<h2>Phoenix Men Sentenced to Prison for Defrauding the Small Business Administration</h2>
<p>PHOENIX – Yesterday, U.S. District Judge David G. Campbell sentenced Harold Halman, II, 58, and Alexander Schaap, 62, to 36 and 30 months in prison, respectively. Both must serve 3 years of supervised release following their prison sentences. The Court also ordered them to pay $4.5 million in restitution. Craighton Boates, 44, New River, Ariz., was also sentenced to 5 years’ probation.</p>
<p>Evidence showed that Halman, Schaap, and Boates were principals in a now defunct company known as Global Medical Equipment of Arizona (“GMEA”). They <strong><em>defrauded the Small Business Administration, Metro Phoenix Bank, and Republic Bank of Arizona</em></strong> by submitting <em><a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/loans/" title="loan" data-wpil-keyword-link="linked" data-wpil-monitor-id="285">loan</a> applications containing false</em> information that included the percentage of GMEA ownership, the use of the loans for pre-existing debts, forged emails and letters misrepresenting that down payments had been made by the principals, and a concealed kickback. The defendants <strong>defaulted on nearly $4.5 million in loans</strong>.</p>
<p>&#8220;These loans should have been granted to qualified small business owners. Instead the defendants effectively denied an opportunity to legitimate small businesses deserving access to capital,” stated Elizabeth A. Strange, First Assistant U.S. Attorney for the District of Arizona. “The United States Attorney’s Office will continue to aggressively investigate and seek criminal prosecution or civil remedies when fraud is perpetrated by corrupt borrowers who attempt to obtain <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="844">financial</a> assistance through the SBA’s guaranteed loan programs. We would like to thank the SBA-OIG, IRS-CID, and the FBI for their thoroughness and dedicated professionalism throughout this investigation.&#8221;</p>
<p>“SBA’s 7(a) program is intended to provide capital to grow the nation’s small businesses not line one’s pockets,” said Acting Inspector General Hannibal “Mike” Ware. “Schemes to unjustly enrich oneself will be rooted out, and those responsible will be brought to justice. I want to thank the U.S. Attorney’s Office for their dedication and leadership throughout this investigation.”</p>
<p>“A sophisticated scheme involving millions in illegally obtained loans does not happen without forethought and criminal intent. The defendants made false statements and omissions to the banks who relied on them to be truthful,” stated IRS-Criminal Investigation Special Agent in Charge Ismael Nevarez, Jr. “We hope this prosecution discourages others from taking the path of fraud in their business ventures.&#8221;</p>
<p>&#8220;These three individuals knowingly executed a scheme to defraud banks out of more than $6 million then conspired to launder the money,&#8221; said Michael DeLeon, Special Agent in Charge of the FBI Phoenix Field Office. &#8220;The guilty pleas of these individuals should send a message. The FBI will continue to work alongside our law enforcement partners to investigate these types of crimes and protect the community from schemes to defraud financial institutions insured by the FDIC.&#8221;</p>
<p>The investigation in this case was conducted by the U.S. Small Business Administration, Office of Inspector General, Internal Revenue Service-Criminal Investigation Division and Federal Bureau of Investigation. The prosecution was handled by Kevin M. Rapp Assistant United States Attorney, District of Arizona, Phoenix.</p>
<p>CASE NUMBER: CR-01015/00946/010159 DGC-1</p>
<p>RELEASE NUMBER: 2018-039_ Halman etal</p>
<p><a href="https://www.justice.gov/usao-az/pr/phoenix-men-sentenced-prison-defrauding-small-business-administration">Original PressReleases&#8230;</a></p>

Financial Fraud: Ima Maria Isham Pleaded Guilty to Fraudulently Obtained Loan Proceeds From Several Federally Insured Banks
<h2>Resident of The Colony Admits Role in $10 Million Fraud</h2>
<p>DALLAS — Ima Maria Isham, 22, of The Colony, Texas appeared this morning before U.S. Magistrate Judge Rebecca Rutherford and pleaded guilty to one count of conspiracy to commit bank fraud, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.</p>
<p>Isham faces a maximum penalty of five years in federal prison and a $250,000 fine. Restitution is mandatory. Isham remains on bond; a sentencing date was not set.</p>
<p>According to documents filed in the case, beginning in March 2015 and continuing until March 2016, Isham, along with coconspirators Eddie Contreraz, Stephanie Loraine Contreraz, Bryce Carragan Armijo, Elizabeth Flint, Abraham Valdez, and Kwanghee (Kathy) Anh, conspired with each other, to commit bank fraud.</p>
<p>Isham and other conspirators were employed at Preferred Marketing Group (PMG), also known as PMG Business Solutions. PMG was a <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/loans/" title="loan" data-wpil-keyword-link="linked" data-wpil-monitor-id="284">loan</a> brokerage company that assisted clients obtain loans, lines of credit, and credit cards. Since the majority of clients had low credit scores, as well as insufficient or unverifiable income or employment, most lenders did not consider these clients to be good credit risks. To overcome these obstacles to obtaining funding, conspirator PMG employees were aware that conspirator Eddie Contreraz frequently created fake paystubs, tax forms and other fraudulent documents in order to falsely inflate clients’ income, as well as falsify a client’s employment position and length of employment. Isham and other conspirators caused many clients to fraudulently obtain funding by causing clients to submit to various lenders false <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="843">financial</a> and false employment information provided by co-defendant Eddie Contreraz.</p>
<p>The defendants fraudulently obtained loan proceeds from several federally insured banks in the Dallas and Fort Worth area by causing borrower loan applications to be submitted to banks which contained false information. False loan information submitted to financial institutions included, inflated false income figures; falsely list the loan applicant’s position as manager of a company (when the applicant actually owned the company or was employed in a lower salaried position); and falsely reported employment when a client was actually unemployed.</p>
<p>According to documents filed in the case, Isham and coconspirators caused borrowers with low credit scores to use “credit repair” services to raise the borrower’s credit score in order to qualify for loans later obtained through the use of false and fictitious documents created by defendant Eddie Contreraz.</p>
<p>From March 2015 through March 2016, Isham and coconspirators fraudulently obtained loans, credit lines, and credit cards from several banks in the total amount of at least $10 million.</p>
<p>The Fort Worth Federal Bureau of Investigation is investigating the case. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.</p>
<p><a href="https://www.justice.gov/usao-ndtx/pr/resident-colony-admits-role-10-million-fraud">Original PressReleases&#8230;</a></p>

Financial Fraud: Albert S. Poawui, Owner of Atius Technology Institute, Pleaded Guilty to Bribing a VA Program for Disabled Military Veterans
<h2>School Owner Pleads Guilty to $2 Million Bribery Scheme Involving VA Program for Disabled Military Veterans</h2>
<p>WASHINGTON – The owner of Atius Technology Institute (“Atius”), a privately owned, non-accredited school specializing in information technology courses, pleaded guilty today to bribing a public official at the U.S. Department of Veterans Affairs (VA) in exchange for the public official’s facilitation of over $2 million in payments that were supposed to be dedicated to providing vocational training for military veterans with service-connected disabilities. Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Jessie K. Liu for the District of Columbia made the announcement.</p>
<p>Albert S. Poawui, 41, of Laurel, Maryland, pleaded guilty to an Information alleging one count of bribing a public official. The plea was entered before U.S. District Judge John D. Bates of the District of Columbia.</p>
<p>According to Poawui’s plea agreement, the Vocational Rehabilitation and Employment (VR&;E) program is a VA program that provides disabled U.S. <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/military-scammer/" title="military" data-wpil-keyword-link="linked" data-wpil-monitor-id="390">military</a> veterans with education and employment-related services. VR&;E program counselors advise veterans under their supervision which schools to attend and facilitate payments to those schools for veterans’ tuition and necessary supplies.</p>
<p>According to admissions made in connection with Poawui’s plea, in or about August 2015, Poawui and a VR&;E program counselor agreed that Poawui would pay the counselor a seven percent cash kickback of all payments made by the VA to Atius. In exchange, the counselor steered VR&;E program veterans to Atius and approved Atius’s invoices for payment.</p>
<p>Poawui admitted that the counselor and a second VR&;E counselor approved payments to Atius without regard for the accuracy of necessary documentation in order to maximize the scheme’s profits. Between August 2015 and December 2017, Poawui and the scheme’s other participants caused the VA to pay Atius approximately $2,217,259.44. Poawui paid the first VR&;E counselor over $155,000 as part of the illicit bribery scheme. These bribery payments were hand-delivered by Poawui or an Atius employee to the VR&;E counselor or the counselor’s assistant, a veteran who was enrolled in the VR&;E program.</p>
<p>Poawui also admitted that, with the knowing assistance of a second Atius employee, he made numerous false representations to the VA to enhance the scheme’s profits. For example, Poawui and the second employee certified to the VA that veterans attending Atius were enrolled in up to 32 hours of class per week, when in fact both knew that Atius offered a maximum of six weekly class hours. After the VA initiated an administrative audit of Atius, Poawui, the VR&;E counselor and the Atius employee took steps to conceal the truth about earlier misrepresentations they had made to the VA.</p>
<p>Poawui’s plea is the result of an ongoing investigation by the FBI’s Washington Field Office and the VA Office of Inspector General. Trial Attorney Simon J. Cataldo of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Sonali D. Patel of the U.S. Attorney’s Office for the District of Columbia are prosecuting the case.</p>

Health Care Fraud: Jose Penaranda Tan Sentenced To One Count Health Care Fraud
<h2>Occupational Therapist Owner of TSM Sentenced for Making False and Fraudulent Statements Related to Health Care Benefits</h2>
<p>GREENEVILLE, Tenn. – On April 16, 2018, Jose Penaranda Tan, 58, of Morristown, Tennessee, was sentenced by the Honorable J. Ronnie Greer, U.S. District Judge, to serve 12 months and one day in federal prison. In addition to his prison sentence, Tan must also pay restitution to Medicare, Medicaid (known as TennCare in the state of Tennessee), Cigna, Optum, and Blue Cross Blue Shield (BCBS) of Tennessee in an amount to be determined by Judge Greer.</p>
<p>Tan pleaded guilty in June 2017 to one count of a 35-count indictment charging him with health care fraud, false statements related to health care matters, and aggravated identity theft.</p>
<p>Tan was the owner and operator of Therapeutic Services of Morristown (TSM), a clinic providing occupational, physical, and speech therapy services, specializing in pediatric care. He worked at TSM as a therapist and as a supervisor of various employees, including the therapists and administrative assistants who were responsible for submitting bills to Medicare, TennCare, and private health insurance companies. A detailed account of his offenses is included in the indictment and plea agreement on file with the U.S. District Court.</p>
<p>Tan admitted that over the course of more than two years, he submitted, or caused to be submitted, almost 10,000 false and fraudulent claims to government and private insurers, totaling approximately $1 million. He instructed employees to bill insurers as if TSM therapists were providing individualized therapy sessions to patients, when in fact Tan directed therapists to treat patients in group settings. By falsely claiming that TSM therapists were providing individual therapy, rather than group therapy, Tan was able to secure higher rates of reimbursement from Medicare, TennCare, Cigna, Optum, and BCBS. Additionally, Tan knowingly and fraudulently used the National Provider Identifiers of former therapist employees to bill for therapy services that were provided by non-credentialed therapy assistants, rather than by qualified and credentialed therapists.</p>
<p>This fraud resulted in Medicare, TennCare, Cigna, Optum, and BCBS paying approximately $400,000 to TSM, to which the clinic was not entitled.</p>
<p>“The U.S. Attorney’s Office will continue to pursue charges against health care providers in the Eastern District of Tennessee who fraudulently bill and obtain payments from our federal healthcare benefit programs, such as Medicare and Medicaid, for services not provided. We will use all resources available to ensure the government is reimbursed for funds owed by these individuals and entities who receive payments to which they were not entitled,” said U.S. Attorney J. Douglas Overbey.</p>
<p>This therapist stole the identities of licensed providers and used them to obtain payments from federal health programs,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services Office of Inspector General in Atlanta. “He cheated his patients out of the care they deserved and is now paying the price for his actions.”</p>
<p>This case was investigated by the Department of Health and Human Services – Office of the Inspector General and the Tennessee Bureau of Investigation. Assistant U.S. Attorneys David Gunn and T.J. Harker represented the United States.</p>
<p><a href="https://www.justice.gov/usao-edtn/pr/occupational-therapist-owner-tsm-sentenced-making-false-and-fraudulent-statements">Original PressReleasess&#8230;</a></p>

