<h2>Mobile County Man Receives 18 Month Sentence for Making Counterfeit United States Currency, Ordered to Pay $130.00 Restitution and All Items Used to Facilitate the Crime Were Forfeited</h2>
<p>United States Attorney Richard W. Moore of the Southern District of Alabama announced that Christopher M. Tanner, a 45 year old resident of Mobile, Alabama was sentenced to 18 months for counterfeiting United States currency. He was also ordered to pay $80 in restitution to the Holiday Inn on Highway 90 Mobile, Alabama and $50.00 restitution to Burger King Theodore Dawes Road, Theodore, Alabama. All items used to facilitate the counterfeiting crime was forfeited to the United States.</p>
<p>On July 17, 2018, according to a factual statement Christopher Tanner signed in connection with his guilty plea to counterfeiting United States currency, on January 29, 2018, Christopher Tanner and his wife, Debbie Tanner, checked into a room at the Holiday Inn on Highway 90 in Mobile, Alabama. Christopher Tanner paid for the room with $80 of counterfeit U.S. currency. Once the hotel staff discovered that the money was counterfeit, they call the local authorities. Officers responded to the scene and located Christopher Tanner on the property. Mr. Tanner was Mirandized and asked if he paid cash for the room and whether he knew the money he used was counterfeited U.S. currency. Mr. Tanner stated that he did pay for the room in cash and that he received the cash from a person he did not know as payment for a business transaction. Mr. Tanner stated that he did not know the money was counterfeit. Officers then told Mr. Tanner that he would be transported to the <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="Financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="876">Financial</a> Crimes Unit of the Mobile Police Department. Mr. Tanner asked officers if they would retrieve a pair of shoes from his hotel room for him. Officers went to the room and knocked on the door. After waiting for approximately five minutes, Mrs. Tanner opened the door. Officers asked for a pair of shoes for her husband. During the wait, officers heard what they believed to be the top of a printer closing and crumbling paper. When Mrs. Tanner returned with the shoes, officers asked if she was alone in the room and if he could conduct a safety check of the room. Mrs. Tanner gave verbal consent. While conducting the safety check, the officers noticed two printers and a pack of paper inside the room. Mrs. Tanner was then detained and a search warrant was obtained for the room. Additionally, officers obtained a search warrant for the vehicle the Tanners drove to the hotel after seeing a package of printer paper in plain view through one of the vehicle’s windows. Items seized during the search of the hotel room included printers; computers; $429.00 cash that include the parent notes used to produce counterfeit federal reserve notes; $8,890.00 in counterfeited U.S. Currency; nineteen bleached genuine $1 federal reserve notes; a notebook containing notes on security information of U.S. currency; a pack of printer paper; and a can of oven cleaner.</p>
<p>Officers also obtained search warrants for the two seized computers. Items found during the searches included: 44 images of counterfeit currency; 20 images of driver’s licenses from various states and an internet history displaying downloads and searches for items related to manufacturing counterfeit currency and documents. All of the items seized during the searches were instrumentalities of and helped facilitate the production of counterfeited U.S. currency.</p>
<p>On January 4, 2018 in DeRidder, Louisiana, Christopher Tanner attempted to pay his electric bill at Beauregard Electric with two counterfeit $20 dollar bills include with genuine U.S. currency. He was not arrested at that time because officers believed his story when he told them he did not know the money was counterfeit.</p>
<p>On March 14, 2018, Tanner went into the Walmart in DeRidder, Louisiana, and purchased merchandise with counterfeited $20 bills. He was not apprehended that day but his fraudulent transaction was captured on Walmart’s security camera video.</p>
<p>On March 17, 2018 in DeRidder, Louisiana, Christopher Tanner was arrested for possessing, passing and attempting to pass counterfeit currency. On this date, a search warrant was executed at a hotel room he was staying in. The items seized during that search included: 1) approximately $18,130 in counterfeit U.S. currency; 2) a Blackberry tablet; 3) a Verizon tablet; 4) an HP Laptop computer. All of Tanner’s criminal activities in DeRidder were continuous actions that were part of his conspiracy in Mobile.</p>
<p>Special Agents of the United States Secret Service along with officers of the Mobile, Alabama Police Department investigated the case and brought it to the U.S. Attorney=s Office for prosecution. The prosecutor assigned to the case is Assistant United States Attorney, Gina S. Vann.</p>

Financial Fraud: Nicholas Ochs Pleaded Guilty To Counts One – Disaster Benefit Fraud
<h2>Ambler, Pennsylvania, Man Admits Defrauding FEMA Relating To Major Disaster</h2>
<p>CAMDEN, N.J. – An Ambler, Pennsylvania, man today admitted defrauding the Federal Emergency Management Agency (FEMA) of thousands of dollars after Hurricane Sandy, U.S. Attorney Craig Carpenito announced.</p>
<p>Nicholas Ochs, 54, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to Counts One (disaster benefit fraud) and Four (mail fraud) of the indictment against him.</p>
<p>According to documents filed in this case and statements made in court:</p>
<p>When a natural disaster or federal emergency occurs in the United States, federal agencies, such as FEMA, provide relief and assistance to affected individuals and entities. FEMA provides <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="875">financial</a> assistance by, among other things, helping affected individuals repair their property.</p>
<p>In October 2012, Cape May County suffered severe damage from wind, rain and flooding generated by Hurricane Sandy when it struck New Jersey. On Oct. 30, 2012, then-President Obama signed a Presidential Disaster Declaration for the State of New Jersey, enabling eligible individuals who were displaced by the storms to seek financial assistance from FEMA.</p>
<p>At the time of Hurricane Sandy, Ochs’s mother lived in a house in Ocean City, New Jersey. In January 2013, Ochs filed an application with FEMA on her behalf, seeking federal rental assistance and assistance for personal property damage under FEMA’s Individual Assistance Program. He claimed the property was damaged as a result of Hurricane Sandy and was unfit for occupancy. An inspector working on behalf of FEMA inspected the property and determined that the property was uninhabitable, that repairs were required, and that the homeowner had moved. During the inspection, Ochs, acting with power of attorney, signed the application on behalf of his mother attesting that all the information on the application was true and correct. By signing the application, Ochs also acknowledged that any disaster relief money awarded would be returned if his mother received insurance benefits for the same loss.</p>
<p>FEMA initially denied Ochs’s claim, citing the fact that the property was covered by insurance. Ochs submitted documents to FEMA indicating that the insurance provider denied his mother’s claim. Based on that, in February 2013, FEMA awarded Ochs’s mother funds for rental assistance and home repair.</p>
<p>In applying to FEMA for home repair and rental assistance claiming that his mother was displaced by Hurricane Sandy, Ochs submitted fraudulent leases claiming that his mother was renting another property on the same block in Ocean City. Ochs also provided fictitious rental receipts. Ochs failed to disclose that the property his mother was renting was owned by his family and that no rent was ever paid. To support his mother’s continued need for rental assistance, Ochs was required to complete FEMA forms, and he faxed fraudulent lease agreements and rental receipts to FEMA.</p>
<p>In February 2013 Ochs contacted FEMA and made a false claim for transportation assistance, claiming that his mother’s 1985 Mercedes Benz was damaged by Hurricane Sandy and submitting fraudulent documentation to that effect.</p>
<p>Between February 2013 and December 2013, FEMA paid Ochs’ mother $17,229 for rental assistance and $4,345 for home repairs, through the issuance of direct deposits into bank accounts that Ochs controlled. Ochs then used the money to pay his personal expenses.</p>
<p>FEMA’s National Flood Insurance Program indemnifies flood insurance providers when a claim is paid out. At the time of the storm, Wells Fargo Bank held the <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/mortgage/" title="mortgage" data-wpil-keyword-link="linked" data-wpil-monitor-id="132">mortgage</a> on Ochs’s mother’s property. After Ochs made a claim to the insurance provider, the insurance provider sent the insurance proceeds to Wells Fargo. To entice Wells Fargo to release the funds, Ochs presented fraudulent invoices and forms from a builder that over inflated the value of the work that the builders performed. Wells Fargo mailed numerous checks totaling $169,518 to the house in Ocean City. Ochs deposited the checks into bank accounts that he controlled and spent the money on personal expenses. The flood insurance claims were indemnified by FEMA.</p>
<p>The count of disaster benefits fraud to which Ochs pleaded guilty to carries a maximum potential penalty of 30 years in prison and a $250,000 fine. The count of mail fraud to which he pleaded guilty carries a potential penalty of 30 years in prison and $1 million fine. Sentencing is scheduled for Jan. 25, 2019.</p>
<p>U.S. Attorney Carpenito credited special agents of the Department of Homeland Security, Office of Inspector General, under the direction of Special Agent in Charge Mark Tasky, with the investigation leading to today’s guilty plea.</p>
<p>The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney=s Office Criminal Division in Camden.</p>
<p>Defense counsel: William J. Hughes Jr., Atlantic City, New Jersey</p>
<p><a href="https://www.justice.gov/usao-nj/pr/ambler-pennsylvania-man-admits-defrauding-fema-relating-major-disaster">Original PressReleases&#8230;</a></p>

