied medical professionals accountable.”

Anyone with information about healthcare fraud may call the FBI at 1-800-CALL-FBI, or 1-800-225-5324 or the California Department of Insurance’s toll-free fraud hotline, 800-927-4357.

DEFENDANTS Case Number: 15cr2821-BAS

Ronald Grusd                                                      Los Angeles, CA

California Imaging Network Medical Group     Incorporated in 2007

Willows Consulting Company                            Incorporated in 2011

SUMMARY OF CHARGES

Conspiracy to Commit Honest Services Mail Fraud, Mail Fraud, Wire Fraud, and Health Care Fraud, in violation 18 U.S.C. 1349

Maximum Penalty: 20 years in custody; $250,000 fine, or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture

Honest Services Mail and Wire Fraud, in violation of 18 U.S.C. Secs. 1341, 1343 and 1346 (18 Counts)

Maximum Penalty (each count): 20 years in custody; $250,000 fine or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture

Health Care Fraud, in violation of 18 U.S.C. 1347, (14 Counts)

Maximum Penalty (each count): 20 years in custody; $250,000 fine or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture

Travel Act, in violation of U.S.C. 1952 (6 Counts)

Maximum Penalty: Five years in custody; $250,000 fine or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture

INVESTIGATING AGENCIES

Federal Bureau of Investigation

San Diego County District Attorney’s Office

California Department of Insurance

 

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Financial Fraud: Antonio Cooper Sentenced For Involvement In a Scheme To Fraudulently Obtain Millions Of Dollars in Income Tax Refunds

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Maryland Man Sentenced to Seven Years in Prison for Role in Scheme That Used Stolen Identities to Fraudulently Seek Tax Refunds

Wide-Ranging Operation Filed Over 12,000 Fraudulent Tax Returns Seeking More Than $42 Million

WASHINGTON – A Maryland man was sentenced today to seven years in prison for his involvement in a scheme to fraudulently obtain millions of dollars in income tax refunds.

The announcement was made by Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division; U.S. Attorney Jessie K. Liu for the District of Columbia; Acting Special Agent in Charge Kelly R. Jackson of the Internal Revenue Service Criminal Investigation (IRS-CI) Washington D.C. Field Office; Acting Inspector in Charge Eric Shen of the U.S. Postal Inspection Service, Washington Division and Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of the Treasury.

Antonio Cooper, 47, of Oxon Hill, Md., pled guilty in May 2016 to charges of conspiracy to commit theft of government funds, theft of public money, and aggravated identity theft.

Cooper was part of a massive sophisticated stolen identity refund fraud scheme that involved a network of more than 130 people, many of whom were receiving public assistance. Conspirators fraudulently claimed refunds for tax years 2005 through 2012, often in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners. Returns were also filed in the names of, and refunds were issued to, willing participants in the scheme. The returns filed listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia. According to court documents, the overall case involved the filing of at least 12,000 fraudulent federal income tax returns that sought at least $42 million in refunds.

Conspirators played various roles in the scheme: stealing identifying information; allowing their personal identifying information to be used; creating and mailing fraudulent federal tax returns; allowing their addresses to be used for receipt of the refund checks; cashing the refund checks; providing bank accounts into which the refund checks were deposited and forging endorsements of identity theft victims on the refund checks. The false returns typically reported inflated or fictitious income from a sole proprietorship and claimed phony dependents to generate an Earned Income Tax Credit, a refundable federal income tax credit for working families with low to moderate incomes. To date, approximately two dozen participants in this scheme have pleaded guilty, and three have been convicted by a trial jury.

According to the government’s evidence, Cooper actively participated in the scheme from approximately February 2010 through July 2012. He also recruited others to do so. As he admitted in Court, Cooper played an integral part in the overall conspiracy; he, his friends, and his family members defrauded the IRS out of more than $2 million through the receipt of fraudulently obtained income tax refund checks. Among other things, Cooper used others’ addresses to receive checks, bought personal identifying information needed to complete tax forms, and cashed some of the fraudulently-obtained tax refund checks.

In addition to the term of prison imposed, U.S. District Judge Rosemary M. Collyer ordered Cooper to serve three years of supervised release and to pay $2,420,241 in restitution to the IRS. She also ordered a forfeiture money judgment $806,747.

Principal Deputy Assistant Attorney General Zuckerman, U.S. Attorney Liu, Acting Special Agent in Charge Jackson, Acting Inspector in Charge Shen and Assistant Inspector General Phillips commended the special agents who conducted the investigation and acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office of the District of Columbia, including former Assistant U.S. Attorney Sherri L. Schornstein; Assistant U.S. Attorney Chrisellen Kolb; Paralegal Specialists Aisha Keys and Donna Galindo; former Paralegal Specialists Jessica Mundi and Julie Dailey; Litigation Technology Specialist Ron Royal; Investigative Analysts William Hamann and Zachary McMenamin, and Victim/Witness Advocate Tonya Jones. They also expressed appreciation for the work of Trial Attorneys Jeffrey B. Bender, Thomas F. Koelbl, and Jessica Moran of the Tax Division, who worked on the case.

Finally, they commended the work of Assistant U.S. Attorneys Ellen Chubin Epstein and Michelle Bradford of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorney Kimberly G. Ang of the Tax Division, who prosecuted the case, as well as Assistant U.S. Attorney Diane Lucas, who assisted with forfeiture issues.

Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.

Fraud News From World

Financial Fraud: Mark R. Wogsland and Bret S. Naggs Charged in Alleged Participation in a Complex Accounting And Securities Fraud Scheme

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Two former executives of Roadrunner Transportation Systems Inc., a publicly traded transportation and trucking company formerly headquartered in Cudahy, Wisconsin, were charged in an indictment unsealed today for their alleged participation in a complex accounting and securities fraud scheme that resulted in a loss of more than $245 million in shareholder value.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Matthew D. Krueger of the Eastern District of Wisconsin, Regional Special Agent in Charge Thomas J. Ullom of the U.S. Department of Transportation Office of Inspector General (DOT-OIG) and Special Agent in Charge R. Justin Tolomeo of the FBI’s Milwaukee Field Office made the announcement.

Mark R. Wogsland, 53, and Bret S. Naggs, 52, both of Cedarburg, Wisconsin, were charged in an indictment filed in the Eastern District of Wisconsin with one count of conspiracy to make false statements to a public company’s accountants and to falsify a public company’s books, records and accounts; one count of conspiracy to commit securities fraud and wire fraud; three counts of securities fraud; and four counts of wire fraud. Naggs, the former controller for Roadrunner’s Truckload operating segment, and Wogsland, the former controller and director of accounting for Roadrunner’s Truckload operating segment, both worked out of Roadrunner’s corporate headquarters in Cudahy. Roadrunner Transportation Systems Inc. is currently headquartered in Downers Grove, Illinois.

“According to the allegations in the indictment, Mark Wogsland and Bret Naggs engaged in a massive securities and accounting fraud scheme that misled shareholders, regulators, and the investing public, and ultimately caused a loss of more than $245 million in shareholder value,” said Acting Assistant Attorney General Cronan. “The Criminal Division is committed to protecting investors and the integrity of U.S. securities exchanges, and we will vigorously pursue corporate executives who engage in deceptive and fraudulent accounting practices.”

“The stability our financial markets depends upon public companies issuing accurate financial statements,” said U.S. Attorney Matthew D. Krueger. “We commend the FBI and the Department of Transportation Office of Inspector General for its excellent efforts in investigating this case.”

“Working with our law enforcement and prosecutorial partners, the U.S. Department of Transportation Office of Inspector General is committed to preventing and detecting corporate fraud and corruption schemes within transportation-related companies intent on providing false or misleading information to the federal government,” said DOT-OIG Regional Special Agent Ullom. “Today’s indictment helps reinforce the message that executives involved in all modes of transportation must uphold the public’s trust and maintain the highest levels of integrity.”

“Corporate fraud remains a high priority for the FBI,” said Special Agent in Charge Tolomeo. “Perpetrators who mislead investors and manipulate financial data to falsely inflate business performance will face justice for their crimes.”

