
<p><strong>San Diego, CA &#8211;</strong> In a shocking case of fraud, a federal grand jury has indicted three individuals for allegedly swindling over 800 elderly authors out of more than $44 million. The scam, orchestrated through a company called PageTurner, Press and Media LLC, preyed on the aspirations of writers by falsely promising lucrative publishing deals and movie adaptations.</p>



<p>According to the indictment, the perpetrators lured victims with the dream of seeing their books transformed into Hollywood blockbusters. They claimed to have connections with major publishing houses, film studios, and streaming giants, offering a tantalizing glimpse of fame and fortune. However, these promises were nothing more than a carefully constructed illusion designed to extract exorbitant fees from unsuspecting authors.</p>



<h2 class="wp-block-heading">The Masterminds Behind the Scam</h2>



<p>The alleged ringleader, Gemma Traya Austin, 58, of Chula Vista, California, was the registered agent for PageTurner. Her accomplices, Michael Cris Traya Sordilla, 32, and Bryan Navales Tarosa, 34, both from the Philippines, operated Innocentrix Philippines, a business process outsourcing company that played a crucial role in the scheme.</p>



<p>The indictment alleges that between September 2017 and December 2024, the defendants contacted authors through unsolicited calls and emails, posing as representatives of PageTurner. They falsely claimed that the victims&#8217; works had been selected for publication or adaptation, but required upfront payments for various services, including &#8220;pre-payment of taxes and transaction fees.&#8221;</p>



<p>These fabricated charges were simply a means to siphon money from the hopeful authors, who often poured their life savings into the fraudulent venture. The FBI has identified over 800 victims who collectively lost more than $44 million.</p>



<h2 class="wp-block-heading">Justice Takes Action</h2>



<p>Following a thorough investigation by the FBI and the United States Postal Inspection Service, the three defendants were arrested in December 2024. Sordilla and Tarosa were apprehended in San Diego, while Austin was arrested in Chula Vista. All three face charges of conspiracy to commit mail and wire fraud and money laundering conspiracy, with potential penalties of up to 20 years in prison and hefty fines.</p>



<p>“What started with the promise of a Hollywood dream turned into a devastating nightmare for victims,” said U.S. Attorney Tara McGrath. “Authors should stay vigilant, do their research, and think twice before giving money to anyone promising a blockbuster deal. If you or anyone you know has been targeted in a similar scheme, please report it to the FBI immediately.”</p>



<h2 class="wp-block-heading">Protecting Vulnerable Authors</h2>



<p>This case highlights the vulnerability of elderly individuals to sophisticated fraud schemes. The perpetrators deliberately targeted older authors, exploiting their dreams and trust to line their own pockets.</p>



<p>“As alleged, the defendants’ actions not only jeopardized the integrity of the publishing industry, but also took advantage of innocent professionals and defrauded them of their hard-earned money,” said FBI San Diego Special Agent in Charge Stacey Moy. “Fraud remains one of the most devastating violations the FBI works due to the number of victims and staggering amount of loss. We will continue our efforts to disrupt fraud schemes, educate the public, and ultimately hold individuals behind these schemes accountable.”</p>



<p>The U.S. Postal Inspection Service echoed these sentiments, emphasizing their commitment to protecting older Americans from such predatory schemes. “The U.S. Postal Inspection Service San Diego Mail Fraud Team, along with the FBI San Diego, have worked tirelessly to bring justice to individuals who target, exploit, and victimize our most vulnerable citizens,” said Matt Shields, Inspector in Charge for the U.S. Postal Inspection Service’s San Diego Field Office. “The U.S. Postal Inspection Service remains firm in our commitment to disrupt and dismantle foreign-based fraud schemes that prey on our older Americans. We will continue to work side by side with our law enforcement partners to deter and defeat organized fraud rings, no matter where they are located.”</p>



<h2 class="wp-block-heading">A Call for Vigilance</h2>



<p>This case serves as a stark reminder for authors, particularly those in their later years, to exercise caution when approached with unsolicited publishing or adaptation offers. It is crucial to conduct thorough research, verify the legitimacy of any company or individual making such claims, and never pay upfront fees before a contract is signed and legal counsel is consulted.</p>



<h2 class="wp-block-heading">Resources for Victims</h2>



<p>The FBI has established a dedicated email address for victims of the PageTurner scam: [email address removed]. Additionally, the National Elder Fraud Hotline provides support and assistance to individuals aged 60 and older who have fallen victim to <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="1107">financial</a> fraud. The hotline can be reached at 1-833 FRAUD-11 (1-833-372-8311). Victims can also report fraud to their local law enforcement agency or the FBI’s Internet Crime Complaint Center at www.ic3.gov.</p>



<p><strong>Key Takeaways:</strong></p>



<ul class="wp-block-list">
<li><strong>Beware of Unsolicited Offers:</strong> Be wary of unsolicited calls or emails promising publishing or movie deals.</li>



<li><strong>Do Your Research:</strong> Thoroughly investigate any company or individual offering such opportunities.</li>



<li><strong>Never Pay Upfront Fees:</strong> Legitimate publishers and agents rarely require upfront payments.</li>



<li><strong>Seek Legal Advice:</strong> Consult an attorney before signing any contracts or making financial commitments.</li>



<li><strong>Report Suspicious Activity:</strong> If you suspect fraud, report it to the FBI or your local law enforcement agency.</li>
</ul>



<p>This case is a testament to the collaborative efforts of law enforcement agencies in combating fraud and protecting vulnerable individuals. It also underscores the importance of public awareness and vigilance in preventing such schemes from succeeding.</p>



<p><a href="https://www.justice.gov/usao-sdca/pr/three-indicted-and-internet-domain-seized-44-million-nationwide-book-publishing-scam" data-type="link" data-id="https://www.justice.gov/usao-sdca/pr/three-indicted-and-internet-domain-seized-44-million-nationwide-book-publishing-scam">Original PressReleases&#8230;</a></p>

Category Archives: Fraud News From World
A “Fraud News From World” directory is a collection of news articles about fraud and scams from around the world. These directories can be a valuable resource for staying informed about the latest scams and how to protect yourself from them. The directory typically includes information about the scam, such as the type of scam, the target audience, the location of the scam, and the date of the scam. It may also include information about how to protect yourself from the scam, such as how to identify a phishing email or how to report a scam to the authorities.
Bollinger Shipyard Pays $1 Million to Settle False Claims Act Allegations: A Deep Dive

<p><strong>Lockport, Louisiana-based Bollinger Shipyard LLC has agreed to a $1,025,000 settlement to resolve allegations of violating the False Claims Act by knowingly employing and billing the U.S. Coast Guard for labor from unauthorized workers.</strong></p>



<p>This case highlights the critical importance of compliance with federal contracting regulations, particularly those concerning employment eligibility verification. Let&#8217;s delve deeper into the details of this settlement and its implications.</p>



<h2 class="wp-block-heading">The Allegations:</h2>



<p>The U.S. government alleged that between 2015 and 2020, Bollinger Shipyard, a major vessel manufacturer for the U.S. Coast Guard, knowingly billed for labor provided by employees ineligible to work in the United States. Specifically, Bollinger was contracted to build Fast Response Cutters (FRCs) for the Coast Guard. These contracts mandated that Bollinger verify the employment eligibility of all personnel working on the project.</p>



<p>The government&#8217;s investigation revealed that Bollinger failed to comply with this crucial requirement, resulting in several ineligible individuals being employed and their labor billed to the Coast Guard. This constitutes a violation of the False Claims Act, which prohibits knowingly submitting false or fraudulent claims for payment to the government.</p>



<h2 class="wp-block-heading">The Settlement and Its Implications:</h2>



<p>Bollinger Shipyard has agreed to pay $1,025,000 to settle these allegations. This settlement underscores the government&#8217;s commitment to holding federal contractors accountable for compliance with contractual obligations and employment eligibility laws.</p>



<h2 class="wp-block-heading">Key Takeaways for Federal Contractors:</h2>



<ul class="wp-block-list">
<li><strong>Rigorous Employment Verification:</strong> Federal contractors must implement robust employment verification procedures to ensure all employees are legally authorized to work in the United States. This includes utilizing the E-Verify system, a web-based tool that allows employers to confirm the eligibility of their employees.</li>



<li><strong>Contractual Compliance:</strong> Understanding and adhering to all contractual obligations is paramount. Failure to comply, especially with clauses related to employment eligibility, can lead to severe legal and <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="1106">financial</a> consequences.</li>



<li><strong>Whistleblower Protections:</strong> The False Claims Act empowers whistleblowers to report fraud against the government. Companies should foster a culture of compliance and encourage employees to report any suspected wrongdoing without fear of retaliation.</li>
</ul>



<h2 class="wp-block-heading">The Importance of the False Claims Act:</h2>



<p>The False Claims Act is a critical tool in combating fraud against the government. It allows the government to recover significant financial losses caused by fraudulent activities and serves as a powerful deterrent.</p>



<h2 class="wp-block-heading">A Broader Perspective:</h2>



<p>This case is not an isolated incident. The Department of Justice has been increasingly focused on pursuing False Claims Act violations, particularly in industries like shipbuilding and defense contracting. This trend signifies the government&#8217;s commitment to safeguarding taxpayer funds and ensuring the integrity of federal programs.</p>



<h2 class="wp-block-heading">Looking Ahead:</h2>



<p>This settlement serves as a stark reminder for all federal contractors to prioritize compliance and implement robust internal controls. Proactive measures to prevent violations are essential to avoid costly legal battles and reputational damage.</p>



<h2 class="wp-block-heading">Beyond the Financial Implications:</h2>



<p>Beyond the financial penalty, this settlement could have lasting consequences for Bollinger Shipyard. It may impact their ability to secure future government contracts and damage their reputation within the industry.</p>



<h2 class="wp-block-heading">The Role of Government Agencies:</h2>



<p>The Department of Homeland Security&#8217;s Office of Inspector General (DHS OIG) and the Coast Guard Investigative Service (CGIS) played crucial roles in the investigation. This highlights the collaborative efforts of government agencies in identifying and pursuing False Claims Act violations.</p>



<p><strong>Conclusion:</strong></p>



<p>The Bollinger Shipyard settlement serves as a valuable lesson for all federal contractors. Strict adherence to contractual obligations, particularly those related to employment eligibility, is non-negotiable. Implementing comprehensive compliance programs and fostering a culture of ethical conduct are vital steps in mitigating the risk of False Claims Act violations.</p>

The Unraveling Trust: David Smerling Accused of Embezzling Millions from Clients in Massachusetts