Insurance Fraud Types And How To Protect Of
<p>Insurance fraud isn&#8217;t a harmless wrongdoing. At the point when individuals cheat insurance organizations out of cash, the legitimate individuals that compensation premiums pay through expanded insurance costs. Insurance organizations lose an expected $30 billion every year in insurance fraud costs that need to get passed on to charge paying purchasers.</p>
<p>You can help stop insurance fraud by reaching your state branch of insurance and giving the greatest number of subtle elements as you can about the fraud that you saw. Customers should figure out how to be careful in recognizing insurance fraud by getting comfortable with the 10 most basic types of fraud.</p>
<p><strong>Stolen Car</strong></p>
<p>There are two ways that crooks execute the stolen <a href="https://www.fraudswatch.com/how-to-report-and-identify-auto-insurance-fraud/">auto insurance fraud scam</a>. The main kind of stolen auto fraud is the point at which an auto proprietor pitches his auto to a body shop to be cut up for parts and afterward reports the auto as stolen. The body shop is in on the fraud, so the specialists are never told about the deal for parts.</p>
<p>The second most basic way that hoodlums submit stolen auto fraud is to pitch the auto to an abroad purchaser, influence the exchange with no printed material, to deliver the auto abroad and after that report it stolen.</p>
<p><strong>Auto Accident</strong></p>
<p>Whenever you see an auto collision, you could be watching insurance fraud in real life. By and large, the driver and mishap casualty are the main ones in on the plan. In different cases, the driver, casualty, insurance specialists and even a portion of the observers that give proclamations are in on the fraud. The estimation of the vehicles is extraordinarily expanded and the insurance result is for two totaled vehicles.</p>
<p><strong>Auto Damage</strong></p>
<p>Any type of insurance fraud is unlawful and harming to the insurance organization. A few people will report a little fender bender, get a gauge for harms, gather the insurance check and afterward not get the auto settled. This is single most normal type of <a href="https://www.fraudswatch.com/insurance-scam-fake-auto-accidents/">collision protection fraud</a> going on, and it happens continually. The general population doing it see no mischief in it, yet the cash the insurance organization pays out originates from premiums paid by different clients, which will go up the all the more regularly this fraud is submitted.</p>
<p><strong>Medical coverage Billing Fraud</strong></p>
<p>Sadly, human services experts will in some cases get in on the insurance fraud act. One type of <a href="https://www.fraudswatch.com/health-insurance-fraud-what-you-should-know/">health insurance fraud</a> is for social insurance suppliers to charge health care coverage organizations a high expense for a standard system, or to charge for administrations that were never rendered.</p>
<p>For instance, you may go in for a customary registration however your specialist chooses to charge your insurance organization for an in-office surgical methodology that never happened. The patient is the casualty of fraud and does not know it.</p>
<p><strong>Pointless Medical Procedures</strong></p>
<p>On the off chance that it appears like your specialist is requesting you to go for superfluous testing, at that point you might be the casualty of insurance fraud. In the event that you go to the specialist for a sore arm however your specialist arranges a progression of blood tests that have nothing to do with your arm, at that point that could be a typical type of insurance fraud.</p>
<p><strong>Organized Home Fires</strong></p>
<p>Property holders insurance fraud costs insurance organizations and their clients billions of dollars every year. A standout amongst the most widely recognized type of property holders insurance fraud is the organized fire or demonstration of vandalism. This should be possible in one of two ways. The <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/mortgage/" title="mortgage" data-wpil-keyword-link="linked" data-wpil-monitor-id="127">mortgage</a> holder either expels vital family things before the fraud happens, or the property holder ensures that the insurance organization knows the estimation of the costly things and afterward has them wrecked.</p>
<p>In relatively every instance of an arranged home fire, the property holder isn&#8217;t home and can represent his whereabouts when the occasion occurred. Lawbreakers are enlisted to set fire to the home, or break in and vandalize the home to influence it to resemble the mortgage holder was deceived.</p>
<p><strong>Tempest Fraud</strong></p>
<p>Offenders will exploit any circumstance to submit insurance fraud, including a noteworthy tempest. A typical type of fraud that occurs in the wake of significant tempests is property holders will either improve the tempest harm to their home to get to a greater degree a settlement, or the mortgage holder will exploit how bustling the insurance organization is and bring in a claim regardless of whether there was no tempest harm.</p>
<p><strong> Abandoned House Fire</strong></p>
<p>A standout amongst the most widely recognized types of mortgage holders insurance fraud is the surrendered house fire. It can occur for an assortment of reasons, yet the final product is dependably fraud. The mortgage holder could have been exchanged to an alternate city in view of his activity and can&#8217;t offer his property, or a landowner claims a home in an area that is not any more prevalent and can&#8217;t motivate occupants to help pay the home <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/loans/" title="loan" data-wpil-keyword-link="linked" data-wpil-monitor-id="283">loan</a>.</p>
<p>On the off chance that you have ever been at the scene of a deserted house fire after the blazes have been put out, you will see no less than one fire examiner for the insurance organization on location. This is a to a great degree normal sort of insurance fraud that causes premiums to go up, as well as puts the structures beside the relinquished home in risk too.</p>
<p><strong>Faked Death</strong></p>
<p>This type of insurance fraud is common to the point that it has been the plot of numerous motion pictures, network shows and books. A criminal will take out a disaster protection arrangement on himself and make his life partner the recipient. After the arrangement has been essentially for a while, the protected criminal fakes his demise and his life partner is paid the passing advantage. At the point when the burial service is finished, the life partner all of a sudden vanishes and the insurance organization is out the demise advantage.</p>
<p><strong>Tenant&#8217;s Insurance</strong></p>
<p>Individuals who lease homes or lofts will regularly take out economical leaseholder&#8217;s insurance strategies to take care of the expense of their belonging. Preceding moving out of the home or flat or when monetary circumstances get terrible, the protected will offer their belonging and after that report them stolen to gather the insurance cash.</p>
<p>Insurance fraud influences everybody in some shape or another. At the point when your accident protection premiums go up, that is mostly because of insurance fraud. In the event that you are aware of insurance fraud that has been submitted, at that point you should report it to your state bureau of insurance quickly.</p>

Securities, Commodities, And Investment Fraud: Hung Kang and John Won Chargedwith Conspiring to Commit Wire and Securities Fraud
<h2>Two Defendants Indicted in Brooklyn Federal Court for Foreign Exchange Trading Scams</h2>
<p><strong>Defendants Stole Hundreds of Thousands of Dollars by Luring Korean-American Investors into Bogus Foreign Exchange Trading</strong></p>
<p>Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Tae Hung Kang, also known as “Kevin Kang,” and John Won with conspiring to commit wire and securities fraud, securities fraud, and conspiring to commit money laundering, in connection with schemes involving foreign exchange trading that targeted members of the Korean-American community. Kang was also charged with substantive wire fraud. The defendants were arrested today and are scheduled to be arraigned 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, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.</p>
<p>“As alleged in the indictment, Kang and Won lured investors with false promises of great profits to be made in the foreign exchange market, and then stole their money,” stated United States Attorney Donoghue. “This Office, together with our law enforcement partners, is committed to investigating and prosecuting fraudsters who prey upon the investing public.” Mr. Donoghue expressed his appreciation to the United States Commodities and Futures Trading Commission and the FBI Field Office in Atlanta for their assistance during the investigation.</p>
<p>“As alleged, Kang and Won pursued victims with specific placement of advertisements in Korean-language newspapers, preying upon the kinship of their target group and exploiting their affiliation with this particular community,” stated FBI Assistant Director-in-Charge Sweeney. “In addition, they falsely represented their trading credentials while persuading investors to contribute additional money in stock—money that was eventually misappropriated. The FBI will continue to dedicate resources to uncovering <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="842">financial</a> crimes of all kinds, especially those that seek to capitalize on the trust and affinity of innocent victims.”</p>
<p>As alleged in court documents, dozens of investors in the Eastern District of New York were defrauded in connection with the two charged schemes, both of which involved foreign exchange trading. Foreign exchange trading refers to trading one currency for another in an effort to profit from fluctuating exchange rates. In connection with the first alleged scheme, investors were enticed by advertisements placed by the defendants in Korean-language newspapers and other promotional materials to open foreign exchange trading accounts that would be managed by Kang, Won and others at their company FOREXNPOWER. Kang and Won promised investors double-digit returns, claiming to have a secret algorithmic trading method that would generate large profits with minimal risk. In fact, Kang and Won had minimal trading experience, their algorithmic trading method never performed as promised, and investors suffered substantial losses.</p>
<p>In the second scheme, investors were persuaded by the defendants to invest their money into stock issued by Safety Capital Management, Inc. (“Safety Capital”), which did business as FOREXNPOWER. These investors were told their investments would be pooled by Kang and others to conduct foreign exchange trading, or to expand the FOREXNPOWER business, and, again, promised a large return on their investment. Ultimately, nearly all of the money that was invested in Safety Capital stock, totaling at least $700,000, was misappropriated by the defendants. The defendants used the stolen money to pay for advertisements targeting investors and promoting FOREXNPOWER.</p>
<p>If convicted of wire fraud conspiracy, the defendants each face up to 20 years’ imprisonment.</p>
<p>The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.</p>
<p>The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Lauren Howard Elbert is in charge of the prosecution.</p>
<p>The Defendants:</p>
<p>TAE HUNG KANG (also known as “Kevin Kang”)<br />
Age: 55<br />
Bayside, New York</p>
<p>JOHN WON<br />
Age: 49<br />
Flushing, New York</p>
<p>E.D.N.Y. Docket No. 18-CR-184 (WFK)</p>
<p><a href="https://www.justice.gov/usao-edny/pr/two-defendants-indicted-brooklyn-federal-court-foreign-exchange-trading-scams">Original PressReleases&#8230;</a></p>