“This indictment makes it clear that the FBI, its fellow field offices, and federal partners are committed to working together to hold those accountable who would attempt to manipulate the market,” said J.C. Hacker, Acting Special Agent in Charge of FBI Atlanta. “This alleged fraud caused significant harm to Roadrunner and its shareholders for personal profit.”

The indictment alleges that between 2014 and 2017, Naggs, Wogsland and their co-conspirators carried out a complex scheme to mislead Roadrunner’s shareholders, independent auditors, regulators and the investing public about Roadrunner’s true financial condition. According to the indictment, beginning in 2014, Naggs, Wogsland and their co-conspirators identified at least $7 million in overstated accounts on the balance sheet of one of Roadrunner’s largest operating companies, Roadrunner Intermodal Services Inc. (RRIS), which included old, uncollectable customer debts with static balances; understated and increasing liabilities for historic debt owed by terminated drivers; and overstated accounts for licenses and other “prepaid assets” that no longer had any actual value. Instead of addressing the misstated accounts by writing them off, the indictment alleges, Naggs, Wogsland and their co-conspirators purposefully left the vast majority of the misstated accounts on Roadrunner’s books in order to fraudulently boost Roadrunner’s financial performance and mislead Roadrunner’s shareholders, independent auditors, regulators and the investing public about Roadrunner’s true financial condition.

According to the indictment, by late 2014, Naggs, Wogsland and their co-conspirators developed a plan to write off a portion of the misstated accounts. However, instead of immediately writing off the full amount, Naggs, Wogsland and their co-conspirators directed RRIS finance employees to adjust the balance sheet by a small amount each month, in order to conceal from Roadrunner’s shareholders, independent auditors, regulators and the investing public the true nature and extent of the misstated accounts. However, after learning that Roadrunner’s performance at other operating companies had deteriorated, the indictment alleges, Naggs, Wogsland and their co-conspirators abandoned the plan and, in some cases, reversed write-offs that had already been booked. The indictment further alleges that beginning in May 2015, Naggs and other Roadrunner employees received monthly financial reports from RRIS, which included profit and loss figures both with and without the planned monthly write-off.

The indictment alleges that as a result of the scheme, nearly all of the misstated accounts remained on RRIS’s balance sheet from 2014 until early 2017, when Roadrunner announced for the first time that it would be restating its previously reported financial results. Three trading days following the announcement, the price of Roadrunner’s shares dropped from $11.74 to $7.54 per share, causing a loss in shareholder value of more than $160 million. In early 2018, Roadrunner issued restated financial results for 2014 through the third quarter of 2016, acknowledging that it had identified material accounting errors resulting from material weaknesses and management override of internal controls. Three trading days after announcing the restated financial results, Roadrunner’s share price further dropped from $7.14 to $4.90, causing an additional loss in shareholder value of more than $85 million.

An indictment is merely an allegation and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The Department of Transportation Office of Inspector General’s Chicago Office and the FBI’s Milwaukee and Atlanta Field Offices are investigating the case. Assistant Chief Henry Van Dyck and Trial Attorneys Caitlin Cottingham and David Stier of the Criminal Division’s Fraud Section are prosecuting the case, with assistance from the U.S Attorney’s Office for the Eastern District of Wisconsin. The Securities and Exchange Commission also provided assistance in this matter.

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Cyber Crime: ROGER THOMAS CLARK Extradited For His Key Figure in the Development of Silk Road and Advised Ross Ulbricht

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Manhattan U.S. Attorney Announces Extradition Of Senior Adviser To The Operator Of The “Silk Road” Website

Roger Thomas Clark Was a Key Figure in the Development of Silk Road and Advised Ross Ulbricht on All Aspects of the Criminal Enterprise

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, James D. Robnett, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Angel M. Melendez, Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), announced today the unsealing of an Indictment charging ROGER THOMAS CLARK, who was a senior adviser to Ross Ulbricht, a/k/a “Dread Pirate Roberts,” a/k/a “DPR,” the owner and operator of the “Silk Road” online illicit black market that operated from January 2011 until October 2, 2013. During its operation, Silk Road was used by thousands of drug dealers and other unlawful vendors to distribute illegal drugs and other illicit goods and services to over a hundred thousand buyers, and to launder hundreds of millions of dollars derived from those unlawful transactions. CLARK was a close confidante of Ulbricht’s who advised him on all aspects of Silk Road’s operations, and who hired and managed a staff of computer programmers who helped develop Silk Road’s technical infrastructure. CLARK was arrested in Thailand on December 3, 2015, and was extradited to the United States today. CLARK is expected to be presented this afternoon before U.S. Magistrate Judge Gabriel W. Gorenstein. CLARK’s case is assigned to U.S. District Judge William H. Pauley III.

Manhattan U.S. Attorney Geoffrey S. Berman said: “Silk Road was a secret online marketplace for illegal drugs, hacking services, and a whole host of other criminal activity. Roger Thomas Clark allegedly served as a trusted confidante to Silk Road founder and operator Ross Ulbricht, advising him on all aspects of this illegal business, including how to maximize profits and use threats of violence to thwart law enforcement. Thanks to the investigative work of our fellow law enforcement agencies and our international partners, Clark now faces justice in an American court.”

IRS-CI Special Agent-in-Charge James D. Robnett said: “The unsealed indictment again shows that the supposed anonymity of the dark web is not a protective shield from prosecution. Working with our law enforcement partners, IRS-CI used its unique financial and cyber expertise to help shine a bright light on a shadowy black marketplace, and we intend to continue pursuing these kinds of criminals no matter where they hide.”

FBI Assistant Director William F. Sweeney Jr. said: “Whether on the streets or on the Internet, the illegality of selling unlawful goods remains unchanged. Under the operation of Ross Ulbricht, the Silk Road was a criminal hub for illicit goods and services. As Ulbricht’s right-hand man, Roger Clark allegedly advised him of methods to thwart law enforcement during the operation of this illegal ploy, pocketing hundreds of thousands of dollars in the process. Today’s extradition of Roger Clark shows that despite alleged attempts to operate under the radar, he was never out of our reach.”

HSI Special Agent-in-Charge Angel M. Melendez said: “The extradition of this man today should be a reminder to those who think they can hide within the confines of the dark web, that you are never out of reach of the long arm of the law. These investigations are important in combatting the illicit drug market and we will continue to work with our law enforcement partners to fight this fight.”

According to the allegations contained in the Indictment unsealed today in Manhattan federal court, the previously unsealed criminal complaint, and evidence presented at Ulbricht’s trial in January and February 2015[1]:

Ulbricht created Silk Road in approximately January 2011, and owned and operated the underground website until it was shut down by law enforcement authorities in October 2013. Silk Road emerged as the most sophisticated and extensive criminal marketplace on the Internet at the time, serving as a sprawling black-market bazaar where unlawful goods and services, including illegal drugs of virtually all varieties, were bought and sold regularly by the site’s users. While in operation, Silk Road was used by thousands of drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other unlawful goods and services to well over 100,000 buyers, and to launder hundreds of millions of dollars deriving from these unlawful transactions.

Silk Road enabled its users to buy and sell drugs and other illegal goods and services anonymously and outside the reach of law enforcement. Silk Road was operated on what is known as “The Onion Router,” or “Tor” network, a special network of computers on the Internet, distributed around the world, designed to conceal the true IP addresses of the computers on the network and thereby the identities of the network’s users. Silk Road also included a Bitcoin-based payment system that served to facilitate the illegal commerce conducted on the site, including by concealing the identities and locations of the users transmitting and receiving funds through the site.

CLARK – who went by the online nicknames “Variety Jones,” “VJ,” “Cimon,” and “Plural of Mongoose” – was described by Ulbricht as a “real mentor” who advised Ulbricht about, among other things, security vulnerabilities in the Silk Road site, technical infrastructure, management of the Silk Road users, and operating in a manner to attempt to thwart law enforcement. CLARK provided advice to Ulbricht on developing a “cover story” to make it appear as though Ulbricht had sold Silk Road, and also assisted with hiring programmers to help improve the infrastructure of, and maintain, Silk Road. CLARK also communicated at length with Ulbricht regarding the rules that governed Silk Road vendors and users, and regarding the promotion of sales on Silk Road, including the sales of narcotics. CLARK also was responsible for gathering information on law enforcement’s efforts to investigate Silk Road.