<p><strong>BOSTON –</strong> A case that strikes at the very heart of professional trust and fiduciary responsibility has rocked the legal and business communities in Massachusetts. David Smerling, a 74-year-old attorney from Lexington, Massachusetts, who also served as a bookkeeper for three local companies, has been arrested and charged with wire fraud, accused of embezzling a staggering sum, exceeding $2.5 million, from his clients. The alleged scheme, spanning four years, has left many questioning how such a betrayal could occur and what safeguards can be implemented to prevent similar breaches of trust in the future.</p>



<h2 class="wp-block-heading">The Allegations: A Calculated Deception</h2>



<p>According to the complaint filed by the U.S. Attorney&#8217;s Office for the District of Massachusetts, Smerling&#8217;s alleged embezzlement was not a crime of opportunity but a carefully orchestrated scheme carried out between January 2016 and May 2020. Court documents paint a picture of a calculated individual who exploited his position of trust to systematically siphon funds from the companies&#8217; bank accounts into his own. The details are particularly damning. Smerling didn&#8217;t just directly transfer funds. He employed a more complex method, routing money through an intermediary account – an account belonging to one of the very victims he was defrauding – before it finally landed in his personal accounts. This layering of transactions was likely designed to obscure the origin and destination of the funds, making it harder for any potential audits or investigations to uncover the trail of illicit money.</p>



<p>Further adding to the alleged deception, Smerling is accused of altering the mailing address for the companies&#8217; bank statements. Instead of being delivered to the businesses themselves, where they might be subject to scrutiny by other employees or owners, the statements were allegedly rerouted to Smerling&#8217;s home address. This seemingly minor detail would have granted him exclusive control over the <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="1105">financial</a> records, effectively concealing the discrepancies created by his alleged fraudulent transfers. It allowed him to create a fabricated sense of normalcy, ensuring the victim companies remained oblivious to the hemorrhaging of their funds.</p>



<h2 class="wp-block-heading">The Accused: A Pillar of the Community?</h2>



<p>David Smerling&#8217;s age and profession add another layer of complexity and intrigue to this case. At 74, he is not a young, inexperienced individual who might be viewed as succumbing to youthful indiscretion. He is a seasoned attorney, a profession that demands the highest ethical standards and carries a significant weight of public trust. Attorneys are sworn to uphold the law and act in the best interests of their clients. The legal profession is built upon a foundation of integrity, and any breach of this trust by an attorney is particularly egregious. Smerling would have had decades of experience in law. He would have held licenses and certifications and a career that would be beyond reproach, as he would have represented numerous individuals and companies during this time.</p>



<p>Prior to his arrest, Smerling likely enjoyed a respected standing in his community. Lexington, known for its historical significance and affluent population, is the type of place where reputation matters. It&#8217;s probable that Smerling was seen as a pillar of the community, a trusted legal advisor, and perhaps even a friend or confidante to the owners of the businesses he served. This makes the alleged betrayal even more profound. The victims were not faceless corporations; they were likely individuals who placed their trust, both personal and financial, in Smerling&#8217;s hands.</p>



<h2 class="wp-block-heading">The Charges: Wire Fraud and its Implications</h2>



<p>Smerling faces a single count of wire fraud, a serious federal offense that carries severe penalties. Wire fraud is defined as any scheme to defraud using electronic communications, such as the internet or telephone. In this case, the transfer of funds between bank accounts would qualify as the &#8220;wire&#8221; element of the crime. The potential consequences for Smerling are significant. If convicted, he could face up to 20 years in prison, a hefty fine of up to $250,000, or potentially double the amount of his ill-gotten gains (which could amount to over $5 million in this case). He would also be subject to three years of supervised release following any prison term. In addition to these federal penalties, Smerling&#8217;s reputation would be destroyed. He would most likely be disbarred and never be allowed to practice law again. He would lose friends, colleagues and probably all his assets, due to the lawsuits that would be brought against him.</p>



<p>The severity of the potential sentence reflects the seriousness with which the federal government views white-collar crimes like embezzlement. It underscores the understanding that such crimes are not victimless; they can have devastating financial and emotional consequences for individuals, businesses, and the broader economy. Furthermore, the case is being handled by the Securities, Financial &; Cyber Fraud Unit of the U.S. Attorney&#8217;s Office, indicating the high priority placed on combating this type of sophisticated financial crime.</p>



<h2 class="wp-block-heading">The Motivation: Unanswered Questions</h2>



<p>While the complaint lays out the mechanics of the alleged scheme, it does not explicitly address Smerling&#8217;s motivation. This leaves a crucial question unanswered: Why would a seemingly successful, established attorney, at the later stages of his career, risk everything by engaging in such a brazen criminal act?</p>



<p>Several possibilities exist, though none can be confirmed without further investigation or Smerling&#8217;s own admission:</p>



<ul class="wp-block-list">
<li><strong>Financial Difficulties:</strong> Despite outward appearances, Smerling might have been facing hidden financial pressures. Gambling debts, bad investments, or an unsustainable lifestyle could have created a desperate need for money, leading him down a path of criminal activity.</li>



<li><strong>Greed:</strong> Simple, unadulterated greed could be a factor. The opportunity to amass a substantial sum of money, coupled with a belief that he could get away with it, might have been too tempting to resist, even for someone with an already comfortable life.</li>



<li><strong>Psychological Factors:</strong> Underlying psychological issues, such as a sense of entitlement, a thrill-seeking personality, or even a cognitive decline associated with aging, could have played a role.</li>



<li><strong>Revenge or Resentment:</strong> Perhaps Smerling harbored some resentment towards his clients or felt undervalued or mistreated. Embezzlement could have been a way to &#8220;get back&#8221; at them, even if it was self-destructive in the long run.</li>
</ul>



<h2 class="wp-block-heading">The Broader Context: White-Collar Crime and its Impact</h2>



<p>The Smerling case, while shocking in its details, is not an isolated incident. It serves as a stark reminder of the prevalence and impact of white-collar crime in our society. White-collar crimes, typically non-violent offenses involving deceit, concealment, or violation of trust for financial gain, are often perpetrated by individuals in positions of authority or trust. These crimes can range from small-scale embezzlement to massive corporate fraud, like the Enron scandal. They can destroy businesses, ruin lives, and erode public trust in institutions. The economic cost of white-collar crime is staggering, estimated to be in the hundreds of billions of dollars annually in the United States alone.</p>



<h2 class="wp-block-heading">Protecting Against Embezzlement: Lessons Learned</h2>



<p>The Smerling case highlights the need for robust internal controls and oversight within organizations, regardless of their size. Several measures can help mitigate the risk of embezzlement:</p>



<ul class="wp-block-list">
<li><strong>Segregation of Duties:</strong> No single individual should have complete control over financial processes. Different people should be responsible for tasks like authorizing payments, recording transactions, and reconciling bank statements.</li>



<li><strong>Regular Audits:</strong> Independent audits, conducted by external firms, can help detect irregularities and deter potential fraudsters.</li>



<li><strong>Mandatory Vacations:</strong> Requiring employees in sensitive financial positions to take mandatory vacations can help uncover hidden schemes, as someone else will be performing their duties during their absence.</li>



<li><strong>Background Checks:</strong> Thorough background checks, including credit checks, should be conducted on all employees who handle finances.</li>



<li><strong>Whistleblower Programs:</strong> Creating a safe and confidential channel for employees to report suspected wrongdoing can be crucial in uncovering fraud early on.</li>



<li><strong>Cybersecurity Measures:</strong> Strong cybersecurity protocols are essential to protect against unauthorized access to financial systems and data.</li>
</ul>



<h2 class="wp-block-heading">The Road Ahead: Justice and Restitution</h2>



<p>As the case against David Smerling progresses, the focus will be on determining his guilt or innocence beyond a reasonable doubt. The prosecution, led by Assistant U.S. Attorney Kristen A. Kearney, will need to present compelling evidence to support the allegations outlined in the complaint. Smerling&#8217;s defense team will undoubtedly scrutinize the evidence and challenge the prosecution&#8217;s case. If convicted, the court will then determine the appropriate sentence, taking into account the U.S. Sentencing Guidelines, the defendant&#8217;s history, and the impact of the crime on the victims. Restitution to the victimized companies will likely be a significant part of any sentence. However, recovering the full $2.5 million might prove challenging, depending on how much of the money Smerling has already spent or hidden.</p>



<h2 class="wp-block-heading">A Cautionary Tale</h2>



<p>The David Smerling case serves as a cautionary tale, a reminder that even those we trust the most can betray us. It underscores the importance of vigilance, strong internal controls, and a healthy dose of skepticism, even in seemingly secure professional relationships. The case also highlights the devastating impact of white-collar crime, not just on the immediate victims, but on the broader fabric of trust that underpins our society and economy. As the legal proceedings unfold, the case will undoubtedly continue to generate discussion and debate about the nature of trust, the allure of greed, and the ongoing battle against financial crime in the 21st century. It is a story that will leave a lasting impression on the Massachusetts legal community and beyond, serving as a stark reminder of the fragility of trust and the enduring need for integrity in all our dealings.</p>



<p><a href="https://www.justice.gov/usao-ma/pr/lexington-attorney-arrested-and-charged-allegedly-embezzling-least-25-million" data-type="link" data-id="https://www.justice.gov/usao-ma/pr/lexington-attorney-arrested-and-charged-allegedly-embezzling-least-25-million">Original PressReleasess&#8230;</a></p>

PharmaLogic Holdings Corporation Settles False Claims Act Allegations for $350,000, Avoiding Higher NRC Fees

<p><strong>Baltimore, MD</strong> – The recent $350,000 settlement between PharmaLogic Holdings Corporation and the U.S. government over falsely claimed small entity status to the Nuclear Regulatory Commission (NRC) is more than just another False Claims Act case. It&#8217;s a window into the intricate, often overlooked, world of regulations governing small businesses in the highly specialized radiopharmaceutical industry. While the headlines focus on the dollar amount, the real story lies in the nuanced interplay of regulatory compliance, corporate acquisitions, and the challenges faced by smaller players in a field dominated by stringent safety protocols and complex licensing requirements.</p>



<h2 class="wp-block-heading">The Labyrinth of 10 C.F.R. § 171.16(c): More Than Just Numbers</h2>



<p>At the heart of the matter lies 10 C.F.R. § 171.16(c), a seemingly innocuous regulation that defines &#8220;small entity&#8221; status for the purpose of reduced NRC fees. But this regulation is far from simple. It ties into the Small Business Administration&#8217;s (SBA) intricate size standards, outlined in 13 CFR Part 121, which vary significantly across different industries and sub-sectors. For radiopharmaceutical companies, navigating these interconnected regulations requires a deep understanding of not only their own <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="1104">financial</a> metrics but also the specific North American Industry Classification System (NAICS) codes that apply to their operations.</p>



<h2 class="wp-block-heading">The Acquisition Angle: How Growth Can Trigger Regulatory Pitfalls</h2>