Tax Fraud: Robert N. Bertrand Sentenced For Failure to Pay Medicare, Social Security and Federal Income Taxes
<h2>Former Chief Financial Officer of “Soup Nazi” Business Sentenced to 9 Months’ Imprisonment for Tax Evasion</h2>
<p><strong>Defendant Failed to Pay Medicare, Social Security, and Federal Income Taxes</strong></p>
<p>Earlier today, in federal court in Brooklyn, Robert N. Bertrand, the Former Chief Financial Officer of Soupman, Inc. (“Soupman”), was sentenced by United States District Judge Pamela K. Chen to nine months’ imprisonment for failure to pay Medicare, Social Security and federal income taxes, to be followed by a one year term of supervised release. Soupman, which is based on Staten Island, licenses its name and recipes from Al Yeganeh, the inspiration for the “Soup Nazi” character on the television series “Seinfeld.” The Court also ordered Bertrand to pay $78,518.18 in restitution to the United States. Bertrand pleaded guilty in December 2017.</p>
<p>Richard P. Donoghue, United States Attorney for the Eastern District of New York, and James D. Robnett, Special Agent in Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the sentence.</p>
<p>According to court filings and facts presented during court proceedings, as Soupman’s CFO, Bertrand had a corporate responsibility to collect, truthfully account for and pay Medicare, Social Security and federal income taxes for Soupman’s employees. Between 2010 and 2014, Bertrand made unreported payments to Soupman employees, and compensated certain employees in large unreported stock awards. Bertrand never reported this employee compensation to the IRS, and never paid Medicare, Social Security and federal income taxes on the side payments or the stock awards, despite a 2012 warning from an external auditor that these payments should be reported to the IRS. From 2010 through 2014, Soupman’s total approximate unreported cash and stock compensation was more than $2.85 million, and the total approximate tax loss to the United States was in excess of $593,000.</p>
<p>“Bertrand has been held to account for abusing his position as the CFO of a publicly traded company in a long-running scheme that cheated the nation’s treasury out of hundreds of thousands of dollars,” stated United States Attorney Donoghue. “Today’s sentencing makes clear that this Office, with our partners at the IRS, will pursue corporate gatekeepers like the defendant who fail to enforce their companies’ tax obligations.”</p>
<p>“Corporate executives such as Mr. Bertrand have a responsibility to collect and turn over all IRS withholding taxes,” stated IRS-CI Special Agent-in-Charge Robnett. “His failure to withhold and pay over is a clear violation that directly impacts those employees of Soupman Inc. and U.S. taxpayers now and in the future. Today justice is served, and Mr. Bertrand is being held accountable for his criminal actions.”</p>
<p>The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Kaitlin T. Farrell is in charge of the prosecution.</p>
<p>The Defendant:</p>
<p>Robert N. Bertrand<br />
Age: 63<br />
Norwalk, Connecticut</p>
<p>E.D.N.Y. Docket No. 17-CR-186</p>
<p><a href="https://www.justice.gov/usao-edny/pr/former-chief-financial-officer-soup-nazi-business-sentenced-9-months-imprisonment-tax">Original PressReleases&#8230;</a></p>

Financial Fraud: Sonya Arrington Indicted on Charges of Wire Fraud, And Theft of Government Property
<h2>Erie City Council President Indicted on Fraud and Theft Charges Relating to her Non-Profit Organization</h2>
<p>ERIE, Pa. – The founder of an Erie non-profit organization and current Erie City Council President has been indicted by a federal grand jury in Erie on charges of wire fraud, theft of government property and false writing or document to the government, United States Attorney Scott W. Brady announced today.</p>
<p>The 33-count indictment, returned yesterday, named Sonya Arrington, 51, of Erie, Pennsylvania, as the sole defendant.</p>
<p>&#8220;When public officials and those who seek donations for charitable purposes commit dishonest acts, public confidence suffers,&#8221; stated U.S. Attorney Brady. &#8220;We will root out and prosecute corrupt individuals whenever we find them engaging in fraudulent acts while serving in a public position or using charitable contributions to their nonprofit organizations for private gain.&#8221;</p>
<p>According to the indictment presented to the court, Arrington diverted funds donated to Mothers Against Teen Violence, a non-profit organization she created to help prevent violence among teenagers, to pay for her gambling and personal expenses. Specifically, the indictment alleges that from December 2011 to March 2018, Arrington engaged in a scheme to defraud MATV of at least $70,000. She allegedly solicited donations from individuals and entities in person and by email; received donations to MATV in cash and checks payable to MATV and deposited a portion of the donations into MATV bank accounts and kept a portion in cash for herself; and did not deposit cash but kept donations for herself. She also allegedly used the debit card for the MATV bank accounts to make purchases unrelated to the organization’s purposes, for things like personal items of clothing, groceries, car washes and food at restaurants; used the debit card for MATV to pay personal bills for T-Mobile, State Farm, First Energy and others; and deposited checks to MATV into personal bank accounts and kept a portion for personal use. The indictment alleges that on 113 occasions from April 2012 to January 2018, Arrington used the MATV debit card to withdraw MATV funds at Presque Isle Downs &; Casino. The indictment also alleges that Arrington fraudulently received approximately $29,558 in Social Security disability benefits and submitted a document to the Social Security Administration that contained a false statement.</p>
<p>The law provides for a maximum total sentence of 635 years in prison, a fine of $7,750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.</p>
<p>Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.</p>
<p>The Federal Bureau of Investigation and the Social Security Administration, Office of Inspector General, conducted the investigation leading to the indictment in this case.</p>
<p>An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.</p>
<p><a href="https://www.justice.gov/usao-wdpa/pr/erie-city-council-president-indicted-fraud-and-theft-charges-relating-her-non-profit">Original PressReleases&#8230;</a></p>

Health Care Fraud: Carl Lindblad and Susan Vergot Admitting That They Participated In a Health Care Fraud Scheme That Bilked TRICARE
<h1>Tennessee Doctors Plead Guilty in $65 Million TRICARE Fraud</h1>
<p>Assistant U. S. Attorneys Benjamin J. Katz and Mark W. Pletcher (619) 546-9604 and (619) 546-9714</p>
<p><b><u>NEWS RELEASE SUMMARY</u> – April 11, 2018</b></p>
<p>SAN DIEGO – Two doctors, Carl Lindblad and Susan Vergot, pleaded guilty in federal court today, admitting that they participated in a health care fraud scheme that bilked TRICARE – the health care program that covers United States service members – out of more than $65 million by prescribing thousands of exorbitantly expensive compounded medications to patients that they never saw or examined.</p>
<p>Drs. Lindblad and Vergot entered their guilty pleas before U.S. Magistrate Judge Mitchell D. Dembin. Both pleaded guilty to conspiracy to commit health care fraud. Their sentencings are scheduled for June 29, 2018 before U.S. District Court Judge Janis L. Sammartino.</p>
<p>Compounded medications are 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 requires a particular dosage or application or is allergic to a dye or other ingredient.</p>
<p>According to the guilty pleas, a team of individuals worked to recruit and pay Marines, primarily from the San Diego area, and their dependents – all TRICARE beneficiaries – to obtain compounded medications that would be paid for by TRICARE. This information was sent to Choice MD, the Tennessee medical clinic that employed Drs. Lindblad and Vergot. Drs. Lindblad and Vergot then wrote prescriptions for the TRICARE beneficiaries, despite never examining the patients in person. Once signed by the doctors, these prescriptions were not given to the beneficiaries, but sent directly to particular pharmacies controlled by co-conspirators, which filled the prescriptions and billed TRICARE at exorbitant prices.</p>
<p>Josh Morgan, a former Marine from San Diego, pleaded guilty last month to Conspiracy to Commit Health Care Fraud for his role in recruiting TRICARE beneficiaries to fraudulently receive these prescriptions.</p>
<p>Between December 2014 and May 9, 2015 – the day that TRICARE stopped reimbursing for compounded medications – Drs. Lindblad and Vergot authorized 4,442 total prescriptions. Over this time, their co-conspirators billed TRICARE $65,679,512 for these prescriptions.</p>
<p>Lindblad and Vergot represent the fifth and sixth defendants charged in relation to this fraud scheme. In addition to Morgan, Jimmy and Ashley Collins, the owners of Choice MD, and CFK, Inc., the owner of a co-conspirator pharmacy, were indicted in March 2018 on charges of Conspiracy to Commit Health Care Fraud and Illegal Payments of Remunerations. That case remains pending.</p>
<p><b><u>DEFENDANTS</u> Case Number 18-cr-0432-JLS </b></p>
<p>Carl Lindblad Age: 53 Cleveland, TN</p>
<p>Susan Vergot Age: 31 Cleveland, TN</p>
<p><b><u>SUMMARY OF CHARGES</u></b></p>
<p>Conspiracy to Commit Health Care Fraud – Title 18, U.S.C § 1349</p>
<p>Maximum penalty: 10 years’ imprisonment and fine of higher of $250,000 or double loss amount</p>
<p><b><u>AGENCY</u></b></p>
<p>Defense Criminal Investigative Service</p>
<p>Naval Criminal Investigative Service</p>
<p>IRS Criminal Investigation Division, Gulfport, MS</p>
<p>Federal Bureau of Investigation &#8211; Jackson, MS Field Office</p>
<p>*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.</p>
<p><a href="https://www.justice.gov/usao-sdca/pr/tennessee-doctors-plead-guilty-65-million-tricare-fraud">Original PressReleases&#8230;</a></p>