CLARK was paid at least hundreds of thousands of dollars for his assistance in operating Silk Road.

CLARK, 56, a citizen of Canada, is charged with narcotics trafficking conspiracy; narcotics trafficking; distributing narcotics by means of the internet; conspiracy to commit, and aid and abet, a computer hacking conspiracy; conspiracy to traffic in fraudulent identification documents; and money laundering conspiracy. If convicted, he faces, among other penalties, a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Berman praised the outstanding joint efforts of the FBI and its New York Special Operations and Cyber Division, HSI Chicago-O’Hare, the DEA’s New York Field Division, and IRS-CI’s New York Field Office. Mr. Berman also thanked the HSI Attache Bangkok, Thailand, for its assistance and support. Mr. Berman also thanked the Royal Thai Police and the U.S. Department of Justice’s Office of International Affairs for their support and assistance.

This case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Michael D. Neff, Richard Cooper, and Timothy T. Howard are in charge of the prosecution.

The charges contained in the Complaint and the Indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.

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Financial Fraud: Jamesy Havens Sentenced For Conspiracy to Commit Mail Fraud And Multiple Money Laundering Offenses

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Jamesy Havens Sentenced As Leader Of Fraud Ring

Approximately $1.5 million in fraudulent loans obtained from car loan companies
Fraudsters concealed scheme by filing false claims of identity theft

LOUISVILLE, Ky. – United States Attorney Russell M. Coleman announced today that Senior United States District Judge Charles R. Simpson III sentenced Jamesy Havens, age 42, of Louisville, Kentucky, to 70 months in prison followed by 3 years of supervised release for conspiracy to commit mail fraud and multiple money laundering offenses. The Court ordered Havens to pay restitution of $1,449,482.66 to the victims of his scheme.

The Court sentenced Havens and his co-defendants for their participation in a fraudulent scheme that defrauded over 39 lenders who loaned money for the purchase of cars from May 2013 to August 2015. The total amount of loss to the lenders was $1,449,482.66. The Court sentenced co-defendant Ronald Brent Lovell, age 36, of Louisville, Kentucky to 37 months in prison, 3 years supervised release, and ordered him to pay $545,274 in restitution for conspiracy to commit mail fraud and three counts of money laundering. The Court sentenced co-defendant Jasen Coon, age 40, of Florida, to 27 months in prison, 3 years supervised release for conspiracy to commit mail fraud and two counts of money laundering, and ordered him to pay $171,398.31 in restitution. The Court sentenced Co-defendant Danny Lee Coslow, age 50, of La Grange, Kentucky to 21 months in prison and 3 years supervised release for conspiracy to commit mail fraud and five counts of money laundering. The Court ordered Coslow to pay $571,775.22 in restitution. The Court sentenced Christopher Peplinski, age 44, of Michigan, to 3 years’ probation for conspiracy to commit mail fraud and four counts of money laundering. The Court ordered Peplinski to pay $257,746.41 in restitution. The Court sentenced Co-defendant David Farnsworth, age 52, of Louisville, Kentucky, to 3 years of probation and ordered him to pay $302,525.34 in restitution. There is no parole in the federal system for those sentenced to prison terms.

According to the plea agreement filed in the case, the United States’ sentencing memorandum, and testimony during the sentencing hearing, Havens and his co-conspirators applied for car loans with no intent of repaying them. Those involved in the scheme subsequently fraudulently denied applying for the loans and claimed that someone else had stolen their identities and submitted the loan applications. Havens and his co-conspirators laundered the loan proceeds through false businesses and bank accounts designed to appear as legitimate car dealerships. They then used the laundered funds for their own personal use. The loans ultimately defaulted. In order to remove the defaulted loans from their credit histories and to interfere with legitimate collection efforts, Havens and the co-conspirators submitted false identity theft claims to credit reporting agencies claiming they were victims of identity theft. In order to support their identify theft claims, Havens and others created or filed false police reports.

Assistant United States Attorney Joshua Judd prosecuted the case. The United States Postal Inspection Service, the Internal Revenue Service, Criminal Investigations, the Federal Bureau of Investigation, and the United States Secret Service investigated the case.

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Financial Fraud: Tanya Jumroon Pleads Guilty in Forced Labor and Visa Fraud Scheme

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Oregon Woman Pleads Guilty for Role in Forced Labor and Visa Fraud Scheme Involving Thai Restaurant Workers

Defendant financially benefited from co-defendant’s use of debts, fraud, threats of financial and reputational harm, and other means to compel victims to work at restaurants

WASHINGTON – Tanya Jumroon, also known as Thunyarax Phatanakit Jumroon, 59, of Beaverton, Oregon, and a naturalized citizen originally from Thailand, pleaded guilty today in a U.S. District Court in Portland, Oregon, to financially benefitting from forced labor, visa fraud conspiracy, and filing a false federal income tax return, announced Acting Assistant Attorney General John Gore of the Justice Department’s Civil Rights Division, U.S. Attorney Billy J. Williams of the District of Oregon, Special Agent in Charge Renn Cannon of the FBI in Oregon, and Special Agent in Charge Darrell Waldon of Internal Revenue Service (IRS) Criminal Investigation’s Seattle Field Office. Jumroon waived indictment by a federal grand jury and pleaded guilty to an information filed by the United States Attorney’s Office and the Civil Rights Division.

According to the defendant’s plea agreement, admissions in court, and other court documents, between 2011 and 2014, the defendant, her then-husband, Paul Jumroon, and other associates fraudulently obtained E-2 visas to bring Thai nationals into the United States to provide cheap labor at two restaurants located in Lake Oswego, Oregon, and Ridgefield, Washington. The restaurants were owned and operated by the defendant and Jumroon at the time, but have since been sold and are under new ownership.

Paul Jumroon used the fraudulently obtained E-2 visas to entice four forced labor victims to come to the United States from Thailand. After the victims arrived, Jumroon used inflated travel expenses, debt manipulation, threats of deportation, serious financial and reputational harm, verbal abuse, and control over identification documents, among other means, to compel them to work 12 hours a day, six to seven days a week, for minimal pay at the restaurants he co-owned and operated with the defendant. The defendant witnessed Paul Jumroon’s mistreatment of two of the victims, and she benefitted financially from the victims’ forced labor at the restaurants. As part of the defendant’s guilty plea, she agreed to pay the four victims a combined $131,391.95 in restitution for their unpaid labor in connection with the forced labor scheme.

The defendant further admitted to filing multiple false tax returns with the IRS by failing to report cash income earned from the restaurants between 2012 and 2015. As part of the plea agreement, the defendant agreed to pay tax due and owing in the amount of $120,384 to the IRS.

“The Justice Department remains committed to combatting human trafficking, holding those who choose to exploit vulnerable individuals accountable, punishing those who profit from these crimes, and securing restitution for exploited victims” said Acting Assistant Attorney General Gore of the Civil Rights Division. “Today’s guilty plea exemplifies the hard work of the Civil Rights Division, in coordination with the U.S. Attorney’s Office, to honor that commitment.”

“Human trafficking schemes are seldom carried out by a single person. Tanya Jumroon profited off of her then-husband’s actions while turning a blind eye,” said Billy J. Williams, U.S. Attorney for the District of Oregon. “In too many of these cases, we later learn that someone close by could have taken action to stop the abuse and intimidation of others and did not. I implore all Oregonians to remain vigilant and watch for the signs of human trafficking in their communities. Your attention and perceptiveness could help a victim in need.”

“These victims believed the Jumroons were offering them a chance at a better life. When they arrived in the U.S., however, they faced false promises, forced labor and abuse. Victims such as these often live in the shadows and find it difficult to get the help they need. We are grateful for the community members who were able to bring this case to our attention so we could work together to bring an end to the physical, psychological and financial exploitation,” said Renn Cannon, Special Agent in Charge of the FBI in Oregon.