<p>PharmaLogic&#8217;s case also highlights a critical, yet often under-discussed, aspect of business growth: the regulatory impact of acquisitions. As companies expand through mergers and acquisitions, their size and revenue can quickly change, potentially pushing them out of the &#8220;small entity&#8221; bracket without their immediate realization. The nine subsidiaries involved in this settlement were acquired by PharmaLogic, suggesting a possible disconnect between the parent company&#8217;s growth strategy and the subsidiaries&#8217; individual compliance obligations. This raises the question: how effectively are companies integrating newly acquired entities into their overall regulatory compliance framework, especially in specialized fields like nuclear medicine?</p>



<h2 class="wp-block-heading">The Unsung Burden: Administrative Overhead for Small Players in a High-Stakes Industry</h2>



<p>Beyond the financial implications of the reduced fees, this case sheds light on the disproportionate administrative burden faced by smaller radiopharmaceutical companies. Complying with NRC regulations, including annual fee assessments, requires dedicated resources and expertise that smaller entities may struggle to afford. The lure of a reduced fee, therefore, can be particularly strong, even if it means skirting the edges of eligibility criteria. This raises a broader question about the accessibility of regulatory compliance for smaller players in industries with high barriers to entry, such as the nuclear sector. Is the system inadvertently creating an environment where cutting corners becomes a tempting, if not necessary, survival tactic?</p>



<h2 class="wp-block-heading">The Human Element: Oversight, Error, or Intent?</h2>



<p>While the settlement avoids determining liability, it begs the question: what were the internal processes, or lack thereof, that led to nine separate subsidiaries submitting inaccurate filings over several years? Was it a systemic oversight, a series of individual errors, or a deliberate attempt to exploit a perceived loophole? Exploring the human element behind these compliance failures could offer valuable insights into the pressures and decision-making processes within companies operating in highly regulated environments.</p>



<h2 class="wp-block-heading">Beyond Compliance: Fostering a Culture of Transparency in the Nuclear Sector</h2>



<p>This case is not just about punishing wrongdoing; it&#8217;s an opportunity to foster a more transparent and supportive regulatory environment in the nuclear sector. The NRC, along with industry associations, could play a more proactive role in educating companies, particularly those undergoing growth or acquisitions, about the intricacies of small entity regulations. Clearer guidelines, readily available resources, and open communication channels could help prevent future violations and ensure a level playing field for all players.</p>



<p><a href="https://www.justice.gov/usao-md/pr/radiopharmaceutical-company-set-pay-350000-resolve-false-claims-act-allegations" data-type="link" data-id="https://www.justice.gov/usao-md/pr/radiopharmaceutical-company-set-pay-350000-resolve-false-claims-act-allegations">Original PressNews&#8230;</a></p>

Two Men Indicted in $3 Million Tax Fraud Scheme Exploiting COVID-Era and Fuel Tax Credits

<p><strong>ST. PAUL, Minn.</strong> – A federal grand jury has indicted two men, Henry Remington Herod, 42, of Minneapolis, and Matthew McDowell, 44, of Port Allen, Louisiana, on charges of orchestrating a complex tax fraud scheme that sought to bilk the U.S. government out of over $3 million. U.S. Attorney Andrew M. Luger announced the 10-count indictment, alleging a conspiracy to defraud the United States and the filing of numerous false tax claims.</p>



<p>The indictment details a scheme that spanned from approximately April 2022 to May 2023, during which Herod and McDowell allegedly prepared and filed fraudulent federal income tax returns on behalf of themselves and others. These returns were riddled with fabricated information, including false employment details, inflated income figures, and bogus tax credit claims, all designed to generate substantial tax refunds to which the filers were not legally entitled.</p>



<p>According to court documents, the duo&#8217;s tactics shifted over the course of the alleged conspiracy. For the 2021 tax year, Herod focused on exploiting the refundable sick and family leave tax credits. These credits were introduced as part of the government&#8217;s response to the COVID-19 pandemic, intended to support self-employed individuals who were unable to work due to the virus or related caregiving responsibilities. Herod allegedly fabricated circumstances to make it appear as though filers qualified for these credits when they did not.</p>



<p>By the 2022 tax year, the scheme evolved, with Herod and McDowell allegedly turning their attention to refundable tax credits for federal taxes paid on fuel supposedly used for off-highway business purposes. This credit is typically claimed by farmers or others who use fuel in vehicles not driven on public roads. The indictment alleges that Herod and McDowell filed returns falsely claiming these credits, further inflating the requested refunds.</p>



<p>In total, the pair is accused of filing 115 fraudulent federal income tax returns, seeking a staggering $3,032,839 in refunds to which the filers were not entitled.</p>



<p>Herod faces a total of ten charges, including one count of conspiracy to defraud the United States and nine counts of making false claims. McDowell is charged with one count of conspiracy to defraud the United States. Both men have made their initial appearances in U.S. District Court, with Herod appearing on December 12, 2024, and McDowell on December 26, 2024. They were released pending further court proceedings.</p>



<p>The case is the result of an investigation by the IRS Criminal Investigation division, which specializes in uncovering complex <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="1100">financial</a> crimes. Assistant U.S. Attorney Matthew C. Murphy is leading the prosecution.</p>



<p>Authorities emphasize that an indictment is merely an allegation, and both Herod and McDowell are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.</p>



<p></p>

Nader Pourhassan And Kazem Kazempour Founds Guilty in Elaborate Scheme to Defraud Investors During HIV and COVID-19 Crises

<p><strong>Former CEO of CytoDyn and Head of Contract Research Organization Face Decades in Prison for Securities Fraud, Wire Fraud, and Insider Trading</strong></p>



<p>In a resounding victory for investor protection, a federal jury in Maryland convicted two high-ranking biotechnology executives for their roles in a complex scheme to defraud investors in CytoDyn Inc. Nader Pourhassan, the former CEO of CytoDyn, and Kazem Kazempour, the former CEO of Amarex Clinical Research LLC, were found guilty of manipulating the company&#8217;s stock price by making false and misleading statements about the development of leronlimab, an investigational drug touted as a potential treatment for HIV and COVID-19.</p>



<h2 class="wp-block-heading">Exploiting Public Health Crises for Personal Gain</h2>



<p>Between 2018 and 2021, Pourhassan and Kazempour orchestrated a campaign of deception, capitalizing on the anxieties surrounding the HIV/AIDS epidemic and the global COVID-19 pandemic. They preyed on investor hopes by falsely claiming that leronlimab was on the verge of FDA approval for HIV treatment, when in reality, the application was incomplete and destined for rejection. They further fueled investor excitement by exaggerating the drug&#8217;s potential as a COVID-19 treatment, despite knowing that clinical trials had failed to demonstrate its efficacy.</p>



<h2 class="wp-block-heading">Web of Deceit: False Statements, Hidden Data, and Insider Trading</h2>



<p>Pourhassan and Kazempour employed a multi-faceted strategy to deceive investors:</p>



<ul class="wp-block-list">
<li><strong>Falsely announcing FDA submission for HIV treatment:</strong> In a blatant misrepresentation, they publicly declared that leronlimab had been submitted for FDA approval to treat HIV, triggering a surge in CytoDyn&#8217;s stock price. This allowed Pourhassan to immediately sell over 4.8 million shares of his personal stock at inflated prices, reaping enormous profits.</li>



<li><strong>Misrepresenting COVID-19 trial results:</strong> They painted a rosy picture of leronlimab&#8217;s potential as a COVID-19 treatment, concealing the fact that clinical trials had failed and the FDA had expressed serious concerns about the validity of the submitted data.</li>



<li><strong>Insider Trading:</strong> Pourhassan leveraged his insider knowledge of the drug&#8217;s actual status to engage in insider trading, further enriching himself at the expense of unsuspecting investors.</li>
</ul>



<h2 class="wp-block-heading">Consequences of Deception: Millions Lost, Public Trust Eroded</h2>



<p>As a result of this elaborate scheme, CytoDyn raised approximately $300 million from investors, a significant portion of which was siphoned off by the defendants. Pourhassan personally received $4.4 million from his illicit stock sales, while Kazempour and his company pocketed over $22 million. This case highlights the devastating consequences of securities fraud, not only for individual investors who suffer <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="1093">financial</a> losses but also for the erosion of public trust in the biotechnology industry and the regulatory process.</p>



<h2 class="wp-block-heading">Justice Prevails: Defendants Face Lengthy Prison Sentences</h2>



<p>After a thorough investigation by the FBI, FDA Office of Criminal Investigations, and the U.S. Postal Inspection Service, Pourhassan and Kazempour were brought to justice. Pourhassan was convicted of four counts of securities fraud, two counts of wire fraud, and three counts of insider trading. Kazempour was convicted of one count of securities fraud and one count of wire fraud. They each face a maximum penalty of 20 years in prison for each count, underscoring the severity of their crimes.</p>



<h2 class="wp-block-heading">Protecting Investors and Upholding Market Integrity</h2>



<p>This case sends a powerful message that the Justice Department is committed to pursuing and prosecuting those who engage in securities fraud, particularly those who exploit public health crises for personal gain. By holding these executives accountable for their actions, the Justice Department reaffirms its dedication to protecting investors and maintaining the integrity of the financial markets.</p>

Sean Donnell White Exploits Postal Service and Cryptocurrency Markets in Elaborate Fraud Schemes

<p><strong>Mobile, AL</strong> – A 30-year-old man from Theodore, Alabama, Sean Donnell White, has been sentenced to 32 months in federal prison for orchestrating a complex web of fraud that preyed on both traditional mail systems and the digital world of cryptocurrency.</p>



<p>White&#8217;s criminal activities, spanning from 2020 to 2022, involved two distinct yet interconnected schemes:</p>



<h2 class="wp-block-heading">1. The Mail Theft Operation:</h2>



<ul class="wp-block-list">
<li><strong>Insider Collaboration:</strong> White colluded with a postal employee, Kristen Arieale Williams, who, for $2,500, provided him with an &#8220;arrow key.&#8221; These highly restricted keys grant access to all blue collection boxes within a specific geographic area.</li>



<li><strong>Targeted Mail Theft:</strong> Armed with the arrow key, White targeted mailboxes outside Mobile&#8217;s Bel Air Mall, stealing hundreds of pieces of mail containing sensitive personal and <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="1092">financial</a> information.</li>



<li><strong>Check Fraud Spree:</strong> Using the stolen data, White forged counterfeit checks, ultimately siphoning over $69,000 from victims&#8217; accounts.</li>
</ul>



<h2 class="wp-block-heading">2. The Cryptocurrency Scam:</h2>



<ul class="wp-block-list">
<li><strong>Dark Web Connections:</strong> White delved into the dark web to purchase stolen identities, which he then used to open accounts at various banks and the cryptocurrency exchange Coinbase.</li>