Tax Fraud: Criminal Charges Against Several Chicago-area Defendants For a Variety of Alleged Tax Schemes
<h2>Federal Prosecutions Serve as Reminder to Comply with Tax Obligations as Filing Deadline Approaches</h2>
<p>CHICAGO — Federal authorities today announced criminal charges against several Chicago-area defendants for a variety of alleged tax schemes. With tax season in full swing, the prosecutions serve as a warning that individual taxpayers are responsible for the contents of their own return.</p>
<p>The criminal prosecutions announced today include charges against two Chicago tax preparers who allegedly assisted clients in obtaining thousands of dollars in fraudulent refunds, as well as charges against individuals accused of knowingly filing false tax returns or willfully failing to file tax returns as required.</p>
<p>In addition to potential criminal penalties, including incarceration, tax evaders remain responsible for all taxes and interest due, as well as civil penalties. The nation’s tax deadline this year is April 17.</p>
<p>“Tax offenses are neither victimless nor without consequence,” said John R. Lausch, Jr., United States Attorney for the Northern District of Illinois. “Taxes are how governments provide essential services. Our office strives to preserve the integrity of the federal tax system through vigorous criminal enforcement of the internal revenue laws.”</p>
<p>“Federal income tax compliance should be equally shared among all of the roughly 9.5 million Chicagoland residents,” said Gabriel Grchan, Special Agent in Charge, IRS Criminal Investigation, Chicago Field Office. “IRS-CI will continue focusing investigative efforts on individuals who contribute to the tax gap and do not comply with the law. With the filing deadline approaching, Chicagoans who might be thinking about cheating should think twice or risk the consequences.”</p>
<p>In an indictment returned last month, a federal grand jury charged JOHN OCWIEJA, 49, of Chicago, with six counts of willfully failing to file an income tax return. Ocwieja allegedly failed to file individual returns for the calendar years 2011 through 2016. Ocwieja has pleaded not guilty to the charges. A status hearing is set for May 9, 2018, before U.S. Magistrate Judge M. David Weisman. The government in Ocwieja’s case is represented by Assistant U.S. Attorney Andrianna Kastanek.</p>
<p>In another tax prosecution, professional tax preparer ANNA PLATOS, 58, of Hickory Hills, is charged with 19 counts of preparing and filing false and fraudulent income tax returns, and one count of obstructing the IRS. Platos, who owned Chicago-based Midway Accounting, filed the returns on behalf of numerous individuals for the tax years 2011 and 2012, according to the indictment. The returns claimed false tax deductions for car and truck expenditures, medical expenses, charitable gifts, and educational expenses, the indictment states. Platos has pleaded not guilty to the charges. A status hearing is set for May 8, 2018, before U.S. District Judge Amy J. St. Eve. The government in Platos’s case is represented by Assistant U.S. Attorney James P. Durkin.</p>
<p>The other professional tax preparer recently charged is IRVING BROWN SR., 69, of Chicago, who operated Irving Brown Sr. Tax Services. According to the indictment, Brown understated his own taxable income for the tax years 2011 and 2012, and he filed returns for taxpayers that he knew to contain false business losses. Brown also allegedly obstructed an IRS audit by fabricating documents and causing a taxpayer to submit them to the IRS. He is charged with two counts of subscribing a false tax return, twelve counts of aiding and abetting the filing of a false tax return, and one count of interfering with the administration of internal revenue laws. Brown has pleaded not guilty to the charges. A status hearing is set for May 9, 2018, before U.S. District Judge Robert W. Gettleman. The government in Brown’s case is represented by Assistant U.S. Attorney Andrew Erskine.</p>
<p>The U.S. Attorney’s Office also recently charged TARA D. SMITH, of Charlotte, N.C., with one count of willfully filing a false income tax return on her own behalf. Smith pleaded guilty to the charge earlier this week. In a plea agreement, Smith admitted that for the calendar year 2014, she filed a return that falsely claimed her total income was approximately $18,260, when she knew that her total income substantially exceeded that amount. Smith’s sentencing is set for July 20, 2018, before U.S. District Judge Sara L. Ellis. The government in Smith’s case is represented by Assistant U.S. Attorney Erika L. Csicsila. The City of Chicago Inspector General’s Office assisted in the Smith investigation.</p>
<p>A criminal information filed this month charges MICHAEL CIELAK, 54, of Chicago, with filing false tax returns. The charges allege that Cielak operated a business that generated scrap metal, and that he failed to report the income he received from the sale of scrap. Cielak will be arraigned on April 17, 2018, before U.S. Magistrate Judge Daniel G. Martin. The government in Cielak’s case is represented by Assistant U.S. Attorney Patrick King.</p>
<p>Earlier this month, the U.S. Attorney’s Office charged BARRY POTICHA, 73, of Northbrook, with scheming to impede the IRS. According to the charges, Poticha worked as the office manager and bookkeeper for two Chicago-area staffing companies. From 2000 through 2010, Poticha allegedly prepared and filed fraudulent tax returns to avoid the payment of employment taxes owed by the companies. Poticha will be arraigned on April 16, 2018, before U.S. District Judge Gary Feinerman. The government in Poticha’s case is represented by Assistant U.S. Attorney Kathryn E. Malizia.</p>
<p>A federal grand jury earlier this month indicted LATASHA MOSS, 30, of Cicero, with theft of government funds in relation to the theft of federal income tax refunds issued for returns filed in the name of other individuals. Moss will be arraigned on April 12, 2018, before U.S. Magistrate Judge Jeffrey T. Gilbert. The government in Moss’s case is represented by Assistant U.S. Attorney Sean K. Driscoll.</p>
<p>The public is reminded that charges are not evidence of guilt. The defendants with pending charges are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.</p>

Announcement on Tax Charges Committed in This Year 2018 By FBI
<h2>Tax Crime Does Not Pay</h2>
<h3>Significant prison sentences have been handed down during the past year</h3>
<p>It’s that time of year again: tax season. The Justice Department would like to remind the public during this time of year that evading your tax obligations could end badly, with substantial fines and penalties, and even long prison sentences. Taxpayers are also reminded to be on the lookout for unscrupulous tax return preparers, who seek to inflate refunds by falsifying deductions, among other means. Even if a tax return preparer makes an error on an individual’s tax return, it is still the taxpayer’s responsibility to pay the correct taxes, and that individual may still be responsible for any unpaid taxes, interest, and fines resulting from these crimes.</p>
<p>“Tax returns are signed under the penalties of perjury, and every taxpayer is ultimately responsible for the contents of his or her own return,” cautioned Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. “While the vast majority of Americans truthfully report and pay their taxes, unfortunately there are those who seek to cheat the system and take a free ride on the backs of the hard working men and women of this country. The Justice Department is committed to bringing tax evaders and those who falsely prepare tax returns to justice.”</p>
<p>Over the past year, federal prosecutors for the Tax Division and U.S. Attorney’s offices across the country have worked tirelessly with special agents of Internal Revenue Service Criminal Investigation and other law enforcements agencies to investigate and prosecute those who illegally evade their taxes. These enforcement efforts continue year round.</p>
<h4>Recent Tax Evasion Prosecutions of Individuals</h4>
<ul>
<li>In July 2017, a Watertown, New York, restaurateur was sentenced to 150 months in prison for tax evasion and investment fraud. He engaged in a scheme to evade more than $4 million in taxes and obstruct the IRS.</li>
<li>In October 2017, a Grand Junction, Colorado, business owner was sentenced to 88 months in prison for tax evasion and failing to file corporate and individual tax returns. He had not filed a personal tax return since 1992 and had not paid individual income taxes since 1993.</li>
<li>In January 2017, a St. Louis, Missouri, tax return preparation business owner was sentenced to 27 months in prison for tax evasion. He underreported his businesses’ gross receipts by over $1.5 million and evaded over $580,000 in tax.</li>
<li>In August 2017, a south Florida salesman was sentenced to 12 months and one day in prison for tax evasion. From 2002 to 2015, he earned over $1.5 million in income selling hurricane resistant windows and evaded paying over $350,000 in taxes. Except for the 2007 tax year, he had not filed an income tax return since 2002.</li>
</ul>
<h4>Recent Employment Tax Prosecutions</h4>
<ul>
<li>In March 2018, the owners of a Memphis, Tennessee, staffing company, who were husband and wife, were sent to jail for failing to pay over payroll taxes and filing false tax documents. The husband was sentenced to 75 months in prison and his wife was sentenced to one year in prison. They failed to pay over $2.8 million in withholdings and other employment taxes to the IRS and filed false employment tax returns.</li>
<li>In October 2017, the owner of a Las Vegas, Nevada, strip club was sentenced to 24 months for evading employment taxes. The former owner of The Crazy Horse Too evaded paying more than $1.7 million in employment taxes.</li>
<li>In July 2017, a Potomac, Maryland, doctor and entrepreneur was sentenced to 119 months and 29 days in prison for defrauding his former company’s shareholders and for failing to pay more than $7.5 million in employment taxes.</li>
</ul>
<h4>Recent Prosecutions Involving Offshore Bank Accounts</h4>
<ul>
<li>In October 2017, two Tampa, Florida, business executives were sentenced to prison for 54 months and 72 months respectively for their roles in a conspiracy to defraud the United States using an offshore tax shelter scheme. They conspired to create and promote a sham offshore tax shelter strategy marketed to clients.</li>
<li>In July 2017, a Fort Myers, Florida, businessman was sentenced to 57 months in prison for conspiring with investment advisors to hide money in offshore bank accounts. He used secret numbered bank accounts and foreign shell companies to hide millions of dollars in order to evade more than $728,000 in U.S. taxes.</li>
<li>In October 2017, a Greenwich, Connecticut, resident pleaded guilty to failing to report to the Department of Treasury funds he maintained in foreign bank accounts. He opened accounts at several banks, including Credit Suisse, UBS, Bank Leu, Clariden Leu, and Bank Hofmann. In 2004, the value of his foreign accounts exceeded $28 million. For over a decade, he filed false tax returns, on which he failed to report income from his foreign accounts.</li>
</ul>
<h4>Recent Prosecutions of Attempts to Obstruct the IRS</h4>
<ul>
<li>In July 2017, a Loveland, Colorado, businessman and delicatessen owner was sentenced to 24 months in prison for conspiring to file fraudulent claims for tax refunds. He conspired with his return preparer to file three tax returns that claimed more than $1 million in bogus refunds, of which the IRS paid $350,765. He spent the funds on precious metals and coins, a truck, jewelry, luxury travel, and sporting equipment.</li>
<li>In November 2017, a Greensboro, North Carolina, resident was sentenced to 37 months in prison for corruptly endeavoring to obstruct the IRS. He filed several fraudulent tax returns with the IRS that included fake income and withholdings, which claimed over $750,000 in fraudulent refunds. He also filed documents with the Guilford County Register of Deeds purporting to renounce his United States citizenship and proclaiming to be a sovereign citizen.</li>
<li>In October 2017, a Boynton Beach, Florida, resident was sentenced to 30 months in prison for obstructing the IRS. He filed fraudulent personal tax returns with the IRS that sought more than $5.6 million in fraudulent refunds, of which the IRS paid more than $485,000. He used the funds to purchase a house and multiple vehicles, including a Jaguar and Mercedes Benz.</li>
</ul>
<p>More information about the Tax Division’s enforcement efforts in these and other areas can be found on the division’s website. The IRS website also has information about how you can blow the whistle on people who fail to pay the tax that they owe.</p>
<p><a href="https://www.justice.gov/opa/pr/tax-crime-does-not-pay">Original PressReleasess&#8230;</a></p>