“Forced labor schemes, such as the one employed by the Jumroons, are deplorable crimes that have no place in today’s society,” said Darrell Waldon, Special Agent in Charge of IRS Criminal Investigation’s Seattle Field Office. “Falsely reporting income and expenses associated with such schemes will continue to be vigorously investigated by IRS-CI Special Agents.”

The defendant faces a maximum of 20 years in prison for financially benefitting from forced labor, five years in prison for visa fraud conspiracy, and three years in prison for filing a false tax return. Her sentencing is scheduled for Oct. 24 before United States District Judge Anna J. Brown.

Co-defendant Paul Jumroon previously pleaded guilty on Feb. 14 to forced labor, visa fraud conspiracy, and filing a false federal income tax return. His sentencing is scheduled for Oct. 18, also before Judge Brown.

Attorney General Sessions issued a proclamation on January 31 commemorating January as National Slavery and Human Trafficking Prevention Month.

The District of Oregon is one of six districts designated through a competitive, nationwide selection process as a Phase II Anti-Trafficking Coordination Team (ACTeam), through the interagency ACTeam Initiative of the Departments of Justice, Homeland Security and Labor. ACTeams focus on developing high-impact human trafficking investigations and prosecutions involving forced labor, international sex trafficking and sex trafficking by force, fraud or coercion through interagency collaboration among federal prosecutors and federal investigative agencies.

This prosecution is the result of the joint investigation by the Federal Bureau of Investigation, Homeland Security Investigations, Internal Revenue Service Criminal Investigation and Department of State’s Diplomatic Security Service, with assistance from the Department of Labor’s Wage and Hour Division and Portland Police Bureau. The case is being prosecuted by Assistant U.S. Attorneys Hannah Horsley and Scott Bradford of the District of Oregon, and Lindsey Roberson of the Civil Rights Division’s Human Trafficking Prosecution Unit.

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Elder Justice: Communities Are Focusing on The Abuse, Fraud, Neglect, and Schemes Perpetrated Against Older Individuals

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Message from U.S. Attorney Ron Parsons for World Elder Abuse Awareness Day

June 15, 2018, is World Elder Abuse Awareness Day.  Communities around the world are focusing on the abuse, fraud, neglect, and schemes perpetrated against older individuals.  As South Dakota’s United States Attorney, I take very seriously the role of our office in protecting older South Dakotans.

In 2017, Congress passed the Elder Abuse Prevention and Prosecution Act.  Among other things, this law enabled the Attorney General of the United States to allocate resources to federal investigations and prosecutions of crimes against older Americans.

In the District of South Dakota, I have designated Kevin Koliner, an experienced prosecutor, to serve as my office’s Elder Justice Coordinator.  Kevin is responsible for prosecuting elder abuse cases, coordinating with state and tribal partners, and conducting public outreach and awareness activities relating to elder abuse.  On a national level, the Department of Justice has convened a large working group to ensure that federal law enforcement stays ahead of the criminals, with access to current trends and information necessary to fulfill our duty of protecting older Americans.

Our focused efforts have already seen results.  Here in South Dakota, our office has prosecuted a large-scale wire fraud case in which an older South Dakotan was targeted in a scam that involved gaining access to his investment account, then forging check requests to deplete the funds.  In a separate case involving thousands of elderly victims, three co-defendants were recently sentenced to considerable time in federal prison after a decades-long scheme in which they peddled a supposed cure-all medical device, enticing vulnerable customers with false claims of scientific studies.

My office is also proud to partner with state and tribal law enforcement on these issues, working together to determine the best forum for ensuring justice for victims of these crimes.  For instance, some matters are best pursued federally because they involve fraud on federal programs or they require interstate or international investigations.  Other elder abuse cases might be best pursued by state authorities, perhaps if they are more local in nature, such as crimes perpetrated by direct caregivers or family members.

This partnership model has been a great success.  Nationwide, the Department of Justice in partnerships between U.S. Attorneys, federal, state, and tribal law enforcement agencies, state attorney generals, and state prosecutors have over the past year brought elder abuse cases involving over 250 defendants, $600 million in victim losses, and involving over one million victims from every state.

As we mark World Elder Abuse Awareness Day, I want to share with you some practical advice regarding warning signs of potential elder abuse.

Examples of financial exploitation include:

  • Use of ATM or credit cards without permission
  • Forging signatures on checks or important documents
  • Requests to older adults for money to cover “emergency” expenses
  • Pressure to grant power of attorney rights
  • Unauthorized sales, such as family heirlooms

Signs that your loved one might be a victim of financial exploitation:

  • Sudden changes in banking practices
  • Being accompanied to important appointments by unknown person
  • Adding new names on bank signature cards
  • Sudden changes in wills or other important documents
  • Unexplained disappearance of funds or possessions
  • Substandard personal care
  • Unpaid bills when financials resources should be adequate
  • Sudden appearance of previously uninvolved relatives

Steps to protect yourself:

  • Check financial statements regularly (at least monthly)
  • Store important documents in a locked drawer
  • Talk to your bank about age-friendly banking options
  • Contact an attorney with any legal questions, and be assured you understand their advice before proceeding
  • Visit ftc.gov every year to get free credit reports, then review those reports thoroughly

For more information about the Department of Justice’s efforts to prevent and combat elder abuse, please visit the Elder Justice Website at elderjustice.gov.  There is also a victim connect hotline, 1-855-4VICTIM (1-855-484-2846), where you can receive service referrals by senior services specialists.  Finally, if you believe you or your loved one is a victim of physical or sexual abuse, do not hesitate to contact local police immediately.

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Financial Fraud: Venkat Guntpally Sentenced For Visa Fraud, Use of False Documents And Mail Fraud

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Fremont Business Owner Sentenced To 30 Months In Prison For Role In Visa Fraud Conspiracy, Mail Fraud, Witness Tampering, And Related Crimes

SAN JOSE – Venkat Guntpally was sentenced to 30 months in prison for his role in a conspiracy to commit several crimes including visa fraud, obstruction of justice, use of false documents, and mail fraud, announced Acting United States Attorney Alex G. Tse; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Ryan Spradlin; and U.S. State Department, Diplomatic Security Service, San Francisco Field Office Special Agent in Charge David Zebley. The sentence was handed down by the Honorable Lucy H. Koh, U.S. District Judge. Guntpally is the last of four defendants to be sentenced in connection with the visa fraud scheme.

A federal grand jury indicted Venkat Guntipally, 49, his wife, Sunitha Guntipally, 44, of Fremont, and two other defendants, Pratap “Bob” Kondamoori, 56, of Incline Village, Nev., and Sandhya Ramireddi, 58, of Pleasanton, in a 33-count indictment filed May 5, 2016. The indictment contains charges in connection with the submission of fraudulent applications for H-1B specialty-occupation work visas.

“Through this multi-year conspiracy, Mr. Guntipally and his co-conspirators exploited foreign workers for profit, defrauded the United States, and engaged in brazen obstruction of justice,” said Acting U.S. Attorney Tse. “Today’s sentence reflects that such crimes harm the nation’s immigration system and erode public trust. This office will continue to prosecute defendants who are out to make an unlawful profit and abuse our immigration laws for purely personal gain.”

“As the lead agency in this investigation, the Diplomatic Security Service demonstrated its commitment to maintaining the integrity of U.S. visas. We pursue those who fraudulently use worker visas, like the H-1B, for personal gain,” said Special Agent in Charge Perlman. “Diplomatic Security Service’s strong relationship with our law enforcement partners and the U.S. Attorney’s Office for the Northern District of California, continues to be essential in the pursuit of justice.”

“Unscrupulous actions by employers to gain an unfair advantage will not be tolerated and HSI will commit its resources to stop these types of criminals from gaming our immigration system to line their pockets with money at the cost of others,” said Ryan L. Spradlin, Special Agent in Charge of HSI operations in northern California and northern Nevada.