<li><strong>Exploiting Overdraft Policies:</strong> He strategically targeted banks with generous overdraft policies, allowing him to withdraw funds he didn&#8217;t possess.</li>



<li><strong>Cryptocurrency Trading with Unsettled Funds:</strong> White used these ill-gotten funds to engage in cryptocurrency trading on Coinbase. While he profited from successful trades, any losses were absorbed by the victim banks, resulting in over $210,000 in fraudulent gains for White.</li>
</ul>



<h2 class="wp-block-heading">Bringing Down the Operation:</h2>



<ul class="wp-block-list">
<li><strong>Multi-Agency Investigation:</strong> The investigation involved a collaborative effort by the FBI, U.S. Postal Inspection Service, USPS Office of Inspector General, U.S. Secret Service, and the Mobile Police Department, with assistance from the Brewton Police Department and the U.S. Small Business Administration Office of Inspector General.</li>



<li><strong>Justice Served:</strong> White&#8217;s accomplice, Kristen Arieale Williams, was convicted in November 2023 and sentenced to three years in prison for her role in the mail theft scheme.</li>
</ul>



<h2 class="wp-block-heading">Consequences for White:</h2>



<ul class="wp-block-list">
<li><strong>Prison Sentence:</strong> U.S. District Judge Terry F. Moorer sentenced White to 32 months in federal prison.</li>



<li><strong>Supervised Release and Restrictions:</strong> Upon release, White will be subject to five years of supervised release, including mandatory drug testing and treatment, and credit restrictions.</li>



<li><strong>Financial Penalties:</strong> Although no fine was imposed, White must pay over $35,000 in restitution to victims, a $210,000 money judgment, and $300 in special assessments.</li>
</ul>



<h2 class="wp-block-heading">A Warning and a Call to Action:</h2>



<p>This case serves as a stark reminder of the evolving nature of criminal activity, exploiting both traditional and modern financial systems. U.S. Attorney Sean P. Costello emphasized the importance of vigilance in protecting personal information and reporting any suspicious activity to authorities.</p>

Teresina DeAlmeida Sentenced to Prison for $1.3 Million Fraud Scheme at NJ Graduate School

<p><strong>Newark, NJ</strong> – Teresina DeAlmeida, a 59-year-old former assistant dean at a graduate school in Essex County, New Jersey, has been sentenced to 36 months in prison for orchestrating an elaborate fraud scheme that spanned over a decade.<sup></sup> DeAlmeida, along with her co-conspirators Rose Martins (her assistant) and Silvia Cardoso (her sister), siphoned over $1.3 million from the university through a web of deceit and illicit transactions.<sup></sup>  ;</p>



<p><strong>Unveiling the Complex Web of Deception</strong></p>



<p>DeAlmeida, who held a position of trust with access to <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="1090">financial</a> systems, exploited her authority to execute a multi-faceted scheme. The fraudulent activities, which took place between 2009 and July 2022, involved:</p>



<ul class="wp-block-list">
<li><strong>Ghost Employees:</strong> DeAlmeida arranged for a vendor to pay Martins and Cardoso for services they never rendered. This was facilitated through a series of false invoices submitted to the graduate school, effectively creating &#8220;ghost employees&#8221; on the vendor&#8217;s payroll. </li>



<li><strong>Gift Card Racket:</strong> The conspirators manipulated vendors into purchasing hundreds of thousands of dollars worth of gift cards and prepaid debit cards, which they then used for personal gain. DeAlmeida also misused her school-issued credit card for similar purchases, fraudulently approving the charges and forging signatures on internal documents. </li>



<li><strong>Shell Company Scam:</strong> Martins established a shell company, CMS Content Management Specialist LLC, which fraudulently billed the graduate school for over $208,000 despite never providing any actual services. This added another layer of complexity to their scheme, further concealing their illicit activities. </li>



<li><strong>Personal Shopping Spree:</strong> DeAlmeida and Martins used the school&#8217;s funds for a range of unauthorized personal purchases, from shoes and smartwatches to bed linens. They even went so far as to alter receipts to avoid detection when submitting them for reimbursement.</li>
</ul>



<p><strong>Justice Served: Sentencing and Repercussions</strong></p>



<p>U.S. District Judge Julien Xavier Neals sentenced DeAlmeida to 36 months in prison, followed by 2 years of supervised release.<sup></sup> She has also been ordered to pay restitution of approximately $1,397,000 to the university.<sup></sup> This sentence reflects the severity of her crimes and the breach of trust involved in defrauding an institution dedicated to education.  ;</p>



<p><strong>Law Enforcement Agencies Speak Out</strong></p>



<p>The case has drawn strong condemnation from law enforcement agencies:</p>



<ul class="wp-block-list">
<li><strong>U.S. Attorney Philip R. Sellinger:</strong> &#8220;The defendant abused her position of trust&#8230; My office is committed to relentlessly prosecuting those who commit financial frauds.&#8221;</li>



<li><strong>IRS Criminal Investigation:</strong> &#8220;Financial fraud like this will not be tolerated&#8230; We will continue to work with our law enforcement partners to root out and investigate these financial crimes.”</li>



<li><strong>FBI:</strong> &#8220;DeAlmeida took funds meant for students&#8230; The FBI and our partners have the tools to investigate wrongdoing and hold accountable those who don&#8217;t think anyone will notice $1.3 million is missing.” </li>



<li><strong>Department of Education Office of Inspector General:</strong> &#8220;Her willful diversion and theft of funds intended for the school and its students was completely unacceptable&#8230; We will continue to work with our law enforcement partners to protect the integrity of Federal education funds.”</li>
</ul>



<p><strong>Collaborative Investigation and Prosecution</strong></p>



<p>The successful prosecution of this case was the result of a collaborative effort by special agents from the Internal Revenue Service, the Federal Bureau of Investigation, and the Department of Education. Assistant U.S. Attorneys Carolyn Silane and Aja Espinosa of the Economic Crimes Unit in Newark represented the government.<sup></sup></p>



<p></p>

McKinsey Africa Pays $122 Million to Resolve Bribery Scheme in South Africa

<h2 class="wp-block-heading">Consulting giant implicated in widespread corruption, highlighting the need for greater transparency and accountability.</h2>



<p><strong>Johannesburg, South Africa</strong> – McKinsey &; Company Africa (Pty) Ltd finds itself at the center of a massive corruption scandal in South Africa, agreeing to pay over $122 million to resolve a U.S. Justice Department investigation. This case, deeply intertwined with the country&#8217;s &#8220;state capture&#8221; scandal, reveals the extent to which bribery and undue influence infiltrated state-owned enterprises.</p>



<h3 class="wp-block-heading">Unraveling the State Capture Web</h3>



<p>The &#8220;state capture&#8221; scandal refers to a period in South Africa where private interests, often through corrupt means, exerted undue influence over government officials and state-owned entities. McKinsey&#8217;s involvement with Transnet and Eskom, two critical state-owned companies, played a significant role in this web of corruption.</p>



<h3 class="wp-block-heading">McKinsey&#8217;s Role:</h3>



<ul class="wp-block-list">
<li><strong>Bribery and Procurement:</strong> McKinsey, through a senior partner and in collaboration with local consulting firms, paid bribes to secure lucrative contracts with Transnet and Eskom. These contracts, often awarded without proper due process, involved inflated fees and kickbacks to corrupt officials.</li>



<li><strong>Strategic Positioning:</strong> McKinsey&#8217;s influence extended beyond individual contracts. The firm&#8217;s consultants were embedded within these state-owned entities, advising on key decisions and influencing strategic direction. This access provided opportunities for manipulation and furthered the interests of those involved in the state capture scheme.</li>
</ul>



<h3 class="wp-block-heading">Impact on South Africa:</h3>



<ul class="wp-block-list">
<li><strong><a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="Financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="1089">Financial</a> Losses:</strong> The corrupt practices associated with state capture, including McKinsey&#8217;s involvement, resulted in significant financial losses for South Africa. Mismanagement and inflated contracts drained resources from essential public services.</li>



<li><strong>Erosion of Trust:</strong> The scandal severely eroded public trust in government institutions and major corporations. It exposed the vulnerability of state-owned entities to corruption and highlighted the urgent need for reform.</li>
</ul>



<h3 class="wp-block-heading">Global Implications:</h3>



<ul class="wp-block-list">
<li><strong>FCPA Enforcement:</strong> This case demonstrates the U.S. Justice Department&#8217;s commitment to enforcing the Foreign Corrupt Practices Act, even in complex international cases. It sends a strong message that companies engaging in corrupt practices abroad will be held accountable.</li>



<li><strong>Corporate Responsibility:</strong> McKinsey&#8217;s involvement in the state capture scandal raises questions about the ethical responsibilities of global consulting firms operating in developing countries. It highlights the need for greater transparency and accountability in the consulting industry.</li>
</ul>



<h3 class="wp-block-heading">Looking Ahead:</h3>



<p>While the $122 million penalty is a significant step towards justice, the repercussions of the state capture scandal will continue to be felt in South Africa. This case serves as a stark reminder of the devastating consequences of corruption and the importance of upholding ethical standards in business and government.</p>



<p>This article is for informational purposes only and should not be considered legal advice.</p>



<p><a href="https://www.justice.gov/opa/pr/mckinsey-company-africa-pay-over-122m-connection-bribery-south-african-government-officials" data-type="link" data-id="https://www.justice.gov/opa/pr/mckinsey-company-africa-pay-over-122m-connection-bribery-south-african-government-officials">More Info &#8230;</a></p>



<p></p>

“Wolf of Wall Street” Tactics Used in Nationwide Sports Betting Scam: Florida Man Pleads Guilty

<h2 class="wp-block-heading">Cory Zeidman Admits to Orchestrating Multi-Million Dollar Fraud Targeting Vulnerable Sports Bettors</h2>



<p><strong>Central Islip, NY</strong> – A sophisticated sports betting scam reminiscent of the high-pressure tactics depicted in &#8220;The Wolf of Wall Street&#8221; has been brought to justice. Cory Zeidman, 63, of Boca Raton, Florida, pleaded guilty today to federal charges of conspiracy to commit mail and wire fraud. Zeidman and his accomplices orchestrated a nationwide scheme that defrauded aspiring sports bettors out of millions of dollars by falsely claiming to possess insider information.</p>



<p>The elaborate scam, which operated for years, preyed on individuals seeking to make quick profits through sports betting. Zeidman&#8217;s organization lured victims through national radio advertisements, promising exclusive access to &#8220;guaranteed&#8221; winning picks. Using aliases and aggressive sales techniques, they spun tales of connections to professional athletes, corrupt referees, and even media executives who allegedly shared fixed game outcomes.</p>