Tax Fraud: Three Individuals Indicted for Defrauding the United States, Theft of Government Funds, and Aggravated Identity Theft
<h2>Three People Charged in Stolen Identity Refund Fraud Scheme</h2>
<p>CAMDEN, N.J. – Three people were arrested today for their alleged roles in an extensive scheme to obtain money through fraudulently obtained refund checks issued by the U.S. Treasury, U.S. Attorney Craig Carpenito announced.</p>
<p>Jorge Gutierrez, 39, of Merchantville, New Jersey; Alberto Sanchez, 34, of Camden; and Roque Bisono, 29, of Maple Shade, New Jersey, were indicted by a grand jury for conspiring to defraud the United States, theft of government funds, and aggravated identity theft. Sanchez was additionally indicted on witness tampering charges, and Bisono was indicted for making false statements to federal law enforcement officials in connection with the investigation. They appeared before U.S. Magistrate Judge Joel Schneider in Camden federal court.</p>
<p>A fourth defendant, Awilda Henriquez, 32, of Camden, remains at large.</p>
<p>According to documents filed in this case and statements made in court:</p>
<p>Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that involves the use of stolen identities to commit tax refund fraud. SIRF schemes generally share a number of hallmarks. Perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico. They then complete Form 1040 tax returns using the fraudulently obtained information and falsifying wages earned, taxes withheld, and other data, always ensuring that the fraudulent tax return generates a refund. They direct the U.S. Treasury Department to mail refund checks to locations that the perpetrators control or can access. With the fraudulently obtained refund checks in hand, SIRF perpetrators generate cash proceeds by depositing the checks into bank accounts that they control or cashing the checks at check cashing businesses.</p>
<p>For the 2013 tax year, in excess of 3,300 SIRF tax returns were filed using the names and Social Security numbers of residents of Puerto Rico, where the refunds were directed to be mailed to a small section of Pennsauken, New Jersey. Of the 3,300 returns filed, several refund checks were issued and ultimately cashed at check cashing agencies in New Jersey, Philadelphia, and New York using false and fraudulent identifications, including fake New Jersey driver&#8217;s licenses, fake Social Security cards, and fake Department of Homeland Security Permanent Resident Identification cards.</p>
<p>Gutierrez, Bisono, Sanchez, and their conspirators allegedly obtained stolen identities of residents of Puerto Rico and used them to file fraudulent income tax returns seeking refunds to which they were not entitled. The conspirators recruited mail carriers from the U.S. Postal Service as part of the scheme to steal the tax refund checks from the mail. The mail carriers were paid for every U.S Treasury check that was stolen. The conspirators paid “check couriers” to cash the tax refund checks in a variety of ways, including at check cashing businesses in and around Camden, New Jersey. The check couriers presented fraudulent identifications at the check cashing businesses matching the names on the tax refund checks in order to cash the checks. In total, the scheme caused $565,091 in losses to the U.S. Treasury.</p>
<p>The counts of conspiracy to steal government funds are punishable by up to five years in prison. The counts of theft of government funds are punishable by a maximum potential penalty of 10 years in prison. The count of false statements is punishable by imprisonment of up to five years. The witness tampering count is punishable by up to 20 years in prison. The count of aggravated identity theft is punishable a statutory mandatory prison sentence of two years that must be served consecutively to any term of imprisonment imposed for the violation of any other count. All the counts are also punishable by a fine of up to $250,000, or twice the gain or loss caused by the offense.</p>
<p>U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark and Special Agent in Charge Vicki S. Duane in Philadelphia, and special agents of the U.S. Postal Service Office of Inspector General, with assistance from the U.S. Postal Inspection Service, under the direction of Inspector in Charge Daniel B. Brubaker, Philadelphia Division, with the investigation leading to today’s charges and arrests.</p>
<p>The government is represented by Assistant U.S. Attorneys Jason M. Richardson and Christina O. Hud of the Criminal Division, Camden.</p>
<p>The charges and allegations in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.</p>

Mortgage Fraud: Betsy Borges Pleaded Guilty In One Count of Conspiracy to Commit Bank Fraud
<h2>Former Atlantic County Prosecutor’s Office Detective Sentenced To 18 Months In Prison For Mortgage Fraud Conspiracy</h2>
<p>CAMDEN, N.J. – An Atlantic County, New Jersey, woman who admitted her role in a more than $200,000 mortgage fraud conspiracy involving a property she purchased in Mays Landing, New Jersey, was sentenced today to 18 months in prison, U.S. Attorney Craig Carpenito announced.</p>
<p>Betsy Borges, 38, of Mays Landing, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to an information charging her with one count of conspiracy to commit bank fraud. Judge Simandle imposed the sentence today in Camden federal court.</p>
<p>Borges was originally charged by complaint in May 2017 with Iraida Fuentes, 35, of Pleasantville, New Jersey.</p>
<p>According to documents filed in this case and statements made in court:</p>
<p>In December 2002, Borges purchased a property in Mays Landing. Despite failing to make <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/mortgage/" title="mortgage" data-wpil-keyword-link="linked" data-wpil-monitor-id="126">mortgage</a> payments to Wachovia and its successor, Wells Fargo, Borges collected rental income from tenants living in the property and concealed that income from the banks. Borges also falsely represented to Wells Fargo, on multiple occasions, that she could not make the mortgage payments for the property.</p>
<p>Borges subsequently arranged with Wells Fargo for Fuentez to purchase the property through a short sale. Not only did Borges and Fuentez conceal their familial relationship from Wells Fargo, they also concealed the fact that Borges and another conspirator provided Fuentez the funds to purchase the property.</p>
<p>On Sept. 20, 2012, Fuentez purchased the property at a price well below its actual value. On Nov. 22, 2016, B&;B Properties – a company owned in part by Borges – purchased the property from Fuentez for $25,000. On Feb. 3, 2017, Borges then individually purchased the property from B&;B Properties for one dollar.</p>
<p>In addition to the prison term, Judge Simandle sentenced Borges to three years of supervised release and ordered her to pay restitution of $206,405.</p>
<p>Fuentes pleaded guilty on Nov. 6, 2017 and was sentenced Feb. 9, 2018 to two years of probation.</p>
<p>U.S. Attorney Carpenito credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Bradley W. Cohen in Newark, with the investigation leading to today’s sentencing.</p>
<p>The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.</p>
<p>Defense counsel: Louis M. Barbone Esq., Atlantic City, New Jersey.</p>
<p><a href="https://www.justice.gov/usao-nj/pr/former-atlantic-county-prosecutor-s-office-detective-sentenced-18-months-prison-mortgage">Original PressReleases&#8230;</a></p>

Financial Fraud: Ho Shin Lee Was Indicted For Laundering From Appalachian State University
<h2>Los Angeles Man Indicted For Money Laundering Of $1.9 Million Stolen From Appalachian State University</h2>
<p>CHARLOTTE, N.C. – Ho Shin Lee, 31, of Los Angeles, California, was indicted by a federal grand jury in Charlotte for laundering more than $1.9 million stolen from Appalachian State University, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina. The 14-count indictment was unsealed today, following Lee’s arrest in California.</p>
<p>John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division joins U.S. Attorney Murray in making today’s announcement.</p>
<p>According to allegations contained in the indictment, on or about November 18, 2016, Lee applied to the Secretary of State of California to register Royce Hub Trading, Inc. as a corporation in California, claiming that the corporation was in the business “general merchandise.” Lee represented himself to be the Chief Executive Officer, Secretary, and Chief <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="Financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="841">Financial</a> Officer of Royce Hub Trading. The indictment alleges that on or about November 23, 2016, Lee opened a bank account with a financial institution in Los Angeles in the name of Royce Hub Trading, Inc. Lee claimed to be president of Royce Hub Trading and was the sole account holder.</p>
<p>Court documents indicate that in 2016, Appalachian State University (“Appalachian State”) awarded a contract to Rodgers Builders to build a new health sciences building at the university. On or about December 2, 2016, an employee at Appalachian State received an email from an unidentified individual purporting to be D.M., an employee of Rodgers Builders. The e-mail was sent from accounts@rodgersbuildersinc.com (link sends e-mail). The legitimate e-mail address for Rodgers Builders was “rodgersbuilders.com.” The fraudulent e-mail contained a direct deposit form and instructions to change Rodgers Builders’ previously submitted banking information to Lee’s newly opened bank account.</p>
<p>The indictment alleges that the Appalachian State employee changed the payment information as directed by the fraudulent e-mail, and on or about December 8, 2016, a payment of approximately $1,959,925.02 intended for Rodgers Builders by Appalachian State was directed to the bank account controlled by Lee.</p>
<p>According to the indictment, on or about December 12, 2016, Lee received the fraud proceeds, and quickly transferred the funds through a series of financial transactions out of his bank account, knowing that the transactions were designed to conceal the nature, location, source, ownership, and control of the fraud proceeds.</p>
<p>Lee is charged with fourteen counts of money laundering. The maximum penalty for the each charge is twenty years in prison and a $ 500,000 fine.</p>
<p>The charges contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.</p>
<p>The FBI investigated the case. Assistant U.S. Attorney Kelli Ferry is in charge of the prosecution.</p>
<h3>Appalachian State University To Receive $1.5 Million Distribution Resulting From U.S. Attorney&#8217;s Office Civil Forfeiture Action</h3>
<p><strong>U.S. Attorney’s Office Collects $23.4 Million in Civil and Criminal Actions in Fiscal Year 2017</strong></p>
<p>CHARLOTTE, N.C. – U.S. Attorney R. Andrew Murray announced that $1,542,442.33 will be distributed to Appalachian State University (ASU) following successful civil forfeiture proceedings against money seized from bank accounts controlled by alleged fraudsters and money launderers who targeted the higher education institution.</p>
<p>U.S. Attorney Murray is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte office.</p>
<p>“Today’s announcement is an example of the results we get when we use civil forfeiture laws to swiftly stop crime and provide financial relief to victims of fraud,” said U.S. Attorney Murray. “In this case, the FBI located and seized the stolen funds even before criminal investigative targets had been identified or a criminal case had been filed. Under these circumstances, civil forfeiture is the only area of law that enables law enforcement to swiftly obtain warrants to secure stolen funds, and to prevent the perpetrators of fraud from accessing them. Identifying and seizing ill-gotten gains and returning forfeited funds to victims is a priority for my office. I will use all of the tools at my disposal to make victims whole, and civil asset forfeiture is an invaluable tool in that arsenal.”</p>
<p>According to allegations contained in the civil forfeiture complaint, beginning in or around December 2016, one or more alleged fraudsters convinced ASU staff to forward over $1.9 million to one or more companies operated by them. According to court records, the fraudsters posed in emails as a legitimate construction company building ASU’s new health sciences facility. After receiving the funds, the alleged fraudsters used numerous bank wire transfers to launder the money among various companies.</p>
<p>Court records indicate that, upon discovery of the fraud, ASU notified the FBI and fully assisted in the investigation. The FBI ultimately located $1,542,442.33 of the money dispersed in multiple bank accounts and obtained forfeiture seizure warrants for it, preventing the wrongdoers from absconding with ASU’s funds. Following that, the U.S. Attorney’s Office filed a civil complaint in federal court. Upon conclusion of the civil forfeiture case, the Department of Justice’s Money Laundering and Asset Recovery Section authorized distribution of all forfeited funds to ASU.</p>
<p>In making today’s announcement, U.S. Attorney Murray commended the work of the FBI. U.S. Attorney Murray also thanks ASU officials for their prompt efforts to notify law enforcement of the fraud.</p>
<p>Assistant United States Attorney Benjamin Bain-Creed of the United States Attorney’s Office in Charlotte handled the proceedings. (Docket No. 5:17-cv-81)</p>
<p><strong>Criminal and Civil Actions Collections in Fiscal Year 2017</strong></p>
<p>In Fiscal Year 2017, the Western District of North Carolina (WDNC) collected $23,476,979.90 in criminal and civil actions. Of this amount, $4,719,016.01 was collected in criminal actions and $18,757,963.89 was collected in civil actions. Additionally, WDNC worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $7,216,680.36 in cases pursued jointly with these offices. Overall, the Justice Department collected just over $15 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2017.</p>
<p>The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the Justice Department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.</p>
<p>The U.S. Attorney’s Office, working with partner agencies and divisions, also collected $2,768,013 in asset forfeiture actions in FY 2017. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.</p>
<p>“Every day, federal prosecutors and staff in the U.S. Attorney’s Office work hard to protect the citizens of the Western District of North Carolina and to ensure that criminals do not profit from their illegal activities,” said U.S. Attorney Murray. “Their diligent efforts enable us to achieve justice, recover taxpayer dollars, secure restitution for victims of federal crimes, and protect the public from fraud, waste and abuse.”</p>
<p><a href="https://www.justice.gov/usao-wdnc/pr/los-angeles-man-indicted-money-laundering-19-million-stolen-appalachian-state">Original PressReleases&#8230;</a></p>