Financial Fraud: David Scott Glasrud Convicted On Federal Theft, Fraud And False Statement Charges Arising
<h2>Founder and Former Administrator of Public Charter Schools in Albuquerque Sentenced to 60 Months for Conviction on Federal Theft, Fraud and False Statements Charges</h2>
<p><strong>David Scott Glasrud also Ordered to Pay $3 Million in Restitution</strong></p>
<p>ALBUQUERQUE – Senior U.S. District Judge James A. Parker today sentenced David Scott Glasrud, 51, the former administrator of Southwest Learning Centers in Albuquerque, N.M., to 60 months of imprisonment for his conviction on federal theft, fraud and false statement charges arising out of a nearly 15-year scheme to defraud the public charter schools he founded out of millions of dollars. Glasrud was ordered to serve a three-year term of supervised release after completing his prison sentence. Judge Parker also ordered Glasrud to pay $3 million in restitution to the victims of his crimes.</p>
<p>U.S. Attorney John C. Anderson and Special Agent in Charge James C. Langenberg of the Albuquerque Division of the FBI announced Glasrud’s sentence, which was imposed based on a guilty plea entered by Glasrud on Oct. 25, 2017. Glasrud entered the guilty plea to a nine-count felony information charging him with two counts of theft from programs receiving federal funds, three counts of wire fraud, two counts of mail fraud, and two counts of making false statements.</p>
<p>According to the felony information, Glasrud established the public charter school, Southwest Secondary Learning Center, in Albuquerque in Dec. 1999, and later established three other public charter schools in Albuquerque: Southwest Primary Learning Center, Southwest Intermediate Learning Center, and Southwest Aeronautics, Mathematics &; Science Academy. The four schools collectively are known as the Southwest Learning Center Schools (Charter Schools) and operate with public funds, including federal funds.</p>
<p>Glasrud served as the Head Administrator for, and exercised <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="874">financial</a> oversight over, the Charter Schools until Aug. 2014. As the Head Administrator and an employee of the Charter Schools, Glasrud had a duty to use his best efforts on behalf of the Charter Schools in all matters of trust and confidence, and not to act for his own benefit at the expense of the Charter Schools. In his plea agreement, Glasrud admitted violating this duty of trust repeatedly over the course of 15 years by engaging in an ongoing series of schemes to defraud the Charter Schools for his personal benefit. Glasrud also acknowledged making false statements to FBI Special Agents who were investigating his criminal conduct.</p>
<p>The felony information charged, and Glasrud admitted, that from Nov. 2000, Glasrud was doing business in his personal capacity as Southwest Educational Consultants, which he incorporated as Southwest Educational Consultants, Inc. (SEC) in March 2002. Glasrud served as SEC’s registered agent, director and President, and his personal expenses were paid out of an SEC bank account. Glasrud used SEC to facilitate his schemes to defraud the Charter Schools.</p>
<p>For example, from Nov. 2000 through Aug. 2014, Glasrud devised and executed a scheme to defraud that involved leasing a building at 9904 Montgomery Blvd. NE (Building) in Albuquerque to one of the Charter Schools (Charter School 1) by misrepresenting, concealing and omitting material facts from Charter School 1, and by breaching duties that he owed to Charter School 1. In Nov. 2000, while doing business as SEC, Glasrud leased the entire Building. Days later, on Dec. 1, 2000, still acting as SEC, he subleased the Building to Charter School 1 for twice the rent that SEC was paying and without disclosing this material information to Charter School 1. As part of his scheme, by 2007, Glasrud had arranged for SEC to sublease a majority of the square footage of the Building to another tenant, with whom Glasrud had a close familial relationship.</p>
<p>Glasrud admitted that as part of his fraudulent scheme, Charter School 1 paid more than double the rent that SEC paid to lease the entire Building, but occupied less than half the Building. Glasrud also admitted causing Charter School 1 to pay SEC approximately four to five times as much as the other tenant for use of less than half of the Building it was sharing. When the New Mexico Public Education Department (PED) raised concerns about Charter School 1’s sublease, Glasrud caused a school representative to misrepresent to PED and the school board the amount of profit that SEC was realizing off the sublease. In his plea agreement, Glasrud admitted that SEC, his personally owned business, made more than $700,000 in profits as the result of this scheme.</p>
<p>In entering his guilty plea, Glasrud also acknowledged devising and executing a series of other schemes to defraud the Charter Schools. In pleading guilty to one of the three wire fraud charges, Glasrud admitted that in Feb. 2004, he and SEC created a bogus business called Media Learning Solutions (MLS) with an “office” address at a mail drop in Las Vegas, NV. Thereafter, Glasrud caused the Charter Schools to pay capital outlay money to MLS based on fraudulent proposals and invoices. Most of the money MLS received from the Charter Schools was not spent on the items for which it was intended or for the benefit of the Charter Schools, and instead was used for Glasrud’s personal benefit. For example, in 2009 and 2010, the Charter Schools paid MLS approximately $265,000, which Glasrud expended as follows: $199,000 to pay down his personal line of credit; $50,000 transferred into his personal bank account; $12,000 for personal items; and $4,000 spent at a casino in Las Vegas, NV.</p>
<p>Another of Glasrud’s fraudulent schemes began in Dec. 2002 and continued until Aug. 2014, and involved Charter School 1’s Extended Learning Program (ELP). The ELP offered students the opportunity to earn school credits using online, computer-based courses. Students paid to receive official school credit from Charter School 1, and Glasrud diverted almost all of the payments into an SEC bank account he controlled. Glasrud admitted that from 2007 to 2014, more than $1,000,000 in payments for the ELP that should have gone to Charter School 1 was deposited into a bank account for SEC, Glasrud’s personal business.</p>
<p>These three schemes are examples of the fraudulent schemes that Glasrud perpetuated over the 15-year period during which he served as the Head Administrator of the Charter Schools and by which he betrayed the trust and confidence placed in him. Glasrud admitted devising and executing each of these three schemes as well as the other schemes described in the felony information and the plea agreement when he entered his guilty plea this morning.</p>
<p>The case was investigated by the Albuquerque Division of the FBI with the assistance of the U.S. Department of Education, Office of Inspector General. Assistant U.S. Attorneys Fred J. Federici and Holland S. Kastrin prosecuted the case.</p>

Financial Fraud: Wayde McKelvy Convicted For Conspiracy to Engage in Securities Fraud And Wire Fraud
<h2>Founder of Bogus Green Energy Firm Convicted of Running a $54 Million Ponzi Scheme</h2>
<p>PHILADELPHIA – U.S. Attorney William M. McSwain announced that Wayde McKelvy, of Colorado, was convicted by a jury of the following crimes: Conspiracy to Commit Wire Fraud (one count); Wire Fraud (seven counts); Conspiracy to Engage in Securities Fraud (one count); and Securities Fraud (one count). The trial was held before United States District Judge Joel H. Slomsky.</p>
<p>The government established at trial that McKelvy and his co-conspirators ran an elaborate Ponzi scheme operating as Mantria Corporation, which received more than $54 million in fraudulently obtained new investor funds. The co-conspirators promised investors huge returns, as high as 484%, for securities investments in supposedly profitable business ventures in real estate and green energy. In reality, Mantria was a classic Ponzi scheme in which new investor money was used to pay “returns” to early investors, and the business generated meager revenues and no actual profits.</p>
<p>To induce investors to invest money, McKelvy and his co-conspirators repeatedly made fraudulent representations and material omissions about the economic state of Mantria. McKelvy also promoted himself as a <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="873">financial</a> wizard through aggressive marketing tactics, even though he had little financial acumen and was an unlicensed securities salesman. McKelvy operated what he called “Speed of Wealth” clubs, which advertised on television, radio and the Internet, held seminars for prospective investors, and promised to make them rich. During those seminars and other programs, McKelvy lied to prospective investors to dupe them into investing in Mantria.</p>
<p>Mantria, based in Bala Cynwyd, Pennsylvania, sent McKelvy “commissions” via wire transfer to an entity he controlled called “Retirement TRACS, LLC.” Mantria also used wire transfers to pay for other portions of the Ponzi scheme, including payments for both the real estate and green energy projects. When the SEC shut down Mantria in November 2009, the pyramid scheme collapsed and was exposed.</p>
<p>“McKelvy repeatedly lied about Mantria’s bright future in the green energy business, often delivering his sales pitch before a live audience full of prospective investors in order to dupe as many people as he could into investing in the company. McKelvy and his co-conspirators talked a big game, promising investment returns as high as 484 percent – but it was all a ruse,” said U.S. Attorney McSwain. “Instead of high returns, the over 300 victims of this fraud unwittingly invested in uninhabitable land and a bogus trash-to-green energy business idea based on bogus scientific methodology. We are pleased that the jury held McKelvy accountable for his part in this massive fraud.”</p>
<p>“Wayde McKelvy actively marketed himself as some kind of financial genius, when in fact he was nothing but a fraud,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “He and his buddies lured investors in by promising sky-high returns on their money, taking full advantage of people’s trust and their hopes for the future. Ponzi schemes can do real damage to victims’ lives, and the FBI is determined to hold the perpetrators accountable.”</p>
<p>This case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Robert Livermore and Sarah Wolfe. Additionally, the Securities and Exchange Commission, Denver Regional Office, assisted with the investigation.</p>

Investment Fraud: SUNG HONG Sentenced For Defrauding More Than 55 Clients On Affinity Investment Fraud
<h2>Couple Sentenced to Lengthy Prison Terms for $12.7 Million Affinity Investment Fraud</h2>
<p><strong>Defendants Preyed on Faith Communities to Fund Lavish Lifestyle</strong></p>
<p>SUNG HONG, 47, and HYUN JOO HONG, 42, of Clyde Hill, Washington were sentenced today in U.S. District Court in Seattle to lengthy prison terms for defrauding more than 55 clients out of $12.7 million, announced U.S. Attorney Annette L. Hayes. SUNG HONG, aka LAURENCE HONG or LAWRENCE HONG, was sentenced to 15 years in prison. His wife, HYUN JOO HONG, aka GRACE HONG, was sentenced to six years in prison. From 2010 until their arrest in June 2017, the couple held themselves out as experienced investment advisors with a track record of performance in order to solicit investor funds for their hedge fund, Pishon Holdings, and for management through separately managed accounts. In fact, SUNG HONG had just completed a 33 month sentence for committing investment fraud when he launched this new scheme in 2010. At the sentencing hearing U.S. District Judge Thomas S. Zilly said, “This scheme was a serious, complex fraud over seven years. You targeted religious victims. You used God as a way to gain trust…. You have emotionally and spiritually damaged these victims and most of them will never recover.”</p>
<p>“Using faith and fraud, this couple stole millions from people whose dreams of a better life have now been shattered,” said U.S. Attorney Annette L. Hayes. “Both repeatedly lied to their investors, all while spending their hard earned money on high-end shopping sprees, luxurious vacations, a yacht and an expensive rental home. Their victims now live paycheck to paycheck with college and retirement funds depleted and a very different financial future than they expected.”</p>
<p>According to records filed in the case, the HONGs recruited investors using religious organizations and shared religious beliefs. The couple claimed that LAURENCE HONG privately invested billions of dollars for wealthy Korean families and that GRACE HONG held a Series 65 securities license and previously worked for a large international investment firm. None of these statements were true. Likewise, the defendants did not disclose LAURENCE HONG’s past criminal conviction for investment fraud. The couple sent potential investors misleading and false investment prospectuses that contained an inaccurate record of their past investment performance and other plagiarized investment outlooks.</p>
<p>Throughout their fraudulent scheme, the HONGs used stolen investor funds for their own benefit, including payments for a 9,000 square foot rental home in Clyde Hill; a 45-foot yacht; multiple high-end vehicles, such as BMWs, a Maserati, an Aston Martin, and a Lamborghini; and numerous expensive vacations to locations such as the Bahamas and Beverly Hills.</p>
<p>One church in California invested $1 million with the HONGs and lost about $300,000 on a single trade. Still, despite the steep losses and a fee arrangement based on investment gains, the HONGs withdrew almost $150,000, ostensibly as advisor fees, from the church’s account. Another couple allowed the HONGs to manage their $180,000 in retirement funds only to lose $100,000 within less than a year. After meeting with the HONGs, that couple then invested their remaining retirement funds in the HONGs’ hedge fund, only for those funds to be redirected into GRACE HONG’s personal account. The HONGs used those funds to pay credit card bills and other personal expenses, including a $16,000 payment to a resort in the Bahamas for a HONG family vacation.</p>
<p>Speaking to LAWRENCE HONG, Judge Zilly noted his prior conviction for a similar fraud: “You clearly did not learn anything from the fact you were convicted and sentenced to prison…. You are one of those con men who will never be able to stop conning people.” Judge Zilly noted that GRACE HONG played “an intricate and important role in the entire scheme. She misrepresented her credentials… she took God’s name – she used that to entice investors to put money in their pockets.”</p>
<p>Judge Zilly ordered the pair to pay more than $12.7 million in restitution. The losses for certain investors represented their entire life or retirement savings.</p>
<p>The case was investigated by the FBI. The United States Attorney’s Office thanks the Commodity Futures Trading Commission (CFTC) for its assistance in the investigation.</p>
<p>The case is being prosecuted by Assistant United States Attorneys Justin Arnold and Steven Masada.</p>
<p><a href="https://www.justice.gov/usao-wdwa/pr/couple-sentenced-lengthy-prison-terms-127-million-affinity-investment-fraud">Original PressReleases&#8230;</a></p>
<div class="field__label">Topic(s):</div>
<div class="field__items">
<div class="field__item even"><a href="https://www.fraudswatch.com/tag/Consumer-Protection/">Consumer Protection</a></div>
<div class="field__item odd"><a href="https://www.fraudswatch.com/tag/financial-fraud/">Financial Fraud</a></div>
<div class="field__item even"><a href="https://www.fraudswatch.com/tag/Investment-Fraud/">Securities, Commodities, &; Investment Fraud</a></div>
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<p> ;</p>