Venkat Guntpally pleaded guilty on April 24, 2017, at which time he admitted that he and his wife founded and owned DS Soft Tech and Equinett, two employment-staffing companies for technology firms. In addition, Guntipally admitted that between approximately 2010 and 2014, he and his wife, together with others, submitted to the government more than one hundred fraudulent petitions for foreign workers to be placed at other purported companies. The end-client companies listed in the fraudulent H-1B applications either did not exist or never received the proposed H-1B workers. None of the listed companies ever intended to receive those H-1B workers. The scheme’s intended purpose was to create a pool of H-1B workers who then could be placed at legitimate employment positions in the Northern District of California and elsewhere. Through this scheme, Venkat Guntipally, along with his co-conspirators, gained an unfair advantage over competing employment-staffing firms, and the Guntipallys earned millions in ill-gotten gains. Venkat Guntipally also admitted that he and his codefendants obstructed justice, including by directing workers to lie to investigators and by laundering money.

Venkat Guntipally was charged with one count of conspiracy, in violation of 18 U.S.C. § 371; ten counts of substantive visa fraud, in violation of 18 U.S.C. § 1546(a); seven counts of using false documents, in violation of 18 U.S.C. § 1001(a)(3); and four counts of mail fraud, in violation of 18 U.S.C. § 1341. He pleaded guilty to the conspiracy charge and the remaining charges were dismissed.

In addition to the prison term, Judge Koh ordered Venkat Guntipally to serve three years of supervised release and ordered him to forfeit $500,000. Venkat Guntipally was ordered to self-surrender on or before June 14, 2019.

All three of Venkat Guntipally’s co-defendants previously pleaded guilty to their respective roles in the scheme. Last year, Judge Koh sentenced Sunitha Guntipally to 52 months in prison, Ramireddi to 14 months’ imprisonment, and Kondamoori to 20 months’ imprisonment for their respective conduct.

Assistant U.S. Attorney Jonas Lerman is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation led by the U.S. Department of State Diplomatic Security Service’s representative to the Document and Benefit Fraud Task Force (DBFTF) overseen by the Department of Homeland Security’s Homeland Security Investigations. The DBFTF is a multi-agency task force that coordinates investigations into fraudulent immigration documents. U.S. Citizenship and Immigration Service’s Office of Fraud Detection and National Security also assisted with the investigation.

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Financial Fraud: Michael Mazar Sentenced or His Participation In a Mail And Wire Fraud Scheme Orchestrated

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Former Bureau of Prisons Correctional Officer Sentenced to 5 Years in Prison for Participating in Prison-Based Fraud Scheme

Ordered to Pay Over $8 Million in Restitution

Former Bureau of Prisons (BOP) correctional officer Michael Mazar, 39, of Hollywood, was sentenced today to 5 years in prison and ordered to pay over $8 million in restitution for his participation in a mail and wire fraud scheme orchestrated from a Miami federal prison.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Robert A. Bourbon, Special Agent in Charge, United States Department of Justice, Office of the Inspector General (DOJ-OIG), Miami Field Office, made the announcement.

According to information disclosed in court, Mazar was employed as a BOP correctional officer at the Federal Detention Center in Miami, Florida, from July 2009 through April 2017. In February 2017, Mazar provided co-conspirator James Sabatino, an inmate, with several cellular telephones and other items. Using the contraband cellular telephones provided by Mazar, Sabatino contacted several retail and jewelry store employees and brand representatives via telephone calls, e-mails, and text messages. Sabatino pretended to be an employee of various film and music companies and convinced the victims to send retail items such as handbags, wristwatches, apparel, and jewelry to various locations in South Florida and elsewhere.

According to the Indictment, the victim companies shipped the retail items and jewelry to Sabatino’s co-conspirators, who then sold the fraudulently obtained items at pawnshops and jewelry stores in South Florida and elsewhere. Mazar received the ill-gotten proceeds, including retail items, jewelry, and U.S. currency, from these co-conspirators and stored them at his residence.

According to information disclosed in court, Sabatino, while in prison, directed Mazar and other co-conspirators to travel to Atlanta, Georgia, from South Florida, in order to transport and sell several pieces of fraudulently obtained jewelry valued at over $3 million. Mazar transported a portion of the proceeds from the sale of the stolen jewelry from Atlanta, Georgia, to South Florida.

Sabatino previously pled guilty to a related racketeering charge in the Southern District of Florida, Case Number 16-20519-CR-Lenard. On November 13, 2017, Sabatino was sentenced to a term of 20 years in prison.

Mazar previously pled guilty to one count of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349. U.S. District Judge Marcia G. Cooke sentenced Mazar to 60 months in prison and 3 years of supervised release. Mazar was also ordered to pay $8,949,025.11 in restitution.

Mr. Greenberg commended the investigative efforts of the FBI and DOJ-OIG. This case was prosecuted by Assistant United States Attorneys Christopher Browne and Nalina Sombuntham.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

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Financial Fraud: RICHARD MOSELEY SR. Sentenced For Illegally High Interest Rates And Issued Payday Loans

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Owner Of Payday Lending Enterprise Sentenced To 10 Years In Prison For Orchestrating $220 Million Fraudulent Lending Scheme

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that RICHARD MOSELEY SR. was sentenced today to 120 months in prison, after having been found guilty in November 2017 of racketeering, fraud, and identity-theft offenses for operating an illegal payday lending enterprise in which MOSELEY charged illegally high interest rates and issued payday loans to victims who did not authorize them. MOSELEY was convicted after a three-week jury trial before U.S. District Judge Edgardo Ramos, who imposed today’s sentence.

Manhattan U.S. Attorney Geoffrey S. Berman said: “Richard Moseley’s illegal payday lending operation exploited more than half a million of the most financially vulnerable people in the U.S. Charging usurious interest and exorbitant fees, and even signing people up for loans they didn’t authorize, Moseley put financially struggling people even further in debt. Today Moseley has been rightly sentenced to prison for his predatory ways.”

According to the Indictment, other filings in Manhattan federal court, and the evidence presented at trial:

From approximately 2004 to 2014, MOSELEY owned and operated a group of payday lending businesses (the “Hydra Lenders”) that issued and serviced small, short-term, unsecured loans, known as “payday loans,” through the Internet to customers across the United States.

For nearly a decade, MOSELEY systematically exploited more than 620,000 financially struggling working people throughout the United States, many of whom struggled to pay for basic living expenses. MOSELEY, through the Hydra Lenders, targeted and extended loans to these individuals at illegally high interest rates of more than 700 percent, using deceptive and misleading communications and contracts and in violation of the usury laws of numerous states that were designed to protect residents from such abusive conduct.

In furtherance of the scheme, the Hydra Lenders’ loan agreements materially understated the amount the payday loan would cost and the total amount of payments that would be taken from borrowers’ bank accounts. MOSELEY structured the repayment schedule of the loans such that, on the borrower’s payday, the Hydra Lenders automatically withdrew the entire interest payment due on the loan, but left the principal balance untouched so that, on the borrower’s next payday, the Hydra Lenders could again automatically withdraw an amount equaling the entire interest payment due (and already paid) on the loan. Under MOSELEY’s control and oversight, the Hydra Lenders proceeded automatically to withdraw such “finance charges” payday after payday, applying none of the money toward repayment of the loan principal. Under the terms of the loan agreement, the Hydra Lenders withdrew finance charges from their customers’ accounts unless and until consumers took affirmative action to stop the automatic renewal of the loan.

Through the Hydra Lenders, MOSELEY also extended numerous payday loans to victims across the country who did not even want the loans or authorize the issuance of the loans, but instead had merely submitted their personal and bank account information in order to inquire about the possibility of obtaining a payday loan. MOSELEY then automatically withdrew the Hydra Lenders’ usurious “financing fees” directly from the financially struggling victims’ bank accounts on a bi-weekly basis. Although hundreds of victims, over a period of years, lodged complaints that they had never approved or even been aware of the issuance of the loans, the Hydra Lenders, at MOSELEY’s direction, continued to issue loans to consumers without confirming that the consumers in fact wanted the loans that they received or had reviewed and approved the loan terms.