Disaster Fraud: Shanyra Bennett Pleaded Guilty In One Count of Disaster Benefits Fraud
<h2>Camden, New Jersey, Woman Admits Defrauding FEMA after Natural Disasters</h2>
<p>CAMDEN, N.J. – A Camden woman today admitted defrauding the Federal Emergency Management Administration (FEMA) in 2014 after Hurricane Sandy struck New Jersey in 2012, U.S. Attorney Craig Carpenito announced.</p>
<p>Shanyra Bennett 40, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging her with one count of Disaster Benefits Fraud.</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 effected 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="840">financial</a> assistance by, among other things, helping effected individuals repair their property.</p>
<p>Due to FEMA&#8217;s vast size and the typically large number of victims resulting from a disaster, FEMA is frequently targeted in disaster fraud schemes by individuals or groups seeking benefits to which they are not entitled. They do this by submitting fraudulent applications to FEMA for among other things, repairs and rental assistance.</p>
<p>In October 2012, various counties of southern New Jersey, including Camden County, sustained significant damage due to wind, rain, and flooding from Hurricane Sandy.</p>
<p>On Oct. 30, 2012, then-President Obama signed a Presidential Disaster Declaration for the State of New Jersey, enabling eligible individuals to seek financial assistance from FEMA when displaced by the storms.</p>
<p>Bennett admitted today that she applied for FEMA benefits in November 2012, requesting rental assistance, assistance to replace personal property that was damaged and assistance for transportation, as her car was damaged and not drivable.</p>
<p>Bennett faxed FEMA documents claiming that she worked as a senior health aide, which required her to travel for work. She sent FEMA a fraudulent letter indicating that she had insurance through Mercury Indemnity Co. of America. At the time of the hurricane, Bennett did not have insurance with Mercury Indemnity. Bennett also submitted fraudulent invoices from a mechanic in Camden.</p>
<p>Based on these false representations and fraudulent documents, on Dec. 10, 2012, FEMA electronically transferred $5,162 into Bennett’s bank account to replace her 2004 Dodge Durango, which she falsely reported destroyed by the hurricane.</p>
<p>To support her claim for personal property assistance, Bennett faxed FEMA a letter purported to be on the letterhead of her employer, which indicated that she was a Certified Home Health Aid and that her position required a laptop to perform her job. She also faxed FEMA earning statements from a company in Camden for July 2013, August 2013, September 2013 and October 2013. At the time of the hurricane, Bennett was unemployed.</p>
<p>As part of the application process for rental assistance, Bennett provided a fraudulent copy of a lease agreement for a house on South 41st Street, Camden, and fraudulent copies of rental receipt payments for June 2013 through November 2013. Bennett neither rented the property nor paid rent for use of the property.</p>
<p>Based on Bennett’s false statements and representations, between December 2012 and September 2013, FEMA transferred $22,190 in disaster related funds through electronic fund transfers into Bennett’s bank account.</p>
<p>Bennett admitted that she also defrauded FEMA in 2011, when Hurricane Irene struck the area. She admitted that between September 2011 and November 2012, based on her fraudulent claims and representations, she received approximately $30,200 in FEMA disaster related funds.</p>
<p>The charge to which Bennett pleaded guilty carries a maximum potential penalty of 30 years in prison and a fine of $250,000. Bennett=s sentencing is scheduled for June 27, 2018.</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&#8217;s Office Criminal Division in Camden in the criminal case.</p>
<p><a href="https://www.justice.gov/usao-nj/pr/camden-new-jersey-woman-admits-defrauding-fema-after-natural-disasters">Original PressReleases&#8230;</a></p>

Financial Fraud: Joshua Philips Indicted In Bank Fraud And Conspiring to Commit Money Laundering

<h2 class="wp-block-heading">Defendant Indicted in Brooklyn Federal Court for Transnational Cyber Scam</h2>



<p>Defendant Stole More Than $800,000 through Email Compromise Scheme, and Wired Illicit Proceeds to Conspirators Overseas</p>



<p>Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Joshua Philips, also known as “Erick Ayo Kalu,” “Anthony Abongile Baker” and “Johnson Foday Brown,” with conspiring to commit wire and bank fraud and conspiring to commit money laundering, in connection with several business email compromise and confidence fraud scams. Philips was arrested on March 7, 2018, in the Northern District of Georgia and was arraigned this afternoon before United States Magistrate Judge Linda T. Walker at the federal courthouse in Atlanta, Georgia.</p>



<p>Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.</p>



<p>“As alleged in the indictment, Philips stole hundreds of thousands of dollars from his victims, then laundered the proceeds of his scam,” stated United States Attorney Donoghue. “The rule of law applies in cyberspace just as it does on the street, and this Office, together with our law enforcement partners, is committed to investigating and prosecuting cybercriminals like the defendants who engage in illegal conduct.” Mr. Donoghue expressed his appreciation to the FBI Field Office in Atlanta and the United States Attorney’s Office for the Northern District of Georgia for their assistance in the case.</p>



<p>“As we alleged, Joshua Philips, together with others, was able to swindle more than $800,000 from unsuspecting victims as a result of schemes of deception known as business email compromise and confidence fraud,” stated FBI Assistant Director-in-Charge Sweeney. “Philips, together with others, tricked victims into sending funds to accounts they thought were part of a legitimate business deal. The defendant then transferred his ill-gotten gains to overseas accounts. I commend the work of the Cyber Task Force who worked dutifully to bring this case to justice.”</p>



<p>Business email compromise is a form of cyber-enabled <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="839">financial</a> fraud. In a typical business email compromise scheme, a malicious actor compromises legitimate business email accounts through computer intrusion techniques or social engineering and uses those accounts to cause the unauthorized transfer of funds. Techniques for perpetrating these schemes include spear phishing, identity theft, spoofing of emails and websites, and the use of malware.</p>



<p>Confidence fraud is another form of cyber-enabled financial fraud. In a typical confidence fraud, a malicious actor befriends, and gains the confidence of, another individual through online communications and uses that confidence to cause the transfer of funds for unauthorized purposes.</p>



<p>As alleged in court documents, individuals in the Eastern District of New York and around the United States were defrauded – through business email compromise and confidence fraud scams – into sending more than $800,000 to the defendant. For example, in or about July 2017 and August 2017, the defendant and others targeted an individual on Long Island (“John Doe 1”) who was engaged in a real estate transaction involving the purchase of property in Massapequa, New York, and his real estate attorney (“John Doe 2”), who facilitated the purchase. On or about August 23, 2017, John Doe 1 received an email from John Doe 2’s email account asking, “With regards to the closing funds, is it currently available?” After responding that the funds were available, John Doe 1 received an email on August 24, 2017 from John Doe 2’s email account instructing him to “to go to your local branch within the day and initiate a wire transfer of the funds to my attorney escrow account.” The email provided information for a bank account that was, in fact, in the control of one of the defendant’s co-conspirators. On August 28, 2017, John Doe 1 sent a wire transfer in the amount of $84,000 to the bank account. The co-conspirator received the money and transferred a portion of it to Philips, who then wired a portion of it overseas. John Doe 2 has informed law enforcement officers that he did not send the August 24 email and that the bank account details did not pertain to any account within his control.</p>



<p>As part of the broader cyber-enabled schemes, Philips unlawfully transferred the fraudulently obtained money overseas, including to various foreign bank accounts and to purchase used cars for an import/export company in Nigeria.</p>



<p>The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.</p>



<p>According to the FBI’s Internet Crime Complaint Center (IC3), business email compromise and confidence fraud scams have continued to rise over the past few years and were the top two types of internet crimes (by reported loss) reported to the FBI in 2016. Such scams have victimized large and small companies, as well as individuals, in every U.S. state and in more than 100 countries around the world.</p>



<p>If you or your company has been victimized by a business email compromise scam or confidence fraud, it is important to act quickly. The FBI’s Internet Crime Complaint Center (IC3) provides the public with a reporting mechanism to submit information concerning suspected Internet-facilitated criminal activity. Individuals and companies who have been victims of Internet crimes are encouraged to file a complaint online at www.ic3.gov. In addition, victims can take steps to mitigate further loss such as contacting banks, credit card companies, and/or credit bureaus to block accounts, freeze accounts, dispute charges, and attempt recovery of lost funds.</p>



<p>The government’s case is being handled by the Office’s National Security &; Cybercrime Section. Assistant United States Attorney Saritha Komatireddy is in charge of the prosecution.</p>



<p>The Defendant:</p>



<p>JOSHUA PHILIPS (also known as “Erick Ayo Kalu,” “Anthony Abongile Baker” and “Johnson Foday Brown”)<br>Age: 33<br>Ellenwood, Georgia</p>



<p>E.D.N.Y. Docket No. 18-CR-121</p>



<p> ;</p>



<p><a href="https://www.justice.gov/usao-edny/pr/defendant-indicted-brooklyn-federal-court-transnational-cyber-scam">Original PressReleases&#8230;</a></p>