Financial Fraud: Kevin Kyes Sentenced For Wire Fraud And Money Laundering Convictions Arising From Ponzi Scheme
<h2>Convicted Fraudster Sentenced To Five Years In Prison For $7 Million Ponzi Scheme</h2>
<p>SAN FRANCISCO – Kevin Kyes was sentenced today to five years in prison for wire fraud and money laundering convictions arising from a $7 million Ponzi scheme, announced United States Attorney Alex G. Tse, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and the Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Tara Sullivan. The sentence was handed down by the Honorable Susan Illston, U.S. District Judge.</p>
<p>After a week-long trial before Judge Illston, a jury convicted Kyes, 70, formerly of Campbell, Calif. and currently of Roseville, Calif., of one count of conspiracy to commit wire fraud, seventeen counts of wire fraud, one count of conspiracy to commit money laundering, and two counts of money laundering. The evidence at trial established that Kyes conspired to commit wire fraud and committed wire fraud as part of a nearly $7 million Ponzi scheme in which the victims were a group of more than 60 Japanese investors. The jury found that Kyes conspired to and did launder the proceeds of this fraud.</p>
<p>From December 2012 through July 2015, Kyes worked with John Holdaway, 74 of Sandy, Utah, to defraud the Japanese investors through a business that they referred to as “Money Management Strategies,” or MMS. Kyes and Holdaway told the investors their money would be invested in high-speed trading programs with historical returns of well over 100% annually. Kyes and Holdaway also told investors that their investments would be safe, in part because their principal investment would never leave the bank accounts into which the funds were sent, and that instead, MMS would draw a credit line secured by their funds and use that to fund trading. Kyes and Holdaway further explained that any trading losses would be borne by MMS. Based on the representations of Holdaway and Kyes, these investors wired money to bank accounts in Northern California controlled by Holdaway and Kyes. The Japanese investors sent approximately $6.8 million to Holdaway and Kyes during the scheme.</p>
<p>The evidence at trial demonstrated that, in reality, Holdaway and Kyes did not invest the money as promised. Instead, they spent the money themselves, used it to fund Ponzi-type payments back to investors, spent the money to pay back prior creditors to whom they owed funds, and spent it on gold-related businesses. In addition, Holdaway and Kyes told investors that they were receiving distributions or returns on their investment. To back up their claims, Holdaway and Kyes created and sent to investors fake documents, including phony account statements and forged letters from an accountant. Holdaway, with Kyes’s knowledge and participation, also sent emails to investors under fake names, to give the appearance that multiple people worked for Holdaway and Kyes, and lied about traveling to Europe or elsewhere to work on their investments.</p>
<p>A federal grand jury indicted Kyes and Holdaway on June 14, 2016, charging them with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349; eighteen counts of wire fraud, in violation of 18 U.S.C. § 1343; one count of conspiracy to engage in monetary transactions in property derived from specified unlawful activity, in violation of 18 U.S.C. § 1956(h); and five counts of engaging in monetary transactions in property derived from specified unlawful activity, in violation of 18 U.S.C. § 1957.</p>
<p>In addition to the prison term, Judge Illston also ordered Kyes to serve three years of supervised release and to pay over $3.6 million in restitution. On October 6, 2017, Holdaway pleaded guilty to one count of conspiracy to commit wire fraud and one count of filing false tax returns, and is scheduled to be sentenced on November 16, 2018, also before Judge Illston.</p>
<p>Assistant U.S. Attorneys Benjamin Kingsley and Helen Gilbert are prosecuting the case with assistance from Bridget Kilkenny and Patricia Mahoney. The prosecution is the result of an investigation by the FBI and the IRS, Criminal Investigation.</p>

Financial Fraud: Eight Defendants Arrested For Stealing From Medicaid And The New York City Department
<h2>Eight Therapists Arrested In Scheme to Defraud Program for Developmentally Disabled Children</h2>
<p><strong>Defendants Allegedly Defrauded the New York State Early Intervention Program Out of More Than $600,000 through Fraudulent Billing for Therapy Sessions that Never Occurred</strong></p>
<p>A criminal complaint was unsealed today in federal court in Brooklyn charging Kaderrah Doyle, Cara Steinberg, Marina Golfo, Ego Onaga, Lyubov Beylina, Danielle Scopinich, Patricia Hakim and Enock Mensah with stealing more than $600,000 in funds from Medicaid and the New York City Department of Health and Mental Hygiene through fraudulent billing practices in connection with the New York State Early Intervention Program (EIP). The EIP is a New York State program that provides remedial services to developmentally delayed children from birth to age three. The defendants, all EIP therapists, were arrested earlier today and are scheduled to make their initial appearance this afternoon before United States Magistrate Judge Sanket J. Bulsara.</p>
<p>Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Mark G. Peters, Commissioner, New York City Department of Investigation (DOI), announced the charges.</p>
<p>“As alleged in the complaint, the defendants defrauded government agencies out of hundreds of thousands of dollars in public funds designated for therapeutic care for developmentally disabled children,” stated United States Attorney Donoghue. “The victims of this fraud include not only the children and their families who were deprived of the therapeutic care that these defendants claimed to have performed, but ultimately the taxpayers whose taxes support Medicaid. This Office and our law enforcement partners are committed to ensuring that those who defraud benefit programs will be held accountable.” Mr. Donoghue also expressed his appreciation to the New York City Department of Health and Mental Hygiene for its assistance during the investigation.</p>
<p>“As we allege today, these defendants stole hundreds of thousands of government dollars from a program designed to aid some of our city’s most vulnerable residents,” stated FBI Assistant Director-in-Charge Sweeney. “Rather than provide honest services, they chose to line their own pockets at the expense of taxpayers and the developmentally-delayed children and their families for whom these funds were targeted. Today’s arrests should serve as a reminder that the FBI will continue to be vigilant in our effort to root out fraud and abuse in programs intended to serve the public when these programs are corrupted by greed.”</p>
<p>“These eight therapists shamefully benefited by stealing hundreds of thousands of dollars in public funds while developmentally disabled and delayed children in their care were denied thousands of crucial therapy sessions, according to the charges,” stated DOI Commissioner Peters. “DOI thanks the U.S. Attorney’s Office for the Eastern District of New York for its prosecution of these crimes.”</p>
<p>According to the complaint, between approximately 2012 and 2018, the defendants submitted thousands of fraudulent session notes and accompanying invoices for non-existent EIP therapy sessions. As a direct result of their fraudulent submissions, the defendants received hundreds of thousands of dollars in reimbursements from Medicaid and the New York City Department of Health and Mental Hygiene. On many occasions, the defendants were not present at the place where the therapy sessions supposedly occurred, including instances in which they were outside of New York State or even outside of the United States. For example, Beylina allegedly submitted approximately 51 fraudulent invoices for EIP therapy sessions that purportedly occurred when she was in the Dominican Republic. On other occasions, the defendants submitted documentation containing the forged signatures of the children’s caretakers, including parents, guardians, teachers and daycare providers. In other instances, the defendants falsely claimed to have performed EIP therapy sessions for two different children at two different locations at the exact same time. Many of the defendants also falsely claimed to have performed EIP therapy sessions when they were, in fact, at work elsewhere, including as full-time teachers with the New York City Department of Education.</p>
<p>The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty.</p>
<p>If convicted, the defendants face a statutory maximum of 10 years’ imprisonment.</p>
<p>The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Ryan Harris and Erin Reid are in charge of the prosecution.</p>
<p>The Defendants:</p>
<p>KADERRAH DOYLE<br />
Age: 41<br />
Bronx, New York</p>
<p>CARA STEINBERG<br />
Age: 40<br />
Old Bridge, New Jersey</p>
<p>MARINA GOLFO<br />
Age: 44<br />
North Pelham, New York</p>
<p>EGO ONAGA<br />
Age: 45<br />
Staten Island, New York</p>
<p>LYUBOV BEYLINA<br />
Age: 30<br />
Brooklyn, New York</p>
<p>DANIELLE SCOPINICH<br />
Age: 35<br />
Ozone Park, New York</p>
<p>PATRICIA HAKIM<br />
Age: 54<br />
Forest Hills, New York</p>
<p>ENOCK MENSAH<br />
Age: 58<br />
Mount Olive, New Jersey</p>
<p>E.D.N.Y. Docket No. 18-MJ-927</p>
<p><a href="https://www.justice.gov/usao-edny/pr/eight-therapists-arrested-scheme-defraud-program-developmentally-disabled-children">Original PressReleases&#8230;</a></p>