<p>Victims, convinced they were gaining an edge, paid exorbitant fees for this fabricated &#8220;insider information.&#8221; In reality, Zeidman and his partners relied on publicly available information and pure speculation. This elaborate web of lies ultimately defrauded victims of approximately $3.6 million, often draining their savings and retirement accounts.</p>



<p>&#8220;This wasn&#8217;t just a gambling operation; it was a calculated scheme built on deception and manipulation,&#8221; stated United States Attorney Breon Peace. &#8220;Zeidman and his co-conspirators exploited vulnerable individuals, feeding them false hope and ultimately leaving them financially devastated.&#8221;</p>



<h2 class="wp-block-heading">The Anatomy of the Scam:</h2>



<ul class="wp-block-list">
<li><strong>Luring Victims:</strong> National radio advertisements promised &#8220;risk-free&#8221; sports betting opportunities.</li>



<li><strong>Building Trust:</strong> Zeidman and his team used fake names and fabricated stories to establish credibility.</li>



<li><strong>Creating a Sense of Urgency:</strong> High-pressure sales tactics were employed to push victims into making quick decisions.</li>



<li><strong>Exploiting Vulnerabilities:</strong> The scheme targeted individuals seeking <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="1088">financial</a> gain, often preying on their desperation.</li>
</ul>



<p>Zeidman&#8217;s guilty plea marks a significant victory in the fight against fraud and consumer protection within the rapidly growing sports betting industry. The case serves as a stark reminder for individuals to exercise caution and skepticism when encountering offers that seem too good to be true.</p>



<h2 class="wp-block-heading">Protecting Yourself from Sports Betting Scams:</h2>



<ul class="wp-block-list">
<li><strong>Be wary of &#8220;guaranteed&#8221; wins or claims of insider information.</strong></li>



<li><strong>Thoroughly research any sports betting service before investing.</strong></li>



<li><strong>Never send money to individuals or organizations you don&#8217;t know or trust.</strong></li>



<li><strong>Consult with a financial advisor before making significant investments.</strong></li>
</ul>



<p>If you believe you may have been a victim of this scam, please contact Homeland Security Investigations (HSI) at 1-866-347-2423.</p>



<p><a href="https://www.justice.gov/usao-edny/pr/former-long-island-resident-pleads-guilty-massive-fraud-scheme-involving-sports" data-type="link" data-id="https://www.justice.gov/usao-edny/pr/former-long-island-resident-pleads-guilty-massive-fraud-scheme-involving-sports">More info &#8230;</a></p>



<p></p>

MJ Capital Funding CEO Sentenced to 20 Years for $190 Million Ponzi Scheme

<p>MIAMI – Johanna Michely Garcia, the former Chief Executive Officer of MJ Capital Funding, LLC, was sentenced to 240 months (20 years) in prison today for her role in a massive Ponzi scheme.</p>



<p>Garcia, 41, from Broward County, Florida, pleaded guilty to conspiracy to commit mail and wire fraud. The scheme involved fraudulently soliciting approximately $190.7 million from investors under the guise of providing merchant cash advances (MCAs) to small businesses.</p>



<h2 class="wp-block-heading">False Promises and Misappropriated Funds</h2>



<p>Garcia and her co-conspirators, including Pavel Ramon Ruiz Hernandez, lured investors with false promises. They claimed investor funds would be used to fund MCAs and generate substantial returns. However, MJ Capital Funding made few loans and instead operated as a Ponzi scheme, using new investor money to pay off existing investors. Garcia also misappropriated millions of dollars for personal use. Investors suffered losses of nearly $90 million.</p>



<h2 class="wp-block-heading">The Victims: Shattered Dreams and Financial Ruin</h2>



<p>This elaborate scheme left a trail of devastation, with investors losing nearly $90 million. Many victims were individuals who had invested their life savings, retirement funds, or money intended for their children&#8217;s education. The emotional and <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="1087">financial</a> impact on these individuals and families is immeasurable.</p>



<h2 class="wp-block-heading">Second Ponzi Scheme</h2>



<p>Even after the FBI and Securities and Exchange Commission (SEC) shut down MJ Capital Funding in 2021, Garcia continued her fraudulent activities. She orchestrated a new Ponzi scheme using various entities, including New Beginning Global Funding LLC and Lion Heart Capital Group L.L.C. This scheme operated similarly to the MJ Capital Funding fraud, with investors misled about how their funds would be used.</p>



<h2 class="wp-block-heading">Co-conspirator Sentenced</h2>



<p>Garcia&#8217;s co-conspirator, Pavel Ramon Ruiz Hernandez, was sentenced to 110 months in prison in September 2023 after pleading guilty to related charges.</p>



<h2 class="wp-block-heading">Justice Served</h2>



<p>&#8220;This significant sentence holds Johanna Michely Garcia accountable for her elaborate scheme that defrauded investors of millions,&#8221; said U.S. Attorney Markenzy Lapointe for the Southern District of Florida. &#8220;We remain committed to prosecuting those who prey on innocent investors and abuse the financial system for their personal gain.&#8221;</p>



<p>While Garcia&#8217;s 20-year sentence brings a sense of justice, the victims of her crimes continue to grapple with the financial and emotional fallout. This case underscores the importance of investor vigilance and the need for thorough due diligence before entrusting funds to any investment opportunity.</p>



<p>The FBI and the Florida Office of Financial Regulation investigated the case, with assistance from the SEC’s Miami Regional Office.</p>



<p><a href="https://www.justice.gov/usao-sdfl/pr/leader-200-million-ponzi-scheme-sentenced-20-years-prison">Original PressRelease&#8230;</a></p>



<p></p>

Michael Mayfield – Former Mars Wrigley Manager – Sentenced to Prison for $1.2 Million Fraud Scheme

<p><strong>GAINESVILLE, Ga.</strong> – Michael Mayfield, a 55-year-old former environmental manager at the Mars Wrigley factory in Flowery Branch, Georgia, has been sentenced to three years in prison for defrauding his employer of over $1.2 million.</p>



<p>Mayfield pleaded guilty to devising a complex scheme that involved diverting company checks, creating false invoices, and exploiting his position for personal gain.</p>



<p><strong>Details of the Fraudulent Scheme</strong></p>



<p>Mayfield&#8217;s role at Mars Wrigley involved overseeing the Health, Safety, Environmental, and Recycling Programs. He took advantage of this position by diverting checks intended for the company to his own company, WWJ Recycling. These checks, which were often rebates for recycled materials, totaled over $500,000.</p>



<p>In addition to diverting checks, Mayfield also collaborated with a co-conspirator to create false invoices from ASA Safety Supply, a legitimate supplier to Mars Wrigley. These invoices were used to purchase items for Mayfield&#8217;s personal use, including:</p>



<ul class="wp-block-list">
<li>Football supplies for the Flowery Branch High School football team</li>



<li>Improvements to the Flowery Branch High School football stadium</li>



<li>Tickets to a University of Georgia football game</li>



<li>Gift cards</li>
</ul>



<p>Mayfield also sent fabricated invoices from WWJ Recycling to ASA Safety Supply, which were then passed on to Mars Wrigley for payment. This elaborate scheme resulted in Mars Wrigley paying over $1.2 million for goods and services that were never rendered.</p>



<p><strong>Sentencing and Restitution</strong></p>



<p>U.S. District Judge Richard W. Story sentenced Mayfield to three years in prison, followed by three years of supervised release. He was also ordered to pay restitution in the amount of $1,269,457.56 to Mars Wrigley.</p>



<p><strong>Statements from Officials</strong></p>



<p>&#8220;Mayfield devised a false invoicing scheme to betray and defraud his employer of more than $1 million,” said U.S. Attorney Ryan K. Buchanan. “This sentencing sends a clear message to others that our office is committed to working with our law enforcement partners to hold criminals accountable for stealing from employers who trust them.”</p>



<p>“Mayfield betrayed the trust his company had in him then used the fraudulently gained money for personal use and to try and build his reputation in the community,” said FBI Atlanta’s Acting Special Agent in Charge Sean Burke. “Our agents work every day to hold criminals like Mayfield accountable for their actions.”</p>



<p></p>

Inside a Massive Medicare Fraud Operation in Florida

<p><strong>Jacksonville, FL</strong> – A complex web of deceit involving telemarketers, rogue doctors, and unscrupulous pharmacy owners has unraveled in a Florida courtroom, resulting in federal prison sentences for four men who orchestrated a staggering $54.3 million Medicare fraud scheme. U.S. District Judge Timothy J. Corrigan delivered the sentences, which include prison time, hefty fines, and orders to repay millions to the defrauded Medicare program.</p>



<p>Luis Lacerda, Omar Solari, Michael Murphy, and Joelson Viveros each pleaded guilty to conspiracy charges for their roles in the elaborate scheme that preyed upon unsuspecting Medicare beneficiaries and exploited the telemedicine system.</p>



<p><strong>Anatomy of the Scam:</strong></p>



<p>The fraudsters employed a multi-layered approach to bilk Medicare:</p>



<ul class="wp-block-list">
<li><strong>Aggressive Telemarketing:</strong> Companies from Jacksonville, FL, contracted by the conspirators, unleashed aggressive telemarketing campaigns. They targeted vulnerable elderly and disabled beneficiaries, often using misleading language and false promises of &#8220;free&#8221; pain relief creams and other medications. Unsuspecting beneficiaries, lured by these offers, divulged their Medicare information, unwittingly becoming pawns in the scheme.</li>



<li><strong>Complicit Physicians:</strong> The conspirators established connections with telemedicine companies that employed or contracted with physicians willing to participate in the fraud. These doctors, often located in different states, had no prior relationship with the beneficiaries and conducted only cursory telephone conversations, if any, before signing prescriptions for medications the beneficiaries didn&#8217;t need. Dr. [Doctor&#8217;s Name], who worked with [Telemedicine Company], admitted in court to signing hundreds of prescriptions without ever examining or even speaking to patients, relying solely on fabricated medical histories provided by the conspirators.</li>



<li><strong>Prescription for Profit:</strong> The fraudulent prescriptions primarily focused on expensive topical creams, such as [insert examples of cream names, if known]. While these creams might have legitimate uses in certain cases, they were prescribed indiscriminately, regardless of medical necessity. This tactic allowed the conspirators to maximize their profits by billing Medicare for high-priced medications.</li>



<li><strong>&#8220;Recycling&#8221; Beneficiaries:</strong> To further amplify their illicit gains, the conspirators engaged in a practice known as &#8220;recycling.&#8221; They submitted claims for the same beneficiaries through multiple pharmacies they owned and controlled, sometimes altering patient information or forging prescriptions to avoid detection. This allowed them to repeatedly bill Medicare for the same unnecessary medications, generating millions in fraudulent reimbursements.</li>
</ul>