Customers across the country, numerous state regulators, and consumer protection groups complained about the Hydra Lenders’ deceptive and misleading practices in issuing usurious and fraudulent loans. Beginning in approximately 2006, in an attempt to avoid civil and criminal liability for his conduct, and to enable the Hydra Lenders to extend usurious loans contrary to state laws, MOSELEY made it appear that the Hydra Lenders were located overseas. Specifically, MOSELEY nominally incorporated the Hydra Lenders first in Nevis in the Caribbean, and later in New Zealand, and claimed that the Hydra Lenders could not be sued or subject to state enforcement actions because they were beyond the jurisdiction of every state in the United States. In truth, the entirety of MOSELEY’s lending business, including all bank accounts from which loans were originated, all communications with consumers, and all employees, were located at MOSELEY’s corporate office in Kansas City, Missouri. The Hydra Lenders’ purported “offshore” operation consisted of little more than a service that forwarded mail from addresses in Nevis or New Zealand to the Kansas City, Missouri, office.

In furtherance of the scheme, MOSELEY falsely told his attorneys that the Hydra Lenders maintained physical offices and employees in Nevis and New Zealand and that the decision whether to extend loans to particular consumers was made by employees of the Hydra Lenders in Nevis and New Zealand. As MOSELEY well knew, at no time did the Hydra Lenders have any employees involved in the lending business in Nevis or New Zealand, and at all times the decision whether to underwrite loans was made by employees under MOSELEY’s direction in Kansas City, Missouri. To defeat state complaints and inquiries, MOSELEY directed his attorneys at outside law firms to submit correspondence to state Attorneys General that stated – falsely, unbeknownst to MOSELEY’s attorneys – that the Hydra Lenders originated loans “exclusively” from their offices overseas and had no physical presence anywhere in the United States.

From approximately November 2006 through approximately August 2014, the Hydra Lenders generated more than $220 million in revenue. MOSELEY made millions of dollars from the scheme, which he spent on, among other things, a vacation home in Mexico, luxury automobiles, and country club membership dues.

* * *

In addition to the 10-year prison term, MOSELEY, 73, of Kansas City, Missouri, was sentenced to three years of supervised release and ordered to forfeit $49 million.

Mr. Berman praised the work of the Federal Bureau of Investigation and the Office Inspector General for the Board of Governors of the Federal Reserve System. Mr. Berman also thanked the Consumer Financial Protection Bureau, which brought a separate civil action against MOSELEY, for referring the matter and for its assistance.

The case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Edward A. Imperatore and David Abramowicz are in charge of the prosecution.

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Fraud News From World

Financial Fraud: Suzy Vang Lo Sentenced for Conspiring to Defraud the United States by Unlawfully Purchasing Supplemental Nutrition Assistance Program (SNAP)

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Former Merced County Store Manager Sentenced for Conspiracy to Defraud Government Benefits Program

FRESNO, Calif. — Suzy Vang Lo, 41, formerly of Merced, was sentenced today by U.S. District Judge Lawrence J. O’Neill to 21 months in prison for conspiring to defraud the United States by unlawfully purchasing Supplemental Nutrition Assistance Program (SNAP) benefits from recipients in exchange for cash, U.S. Attorney McGregor W. Scott announced.

Suzy Vang Lo and her husband, Michael Chu Lo, pleaded guilty to the scheme in March 2018. According to court documents, Suzy Vang Lo was the manager of LV Market in Winton. Her husband performed many employee functions at the store even though he was not officially employed at the store. Suzy Vang Lo conspired with her husband to give SNAP recipients cash in exchange for swiping their benefit cards. When the defendants exchanged SNAP benefits for cash, it caused the U.S. Department of Agriculture (USDA) to wire sums of money into an account that Suzy Vang Lo controlled.

Special Agent-in-Charge Lori Chan, United States Department of Agriculture (USDA), Office of Inspector General (OIG), Western Region, stated: “The USDA OIG has the responsibility for protecting the integrity of the Supplemental Nutrition Assistance Program. Protecting the integrity of SNAP is a major investigative priority for OIG. OIG conducts investigations in each region of the United States to deter and uncover criminal activity that undermines important USDA nutrition programs. Vendors who engage in SNAP fraud exploit the program’s needy beneficiaries and misuse the substantial funding that taxpayers provide. The OIG at USDA works to ensure SNAP funds are used for their intended purpose, feeding families, not for the enrichment of criminal enterprises.”

The USDA, through its Food and Nutrition Service, administers SNAP, a food assistance program designed to help low-income individuals and families purchase food. In California, the Food and Nutrition Service authorizes retail food stores to accept SNAP benefits for eligible food items from authorized recipients via the Electronic Benefit Transfer (EBT) system. Through EBT, the funds provided by SNAP and other state benefits programs are loaded onto the benefit recipients’ EBT debit cards. When a recipient wishes to use SNAP benefits to purchase eligible food items at a participating store, the store or customer swipes the recipient’s EBT card, and the recipient enters a Personal Identification Number (PIN). The SNAP dollar amount is immediately deducted from the customer’s SNAP account and is credited dollar-for-dollar to the retailer’s bank account.

When a retailer is authorized to participate in SNAP, it is informed that it may accept SNAP benefits only in exchange for eligible food items, and it must acknowledge in writing that trading cash for SNAP benefits is illegal.

In this case, for approximately three and a half years, the defendants swiped SNAP beneficiaries’ EBT cards and give them cash in the approximate amount of 69 cents per dollar of SNAP benefits. Michael Chu Lo kept notes at the cash registers to warn customers to remain silent during the transactions to avoid detection, and he attempted to hide large transactions by swiping EBT cards multiple times.

This case is the product of an investigation by the U.S. Department of Agriculture Office of Inspector General. Assistant U.S. Attorneys Megan A. S. Richards and Jeffrey A. Spivak are prosecuting the case.

Co-defendant Michael Lo is scheduled to be sentenced on July 25, 2018.

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Fraud

Financial Fraud: ANNE AROSTE Indicted on Federal Fraud And Identity Theft

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Claims Specialist at Social Security Administration Arrested on Fraud and Identity Theft Charges for Allegedly Misappropriating at Least $680,000 in Fraudulent Benefits

CHICAGO — A claims specialist for the U.S. Social Security Administration has been indicted on federal fraud and identity theft charges for allegedly approving and pocketing at least $680,000 in fraudulent benefits.

ANNE AROSTE, also known as “Ann Aroste,” worked as a claims specialist at the SSA’s field office in Aurora. Aroste was responsible for processing applications for Social Security benefits via the agency’s electronic records system. According to the indictment, Aroste created fraudulent applications for benefits on the Social Security earnings records of deceased workers. She then used her employee credentials to approve the applications and to route the payments to bank accounts she controlled, the indictment states.

From 2013 to last month, Aroste caused the U.S. Treasury Department to issue at least $680,962, in fraudulent payments, the indictment states.

The indictment charges Aroste, 42, of Montgomery, with five counts of wire fraud and five counts of aggravated identity theft. She was arrested this morning and pleaded not guilty at an afternoon arraignment before U.S. Magistrate Judge Daniel G. Martin. A detention hearing is set for June 13, 2018, at 11:00 a.m., before U.S. District Judge Manish S. Shah.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Tracey Thanos, Special Agent-in-Charge of the Social Security Administration’s Office of Inspector General in Chicago; and Benjamin Sides, Special Agent-in-Charge of the U.S. Department of State, Diplomatic Security Service Chicago Field Office.

The indictment describes five instances in which Aroste allegedly caused an application for Social Security benefits to be submitted in the names of individuals whom Aroste falsely claimed had been married to deceased workers. Aroste used her employee credentials to approve the fraudulent applications for survivor’s benefits based on the Social Security earnings of the deceased workers, the indictment states. The Treasury then transmitted the benefit payments into Aroste’s bank accounts.

The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Each count of wire fraud is punishable by up to 20 years in prison, while each count of aggravated identity theft carries a mandatory, consecutive prison sentence of two years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Special Assistant U.S. Attorney Jared C. Jodrey.