Health Care Fraud: Wade Neal Barker Admitted His Role In The $200 Million Forest Park Medical Center Fraud
<h2>Surgeon Pleads Guilty In Forest Park Medical Center Bribery Scam</h2>
<p>A Mesquite-based bariatric surgeon today formally admitted his role in the $200 million Forest Park Medical Center fraud, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.</p>
<p>53-year-old Wade Neal Barker, one of Forest Park’s founding doctors, appeared in court this morning, where he pleaded guilty to conspiracy to pay and receive healthcare bribes and kickbacks as well as aiding and abetting commercial bribery.</p>
<p>“Patients trust doctors to make healthcare recommendations based on their best interests,” said Nealy Cox. “Instead, Dr. Barker let his own <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="872">financial</a> considerations guide decisions about where patients would be treated – and, in the process, defrauded millions from patients’ insurance. The Northern District of Texas will not tolerate plots that undermine confidence in the healthcare system.”</p>
<p>“With the plea in this conspiracy to defraud patients and the healthcare industry by those entrusted to administer and to protect it, the FBI and our law enforcement and regulatory partners will increase our efforts to shine even brighter lights on such schemes to restore the missing trust for all those harmed by the conspirator&#8217;s actions,” said Eric Jackson, Special Agent-In-Charge of the FBI Dallas Division.</p>
<p>Barker is the seventh of 21 <a href="https://www.fraudswatch.com/how-to-defend-yourself-from-fraudulent-charitable-schemes/">defendants to formally plead guilty in the bribery scheme</a>, designed to induce doctors to refer lucrative patients – particularly those with high-reimbursing, out-of-network private insurance – to the now-defunct hospital, as opposed to other facilities.</p>
<p>Instead of billing patients for out-of-network co-payments, instituted by insurers to de-incentivize the high costs associated with out-of-network treatment, Forest Park allegedly assured patients they would pay in-network prices. Because they knew insurers wouldn’t tolerate such practices, they concealed the patient discounts and wrote off the difference as uncollected “bad debt.”</p>
<p>According to prosecutors, Barker and his co-conspirators shelled out approximately $40 million in bribes, disguised as “marketing money” and funneled through a shell company, between 2009 and 2013. Because he performed surgeries at Forest Park, Barker received these so-called “marketing” payments as well.</p>
<p>He faces roughly five to seven years in federal prison. Sentencing has not yet been set.</p>
<p>Co-defendants Richard Ferdinand Toussaint, Jr., another Forest Park Founder, and Alan Andrew Beauchamp, the hospital manager, have pleaded guilty in the case, along with several others. The remaining defendants are awaiting trial early next year.</p>
<p>The case was investigated by the Federal Bureau of Investigation, the U.S. Department of Labor Office of Inspector General, the U.S. Department of Labor Employee Benefits Security Administration, the U.S. Department of Defense &#8211; Defense Criminal Investigative Service, the U.S. Office of Personnel Management Office of Inspector General, and Internal Revenue Service Criminal Investigation, with assistance from the Food and Drug Administration and the U.S. Postal Inspection Service.</p>
<p>Assistant U.S. Attorneys Andrew Wirmani, Kate Pfeifle and Mark Tindall are prosecuting the case.</p>
<p><a href="https://www.justice.gov/usao-ndtx/pr/surgeon-pleads-guilty-forest-park-medical-center-bribery-scam">Original PressReleases&#8230;</a></p>

Tax Fraud: David Tielle Pleaded Guilty To Fraudulently Claim Tax Refunds Based On The Biodiesel Mixture Tax Credit
<h2>Pennsylvania Man Pleads Guilty to Biodiesel Tax Conspiracy</h2>
<p>A Harrisburg, Pennsylvania man pleaded guilty yesterday in federal court to one count of conspiring to defraud the Internal Revenue Service (IRS), announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, Acting Assistant Attorney General Jeffrey H. Wood of the Justice Department’s Environmental and Natural Resources Division, EPA Criminal Investigation Division Director Jessica Taylor, and U.S. Attorney David J. Freed for the Middle District of Pennsylvania.</p>
<p>According to documents and information provided to the court, David Tielle served as Director Business Development at Keystone Biofuels Inc. (Keystone), located in Shiremanstown, Pennsylvania, and later in Camp Hill, Pennsylvania. Keystone purported to be a producer and seller of biodiesel, a type of renewable fuel. Between 2009 and 2012, Tielle participated in a conspiracy to fraudulently claim tax refunds based on the Biodiesel Mixture Tax Credit – a federal excise tax credit for persons or businesses who mix biodiesel with petroleum and use or sell the mixture as a fuel.</p>
<p>“Fraud committed against the United States Government, making all of us victims, is always disappointing,” said U.S. Attorney David J. Freed. “It is particularly so when the fraud is connected to a program with the laudable aim of encouraging renewable fuel production. The defendant in this case nefariously turned a program meant to benefit our community into a scheme to enrich himself and his partners, at our expense. I commend the tireless work of all of our partners in this case, especially the investigators with IRS-Criminal Investigation and the Environmental Protection Agency Criminal Investigation.”</p>
<p>“A strong enforcement program is essential to maintaining the integrity of the renewable fuel program,” said EPA Special Agent in Charge Jennifer Lynn. “Yesterday&#8217;s guilty plea should send a clear message that EPA and our law enforcement partners are committed to vigorously pursuing these criminal cases.”</p>
<p>As part of the conspiracy, Tielle caused inflated fuel amounts to be reported to the IRS in order to fraudulently claim tax refunds on fuel Keystone was not producing. To account for the inflated fuel amounts, Tielle created false books and records and engaged in a series of sham <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="871">financial</a> transactions intended to mirror the false books and records. Tielle also caused Keystone to fraudulently claim tax refunds on fuel that did not meet the quality standards needed to qualify for the Biodiesel Mixture Tax Credit and on fuel Keystone had not mixed with petroleum. The total loss resulting from Tielle’s conduct is approximately $4,149,983.41.</p>
<p>Tielle faces a statutory maximum sentence of five years in prison, as well as a period of supervised release, restitution, and monetary penalties.</p>
<p>The case was investigated by IRS-Criminal Investigation and the EPA Criminal Investigation Division. The prosecution is being handled by Assistant U.S. Attorney Geoffrey MacArthur, Special Assistant U.S. Attorney David Lastra, Trial Attorneys Mark Kotila and Kimberly Ang of the Justice Department’s Tax Division and Senior Litigation Counsel Howard P. Stewart of the Justice Department’s Environmental and Natural Resources Division.</p>
<p><a href="https://www.justice.gov/opa/pr/pennsylvania-man-pleads-guilty-biodiesel-tax-conspiracy">Original PressReleases&#8230;</a></p>

Financial Fraud: Si Chen Pleaded Guilty To Participating In a Scheme That Illegally Exported Sensitive Space Communications Technology
<h2>Pomona Woman Sentenced to Federal Prison in Scheme to Smuggle Restricted Space Communications Technology to China</h2>
<p>SANTA ANA, California – A Chinese national who pleaded guilty to participating in a scheme that illegally exported sensitive space communications technology to China was sentenced today to serve 46 months in federal prison.</p>
<p>Si Chen, 33, a Pomona resident who has been in custody since her arrest in May 2017, was sentenced by United States District Judge Cormac J. Carney.</p>
<p>Chen, who used various aliases, included “Cathy Chen,” pleaded guilty in July to conspiracy to violate the International Emergency Economic Powers Act (IEEPA), which controls and restricts the export of certain goods and technology from the United States to foreign nations. Chen also pleaded guilty to money laundering and using a forged passport with her photo but a different name that appeared to have been issued by the People’s Republic of China.</p>
<p>“This defendant knowingly participated in a plot to secretly send items with <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/military-scammer/" title="military" data-wpil-keyword-link="linked" data-wpil-monitor-id="395">military</a> applications to China,” said United States Attorney Nick Hanna. “The smuggled items could be used in a number of damaging ways, including in equipment that could jam our satellite communications. We will aggressively target all persons who provide foreign agents with technology in violation of U.S. law.”</p>
<p>According to court documents, from March 2013 through the end of 2015, Chen purchased and smuggled sensitive items to China without obtaining licenses from the U.S. Department of Commerce that are required under IEEPA. Those items included components commonly used in military communications “jammers.” Additionally, Chen smuggled communications devices worth more than $100,000 that are commonly used in space communications applications. Chen falsely under-valued the items on the shipping paperwork to avoid arousing suspicion. Chen received payments for the illegally exported products through an account held at a bank in China by a family member.</p>
<p>Under IEEPA, it is crime to willfully export or attempt to export items that appear on the Commerce Control List without a license from the U.S. Department of Commerce. These are items authorities have determined could be detrimental to regional stability and national security.</p>
<p>“The export of sensitive technology items to China or anywhere else in the world is tightly regulated for good reason,” said Joseph Macias, Special Agent in Charge for Homeland Security Investigations (HSI) Los Angeles. “One of HSI’s top enforcement priorities is preventing U.S. military products and sensitive technology from falling into the hands of those who might seek to harm America or its interests. We will continue to work closely with its law enforcement partners to aggressively target and investigate those who jeopardize our nation’s security – or the welfare of those devoted to protecting it.”</p>
<p>In addition to participating in the scheme to violate IEEPA, Chen used several aliases and a forged Chinese passport to conceal her smuggling activities. Chen used a Chinese passport bearing her photo and a false name – “Chunping Ji” – to rent an office in Pomona where she took delivery of the export-controlled items. After receiving the goods, Chen shipped the devices to Hong Kong, and from there the items were transshipped to China. The parcels shipped to Hong Kong bore her false name, along with false product descriptions and monetary values, all done in an effort to avoid attracting law enforcement scrutiny.</p>
<p>“Today’s sentencing is the result of outstanding collaborative investigative work by the Office of Export Enforcement and its law enforcement partners to prevent the illegal shipment of sophisticated U.S.-origin technology. We will continue to pursue violators wherever they may be,” said Richard Weir, Special Agent in Charge of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, Los Angeles Field Office.</p>
<p>“Today’s sentencing of Chen demonstrates the Defense Criminal Investigative</p>
<p>Service’s unwavering commitment to protect our country from those who would do harm,” said Chris Hendrickson, Special Agent in Charge, DCIS Western Field Office. “DCIS, along with our federal law enforcement partners, will relentlessly pursue those who put our military at risk by illegally exporting protected military assets and sensitive technology to bad actors.”</p>
<p>The investigation in this case was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), the U.S. Department of Commerce’s Office of Export Enforcement, and the Defense Criminal Investigative Service.</p>
<p>The case against Chen is being prosecuted by Assistant United States Attorney Judith A. Heinz of the National Security Division.</p>
<p><a href="https://www.justice.gov/usao-cdca/pr/pomona-woman-sentenced-federal-prison-scheme-smuggle-restricted-space-communications">Original PressReleases&#8230;</a></p>