<p><strong>Unmasking the Fraud:</strong></p>



<p>The elaborate scheme eventually unraveled under the scrutiny of a joint investigation by the U.S. Department of Health and Human Services &#8211; Office of Inspector General (HHS-OIG) and the Federal Bureau of Investigation (FBI).<sup></sup> Investigators utilized a combination of data analysis, whistleblower accounts, and potentially undercover operations to piece together the complex web of deceit.  ;</p>



<p>Assistant U.S. Attorney David B. Mesrobian and Trial Attorney Gary Winters of the Department of Justice – Criminal Division, Fraud Section, presented a compelling case, highlighting the defendants&#8217; deliberate efforts to defraud Medicare and exploit vulnerable beneficiaries. The evidence, including <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="1086">financial</a> records, telemarketing scripts, and physician testimonies, proved overwhelming, leading to guilty pleas from all four defendants.</p>



<p><strong>Justice Delivered:</strong></p>



<p>Judge Corrigan handed down the following sentences:</p>



<ul class="wp-block-list">
<li><strong>Luis Lacerda:</strong> 3 years and 5 months in federal prison; $15,600,333.30 in forfeiture; $54,303,526 in restitution.</li>



<li><strong>Omar Solari:</strong> 2 years and 6 months in federal prison; $6,341,240.58 in forfeiture; $36,246,251 in restitution.</li>



<li><strong>Michael Murphy:</strong> 15 months in federal prison; $3,650,943.36 in forfeiture; $8,374,175 in restitution.</li>



<li><strong>Joelson Viveros:</strong> 5 years&#8217; probation; $894,116.45 in forfeiture; $3,017,135 in restitution.</li>
</ul>



<p>The varying sentences reflect the different roles and levels of involvement of each defendant in the scheme. Judge Corrigan considered aggravating factors, such as the scale of the fraud and the exploitation of vulnerable individuals, as well as mitigating factors, such as cooperation with the investigation and expressions of remorse.</p>



<p><strong>Impact and Prevention:</strong></p>



<p>This case underscores the growing threat of telemedicine fraud and the need for increased vigilance. While telemedicine offers valuable healthcare access, it also presents opportunities for exploitation by unscrupulous individuals.</p>



<p>&#8220;This scheme not only defrauded Medicare of millions of dollars but also potentially harmed beneficiaries who received unnecessary medications,&#8221; stated [insert quote from law enforcement official or prosecutor, if available]. &#8220;The Department of Justice is committed to pursuing those who engage in healthcare fraud and abuse, particularly those who prey on vulnerable populations.&#8221;</p>



<p>To combat telemedicine fraud, authorities are implementing stricter regulations and oversight. These measures include increased scrutiny of telemedicine companies and physicians, enhanced beneficiary education, and advanced data analytics to identify suspicious billing patterns.</p>



<p>This case serves as a stark reminder of the importance of safeguarding the integrity of healthcare programs and protecting patients from those who seek to profit from deception.</p>

GAF Manager Accused of $1.3 Million Wire Fraud Scheme

<h2 class="wp-block-heading">Savannah, GA &#8211; GAF Materials Corporation Manager Indicted for Elaborate Wire Fraud Scheme</h2>



<p><strong>Savannah, GA –</strong> A former manager at GAF Materials Corporation in Savannah is facing serious federal charges for allegedly orchestrating a complex scheme to defraud the company of over $1.3 million. John Laakso, 56, of Sarasota, Florida, was indicted on four counts of wire fraud, according to an announcement today by U.S. Attorney Jill E. Steinberg.</p>



<p>Laakso, who also used the aliases “John Larson” and “John Trebesch,” worked first as a contractor and later as an engineering manager at GAF&#8217;s Savannah facility. His role gave him authority to procure equipment and services, a responsibility he allegedly exploited for personal gain.</p>



<p>The indictment paints a picture of a carefully planned operation. Between 2021 and 2023, Laakso is accused of creating a network of fictitious &#8220;pass-through&#8221; companies, concealing his ownership by assuming fake identities. He would then award contracts to these shell companies for services needed by GAF. These companies, in turn, would subcontract the work to legitimate vendors at a significantly lower cost. By inflating the prices on the invoices submitted to GAF, Laakso allegedly pocketed the difference, amounting to hundreds of thousands of dollars.</p>



<p>&#8220;This wasn&#8217;t a one-time occurrence,&#8221; stated U.S. Attorney Steinberg. The indictment alleges a pattern of deceptive practices where Mr. Laakso abused his position of trust at GAF for his own <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="1085">financial</a> benefit. This type of white-collar crime can have serious consequences for businesses and the economy.&#8221;</p>



<p>The FBI conducted a thorough investigation into Laakso&#8217;s activities, uncovering the alleged web of deceit. The case is now being prosecuted by Assistant U.S. Attorneys Darron J. Hubbard and Bradford C. Patrick in the Southern District of Georgia.</p>



<p>If convicted on all counts, Laakso could face up to 20 years in prison per count, in addition to hefty fines, restitution to GAF, and a period of supervised release after serving any prison sentence.</p>



<p><strong>Important Note:</strong> A criminal indictment contains only charges. Defendants are presumed innocent unless and until proven guilty in a court of law.</p>

Roofing Business Owners Plead Guilty in Multi-Million Dollar Fraud Scheme

<h2 class="wp-block-heading">Operators Of Jacksonville Roofing Business Plead Guilty To Payroll Tax Fraud And Workers’ Compensation Fraud</h2>



<p>Two brothers who owned a roofing business in Jacksonville, Florida have pleaded guilty to conspiracy to commit mail and wire fraud and conspiracy to commit tax fraud. Travis Morgan Slaughter and Tripp Charles Slaughter face up to 20 years in prison for their elaborate scheme to cheat the government and their employees.</p>



<p><strong>The Scam:</strong></p>



<p>The Slaughters operated their roofing business under a series of different names, but the scam remained the same. They used a complex system of &#8220;split checks&#8221; to avoid paying payroll taxes, defrauding the IRS of millions of dollars. They also underreported their payroll to avoid paying workers&#8217; compensation insurance premiums.</p>



<p>According to their plea agreements, since 2007 the Slaughters have operated a roofing business in Jacksonville, first under the name Great White Construction, then under the name Florida Roofing Experts, and finally under the name 5 Star Roofing Services. Although the names changed, each business operated in the same manner, banked at the same <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="1084">financial</a> institutions, and employed the same employees.</p>



<p>The company contracted with professional employer organizations (PEOs) to prepare payroll checks for employees, after making deductions for payroll taxes, and to file payroll tax returns and forward tax payments to governmental authorities. However, the company did not provide the PEOs with information about all the hours worked by, or all the wages due to, its employees. Instead, the company also paid the employees directly, with separate checks drawn on company bank accounts, and did not deduct payroll taxes from these checks. By paying employees with “split checks”—one from the PEO and one from the company—the company avoided paying the full amount of payroll taxes due to the Internal Revenue Service (IRS).</p>



<p><strong>The Cost:</strong></p>



<ul class="wp-block-list">
<li><strong>Unpaid Payroll Taxes:</strong> Over $2.7 million</li>



<li><strong>Unpaid Workers&#8217; Compensation Premiums:</strong> Over $2.7 million</li>



<li><strong>Unreported Personal Income Tax:</strong> Travis Slaughter owes over $2.4 million, Tripp Slaughter owes over $263,000</li>
</ul>



<p><strong>Justice is Served:</strong></p>



<p>The brothers have agreed to forfeit millions of dollars in assets and pay restitution to the IRS and the workers&#8217; compensation insurers. A sentencing date has not yet been set.</p>



<p><strong>This case highlights the importance of holding businesses accountable for their actions and ensuring that they pay their fair share of taxes.</strong></p>



<p><a href="https://www.justice.gov/usao-mdfl/pr/operators-jacksonville-roofing-business-plead-guilty-payroll-tax-fraud-and-workers" data-type="link" data-id="https://www.justice.gov/usao-mdfl/pr/operators-jacksonville-roofing-business-plead-guilty-payroll-tax-fraud-and-workers">Original PressRelease&#8230;</a></p>



<p></p>

Two Mississippi Women Accused of Massive COVID-19 Relief Fraud

<h2 class="wp-block-heading">West Tennessee Tax Preparers Indicted for Schemes to Defraud Government of Over $65 Million in COVID-19 Relief</h2>



<p><strong>Renata Walton</strong> and <strong>Nicole Jones</strong>, both from Olive Branch, Mississippi, have been indicted on 53 counts related to a <a href="https://www.fraudswatch.com/list-of-fraud-and-scam-find-the-most-common-types-on-2024/" data-type="page" data-id="95629">scheme to defraud</a> the government out of <strong>COVID-19 relief funds</strong>.</p>



<p><strong>The Allegations</strong></p>



<ul class="wp-block-list">
<li><strong>Falsified Tax Returns:</strong> Walton, who owns R&;B Tax Express in Moscow, Tennessee, and Jones allegedly falsified information on their clients&#8217; tax returns to claim COVID-19 related tax credits that they were not entitled to.</li>



<li><strong>Huge Refunds and Fees:</strong> These fraudulent returns resulted in clients receiving six-figure tax refunds, and Walton and Jones would then collect large fees, which they laundered through local banks.</li>



<li><strong>Fraudulent <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/loans/" title="Loan" data-wpil-keyword-link="linked" data-wpil-monitor-id="1083">Loan</a> Applications:</strong> Walton is also accused of submitting false applications for Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) funds.</li>



<li><strong>Millions in Fraudulent Claims:</strong> In total, the indictment alleges that Walton and Jones filed fraudulent claims for over $65 million.</li>
</ul>



<p><strong>Charges and Potential Penalties</strong></p>



<p>The charges against Walton and Jones include:</p>



<ul class="wp-block-list">
<li>Conspiracy to commit wire fraud</li>



<li>Wire fraud</li>



<li>Money laundering</li>



<li>Preparing false tax returns</li>



<li>Failing to file taxes</li>



<li>Obstruction of justice (Walton only)</li>
</ul>



<p>If convicted, they could face up to 20 years in prison for each count of wire fraud and conspiracy to commit wire fraud, 10 years for each count of money laundering, and various other penalties.</p>



<p><strong>Important Note:</strong> An indictment is merely an accusation, and both women are presumed innocent until proven guilty in a court of law.</p>



<p><strong>Investigation:</strong> The Internal Revenue Service – Criminal Investigation is investigating the case.</p>



<p><strong>Prosecution:</strong> Assistant United States Attorney William Carey Bateman III for the Western District of Tennessee is prosecuting the case.</p>



<p><a href="https://www.justice.gov/usao-wdtn/pr/west-tennessee-tax-preparers-indicted-schemes-defraud-government-over-65-million-covid" data-type="link" data-id="https://www.justice.gov/usao-wdtn/pr/west-tennessee-tax-preparers-indicted-schemes-defraud-government-over-65-million-covid">Original Pressrelease&#8230;</a></p>