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Fraud News From World

Tax Fraud: Jaquon Mucsarney Sentenced For Conspiracy to Defraud The United States And Aggravated Identity Theft

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Final Defendant Receives 12 Year Prison Sentence in $2 Million Conspiracy to Defraud the IRS

DENVER – Jaquon Mucsarney, age 37, of Aurora, Colorado was sentenced by Chief U.S. District Court Judge Marcia S. Krieger to serve 144 months in prison followed by 3 years of supervised release for conspiracy to defraud the United States and aggravated identity theft, announced the United States Attorney Bob Troyer, IRS – Criminal Investigation Special Agent in Charge Steven Osborne and Social Security Administration Office of Inspector General Special Agent in Charge Wilbert M. Craig. Mucsarney was also ordered to pay $327,970 in restitution to the IRS.

According to information contained in the indictment and plea agreement, between January 1, 2011 and January 1, 2016, Mucsarney devised a scheme to defraud the Internal Revenue Service by filing tax return with false information in order to obtain a fraudulent tax refund. At various times, Mucsarney received assistance from his mother, Schosche MucSarney and girlfriend Sherry Charleston.

As leader of this scheme, Mucsarney created approximately 50 fictitious businesses which only existed on “paper” and had little or no legitimate business activity. In order to file corporate tax returns for these businesses, Mucsarney logged into the U.S. Treasury website and obtained an Employment Identification Number (EIN) using either his or Schosche’s social security numbers. When Mucsarney became aware the IRS was investigating his activities, he started using individuals stolen names and social security numbers to obtain EINs for various companies.

Mucsarney typically filed U.S. Corporation Income Tax Returns (Forms 1120) on behalf of the shell companies which he completed with false information relating to income, deductions, overpayments, and refunds due. When Mucsarney was incarcerated on unrelated charges, he would either supply Schosche and Charleston with the false information to complete the fraudulent income tax returns or have Schosche send Mucsarney blank IRS form to complete. Mucsarney would then mail the completed tax returns to the IRS directly from his correctional facility.

Over the course of the scheme, Mucsarney, with the assistance of others, submitted approximately 100 fraudulent income tax returns to the IRS which claimed refunds totaling $2,168,277. Of the amount requested, the IRS ultimately paid out approximately $327,970.

“Mucsarney stole identities and used fake business names to line his own pockets,” said U.S. Attorney Bob Troyer. “Thanks to our prosecutors and law enforcement partners, for the next twelve years Mucsarney’s real identity will be known to the Bureau of Prisons.”

“Stealing identities and filing false tax returns is a serious crime that hurts innocent taxpayers,” said Steven Osborne, Special Agent in Charge of the Denver Field Office of IRS – Criminal Investigation. “This 12-year sentence demonstrates our unwavering commitment to protecting the interests of law-abiding taxpayers to ensure that the only citizens who receive tax refunds are those who are entitled to them.”

“The SSA OIG promotes Social Security number (SSN) integrity by pursuing cases of SSN misuse and related government fraud,” said Wilbert Craig, Special Agent-in-Charge of the SSA OIG Denver Field Division. “We thank the U.S. Attorney’s Office for prosecuting this case, which resulted in a 12-year prison sentence for the defendant at the center of an SSN misuse and tax fraud scheme, and we will continue to work with the IRS-Criminal Investigation to investigate similar cases.”

Schosche Mucsarney was sentenced on November 22, 2016 to five years probation and restitution of $195,902 to the Internal Revenue Service based on her guilty plea to conspiracy to defraud the government. Sherry Charleston was sentenced on January 9, 2017 to eighteen months imprisonment, 3 years supervised release, and restitution of $16,541 for conspiracy to defraud the government.

This case was investigated by the Internal Revenue Service – Criminal Investigation and the Social Security Administration, Office of Inspector General. This case is being prosecuted by Assistant U.S. Attorney Tim Neff.

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Email Scams Examples

Email Scam Example: Fake Citibank Texas USA Email

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This is an email scam received about “Citibank Texas USA” is a phishing scam and why not try to contact these people or log onto these sites and enter your data because you risk being stolen.

Fake Letter From Mr Kennedy Swan – Citibank Texas USA – Email Scam Example

from: Mr Kennedy Swan <administracion@creacttive.net>
reply-to: kennedyswancitibank@gmail.com (email For Scam You)
to: contact@fraudswatch.com
date: Sun, Jun 3, 2018 at 7:38 AM
subject: ATTN:UNPAID BENEFICIARY
mailed-by: srs.emailowl.com
signed-by: creacttive.net

Citibank Texas USA
1100 Andrews Highway Branch
Full Service Brick and Mortar Office
Email: kennedyswancitibank@gmail.com

ATTN:UNPAID BENEFICIARY,

This is an official advice from the Citibank Texas USA foreign remittance/telegraphic dept. it has come to

our notice that your Over Due payment of USD10.000.000.00 MILLION has being deposit with us (Citibank

Texas USA)for further credit to your bank account as the original beneficiary.

The already transferred funds, which was made in secret transfer so that they can do final crediting to your

account, but it can not work. Secret diplomatic payments are not made unless the funds are related to

terrorist activities why must your payment be made in secret transfer, if your transaction is legitimate, why

did you not receive the money directly into your account, This is a pure coded means of payment, Records which

we have had with this method of payment in the past has always been related to terrorist acts, we do not want

you to get into trouble as soon as these funds reflect in your account, so it is our duty as a Citibank to

correct this little problem before this fund will be credited into your personal account if not your fund will

be return back to the country of origin .

we have (STOPPED THE TRANSFER)on its way to deliver to your account and pay you through a secured diplomatic

transit account (S.D.T.A),A contract has being signed by all the Europe banks that all the beneficiary been

owed by them should be paid via European UNION (EU) RESERVE ACCOUNT with us.

The already transferred funds has already being reprogrammed in our Remittance computer system for final

crediting to your account, but it can not work, because the information we have here in your payment file

which was sent to us regards to your bank account is not complete.

Please you are advice to reconfirm to us the below stated information for the final credit to your account.

YOUR FULL NAME
YOUR CONTACT ADDRESS
YOUR TELEPHONE NUMBER
YOUR AGE
YOUR OCCUPATION
YOUR BANK NAME
YOUR BANK ADDRESS
YOUR BANK ACCOUNT NUMBER
YOUR BANK ACCOUNT NAME
YOUR BANK SWIFT CODE
YOUR BANK ROUTING NUMBER
A COPY OF YOUR ID CARD FOR IDENTIFICATION.

It is very important you reconfirm the above information to us for immediate further credit, and be rest

assured that as soon as you reconfirm the information your fund will be credit to your account within 24hours

without further delay, and all the transfer payment documents will be send to you to enable you confirm the

payment in your bank account without any further problem.

WARNING: failure to produce the above requirement in the next 7 working day , legal action will be taken

immediately by returning the fund back to country of origin or report to FBI for investigation, means that

your fund will be regards as a terrorism, drug trafficking or money laundering and they are a serious problem

here in our country today.
contact me via private email address: kennedyswancitibank@gmail.com for security reasons.

THANKS FOR YOUR UNDERSTANDING

Mr Kennedy Swan,
Director Remittance Department
Citibank Texas USA

Fraud News From World

Financial Fraud: Six Individuals Have Stolen Over $8 million From a Bank And an Insurance Company

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Six charged in massive fraud & money laundering scheme

Alleged to have stolen over $8 million from a bank and an insurance company

Indianapolis – United States Attorney Josh Minkler announced federal charges against six individuals, including a former regional construction project manager for a bank, the owners of two different construction companies, the owner of an Indianapolis maintenance services company, and the owner of a Plainfield, Indiana, supply company. The six defendants are alleged to have operated a large-scale scheme to defraud and embezzle over $8 million from a Pennsylvania based bank and a Pennsylvania based insurance company. These charges are the product of a two-year investigation led by the U.S. Postal Inspection Service, with assistance from the Federal Bureau of Investigation and Internal Revenue Service. Neither the bank nor the insurance company are being named because they are victims in this case.