Financial Fraud: PAUL D. LAMARCHE Pleaded Guilty To Wire Fraud And Theft Of Government Property
<h2>Captain of Prominent Tourist Sailing Ship Sentenced to Prison for Illegally Claiming Disability</h2>
<p><strong>Collected Disability Payments Claiming He Couldn’t Work, while Telling Coast Guard He had No Impairments for Captain’s Credentials</strong></p>
<p>The Captain of a Seattle tourist sailboat was sentenced today in U.S. District Court in Seattle to 9 months in prison, two years of supervised release, a $5,500 fine and $324,738 in restitution and civil penalty, announced U.S. Attorney Annette L. Hayes. PAUL D. LAMARCHE, 67, pleaded guilty to wire <a href="https://www.fraudswatch.com/loans-fraud-getting-a-loan-after-identity-theft/">fraud and theft</a> of government property in March 2018, admitting he collected more than $177,000 in disability payments from the Railroad Retirement Board while operating Emerald City Charters – a tourist attraction running sailing ships on the Seattle waterfront. At the sentencing hearing U.S. District Judge James L. Robart said LAMARCHE was “…stealing from the government and lying about it…. He’s obviously made a lot of money, but he’s stealing every year… He’s a thief.”</p>
<p>According to records filed in the case, in June 1988, LAMARCHE claimed he could no longer work as a Burlington Northern Brakeman/Conductor due to a back injury. In August 1993, he began receiving a disability annuity from the Railroad Retirement Board. In connection with those payments, he certified annually that his medical condition had not improved, that he was unable to work and had limited earnings. In fact, from 1984 to the present, LAMARCHE owned and operated Emerald City Charters, which operates two large sea-going sailboats on Elliott Bay. While claiming disability, LAMARCHE submitted multiple forms to the U.S. Coast Guard certifying that he had no impairments that limit his physical activities or ability to pilot the sailboats.</p>
<p>On multiple occasions in various settings, LAMARCHE appeared in promotional videos actively sailing the boats. He made statements that he had missed “only a couple days of work in 23 years,” and he appeared in a television feature story doing yoga on a stand-up paddleboard. Even as the Railroad Board began investigating his disability claim in 2015, he continued to submit false reports claiming he was not able to “lift, pull or carry heavy items” was “unable to run or jump,” and had “debilitating headaches daily.” He now admits all those statements were false.</p>
<p>In addition to the $177,369 in restitution, LAMARCHE agreed to pay an additional $177,369 as a civil penalty for violating the False Claims Act. The U.S. Coast Guard has a pending action to address LAMARCHE’s Captain’s license. LAMARCHE was ordered to report to prison October 2, 2018.</p>
<p>The case was investigated by Special Agents of the Railroad Retirement Board Office of Inspector General (RRB-OIG) and U.S. Coast Guard Investigative Service.</p>
<p>The case was prosecuted by Assistant United States Attorney Stephen Hobbs and the civil investigation and settlement were handled by Assistant United States Attorney Kayla Stahman and Investigator Judy Swem.</p>
<p><a href="https://www.justice.gov/usao-wdwa/pr/captain-prominent-tourist-sailing-ship-sentenced-prison-illegally-claiming-disability">Original PressReleases&#8230;</a></p>

Cyber Crime: Filip Lucian Simion Sentenced For Conspiracy To Import Controlled Substances And Launder Money
<h2>Leader Of Darknet ItalianMafiaBrussels Drug Trafficking Organization Sentenced To 11 Years’ Imprisonment</h2>
<p>DENVER – U.S. Attorney Bob Troyer announced that on September 26, 2018, U.S. District Court Judge R. Brooke Jackson sentenced Filip Lucian Simion, age 25, to 132 months (11 years) imprisonment for conspiracy to import controlled substances and launder money. Judge Jackson also ordered a personal money judgment against Simion in the amount of $850,000.00.</p>
<p>On May 3, 2016, in a joint U.S./European enforcement action, law enforcement dismantled the ItalianMafiaBrussels Drug Trafficking Organization, arresting ten defendants during early morning raids in Bruges, Belgium and surrounding areas. Filip Lucian Simion and Leonardo Cristea were arrested simultaneously in Bucharest, Romania, and extradited to the District of Colorado in July and October of 2016, respectively.</p>
<p>The nine-count indictment underlying the extraditions charged Filip Lucian Simion, Leonardo Cristea, and others with conspiracies to distribute and import into the United States controlled substances, in violation of Title 21, United States Code, Sections 846 and 963. The defendants were also charged with substantive counts of importation of controlled substances and aiding and abetting, in violation of Title 21, United States Code, Section 952(a), and Title 18, United States Code, Section 2. In addition, Filip Lucian Simion was charged in several counts of distribution of controlled substances by means of the Internet, in violation of Title 21, United States Code, Section 841(h)(1)(A) and conspiracy to launder money, in violation of Title 18, United States Code, Section 1956(h).</p>
<p>The leader of the organization, Filip Lucian Simion, plead guilty in April to one count of conspiracy to import into the United States controlled substances, and one count of conspiracy to launder money.</p>
<p>The evidence from the investigation revealed that from January 2013, through May 3, 2016, members of the conspiracy imported kilogram quantities of MDMA (3,4-methylenedioxymethamphetamine, a Schedule I controlled substance commonly known as Ecstasy) into the United States via the mail from various countries in Europe. The transnational organization operated online as the Darknet vendor “ItalianMafiaBrussels” or “IMB” and used encrypted email and TOR-based online black markets, such as the now defunct Silk Road and Silk Road 2.0, to sell the MDMA, primarily to United States and Canadian customers. The organization accepted payment for the drugs in the cryptocurrency bitcoin. In 2014 and 2015, several defendants were charged and convicted in the District of Colorado for distribution of MDMA sourced by the organization.</p>
<p>“Let there be no mistake. As the internet has grown, so has the long arm of the law,” said U.S. Attorney Bob Troyer. “If you’re harming people in Colorado, no distance is a safe distance. We will find you, we will bring you here, and we will send you to federal prison.”</p>
<p>“The Darknet is a rapidly evolving network that enhances the ability of transnational criminal organizations to move illicit goods worldwide. The anonymity it provides, coupled with the use of cryptocurrencies to launder proceeds made this a complicated investigation. Our special agents were able to call on their expertise, as well as HSI’s broad investigative mandate, to contribute to shutting down the ItalianMafiaBrussels Drug Trafficking Organization. Colorado is safer now that this group will no longer be able to bring illegal narcotics to its cities,” said HSI Denver SAC Steve Cagen.</p>
<p>“This case highlights the broad reach of the law enforcement community when we bring together state, federal and international partners to dismantle worldwide criminal organizations. The U.S. Postal Inspection Service would like to commend all those who came together to bring down one of the world’s largest distributors of illicit drugs,” said Kevin Rho, Inspector in Charge of the Denver Division of the U.S. Postal Inspection Service. “This case sends a clear message that criminals who use the U.S. mail to send illegal narcotics to American citizens are not safe hiding behind cryptocurrency transactions and foreign borders. Postal Inspectors are steadfast in their commitment to protecting the American public, and USPS employees, from the hazards of drugs in the mail,” said Rho.</p>
<p>&#8220;This sentence sends a strong message to dark Web merchants of illegal goods that law enforcement is coming for them,&#8221; said Steven Osborne, Special Agent in Charge of IRS Criminal Investigation.</p>
<p>This case was investigated by the Denver Illicit Digital Economy Working Group, comprised of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the U.S. Postal Inspection Service, and the Internal Revenue Service, in partnership with the Romanian Central Anti-Narcotics Unit in Bucharest, Romania, and the Belgian Federal Judicial Police, East Flanders Drug Unit in Dendermonde, Belgium. Other United States and international agencies assisting the working group in this investigation included: the Boulder County Drug Task Force, the Arapahoe County Sheriff’s Office, the Boulder County District Attorney’s Office, U.S. Customs and Border Protection offices nationwide, the Department of Justice Office of International Affairs, Europol, and Eurojust.</p>
<p>The case was prosecuted by Michele R. Korver, Digital Currency Counsel at the DOJ Criminal Division’s Money Laundering and Asset Recovery Unit, on detail from the U.S. Attorney’s Office in the District of Colorado.</p>
<p><a href="https://www.justice.gov/usao-co/pr/leader-darknet-italianmafiabrussels-drug-trafficking-organization-sentenced-11-years">Original PressReleases&#8230;</a></p>