<p></p>

Financial Fraud: Glen Burke Was Sentenced In Two Predatory Schemes That Defrauded Thousands of Victims
<h2>Defendant Sentenced in Multimillion Dollar Prize Promotion Scams Targeting Elderly Victims</h2>
<p>An individual who ran multimillion dollar prize promotion scams was sentenced on March 12, 2018, to serve 87 months in prison by a federal judge in Las Vegas, Nevada, the Department of Justice announced.</p>
<p>Glen Burke, 58, of Las Vegas, was sentenced to 87 months in prison, followed by three years of supervised release. U.S. District Judge Jennifer A. Dorsey also ordered Burke to pay $2,785,508.36 in restitution, reflecting the consumer loss from one of Burke’s schemes.</p>
<p>Burke pleaded guilty in December 2017 to criminal contempt of court and conspiracy charges arising from his operation of two predatory schemes that defrauded thousands of victims, many of whom were elderly, out of more than $20 million. Burke conducted those fraudulent campaigns in violation of a 1998 court order obtained by the Federal Trade Commission (FTC) permanently banning him from telemarketing and making misrepresentations to consumers. A co-defendant, Michael Rossi, 52, also of Las Vegas, also pleaded guilty in connection with one of Burke’s schemes. Rossi is scheduled to be sentenced on June 25, 2018.</p>
<p>“This case exemplifies the Department’s commitment to halt schemes that target seniors, which the Attorney General announced in an historic elder fraud sweep a few weeks ago,” said Acting Assistant Attorney General Chad Readler of the Justice Department’s Civil Division. “We are sending a clear message: Perpetrators of telemarketing fraud will be prosecuted and law enforcement will not stop until fraudulent mass mailing practices are halted.”</p>
<p>Burke pleaded guilty to criminal contempt of court for violating a court order prohibiting him from making misrepresentations to consumers. The charge stemmed from Burke’s operation of a mass-mailing fraud scheme that misled consumers into believing that they had won large cash prizes, often millions of dollars. Burke specifically mailed consumers solicitations that used fake names and, in many cases, looked like they came from law firms or <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="838">financial</a> institutions, advising consumers to pay a fee – usually $20 to $30 – to claim their promised winnings. Once consumers paid, however, Burke never sent any consumer a promised prize.</p>
<p>Burke, along with Rossi, also pleaded guilty to conspiracy to commit mail and wire fraud for running a fraudulent telemarketing operation. Telemarketers working for Burke and Rossi falsely told victims that they had won one of five valuable prizes, typically: a Chevy Camaro; a Boston Whaler boat; a diamond-and-sapphire bracelet; $3,000 cash; or a cruise that could be exchanged for $2,300. To claim the prize, consumers were told to pay hundreds, or in some cases thousands, of dollars. Once they paid, victims received a nearly worthless piece of costume jewelry or nothing at all.</p>
<p>In January 2013, the FTC filed a civil contempt case against Burke for violating the 1998 court order. The district court found Burke in civil contempt and ordered him to pay contempt sanctions of over $20 million, reflecting consumer loss from both the telemarketing and mass-mailing schemes.</p>
<p>Acting Assistant Attorney General Readler commended the investigative efforts of the U.S. Postal Inspection Service and thanked the FTC for its valuable assistance. The case was prosecuted by Trial Attorneys Timothy Finley and Daniel Zytnick of the Consumer Protection Branch of the Department of Justice’s Civil Division and Assistant U.S. Attorney Nicholas Dickinson of the District of Nevada.</p>

Law Firms Need To Pay Attention on Emails Scam
<p>Cyber criminals, based overseas and concentrated in Nigeria, send scam emails to <strong>law firms</strong> on a daily basis in an effort to fraudulently extract IOLTA funds and enrich themselves. Because of the increasing prevalence of these ventures, attorneys need to understand how such cons work and to protect themselves against fraud.</p>
<p>The scam begins with an email purportedly from a prospective client who needs legal help. The scammer, after obtaining an engagement letter, advises the <em>law firm</em> that the matter is going to be resolved and the adverse party will send a settlement check to the lawyer. The check quickly arrives and the lawyer will typically deposit it into the firm’s IOLTA account. The criminal then tells the <strong>law firm</strong> that they can keep their fee from the proceeds of the recently received check but should wire the difference to the scammer. The wire instructions will always be to an overseas bank, typically one in Japan. The scammers use the anonymity of the internet to create virtually untraceable email accounts, and ultimately untraceable bank accounts.</p>
<p>The con oftentimes originates in Nigeria. Lagos, soon to be one of the most populous cities in the world, is the unofficial capital of this fraud. In the hoax directed at law firms, the attorney is always sought for a contingency or for a very simple matter. After legal representation has been formally obtained and with a retainer agreement in place, the scammer advises that the debt or money sought from a third party will be immediately paid to the lawyer.</p>
<p>Importantly, the scammer requests that the attorney not contact the debtor because the client wishes to maintain a working relationship with the debtor, perhaps in a divorce scenario where the obligor is a former spouse of the client. Within days, a check (typically for several hundred thousand dollars) is delivered to the law firm and deposited in the firm’s IOLTA account. The law firm is entitled to the contingency fee, and is instructed to send the balance to the scammer. In all cases, the crook will request an immediate wire transfer to a foreign bank. From the scammer’s viewpoint, he must receive the wire payment before the law firm discovers that the check it deposited into its IOLTA account is not valid. Such fraudulent checks are difficult to identify because they are typically real checks that have been only slightly altered so as to be consistent with the fraud.</p>
<p>The reader may think a request for legal services from a prospective client with a suspicious email account (e.g. haydn@diesseweb.it), domiciled and traveling out of the country, with an unidentifiable foreign accent and not coming to the law office in-person, is nothing more than a laughable hoax. And yet, untold losses are caused by these schemes annually. The schemes themselves violate Section 419 of the Nigerian criminal code, and are sometimes called a “419 fraud.”</p>
<p>The ARDC has issued an alert – https://www.iardc.org/information/alert.html – and has provided tips to lawyers to be on the watch for this scam. Among the ARDC’s cautions:</p>
<ul>
<li>Wait for a check, even a cashier’s or certified check, to clear before using the money. A provisional credit, issued within a few days after the deposit, does not mean that the check is good. Verify the authenticity of the check with the issuing bank.</li>
<li>Be suspicious of a client who insists that you send funds by wire transfer or otherwise pressures you to act quickly.</li>
<li>Take steps to verify that the “client” is who they say they are, particularly if there are no face-to-face communications with the client. If you are dealing with a stranger, verify the person’s identity using reliable third-party sources.</li>
<li>If you have deposited a check that bounces, the bank may withdraw the original amount credited and that may result in the conversion of other clients&#8217; funds in the trust account. If your trust account does not have enough money to cover the deduction, the bank may freeze your trust account or the bank may sue you to recover the funds. See Wachovia Bank v. Bartko, No. 1:08-CV-2636 (Ga.)</li>
</ul>
<p> ;</p>
<p>Although the ARDC has provided a number of agencies that can be contacted if you receive a counterfeit check – such as the FBI, the FTC, and the U.S. Postal Service – this type of scam is one that is too common – and the size of each transaction is typically too small – for federal agencies to allocate resources to help.</p>
<p>The key element of the Nigerian scam is that a check is received by the law firm, but the firm is asked to wire funds out. The delay in time between the bank’s reporting the check as having (provisionally) “cleared,” and discovery of the con, provides time for the scammer to abscond with the law firm’s IOLTA funds.</p>
<p>In order to protect against this, each check received must be critically evaluated, and discussed with the issuing bank to determine the check’s validity.</p>
<p>The Nigerian scam represents a significant <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="837">financial</a> and reputational risk for law firms. Lawyers need to know their clients. Any prospective client who does not appear in person should be viewed cautiously. A law firm should be suspicious of any request by a client to wire funds, and that suspicion should rise to the level of alarm if the wire is bound for a foreign country. Any client who deposits a check should receive a check – not wired funds – from the law firm because the increased time required to send a check coupled with the increased time for the check to clear may provide protection to the law firm. The provisional clearing of the scammer’s check is meaningless because even when a check provisionally clears, the law firm is still responsible if the check later turns out to be fraudulent.</p>
<p>The FBI and other federal agencies have been unable to curb the Nigerian scam. The scale of the swindle has increased over time, and the methods used by the perpetrators have become more sophisticated. However, with an understanding of the basic premise of this fraud, a law firm can minimize the risk of falling victim to it and (unwittingly) contributing to Nigeria’s expanding economy.</p>
<p><a class="btn btn-default" href="https://www.fraudswatch.com/email-scam-richard-co-associates-attorney-at-law-solicitors-301/">Examples Of E-mail From Law Firm</a></p>

Financial Fraud: Louis F. Petrossi Was Convicted On Securities Fraud, Investment Adviser Fraud, And Wire Fraud
<p>New York Investment Adviser Convicted Of Defrauding Investors</p>
<p>HARRISBURG – Louis F. Petrossi, age 77, the founder and president of the Wealth Research Institute, a purported investment research firm, was convicted yesterday by a federal jury in the Middle District of Pennsylvania, on three counts of securities fraud, investment adviser fraud, and wire fraud for his role in a scheme to defraud investors. The four-day trial was held before Chief United States District Court Judge Christopher C. Conner in Harrisburg.</p>
<p>David J. Freed, United States Attorney for the Middle District of Pennsylvania and Richard P. Donoghue, United States Attorney for the Eastern District of New York, jointly announced the verdict.</p>
<p>The evidence at trial established that Petrossi falsely claimed to investors that money they had invested in purported investment funds, Chadwicke Partners LLC (“Chadwicke Partners”) and Chadwicke Ventures LLC (“Chadwicke Ventures”), would be used to invest in startup companies. Instead, the defendant used the investors’ money to pay for personal expenses and issued fraudulent statements that overstated both the cost and value of the securities held by Chadwicke.</p>
<p><figure id="attachment_55656" aria-describedby="caption-attachment-55656" style="width: 300px" class="wp-caption alignnone"><a href="https://www.fraudswatch.com/financial-fraud-louis-f-petrossi-was-convicted-on-securities-fraud-investment-adviser-fraud-and-wire-fraud/financial-fraud-louis-f-petrossi-was-convicted-on-securities-fraud/" rel="attachment wp-att-55656"><img class="size-medium wp-image-55656" src="https://www.fraudswatch.com/wp-content/uploads/2018/03/Financial-Fraud-Louis-F-Petrossi-Was-Convicted-On-Securities-Fraud-300x227.png" alt="Louis F. Petrossi Was Convicted On Securities Fraud" width="300" height="227" /></a><figcaption id="caption-attachment-55656" class="wp-caption-text">Financial Fraud: Louis F. Petrossi Was Convicted On Securities Fraud</figcaption></figure></p>
<p>The evidence also showed that between January 2015 and January 2017, Petrossi solicited more than $1.8 million in investments in Chadwicke Partners from more than 25 investors nationwide including an investor residing in the Middle District of Pennsylvania. Petrossi promoted Chadwicke as providing the opportunity to invest in high-profile startups companies such as Lyft, Inc., Maplebear Inc., Pinterest Inc., Spotify Technology SA, and Palantir Technologies, Inc. among others. Petrossi invested approximately $665,400 in privately held startup companies but used more than $1.1 million in investor funds to pay for personal expenses, including payments to BMW, renovations to his home and to pay his personal legal fees. In or around August 2016, Petrossi sent emails to Chadwicke investors attaching a spreadsheet that contained false and misleading statements about the purchase price and value of the securities held by the Chadwicke funds in order to conceal his misappropriation of investor money.</p>
<p>On May 3, 2016, Petrossi was arrested in Nevada pursuant to an indictment returned by a federal grand jury in the Eastern District of New York for his role in a securities fraud scheme involving the securities of ForceField Energy Inc. Under the terms of Petrossi’s pre-trial release, the defendant was prohibited from employment “directly involving the handling of investors.” Between May 3, 2016 and approximately January 2017, Petrossi continued to engage in the Chadwicke scheme by emailing the August 2016 spreadsheet and soliciting $210,000 in investor funds.</p>
<p>Petrossi faces a maximum of 20 years’ imprisonment on each count of conviction when he is sentenced by Chief Judge Conner of the Middle District of Pennsylvania.</p>
<p>Petrossi was convicted in May 2017 by a federal jury in Brooklyn for his role in the ForceField Energy Inc. market manipulation scheme. He faces a maximum sentence of 20 years’ imprisonment when he is sentenced by United States District Judge Brian M. Cogan of the Eastern District of New York.</p>
<p><figure id="attachment_55661" aria-describedby="caption-attachment-55661" style="width: 150px" class="wp-caption alignleft"><a href="https://www.fraudswatch.com/financial-fraud-louis-f-petrossi-was-convicted-on-securities-fraud-investment-adviser-fraud-and-wire-fraud/louis-f-petrossi/" rel="attachment wp-att-55661"><img class="size-thumbnail wp-image-55661" src="https://www.fraudswatch.com/wp-content/uploads/2018/03/Louis-F-Petrossi-150x150.jpg" alt="Louis F. Petrossi" width="150" height="150" /></a><figcaption id="caption-attachment-55661" class="wp-caption-text">Louis F. Petrossi</figcaption></figure></p>
<p>Assistant United States Attorney Mark E. Bini of the Eastern District of New York and Special Assistant United States Attorney John O. Enright of the United States Securities and Exchange Commission’s Enforcement Division prosecuted the case.</p>
<p>The matter was investigated by the United States Securities and Exchange Commission’s Enforcement Division.</p>
<p>A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.</p>
<p>Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant&#8217;s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.</p>
<p><a href="https://www.justice.gov/usao-mdpa/pr/new-york-investment-adviser-convicted-defrauding-investors">Original PressReleases&#8230;</a></p>