“This community has a right to hold high expectations of individuals in positions of trust in our financial institutions,” said Minkler. “Those who blatantly commit fraud and abuse their positions will be held accountable in federal court.”

Those charged were: John L. Williams, 49, Zionsville, a former employee of the bank; Ernie Perkins, 36, Zionsville, the owner of Remarkable Creative Enterprises (“RCE”); Robert Finch, 71, Indianapolis, owner of Finch Constructors and Finch Management; Donald Landis, 58, Plainfield, owner of P&L Supply; Walter Watson, 69, Detroit, Michigan, owner of W-3 construction company; and Shalonda Coleman, 42, Indianapolis, a former employee of the insurance company.

According to the indictment, Williams was employed as a construction project manager in the Indianapolis regional office of the bank. His responsibilities included overseeing the bank’s internal real estate projects in Wisconsin, Illinois, Michigan, Kentucky and Indiana, including new bank branch construction and existing bank branch renovation projects. In carrying out the scheme, Williams would contact Perkins, Finch, Watson, and Landis and instruct them to submit fraudulent invoices to the bank for work that was never performed and materials that were never supplied. Williams used his position at the bank and his oversight of the projects in question to approve payment of the fraudulent invoices. Once the bank paid the invoices, Perkins, Finch, Watson, and Landis would kick back a large percentage of the money to CB Consulting, a fictitious business entity controlled by Williams. In many cases, the money passed through multiple bank accounts before reaching the bank account Williams set up for CB Consulting.

Coleman and Perkins are also charged with using the U.S. Mail to defraud a Pennsylvania-based insurance company and steal money. In those instances, Coleman used her position as a claims processor, and her access to the company’s computer systems, to cause the insurance company to mail checks to RCE. Coleman disguised the payments to RCE as payments for work performed for the company’s insurance clients, but no work was ever performed. Instead, Perkins would deposit the checks into RCE accounts and kick back a percentage of the money to Coleman.

All six defendants are charged with conspiring to launder the money stolen from the bank and insurance company, and Williams and Finch are separately charged with engaging in a significant number of financial transactions in excess of $10,000 using the stolen funds. Those transactions included transfers to other bank accounts held by the defendants, construction of a residence in Zionsville, Indiana, more than $100,000 in payments for Williams’ daughter’s wedding, and the purchase of multiple automobiles. Williams and Coleman are also charged with tax evasion and filing false tax returns, respectively, for failing to report their receipt of stolen funds as income on their tax returns.

“The members of this criminal enterprise executed a scheme to steal millions of dollars, for their own personal use, and evade the law,” said Inspector in Charge Patricia Armstrong, of the Detroit Division, U.S. Postal Inspection Service. “The arrest and indictment of these defendants should serve as a warning to others who seek to commit similar crimes. Postal Inspectors, and our federal law enforcement partners, will tirelessly pursue them until they are brought to justice.”

“Those who line their pockets by embezzling and stealing from others or the government should know they will not go undetected and will be held accountable,” said Gabriel Grchan, Special Agent in Charge of IRS Criminal Investigation. “These charges and arrests show that IRS Criminal Investigation is committed to following the money trail to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice. IRS Criminal Investigation stands ready to partner with all law enforcement agencies in Indiana to pursue individuals who steal from others and the government.”

“The FBI is committed to aggressively pursuing fraud committed on individuals, corporations or financial institutions. These charges send a clear message that attempting to hide criminal activity and defraud others comes at a price,” said Grant Mendenhall, Special Agent in Charge of the FBI’s Indianapolis Division. “Through collaborative efforts with our partners we will continue to work diligently to identify and investigate those who perpetuate these crimes and stop this type of corruption.”

According to Assistant United States Attorney Matthew J. Rinka, who is prosecuting this case for the government, each defendant faces a maximum of thirty (30) years imprisonment for their roles in the scheme and up to three (3) years of supervised release following any term of imprisonment.

An indictment is only a charge and not evidence of guilt. All defendants are considered innocent until proven otherwise in federal court.

In October 2017, United States Attorney Josh J. Minkler announced a Strategic Plan designed to shape and strengthen the District’s response to its most significant public safety challenges. This prosecution sentencing demonstrates the office’s firm commitment to partner with federal and local law enforcement agencies to prosecute those individuals who perpetrate large-scale fraud schemes and abuse positions of trust. See United States Attorney’s Office, Southern District of Indiana Strategic Plan.

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Fraud

The Fake Check Mystery Shopper Scam Targeting America’s Seniors

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An increasing number of seniors are becoming tech-savvy, however, thieves are honing in on this and are using it to their advantage. In 2017, a billion dollars was stolen from the country’s population via fraudulent practices, with online and email fraud costing $200 million. One of the latest scams to hit America’s seniors is the mystery shopper scam, which is putting their finances and their personal identity at risk.

The mystery shopper scam

For seniors needing a bit of spare cash, mystery shopping is the perfect solution as it’s non-taxing, can be done at your leisure and you often get to keep the goods you buy as part of your assignment. That’s exactly what Walli Muhammad thought when he applied for a mystery shopper role and was offered the job. For Muhammad, the role sounded perfect “I thought it was wonderful!” he said, but he became suspicious when he was told to send the money he’d received, via what he now knows to be a fake check, to two individuals in different states. The unwitting senior was being set up as a money mule and had he not have acted on his suspicions, he could have lost a small fortune in the scam.

Fake checks

Muhammad isn’t the only American citizen to have been targeted by this mystery shopper scam either. Earlier this year, 75-year-old Leon Talada was offered the opportunity to become a mystery shopper and, like Muhammad was sent a fake check for almost $4,000. Thankfully, his bank sussed it was fraudulent before it was too late. The scam even date backs to last year as Steve Miller found out when he received a check for more than $2,000. He was asked to cash the check and then purchase cards from a local store and send the numbers to the mystery shopping agency via email. Miller was quick to identify that he was in the midst of a scam and didn’t lose any money, but the impact on seniors who discover the con when it’s too late could be astronomical.

Why mystery shopping?

So why are criminals using mystery shopping scams in a bid to get hold of seniors’ cash? One theory is that because it’s seen as an easy job, more seniors than any other demographic are likely to apply for the role. The older generation is much more used to dealing in checks than millennials, so, for them, it’s not an unusual method of receiving cash. Seniors tend to be the more trusting members of society and many won’t have any concerns about undertaking the ‘work’ they’re told to do by the scammers while waiting for their check to clear.

A name change

The perpetrators of these cons have become wise to the fact that their intended victims, including Muhammad, Talada, and Miller have caught onto their scams and so they have upped their game. Instead of advertising for ‘Mystery Shoppers’, unsuspecting applicants are being offered the role of ‘Secret Store Evaluator’. While the name has changed the scam hasn’t and seniors who find themselves being given such a job will still be sent a fake check and instructions to transfer cash or to purchase multiple gift cards and send the details of the cards to the criminals behind the con.

Protecting yourself

Following the scam, Muhammad warned, “I would have been homeless trying to pay back the funds they had stolen from me.” So if you do find yourself in a tricky situation following a fake check mystery shopper scam, you may need to consider your borrowing options to help you get back into the black. However, prevention is key and you should aim to do all you can to protect yourself and your information when online. Should you suspect anything untoward when buying goods online, after receiving an email or when reviewing financial products, put a halt to proceedings immediately, as the seniors in the cases demonstrated above did, and seek professional advice from an anti-fraud organization.

Genuine opportunities

While mystery shopping scams continue to do the rounds, the good news is that there are legitimate companies offering mystery shopping opportunities to the older generation. The solution to finding a genuine one is to look for company reviews and speak to other mystery shoppers on the net to see which ones they recommend. Never use your own money to make a purchase and always wait for a check to clear before completing the assignment you’ve been allocated.

Scammers are constantly looking for new ways to steal cash from the country’s seniors and the latest mystery shopper scam is just one of their latest tricks. So if you’re thinking about becoming a mystery shopper, stay on your guard, ensure any checks you receive are legitimate and never use your own funds, even if instructed to do so.