False Claims Act: KRH Along With Six Subsidiaries Have Agreed To Pay To Resolve Allegations That They Violated The False Claims Act
<h2>Kalispell Regional Healthcare System to Pay $24 Million to Settle False Claims Act Allegations</h2>
<p>Montana-based Kalispell Regional Healthcare System (KRH) along with six subsidiaries and related entities – Kalispell Regional Medical Center (KRMC), HealthCenter Northwest LLC (HealthCenter), Flathead Physicians Group LLC (Flathead), Northwest Horizons LLC (NH), Northwest Orthopedics &; Sports Medicine LLC (NOSM), and Applied Health Services Inc. (AHS), (collectively, “KRH entities”) – have agreed to pay $24 million to resolve allegations that they violated the False Claims Act by paying physicians more than fair market value, and by conspiring to enter into arrangements that improperly induced referrals, the Department of Justice announced today.</p>
<p>“Financial arrangements that improperly compensate physicians who make referrals to a hospital drive up the cost of health care services for everyone,” said Assistant Attorney General Joseph H. Hunt for the Department of Justice’s Civil Division. “This settlement demonstrates the Department’s determination to enforce federal laws aimed at preventing conflicts of interest between the <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="870">financial</a> interests of hospitals and physicians and the best interests of the patients they serve.”</p>
<p>The government alleged that the KRH entities had arrangements with referring physicians that violated the Medicare physician self-referral prohibition, commonly known as the Stark Law, and other arrangements that also violated the Anti-Kickback Statute. The Stark Law prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has an improper compensation arrangement. The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. Both the Anti-Kickback Statute and the Stark Law are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based only on the best interests of the patient.</p>
<p>Between 2010 and 2018, the KRH entities allegedly violated the Stark Law by paying excessive full-time compensation to more than 60 physician specialists – many of whom worked far less than full-time. Additionally, HealthCenter, Flathead, NH, NOSM, and AHS allegedly conspired to violate the Anti-Kickback Statute by paying excessive compensation to physicians employed by KRH, KRMC, and other KRH entities to induce referrals to HealthCenter, and by providing administrative services to HealthCenter at below fair market value to reduce expenses and increase profits distributed to physician investors at Flathead, an owner of HealthCenter, also to induce referrals to HealthCenter.</p>
<p>“Quality healthcare is a critical need of all Montanans, but paying extra to physicians to induce referrals improperly raises the cost of that healthcare and must stop,” said United States Attorney for the District of Montana Kurt Alme. “I would like to thank the team that worked hard to bring this to a quick and successful resolution, which is the largest False Claims Act recovery in the District of Montana, including members of the U.S. Department of Justice and U.S. Attorney’s Office, as well as agents with the Department of Health and Human Services-Office of Inspector General and the Federal Bureau of Investigation.”</p>
<p>“Our office will continue to focus our efforts on those who make improper payments to physicians for the purpose of inducing referrals in order to ensure the integrity of HHS programs,” said Steve Hanson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations, Kansas City Region.</p>
<p>The settlement resolves allegations originally brought in two lawsuits filed by Jon Mohatt, a former Chief Financial Officer for KRH’s Physicians Network, under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. The whistleblower will receive $5,411,521 million as his share of the recovery in the two consolidated cases.</p>
<p>The case was handled by the U.S. Attorney’s Office for the District of Montana, the Justice Department’s Civil Division, and the U.S. Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation.</p>
<p>The lawsuits are captioned United States ex rel. Mohatt v. Kalispell Regional Healthcare System et al., Civ. No. 16-125 and United States ex rel. Mohatt v. HealthCenter NW, LLC et al., Civ. No. 18-80, and are consolidated under Civ No. 18-80. The claims settled by this agreement are allegations only; there has been no determination of liability.</p>
<p><a href="https://www.justice.gov/opa/pr/kalispell-regional-healthcare-system-pay-24-million-settle-false-claims-act-allegations">Original PressReleases&#8230;</a></p>

Health Care Fraud: RS Compounding, LLC And And Renier Gobea Owner Pay Financial Fraud Allegations
<h2>Government Settles $1.2 Million Lawsuit Against Florida Compounding Pharmacy And Its Owner For Excessive Charges To TRICARE</h2>
<p>Tampa – U.S. Attorney Maria Chapa Lopez announces that the United States has settled allegations that a Tampa-based compounding pharmacy, now-defunct RS Compounding, LLC, and its owner, Renier Gobea, knowingly billed TRICARE excessive prices for compounded prescriptions. In reaching this settlement, the parties resolved allegations that, between January 1, 2012, and January 31, 2014, Gobea and RS Compounding charged TRICARE at least 2,000 percent more for drugs than they charged cash-paying customers, in violation of the False Claims Act.</p>
<p>TRICARE, the health care program for uniformed service members and their families, prohibits pharmacies from charging TRICARE more than the general public. Gobea and RS Compounding charged TRICARE vastly more than they charged the public, in some cases over 10,000 percent more. When Gobea and RS Compounding determined that this practice violated TRICARE policy in January 2014, they made mere prospective changes and did not return the profits secured by the overcharges. In an ability-to-pay settlement, the government agreed to accept $1.2 million to resolve these allegations.</p>
<p>TRICARE’s costs for compounded drugs rose from $5 million in 2004 to $514 million in 2014 and $1.75 billion in fiscal year 2015. To date, the U.S. Attorney’s Office for the Middle District of Florida has pursued numerous <a href="https://www.fraudswatch.com/mortgage-fraud-what-it-is-and-how-to-action/">actions involving fraud</a> associated with compounding pharmacies, resulting in over $57 million in settlements.</p>
<p>“This case is part of our long-standing efforts to hold compounding pharmacies accountable,” said U.S. Attorney Chapa Lopez. “We will continue to combat unscrupulous practices in all forms, especially those that harm or interfere with the care received by our service members and their families.”</p>
<p>“This settlement demonstrates the commitment of the Defense Criminal Investigative Service and its law enforcement partners to ensure that medical service providers do not unjustly enrich themselves by wasting and diverting precious taxpayer dollars. DCIS protects and preserves the integrity of TRICARE, a vital DoD program serving U.S. service members, retirees, and their families,” said Special Agent in Charge John F. Khin, Southeast Field Office.</p>
<p>This lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government when they discover evidence that defendants have submitted false claims for government funds and to receive a share of any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done in this case. The case is captioned United States ex rel. McKenzie Stepe v. RS Compounding LLC, Renier Gobea, Case No. 8:13-cv-3150-T-33AEP (M.D. Fla.). McKenzie Stepe filed this qui tam case, and, although she passed away during the pendency of the case, her estate will receive $264,000 as part of the settlement.</p>
<p>The government’s complaint in this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).</p>
<p>The investigation was conducted by TRICARE, the U.S. Department of Health and Human Services Office of Inspector General, and the U.S. Attorney’s Office for the Middle District of Florida. It was handled by Assistant U.S. Attorneys Shea Gibbons and Sean Keefe.</p>
<p>The claims resolved by this settlement are allegations only, and there has been no determination of liability.</p>
<p><a href="https://www.justice.gov/usao-mdfl/pr/government-settles-12-million-lawsuit-against-florida-compounding-pharmacy-and-its">Original PressReleases&#8230;</a></p>

Financial Fraud: James E. Doyle Pleaded Guilty To Thirty-One Counts Of Bank Fraud
<h2>Former State Senator, RI Businessman Pleads Guilty to Bank Fraud, Tax Crimes</h2>
<p>PROVIDENCE, RI – Former Rhode Island State Senator and businessman James E. Doyle, III, 46, of Pawtucket, today pleaded guilty in U.S. District Court in Providence to thirty-one counts of <a href="https://www.fraudswatch.com/banking-fraud-ways-of-cheating-and-stealing-banking/">bank fraud</a> and one count each of filing a false tax return and failing to file a tax return.</p>
<p>Appearing before U.S. District Court Judge William E. Smith, Doyle admitted to the Court that as owner of Doyle Respiratory, LLC and Doyle Sleep Solutions, LLC, he engaged in $74 million dollars in worthless bank transactions executed in check-kiting schemes through bank accounts he controlled at Bristol County Savings Bank, Alliance Blackstone Valley Federal Credit Union (ABVFCU) and Santander Bank. Doyle admitted that he executed the scheme through the use of checks, cash withdrawals, ATMs electronic transfers and ACH transfer payments.</p>
<p>Doyle’s guilty plea is announced by United States Attorney Stephen G. Dambruch, Special Agent in Charge of Internal Revenue Service Criminal Investigation Kristina O&#8217;Connell, and Special Agent in Charge of the FBI Boston Division Harold H. Shaw.</p>
<p>Doyle admitted to the Court that he accomplished the check-kiting scheme by writing checks from accounts he knew were not backed by sufficient funds and depositing those checks into different accounts to cover daily overdrafts in that account. Simultaneously, he wrote checks out of the second account and deposited those checks back into the first bank account. The purpose and effect of writing and depositing these worthless checks was to manipulate the numerical balances in the checking accounts, and thereby create the false and fraudulent appearance that the accounts had sufficient available funds in the accounts and to deceive and trick the banks into honoring the checks drawn against the checking accounts with insufficient funds.</p>
<p>In order to avoid detection, Doyle admitted to the Court, he did this daily throughout the life of the scheme, at times undertaking in excess of 50 transactions per day. At times, he also utilized ATM machines in order to lengthen the time it took for checks to be presented for clearing.</p>
<p>The investigation revealed that over the life of the scheme the defendant wrote tens of thousands of worthless checks between the banks at which he maintained accounts.</p>
<p>Doyle also admitted to the Court that for tax years 2013 thru 2016 he and his wife failed to report to the IRS more than $1 million dollars in income and failed to pay $305,426 in taxes due the IRS.</p>
<p>Doyle is scheduled to be sentenced on January 18, 2019.</p>
<p>The case is being prosecuted by Assistant U.S. Attorney Dulce Donovan.</p>
<p>The matter was investigated by Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation.</p>
<p><a href="https://www.justice.gov/usao-ri/pr/former-state-senator-ri-businessman-pleads-guilty-bank-fraud-tax-crimes">Original PressReleases&#8230;</a></p>

Mortgage Fraud: Michael Arroyo Sentenced For Defrauding Banks in Shotgun Loan Scheme
<h2>Real Estate Broker Sentenced to Prison for Role in Defrauding Banks in $3.5 Million ‘Shotgun’ Loan Scheme</h2>
<p>NEWARK, N.J. – A New York real estate broker and a Bergen County, New Jersey, homeowner were sentenced today for their respective roles in a $3.5 million scheme to use false information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a practice known as “shotgunning,” U.S. Attorney Craig Carpenito announced.</p>
<p>Michael Arroyo, 60, of Bronx, New York, was sentenced to 21 months in prison. He previously pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with conspiracy to commit <a href="https://www.fraudswatch.com/banking-fraud-ways-of-cheating-and-stealing-banking/">bank fraud</a>.</p>
<p>Rafael Popoteur, 67, of Ridgefield Park, New Jersey, was sentenced to three years of supervised release, including one year of house arrest. He previously pleaded guilty before Judge Vazquez to an information charging him with conspiracy to commit bank fraud.</p>
<p>According to documents filed in the case and statements made in court:</p>
<p>From 2012 through January 2014, Arroyo and others conspired to fraudulently obtain multiple home equity lines of credit (HELOCs) from banks on residential properties in New Jersey and New York, including a residential property on Havermeyer Avenue in the Bronx. In 2013, Arroyo and others transferred ownership of the property to an individual living at the property and his family friend.</p>
<p>Arroyo and others then applied, in the family friend’s name, for two HELOCs from two banks using the Havermeyer Avenue property as collateral. They hid from the lenders the fact that the property was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also falsely inflated the family friend’s income without his knowledge. In addition, the equity in the property was far less than the amount of the HELOC loans that Arroyo and others applied for.</p>
<p>The victim banks eventually issued loans to the family friend in excess of $500,000. After the victim banks deposited money into the family friend’s bank accounts, portions of the funds were disbursed to Arroyo and others. Eventually, the family friend defaulted on the two HELOC loans.</p>
<p>Popoteur was a client of Arroyo and another broker. From 2012 through January 2014, Popoteur and the two real estate brokers, and others, conspired to fraudulently obtain multiple HELOCs from banks on a residential property in New Jersey. To get the banks to extend lines of credit they would not have otherwise approved, Popoteur and the real estate brokers executed a quitclaim deed to transfer ownership of a Ridgefield Park, New Jersey property to Popoteur, who also lived at the property.</p>
<p>Popoteur and the real estate brokers then applied for three HELOCs from multiple banks using the Ridgefield Park, New Jersey property as collateral. As the conspirators had done previously, they hid from the lenders the fact that the properties offered as collateral were either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also contained false information concerning Popoteur’s income, which was stated to be higher than his actual income. At the time the applications were made, the value of the Ridgefield Park, New Jersey property that was unencumbered by a <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/mortgage/" title="mortgage" data-wpil-keyword-link="linked" data-wpil-monitor-id="131">mortgage</a> was far less than the amount of the HELOC loans Popoteur and the others applied for.</p>
<p>The victim banks eventually issued loans to Popoteur in excess of $495,000. After the victim banks funded the HELOCs and deposited money into Popoteur’s bank accounts, Popoteur disbursed portions of it to the real estate brokers and others. In 2014, Popoteur defaulted on all three HELOC loans.</p>
<p>The overall scheme resulted in $3.5 million in losses to the victim banks.</p>
<p>In addition to the prison term, Judge Vazquez sentenced Arroyo five years of supervised release.</p>
<p>U.S. Attorney Carpenito credited special agents of the Federal Housing Finance Agency (FHFA) – Office of Inspector General, under the direction of Special Agent in Charge Steven Perez in Newark, and special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s sentencings.</p>
<p>The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA, Office of the Inspector General.</p>
<p><a href="https://www.justice.gov/usao-nj/pr/real-estate-broker-sentenced-prison-role-defrauding-banks-35-million-shotgun-loan-scheme">Original PressReleases&#8230;</a></p>