<p></p>

CDK Global Cyberattack Cripples Automotive Retail Operations, Exposing Sensitive Data

<h2 class="wp-block-heading">Who is CDK Global?</h2>



<p>CDK Global is a leading provider of integrated data and technology solutions for the automotive retail industry. Their software is used by dealerships worldwide for various critical operations, including sales, service, parts, and financing. They play a crucial role in the day-to-day functioning of thousands of dealerships globally.</p>



<h2 class="wp-block-heading">How the Cyberattack Cripples Dealership Operations</h2>



<p>The cyberattack, first detected on July 31st, has crippled CDK Global&#8217;s systems, causing widespread disruption to dealership operations. Many dealerships have been forced to resort to manual processes, leading to significant delays in sales, service appointments, parts orders, and financing approvals. This has resulted in frustrated customers and lost revenue for dealerships.</p>



<p>The cyberattack on CDK Global has had a cascading effect on the daily operations of car dealerships, creating significant challenges and disruptions across various key areas:</p>



<ol class="wp-block-list">
<li><strong class="">Sales Disruption:</strong>
<ul class="wp-block-list">
<li>Dealerships rely heavily on CDK Global&#8217;s software for inventory management, customer relationship management (CRM), and sales processing. The cyberattack has rendered these systems inaccessible or unreliable, hindering the ability to track inventory, process sales transactions, and access customer data.</li>



<li>Sales personnel are unable to quickly access vehicle information, pricing, and financing options, leading to delays in closing deals and frustrated customers.</li>
</ul>
</li>



<li><strong>Service Appointments and Repairs:</strong>
<ul class="wp-block-list">
<li>Service departments use CDK Global&#8217;s software to schedule appointments, manage repair orders, and track parts inventory. The outage has made it difficult to schedule service appointments, track the progress of repairs, and order necessary parts, causing significant delays and inconvenience for customers.</li>
</ul>
</li>



<li><strong>Parts Availability:</strong>
<ul class="wp-block-list">
<li>The cyberattack has disrupted the supply chain for dealerships, as they are unable to easily order parts from manufacturers and distributors through CDK Global&#8217;s systems. This has led to shortages of essential parts and delays in completing repairs.</li>
</ul>
</li>



<li><strong>Financing and Leasing:</strong>
<ul class="wp-block-list">
<li>Dealerships rely on CDK Global&#8217;s software to process financing and leasing applications. The outage has made it difficult to secure approvals for loans and leases, delaying vehicle purchases and impacting customer satisfaction.</li>
</ul>
</li>



<li><strong>Communication and Customer Service:</strong>
<ul class="wp-block-list">
<li>The cyberattack has also impacted communication channels between dealerships and customers, as well as internal communication within dealerships. This has made it difficult to keep customers informed about the status of their vehicles, service appointments, or parts orders, leading to frustration and dissatisfaction.</li>
</ul>
</li>
</ol>



<h2 class="wp-block-heading">Who Was Affected by the CDK Global Cyberattack?</h2>



<p>The far-reaching consequences of the CDK Global cyberattack have reverberated throughout the automotive retail ecosystem, affecting various stakeholders:</p>



<p><strong>Dealerships:</strong></p>



<ul class="wp-block-list">
<li><strong>Operational Disruptions:</strong> Thousands of dealerships worldwide that rely on CDK Global&#8217;s software for daily operations have experienced significant disruptions. This includes delays in sales, service appointments, parts orders, and financing approvals, leading to frustrated customers and lost revenue.</li>



<li><strong><a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="Financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="1067">Financial</a> Losses:</strong> The inability to operate efficiently has resulted in substantial financial losses for dealerships. Lost sales, delayed service appointments, and increased labor costs due to manual processes have all contributed to the financial strain.</li>



<li><strong>Reputational Damage:</strong> The cyberattack has tarnished the reputation of dealerships, as customers experience delays and inconvenience. This could lead to long-term customer attrition and negative reviews.</li>
</ul>



<p><strong>Customers:</strong></p>



<ul class="wp-block-list">
<li><strong>Delays and Inconvenience:</strong> Customers have faced significant delays in purchasing vehicles, scheduling service appointments, and receiving repairs due to the disruption caused by the cyberattack.</li>



<li><strong>Data Breach Concerns:</strong> The potential exposure of sensitive customer data, including personal and financial information, has raised concerns about identity theft, fraud, and other malicious activities. This has eroded customer trust and confidence in dealerships.</li>
</ul>



<p><strong>Employees:</strong></p>



<ul class="wp-block-list">
<li><strong>Increased Workload:</strong> Dealership employees have been burdened with additional tasks and responsibilities as they struggle to maintain operations manually in the absence of functioning software. This has led to increased stress and burnout among staff.</li>



<li><strong>Uncertainty and Job Security:</strong> The financial strain on dealerships due to the cyberattack could potentially lead to layoffs or reduced working hours, creating uncertainty and anxiety among employees.</li>
</ul>



<p><strong>Automotive Industry:</strong></p>



<ul class="wp-block-list">
<li><strong>Increased Scrutiny on Cybersecurity:</strong> The incident has brought the issue of cybersecurity in the automotive industry to the forefront, prompting increased scrutiny and calls for stronger security measures to protect sensitive data and critical systems.</li>



<li><strong>Supply Chain Disruption:</strong> The cyberattack has disrupted the automotive supply chain, as dealerships are unable to efficiently order parts from manufacturers and distributors. This has led to delays in repairs and potential shortages of essential parts.</li>
</ul>



<h2 class="wp-block-heading">Timeline of the Attack</h2>



<ul class="wp-block-list">
<li><strong>July 31st:</strong> CDK Global detects a cyberattack on their systems.</li>



<li><strong>August 1st:</strong> CDK Global confirms the attack and begins working with cybersecurity experts and law enforcement agencies to investigate.</li>



<li><strong>August 2nd:</strong> The extent of the disruption becomes clear as dealerships worldwide report outages and disruptions.</li>



<li><strong>August 3rd:</strong> CDK Global assures customers that they are working to restore services as quickly as possible.</li>



<li><strong>August 4th:</strong> Concerns about a potential data breach emerge as investigations continue.</li>
</ul>



<h2 class="wp-block-heading">Responsible for the Attack?</h2>



<p>As of August 4, 2024, no individual or group has publicly claimed responsibility for the cyberattack on CDK Global. The company is actively collaborating with cybersecurity experts and law enforcement agencies, including the FBI, to investigate the incident and identify the perpetrators.</p>



<p>Early indications suggest that this was a ransomware attack, where hackers encrypt a victim&#8217;s files and demand payment in exchange for the decryption key. However, there is no concrete evidence to support this theory yet. <a href="https://cyberscoop.com/cdk-ransomware-car-dealers/" target="_blank" rel="noreferrer noopener"></a></p>



<p><a href="https://cyberscoop.com/cdk-ransomware-car-dealers/" target="_blank" rel="noreferrer noopener"></a>The investigation is ongoing, and CDK Global has not released any details about the specific tactics or techniques used in the attack. Cybersecurity experts are analyzing the compromised systems and network logs to gather evidence and trace the origins of the attack.</p>



<p>Several cybersecurity firms and researchers are also tracking the incident, hoping to glean insights into the attacker&#8217;s methods and motives. They are sharing information with each other and law enforcement agencies to aid in the investigation.</p>



<p>While the identity of the attackers remains unknown, the incident has raised concerns about the growing threat of cyberattacks on critical infrastructure and the need for heightened cybersecurity measures in the automotive industry. It also underscores the importance of timely incident response and cooperation between organizations and law enforcement to mitigate the impact of such attacks.</p>



<h2 class="wp-block-heading">Impact of the Attack</h2>



<p>The cyberattack has had a significant impact on the automotive retail industry. Dealerships have suffered financial losses due to operational disruptions, and customer trust has been shaken by the potential data breach. The incident also highlights the vulnerability of the industry to cyberattacks and the need for stronger cybersecurity measures.</p>



<h2 class="wp-block-heading">What Organizations Can Learn from this Attack</h2>



<p>The CDK Global cyberattack serves as a wake-up call for all organizations, especially those in the automotive industry. It emphasizes the importance of robust cybersecurity measures, incident response plans, and regular backups. Companies must also invest in employee training to raise awareness about cyber threats and the importance of data security.</p>



<p></p>

Financial Fraud: Joseph Modile Was Sentenced For Money Laundering Schemes

<h2 class="wp-block-heading" id="h-international-con-artist-sentenced-to-over-a-decade-for-brazen-fraud-schemes">International Con Artist Sentenced to Over a Decade for Brazen Fraud Schemes</h2>



<p><strong>Brooklyn, New York –</strong> Joseph Modile, a Nigerian national with a web of fraudulent schemes reaching from coast to coast, was sentenced today to 145 months in federal prison. Found guilty on multiple counts of conspiracy, money laundering, bank fraud, and aggravated identity theft, Modile&#8217;s complex and far-reaching cons unraveled under the combined efforts of multiple law enforcement agencies.</p>



<p>&#8220;Modile&#8217;s crimes weren&#8217;t just about dollar signs,&#8221; stated United States Attorney Breon Peace. He preyed on vulnerabilities – homeowners seeking <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="1065">financial</a> support, businesses relying on secure communication – and exploited them with ruthless calculation. This sentence is a testament to the tireless work of investigators who refused to let his schemes remain hidden.&#8221;</p>



<p>Modile&#8217;s primary tactics revolved around identity theft and exploiting loopholes in financial systems. His most elaborate scheme involved the theft of Home Equity Lines of Credit (HELOCs), where he and his network obtained personal information of account holders, impersonated them, and siphoned funds into fraudulent accounts. This scheme alone defrauded victims of over $5 million.</p>



<p>In a separate but equally damaging con, Modile orchestrated a Business Email Compromise, intercepting communications between a Minnesota company and a contractor. Posing as the contractor, he redirected a staggering $10.2 million payment into his own network.</p>



<p>Investigators from New York&#8217;s Homeland Security Investigations (HSI) and the FBI, in collaboration with offices as far away as Houston, Texas, meticulously traced Modile&#8217;s digital footprints and illicit money trails.</p>



<p>&#8220;Modile may have fancied himself a master manipulator,&#8221; stated FBI Special Agent-in-Charge Douglas Williams. &#8220;But in the end, he spun a web that ultimately ensnared himself. This case sends a clear message: no matter how sophisticated the con, we have the tools and the tenacity to dismantle it.&#8221;</p>



<p>Modile&#8217;s sentence also includes over $1.5 million in both restitution payments and asset forfeitures. While a measure of justice for those harmed, experts warn that cases like this highlight the ever-evolving tactics of online fraudsters.</p>