Mortgage Guide: SAFE ACT California Study Guide Free By Caroline Gerardo
<p><strong>About Caroline Gerardo: Poet and Writer at night with a passion for my &#8220;job&#8221; as a Mortgage Banker</strong></p>
<p>I&#8217;m studying to take the California component of the SAFE ACT Test<br />
These questions and answers I have provided as a study guide.<br />
I don&#8217;t guarantee you will pass or these are the questions, but practice on the laws can&#8217;t hurt.<br />
Some where over the rainbow our values will come back?<br />
Some where over the rainbow being in the <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/mortgage/" title="mortgage" data-wpil-keyword-link="linked" data-wpil-monitor-id="125">mortgage</a> business won&#8217;t mean you are frowned upon in every circle.</p>
<ol>
<li>A compensation contract for a <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/loans/" title="loan" data-wpil-keyword-link="linked" data-wpil-monitor-id="282">loan</a> transaction must be retained for three years.</li>
<li>MLO’s certificate for Continuing Education does not need to be retained.</li>
<li>Grace period for a DRE license is two years after expiration</li>
<li>Division of California Department of Corporations that handles violations of the California <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="Financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="836">Financial</a> Code is the Enforcement Division</li>
<li>If a MLO is not in compliance with a DOC provision, his bond can be increased from $50000 to $100000</li>
<li>If an advertisement has been disapproved, the MLO must discontinue the ad immediately.</li>
<li>MLO who advertises on radio/ air waves must maintain a transcript of the ad for audit 90 days</li>
<li>Regulators are concerned with improper production, not loan volume</li>
<li>An administrative penalty is $2500 while civil court penalty is $25000</li>
<li>Independent escrow agents are subject to regulations of the Department of Corporations</li>
<li>MLO and certain fiduciaries are regulated by the operational arm of the California Department of Corporations known as the Financial Services Division</li>
<li>Commissioner of DRE is a real estate broker with 5 years experience and is appointed by the Governor</li>
<li>DRE audits a licensed real estate broker and charges cost if a violation is proven</li>
<li>MLO can prove a particular interest rate was available by showing the rate sheet</li>
<li>California Foreclosure Act guides borrowers in the pursuit of a modification</li>
<li>Lenders and brokers may not add anything to the appraisal fee</li>
<li>MLO files BK must notify commissioner in 5 days</li>
<li>Covered loan can have a prepay for 3 years</li>
<li>Loan denial record must be kept 3 years</li>
<li>Prepay penalty is waived in a natural declared disaster</li>
<li>MLO guilty of redlining license suspended</li>
<li>Conversion is misappropriation of funds</li>
<li>Fees on a covered loan can’t exceed $1000 or 6% of original balance</li>
<li>Violation on covered loan is suspend 6 months to 3 years 2<sup>nd</sup> time permanent and $2500+ civil liable $15000+++</li>
<li>Broker must place $ for others in trust account in 3 business days</li>
<li>Broker must withdraw any of his own funds from trust account (example property manager) as fees in 25 days</li>
<li>Mortgage lender may no longer consider rising real estate prices as a mitigating factor against loan risks</li>
<li>MLO continuing education on: 3 hours of Federal law and regulations;</li>
<li>Net worth and surety bond for California Residential Mortgage Lenders is: surety bond $50000 net worth $250000</li>
<li>Net worth and surety bond for Finance Lenders License is: surety bond of $25000 and net worth $25000</li>
<li>If Finance Lender employs more than one MLO net worth increases to $250000.</li>
<li>Law October 2009 to ensure California complied with SAFE Act is SB 32</li>
<li>January 2010 all licensed real estate brokers, salespersons and RE corporations who make arrange or service loans must submit to the DRE an online report called the RE-866.</li>
<li>RE-866 if licensee is a real estate corporation, the name an license number of the officer will be provided</li>
<li>Re-866 form due January 31, 2010 or 30 days of commencing Mortgage orginations</li>
<li>Penalty to file RE—866 $50 day for first 30 and $100 a day up to $10000.</li>
<li>B&;PCode Section 10131 real estate broker is one who for compensation, solicits, negotiates or performs services for others</li>
<li>B&;P Code Section 10131 real estate broker engages n the making of loans, buying from. Selling to, or exchanging with the public real property sales contracts or secured promissory notes as a principal</li>
<li>B&;P Code “in the business” means acquiring for resale to the public real property sales contracts or secured promissory notes in the amount of 8 or more a year</li>
<li>Cash, corporate capital, warehouse credit lines, other $ that are liability items on the person’s financial statements secured or unsecured are known as own funds</li>
<li>To renew a California real estate license licensee must take</li>
<li>Fees for a lock-in agreement are refunded if the agreement is executed and the loan is denied</li>
<li>MLO activity can take place only at the address on license unless borrower requests otherwise</li>
<li>MLO license should be placed prominently in office</li>
<li>Renewal fees are due December 31 each year</li>
<li>Change of ownership form is filed with Commissioner when mortgage co changes hands</li>
<li>Print media must match business name and information registered with NMLS</li>
<li>DOC commissioner inspects books and records of MLO every 2 years</li>
<li>DOC commissioner may inspect as often as necessary</li>
<li>Commissioner of DOC and DRE can issue a desist and refrain order</li>
<li>Audits by DRE or Doc MLO Co pays costs</li>
<li>Broker licensed under Consumer Finance Lending Laws may broker loans to Finance Lenders</li>
<li>Delaying the closing of a loan to increase costs is predatory lending</li>
<li>Compensation contract for a loan transaction must be retained for 3 years</li>
<li>Residential mortgage loan is 1-4 units</li>
<li>MU1- corporation or sole proprietor-business</li>
<li>MU2 –each control persons</li>
<li>MU3-license branch</li>
<li>MU4 individual</li>
<li>2 hours of ethics including training on fair lending, fraud, and consumer protection challenges;2 hours of lessons related to lending standards for the nontraditional mortgage product market; and 1 hour other</li>
<li>Mortgage bankers must have net worth $250000 and surety $50000</li>
<li>Application fee for California Mortgage banker’s license is $900 CRMLA</li>
<li>Maintenance annual fee DRE license MLO endorsement is $300</li>
<li>Reporting requirements for brokers: list of licensees, advertising media, types loans serviced- how many covered loans…</li>
<li>Maintain license classes: 8 hours continuing education+ 45 hours continuing education every 4 years</li>
<li>Processors and Underwriters who work as independent contractors must be licensed</li>
<li>Pre-licensed education is 20 hours</li>
<li>Applicants who completed endorsement before August 31 2010 do not have to complete the 20 hours</li>
<li>New applicants for Finance lender in CA file through NMLS is they intend to make or broker mortgage loans (they can finance cars and not do mortgages)</li>
<li>Section2924.6 Civil Code due on sale clauses are not allowed for:transfer resulting from death of spouse, adding spouse on title, divorce decree- Dissolution, inter vivos trust transfer where they are beneficiaries,junior liens</li>
<li>Section 50318 misleading public as to education, license … 12 months bar</li>
<li>Unruh Civil rights act- sex race color religion ancestry national origin disability medical condition marital status sexual orientation</li>
<li>Holden Act- redlining geographical discrimination 1-4 Section 35801, Borrower complains to Secretary of the California Department of Business, Transportation and Housing 30 days determination</li>
<li>Holden Act is Secretary determines the violation desist and refrain – make the loan or pay $1000</li>
<li>Holden Act Appeal to hearing 10 days – hearing happens in 20 days – decision in 45 days can be appealed in court</li>
<li>Section2780 RE Commissioner Regulations: race color sex religion ancestry physical handicap marital status national origin- panic selling block busting</li>
<li>Mortgage broker agreements-cannot be for high cost per HOEPA</li>
<li>Mortgage broker agreements can charge actual charges upfront and an application fee</li>
<li>Advertising no no words: guaranteed, safe, bonded, sound, investment plan, growth plan, low doc, no income, no assets, stated, immediate approvals</li>
<li>Loan modification scams cannot charge fees upfront, take a wage assignment, power of attorney,</li>
<li>Loan modification scam fines $10000 plus one year county jail individual, $50000 for corporation 3X damages</li>
<li>California Foreclosure Prevention Act- 90 days notice of default + 90 4 days before sale for reinstatement</li>
<li>MLO can’t charge a fee for best efforts to find a loan- must deliver</li>
<li>Loan servicers must pay interest of 2% on advance impound accounts</li>
<li>Covered loan law California Civil Code 4970- 4979.8 High Cost Loans Any residential loan does not exceed Fannie Mae’s conforming loan limit- APR exceeds 8% over Treasuries of 15<sup>th</sup> day of month or total points and fees paid by consumer exceed 6% of loan amount or $1000– No prepayment 3 years, no balloon less than 5 except for bridge loans, neg am must be disclosed, 55% DTI, no loan flipping, must be a benefit</li>
<li>Trust funds – must deposit in escrow or trust account 3 business days</li>
<li>Trust fund record keeping: 3 years, reconcile monthly, no interest</li>
<li>Covered loan is not a super jumbo</li>
<li>Willful violation of Covered Loan Law $15000 or damages</li>
<li>California Finance Lenders Law Commissioner Department Corporations can suspend a license not to exceed 12 months</li>
<li>Maximum criminal penalty for violation of California Residential Mortgage Lending Act is $10000 and one year in jail</li>
<li>DRE cannot file criminal charges</li>
<li>Max payout to consumers from DRE Real Estate Recovery account $250000</li>
<li>California Administrative Procedures Act hearing final decision 100 days</li>
</ol>