Health Care Fraud: Robert Madonna Pleaded Guilty For Conspiracy to Commit Health Care Fraud

<h2 class="wp-block-heading">Former Margate Mortgage Consultant Admits Health Care Fraud Conspiracy</h2>



<p>CAMDEN, N.J. – A former Atlantic County resident now living in Florida admitted defrauding New Jersey state health benefits programs out of millions of dollars by submitting fraudulent claims for medically unnecessary prescriptions, U.S. Attorney Craig Carpenito and N.J. Attorney General Gurbir S. Grewal announced.</p>



<p>Robert Madonna, 36, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with conspiracy to commit health care fraud.</p>



<p>According to documents filed in this case and statements made in court:</p>



<p>Compounded medications are supposed to be specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.</p>



<p>Madonna was one of the owners of a company formed to market prescription compounded medications, referred to as Company 1. From May 2015 through February 2016, Madonna and others associated with the company persuaded individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications.</p>



<p>The conspirators learned that certain compound medication prescriptions – including pain, scar, and antifungal creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply. The conspirators also learned that the N.J. State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, and the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents, would cover compound medication prescriptions.</p>



<p>Madonna and his conspirators entered into an agreement under which Company 1 would receive a percentage of the amounts paid to compounding pharmacies for prescriptions secured by Madonna and his conspirators. Madonna and his conspirators then recruited public employees, offered them hundreds of dollars per month, and persuaded them to agree to obtain prescription compounded medications without any examination by a medical professional that the medications were medically necessary. Madonna would obtain insurance and personal information from the public employees and give that information to conspirators. A doctor then would call the public employees and complete the prescription without personally examining the employees or having a prior doctor/patient relationship with them. Company 1 would receive a percentage of the amounts paid on these fraudulent prescriptions, which Madonna and others would divide.</p>



<p>According to the information, Madonna and his conspirators caused New Jersey to pay more than $2 million in fraudulent claims for compounded medications for public employees.</p>



<p>Madonna received $179,370 in gross proceeds for his role in the scheme. As part of his plea agreement, Madonna must forfeit these criminal proceeds and pay restitution of at least $2,092,791.</p>



<p>Madonna faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Feb. 5, 2019.</p>



<p>U.S. Attorney Carpenito credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; IRS – Criminal Investigation, under the direction of Special Agent in Charge John Tafur in Newark: and the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to today’s guilty plea. He also thanked the Division of Pensions and <a class="wpil_keyword_link" title="Financial" href="https://www.fraudswatch.com/tag/financial-fraud/" data-wpil-keyword-link="linked" data-wpil-monitor-id="869">Financial</a> Transactions in the State Attorney General’s Office, under the direction of Attorney General Grewal and Division Chief Eileen Schlindwein Den Bleyker, for its assistance in the investigation.</p>



<p>The government is represented by Assistant U.S. Attorneys R. David Walk, Jr. and Jacqueline M. Carle of the U.S. Attorney’s Office in Camden.</p>



<p><a href="https://www.justice.gov/usao-nj/pr/former-margate-mortgage-consultant-admits-health-care-fraud-conspiracy">Original PressReleases&#8230;</a></p>



<p></p>

Cyber Crime: PETERIS SAHUROVS Sentenced For Participating In a Lucrative Scareware Hacking Scheme
<h2>Latvian National Sentenced To Prison For -Scareware- Hacking Scheme That Targeted Minneapolis Star Tribune Website</h2>
<p>A Latvian man was sentenced today in Minneapolis for participating in a lucrative <strong>scareware hacking scheme</strong> that targeted visitors to the Minneapolis Star Tribune’s website. Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Erica H. MacDonald of the District of Minnesota and Special Agent in Charge Jill Sanborn of the FBI’s Minneapolis Field Office made the announcement.</p>
<p>PETERIS SAHUROVS aka “Piotrek” and “Sagade,” 29, was sentenced to 33 months in prison for conspiracy to commit wire fraud. District Judge Ann D. Montgomery of the District of Minnesota imposed the sentence. SAHUROVS will be removed from the United States to Latvia following his prison sentence. SAHUROVS was arrested in Latvia on a District of Minnesota indictment in June 2011, but was released by a Latvian court and later fled. In November 2016, SAHUROVS was located in Poland, apprehended by Polish law enforcement, and extradited to the United States in June 2017. SAHUROVS was once the FBI’s fifth most wanted cybercriminal and a reward of up to $50,000 had been offered for information leading to his arrest and conviction. He pleaded guilty before Judge Montgomery on February 7, 2018.</p>
<p>According to admissions made in connection with his plea, from at least May 2009 to June 2011, SAHUROVS operated a “bullet-proof” web hosting service in Latvia, through which he leased server space to customers seeking to carry out criminal schemes without being identified or taken offline. The defendant admitted that he knew his customers were using his servers to perpetrate criminal schemes, including the transmission of malware, fake anti-virus software, spam, and botnets to unwitting victims, and he received notices from Internet governance entities (such as Spamhaus) that his servers were hosting malicious activity. Nonetheless, SAHUROVS took steps to protect the criminal schemes from being discovered or disrupted, and hosted them on his servers for <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="868">financial</a> gain.</p>
<p>SAHUROVS admitted that from in or about February 2010 to in or about September 2010, he registered domain names, provided bullet-proof hosting services, and gave technical support to a “scareware” scheme targeting visitors to the Minneapolis Star Tribune’s website. On February 19, 2010, the Minneapolis Star Tribune began hosting an online advertisement, purporting to be for Best Western hotels, on its website, startribune.com. Two days later, however, the advertisement began causing the computers of visitors to the website to be infected with malware. This malware, also known as “scareware,” caused visitors to experience slow system performance, unwanted pop-ups and total system failure. Website visitors also received a fake “Windows Security Alert” pop-up informing them that their computer had been infected with a virus and another pop-up that falsely represented that they needed to purchase the “Antivirus Soft” computer program to fix their security issues, at a price of $49.95.</p>
<p>Website visitors who clicked the “Antivirus Soft” window were presented with an online order form to purchase a purported security program called “Antivirus Soft.” Users who purchased “Antivirus Soft” received a file download that “unfroze” their computers and stopped the pop-ups and security notifications. However, the defendant admitted, the file was not a real anti-virus product, did not perform legitimate computer security functions, and merely caused the malware that members of the conspiracy had previously installed to cease operating. Meanwhile, the defendant admitted, victim users who did not choose to purchase “Antivirus Soft” became immediately inundated with so many pop-ups containing fraudulent “security alerts” that all information, data, and files on their computers were rendered inaccessible. Members of the conspiracy defrauded victims out of substantial amounts of money as a result of the scheme. The defendant admitted that as a result of his participation, he made between $150,000 and $250,000 U.S. dollars.</p>
<p>This case was investigated by the FBI’s Minneapolis Field Office. The Criminal Division’s Office of International Affairs secured the extradition from Poland and the Polish National Police, the National Prosecutor’s Office, and the Ministry of Justice provided substantial assistance in this matter.</p>
<p>Assistant U.S. Attorney Timothy C. Rank of the District of Minnesota and Trial Attorney Aaron R. Cooper of the Criminal Division’s Computer Crime and Intellectual Property Section prosecuted the case.</p>
<p>Defendant Information:</p>
<p>PETERIS SAHUROVS, 29</p>
<p>Rezekne, Latvia</p>
<p>Convicted:</p>
<p>Conspiracy to commit wire fraud, 1 count<br />
Sentenced:</p>
<p>33 months in prison<br />
Removal from the United States to Latvia following the defendant’s prison sentence</p>
<p><a href="https://www.justice.gov/usao-mn/pr/latvian-national-sentenced-prison-scareware-hacking-scheme-targeted-minneapolis-star">Original PressReleases&#8230;</a></p>

Financial Fraud: Arturo Vargas Previously Entered Guilty Plea and Admitted Role in Scheme in April 2018
<h2>Another Texas Businessman Pleads Guilty to Participating in Multi-Million Dollar Fraud Scheme that Exploited Big Crow Program Office at Kirtland Air Force Base</h2>
<p><strong>Business Partner Previously Entered Guilty Plea and Admitted Role in Scheme in April 2018</strong></p>
<p>ALBUQUERQUE – Arturo Vargas, 55, a businessman from El Paso, Texas, pleaded guilty today in federal court in Albuquerque, N.M., to participating in a fraudulent scheme to defraud the United States out of millions of dollars through contracts involving the now defunct Big Crow Program Office at Kirtland Air Force Base in Bernalillo County, N.M.</p>
<p>Vargas entered the guilty plea to one of the conspiracy charges in the 46-count indictment charging him with conspiring to defraud the United States with respect to claims. Vargas’s plea agreement, attached to this press release, includes a five-page admission of facts in which he acknowledges and accepts responsibility for the criminal conduct attributed to him in the indictment.</p>
<p>Vargas remains on conditions of release pending his sentencing hearing, which has yet to be scheduled. Under the terms of the plea agreement, Vargas will be sentenced to a term of imprisonment within the range of 0 to 21 months, and the Court will determine any fine, restitution, and the length and conditions of supervised release imposed on Vargas. The United States has agreed to move to dismiss the remaining charges against Vargas after he is sentenced.</p>
<p>Vargas’s business partner, Jose Diaz, 59, also of El Paso, previously entered a guilty plea and admitted his involvement in the <a href="https://www.fraudswatch.com/how-to-defend-yourself-from-fraudulent-charitable-schemes/">fraudulent scheme</a> in April 2018. Diaz pled guilty to three counts, a conspiracy charge and two fraud charges, of the indictment and acknowledged the criminal conduct attributed to him in the indictment. Diaz remains on conditions of release pending his sentencing hearing, which has yet to be scheduled. His sentencing exposure is discussed below. The United States will move to dismiss the remaining charges against Diaz after he is sentenced.</p>
<p>Summary of the Indictment</p>
<p>Vargas, Diaz, and their co-defendants, Milton Boutte, 73, of Moriarty, N.M., and George Lowe, 56, of Fort Washington, Md. were indicted in Nov. 2017, in a 46-count indictment charging them with perpetuating a fraudulent scheme to defraud the United States from Oct. 2004 through Feb. 2009, in Bernalillo County, N.M., and elsewhere. The indictment generally alleged that the defendants perpetuated their scheme by submitting fraudulent invoices to federal agencies and fraudulently participating in a government program intended to promote minority-owned small businesses. According to the indictment, beginning in fall 2004, Boutte, who was then the Director of the Big Crow Program Office, and Lowe, a lobbyist, conspired and schemed with Diaz and Vargas, owners of minority-owned small businesses who had contracts with the Big Crow Program Office, to pay lobbyists, consultants and contractors with funds fraudulently obtained from the United States. The defendants allegedly did so even though the Big Crow Program Office was not authorized to lobby or to expend appropriated funds for lobbying activities under the contracts they were operating under.</p>
<p>The indictment alleged that the defendants facilitated their fraudulent scheme by exploiting a U.S. Small Business Administration (SBA) program intended to promote the development of small businesses owned by socially and economically disadvantaged individuals by making them eligible to obtain sole-source contracts from government agencies without competitive bidding. In April 1995, Diaz enrolled his company, Miratek, in the SBA program and in 2004 Miratek received a sole-source contract to provide technical and managerial support for the Big Crow Program Office. After the sole-source contract was awarded to Miratek, the defendants allegedly conspired fraudulently to misapply funds to pay Lowe and other lobbyists for lobbying on Big Crow’s behalf, allegedly diverting at least $529,000 of the contract funds to pay Lowe and his firm, Broadcreek Associates. This allegedly violated the conditions of the SBA program and of Miratek’s contract because lobbying services were not within the authorized scope of work and because Lowe was not an employee of Miratek. In furtherance of their alleged frauds, the defendants allegedly disguised the nature of the claims for services purportedly provided by Lowe and other lobbyists.</p>
<p>The indictment alleged that, in April 2004, after Miratek’s eligibility for the SBA program expired, the defendants created a joint venture to take its place in the fraudulent scheme. According to the indictment, Diaz and Vargas created a joint venture known as Vartek, LLC, to afford Diaz the ability to continue to have access to sole-source contracts under the SBA program and to enable the defendants to continue to perpetuate their scheme to defraud the United States. The SBA relied on the promises and representations of Diaz and Vargas and approved the Vartek joint venture on Dec. 20, 2005. Vartek was awarded two sole-source contracts, valued at approximately $3,209,116 and $3,847,939, respectively, to provide technical and analytical support for the Big Crow Program Office similar to the contracts previously awarded to Miratek.</p>
<p>The indictment further alleged that Diaz and Vargas misappropriated funds authorized under the Vartek contracts to pay Lowe and other unauthorized lobbyists, consultants and contractors at Boutte’s direction. Diaz and Vargas submitted fraudulent invoices to the U.S. Army Contracting Agency containing claims for payment for services purportedly provided by Lowe and other lobbyists, consultants and contractors. To conceal and disguise the nature of those payments, Diaz and Vargas misrepresented in those invoices that Lowe and other lobbyists, consultants and contractors were Vartek employees. To further disguise the diversion of large sums, Diaz and Vargas made fictional claims for work purportedly performed under the contracts by other persons. Diaz and Vargas fabricated the hours that those purported employees worked on the contracts. Diaz and Vargas falsely represented that the lobbyists and consultants were “project managers” and billed the government at or near the highest rate allowed under the contracts. In aggregate, Diaz and Vargas fraudulently claimed and obtained payments under the Vartek contracts totaling more than $5,800,000 for lobbyists, consultants and unauthorized contractors, of which at least $506,000 was diverted and paid to Lowe and his firm, Broadcreek Associates. Diaz also falsified and fabricated the hours that he himself worked under those contracts.</p>
<p>The indictment includes forfeiture provisions requiring that the defendants forfeit to the United States any property, real or personal, which constitutes or is derived from proceeds of their crime if the defendants are convicted of the offense of conspiracy to commit wire fraud.</p>
<p>Statutory Penalties for Charges in Indictment 17-CR-3338-JB</p>
<p>Count 1 charges Boutte, Diaz, Vargas and Lowe with conspiracy to defraud the United States with respect to claims, in violation of 18 U.S.C. § 286, and carries a maximum penalty of ten years of imprisonment and a fine of not more than $250,000 or twice the pecuniary loss or gain.</p>
<p>Count 2 charges Boutte, Diaz, Vargas and Lowe, with conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and carries a maximum penalty of 20 years of imprisonment and a fine of not more than $250,000 or twice the pecuniary loss or gain.</p>
<p>Counts 3 and 4 charge Boutte, Diaz and Vargas with fraud against the United States, in violation of 18 U.S.C. § 1031, and aiding and abetting such fraud, in violation of 18 U.S.C. § 2. Each charge carries a maximum penalty of 20 years of imprisonment and a fine not more than $5,000,000 if the loss is less than $500,000, but not to exceed $10,000,000 in the aggregate.</p>
<p>Counts 5 through 46 charge certain of the defendants with making false, fictitious and fraudulent claims, in violation of 18 U.S.C. § 287, and aiding and abetting the making of such claims, in violation of 18 U.S.C. § 2. Each charge carries a maximum penalty of five years of imprisonment and a fine of not more than $250,000. Counts 5 through 9 charge Boutte, Diaz and Lowe; Counts 10 through 22 charge Boutte, Diaz, Vargas and Lowe; Counts 23 through 24 charge Boutte, Diaz and Vargas; and Counts 25 through 46 charge Boutte, Diaz and Vargas.</p>
<p>Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.</p>
<p>The case was investigated by the Major Procurement Fraud Unit of the U.S. Army Criminal Investigations Command, Defense Criminal Investigations Services, Defense Contract Audit Agency – Investigative Support, and U.S. Small Business Administration Office – Office of Inspector General, and General Services Administration – Office of Inspector General. Assistant U.S. Attorneys Timothy S. Vasquez and Jeremy Peña are prosecuting the case.</p>
<p><a href="https://www.justice.gov/usao-nm/pr/another-texas-businessman-pleads-guilty-participating-multi-million-dollar-fraud-scheme">Original PressReleases&#8230;</a></p>

Financial Fraud: Alan W. Rodrigues And Mark L. Bausch Sentenced For Telemarketing Fraud Scheme
<h2>Two Las Vegas Residents Sentenced For Multimillion Dollar Telemarketing Scheme Targeting Small Business Owners</h2>
<p>LAS VEGAS, Nev. – Two Las Vegas residents were sentenced today to a total of 18 years in federal prison for their involvement in a $14 million dollar <strong>telemarketing fraud scheme</strong> targeting small business owners, announced U.S. Attorney Dayle Elieson for the District of Nevada, Special Agent in Charge Aaron C. Rouse for the FBI’s Las Vegas Division, and Special Agent in Charge Tara Sullivan for the IRS Criminal Investigation.</p>
<p>Alan W. Rodrigues, 59, was sentenced to 120 months, and Mark L. Bausch, aka Mark Eting, 44, was sentenced to 96 months. Each defendant pleaded guilty in May to one count of conspiracy to commit wire fraud, 30 counts of wire fraud, and 6 counts of money laundering. In addition to the prison terms, Bausch and Rodrigues agreed to pay $13,966,329.30 in restitution to victims and to pay between $631,142 and $1,050,955 in a criminal forfeiture money judgment. United States District Judge Kent J. Dawson presided over the hearings.</p>
<p>According to their individual plea agreements, from March 2009 to about October 2010, Bausch, Rodrigues, and their co-conspirators organized and operated Small Business Funding Co., Inc., Company Funds, Inc., Foundation Research, Inc., and Silver State Holding Company, all telemarketing companies. They charged a fee for their services and offered to help small business owners obtain grants from public and private entities.</p>
<p>In order to perpetuate their fraud scheme, the defendants made false statements to victims to make it appear that they were likely to or guaranteed to receive a grant. They hired salespersons to market the services and to provide false information to the customers. In order to convince the customers that their service was legitimate, the defendants instructed their employees to conduct research about funding entities and send letters to customers and funders, knowing that many of the customers would not qualify for the grants. The defendants also solicited customers by conducting seminars throughout the United States. Throughout the entire scheme, the telemarketing companies received numerous complaints from customers, and the defendants facilitated giving false statements to victims in order to prevent or delay them from contacting law enforcement. Bausch and Rodrigues used the proceeds from the scheme to enrich themselves and others and to pay the expenses necessary to continue operating the scheme.</p>
<p>In December 2014, Bausch, Rodrigues, and co-defendants were indicted for their roles in the telemarketing fraud scheme. Several co-defendants have already pleaded guilty and have been sentenced for their role in the scheme, including Craig Rudolph who was sentenced to 77 months in prison; Jonas Bowen who was sentenced to 63 months in prison; Lee Panelli who was sentenced to 41 months in prison; and David Bergstrom who was sentenced to 51 months in prison. In a separate case, co-defendant Joseph Marfoglia was sentenced to 125 months in prison.</p>
<p>The case was investigated by the FBI and IRS Criminal Investigation. Assistant U.S. Attorneys Daniel R. Schiess and Jared L. Grimmer prosecuted the case.</p>
<p><a href="https://www.justice.gov/usao-nv/pr/two-las-vegas-residents-sentenced-multimillion-dollar-telemarketing-scheme-targeting">Original PressReleases&#8230;</a></p>