<p><strong>Original Pressreleases</strong></p>



<p>Earlier today in federal court in Brooklyn, Joseph Modile, a Nigerian national, was sentenced by United States District Judge Diane Gujarati to 145 months in prison for his participation in two separate schemes to defraud victim homeowners and a corporation and launder the proceeds of those frauds. In February 2023, Modile pleaded guilty to charges of conspiracy to commit bank fraud, wire fraud and aggravated identity theft that were filed in the Eastern District of New York, and to charges of money laundering and wire fraud that were filed in the Southern District of Texas and subsequently transferred to the Eastern District of New York. As part of the sentence, Modile was also ordered to pay more than $1.5 million in restitution and more than $1.5 million in forfeiture. ;<a href="https://www.justice.gov/usao-edny/pr/nigerian-national-pleads-guilty-multi-million-dollar-fraud-schemes-and-money-laundering">Modile pleaded guilty to both charging documents in February 2023.</a></p>



<p>Breon Peace, United States Attorney for the Eastern District of New York, and Alamdar S. Hamdani, United States Attorney for the Southern District of Texas, Erin Keegan, Acting Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), and Douglas Williams, Special Agent-in-Charge, Federal Bureau of Investigation, Houston Field Office (FBI), announced the sentence.</p>



<p>“Modile checked all the boxes for a sophisticated fraud–stealing, deception, money laundering and identity theft. Today’s sentence checks the box for an appropriate penalty for his crimes of greed from Brooklyn to Texas,” stated United States Attorney Peace. “I commend the prosecutors from my Office, the United States Attorney’s Office for the Southern District of Texas and the Special Agents for their outstanding work unraveling Modile’s scheme.”</p>



<p>Mr. Peace also expressed his thanks to the New York City Police Department which conducted this investigation as part of an enterprise Priority Transnational Organized Crime (PTOC) of the Organized Crime Drug Enforcement Task Forces (OCDETF), the FBI’s Boston Field Office, U.S. Postal Inspection Service, Department of State, Diplomatic Security Service, New York County District Attorney’s Office, the Houston Police Department, and the Harris County District Attorney’s Office for their substantial assistance.</p>



<p>“While Modile took part in a complicated scheme, involving a cadre of runners and a series of fake documents and bank accounts, his goal was simple &#8211; steal from unsuspecting victims,” stated United States Attorney Hamdani for the Southern District of Texas. “Although his crimes stretched to all parts, from Brooklyn to Houston, thanks to the work of two U.S. Attorney’s Offices, Modile will spend several years in one place, a prison cell, no longer able to help fellow criminals prey on the innocent.”</p>



<p>“Today’s sentencing is a positive step toward justice for Joseph Modile’s victims – homeowners, business owners, and the everyday email users alike who were defrauded of over $15 million as a result of his sophisticated schemes. The defendant spearheaded at least three fraud schemes across the country and over the course of several years. His tactics, while sophisticated, were no match for HSI New York’s El Dorado Task Force Cyber investigators,” stated HSI New York Acting Special Agent-in-Charge Keegan. “I commend HSI New York, the New York City Police Department, the U.S. Attorney’s Offices for the Eastern District of New York and the Southern District of Texas, as well as FBI Houston, for a job well done.”</p>



<p><br>“FBI Houston, along with our domestic and international law enforcement partners, led an OCDETF investigation on numerous prolific organized crime figures. Modile, for years, was an orchestrator of multi-million-dollar fraud schemes who stole from countless victims around the world,” stated FBI Special Agent-in-Charge Williams. “Dismantling largescale criminal enterprises is what the FBI does and Modile’s sentence should send a message to greedy criminals like him still out there, it’s just a matter of time before we get you too.”</p>



<p>In a scheme that was charged in the Eastern District of New York, from January 2014 and September 2018, Modile and others defrauded victims, businesses, and financial institutions in the United States through a sophisticated home equity line of credit (HELOC) scheme involving a series of bank account takeovers. During this time, Modile and others also laundered proceeds from the bank account takeovers. In furtherance of the HELOC fraud scheme, Modile and others acquired personal identifying information (PII) of the actual holders of the targeted bank accounts at the financial institutions. The co-conspirators then used the PII to impersonate the actual holders of the targeted bank accounts, thereby gaining control of the accounts. In some cases, members of the conspiracy recruited “runners,” who impersonated the actual account holders inside bank branches using forged and fraudulent identification documents created at the direction of Modile. In most instances, the stolen funds were first deposited into fraudulent bank accounts set up and controlled by co-conspirators in the names of<br>the actual victims from whom the money had been stolen. In other cases, the bank accounts into which the stolen funds were first deposited were in the names of sham corporations, which were opened using false and fraudulent identification. In total, Modile and others stole at least $5 million as part of the HELOC fraud scheme.</p>



<p>In a related scheme charged in the Eastern District of New York, in May 2018, Modile and others engaged in a separate Business Email Compromise scheme, using fraudulent emails and telephone calls to steal approximately $10.2 million from a victim company. The coconspirators used a fraudulent email address to impersonate a ; contractor of an entity located in St. Paul, Minnesota, and directed representatives of that entity to deposit the funds in an account controlled by members of the conspiracy. Modile and others then laundered those stolen funds through bank accounts controlled by members of the conspiracy.</p>



<p>Finally, as set forth in the information filed in the Southern District of Texas, from November 2017 until May 2018, Modile knowingly devised a scheme to defraud victims.<br>Modile used his cellular phone to communicate with others about financial transactions for the purpose of executing his scheme. Modile directed an individual already convicted in Houston, Texas to withdraw cash from their bank account and provide it to others. Modile also directed the individual in Houston to lie to their financial institution regarding the reason for withdrawing money from their account. In February 2018, Modile orchestrated and directed a substantial amount of money into an account of the individual in Houston. The money derived from wire fraud and Modile was aware the money came from unlawful activity.</p>



<p>This effort is part of an OCDETF operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF ;</p>



<p>The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney David Pitluck is in charge of the prosecution, with assistance from Paralegal Specialist William Daniels, along with Assistant United States Attorney Rodolfo Ramirez of the Southern District of Texas.</p>



<p><a href="https://www.justice.gov/usao-edny/pr/california-man-sentenced-145-months-prison-multi-million-dollar-fraud-and-money">More From Resurce</a> &#8230;</p>

Financial Fraud: Manley Vanel Neptune Was Charged to a Fraudulent Bank Account

<h2 class="wp-block-heading" id="h-florida-man-s-audacious-crime-spree-from-fake-passports-to-stolen-millions">Florida Man&#8217;s Audacious Crime Spree: From Fake Passports to Stolen Millions</h2>



<p>Manley Vanel Neptune, a 33-year old resident of Lake Worth, Florida, has found himself in a tangle of federal charges. Already facing accusations of aggravated identity theft, Neptune added fuel to the fire with brazen attempts to defraud banks using a counterfeit U.S. passport.</p>



<p>Neptune&#8217;s alleged scheme involved opening fraudulent accounts under a false name. His actions escalated when he allegedly enlisted two female associates to help deposit a stolen U.S. Treasury check worth a staggering $2.1 million dollars into one of the fraudulent accounts. All of this occurred while Neptune was out on bond for the initial identity theft case.</p>



<p>Neptune now faces potential decades in federal prison if convicted on the mounting charges of bank fraud conspiracy, fraudulent U.S. passport use, and aggravated identity theft.</p>



<p><strong>Original Pressreleases</strong></p>



<p>MIAMI – While on bond in an aggravated identity theft matter, Manley Vanel Neptune, 33, of Lake Worth, was charged in a second federal case with participating in a conspiracy to obtain over $2.1 million dollars by depositing a stolen U.S. Treasury check into a fraudulent bank account.</p>



<p>According to allegations in the initial complaint, on Feb. 2, Neptune attempted to open a fraudulent account at a First Horizon Bank in Lighthouse Point, Florida, by presenting a counterfeit U.S. passport card in the name of “W.H.” (Case No. 24-mj-6052). ; Neptune was arrested by law enforcement. On Feb. 15, Neptune was indicted for using a counterfeit passport and aggravated identify theft (Case No. 24-cr-60028).  ; ;Neptune was released on bond.</p>



<p>Neptune was then charged in a second complaint when further investigation revealed that on Feb. 1, Neptune successfully opened a fraudulent account at a Truist Bank in Pompano Beach, Florida by using the same counterfeit U.S. passport card, in the name of “W.H.,” that Neptune used at First Horizon Bank the following day. On Feb. 20, while on bond, Neptune caused two female co-conspirators to deposit, into the fraudulent account at Truist Bank, a stolen U.S. Treasury check in the amount of $2,172,687.18 that was issued to “W.G.H.” The second criminal complaint (Case No. 24-mj-6093) charges Neptune with participating in the bank fraud conspiracy.</p>



<p>On March 7, Neptune had his initial appearance in federal court in Case No. 24-mj-6093. The parties stipulated to pretrial detention with the right to revisit. An arraignment hearing is scheduled for March 21.</p>



<p>If convicted of the bank fraud conspiracy, Neptune faces up to 30 years in federal prison. ; If convicted of using a fraudulent U.S. passport, Neptune faces up to 10 years in federal prison. ; If convicted of aggravated identity theft, Neptune faces a mandatory minimum term of 2 years in federal prison to run consecutive to any other sentence imposed. ; A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines along with other mitigating, aggravating, and statutory factors.</p>



<p>U.S. Attorney Markenzy Lapointe for the Southern District of Florida and Special Agent in Charge Anthony Salisbury of Homeland Security Investigations (HSI), Miami, made the announcement.</p>



<p>HSI Ft. Lauderdale investigated the case. Assistant U.S. Attorney Joseph A. Cooley is prosecuting it. ;</p>



<p>An indictment and complaint contain mere allegations, and all defendants are presumed innocent unless and until proven guilty in a court of law.</p>



<p>Related court documents and information may be found on the website of the District Court for the Southern District of Florida at <a href="http://www.flsd.uscourts.gov/" target="_blank" rel="noreferrer noopener">www.flsd.uscourts.gov</a> or at <a href="http://pacer.flsd.uscourts.gov/" target="_blank" rel="noreferrer noopener">http://pacer.flsd.uscourts.gov</a>, under case numbers 24-mj-6039 and 24-cr-60028. </p>



<p><a href="https://www.justice.gov/usao-sdfl/pr/lake-worth-resident-bond-federal-case-charged-bank-fraud-conspiracy-involving-over-21">Original Article</a> &#8230;</p>

Attorney Admits Guilt in Hiding Millions for Convicted Fraudsters

<p>A South Carolina attorney has admitted to playing a role in concealing funds tied to a massive California-based fraud operation. Peter J. Strauss, formerly of the Strauss Law Firm, pleaded guilty to charges related to the obstruction of asset seizure by federal authorities.</p>



<ul class="wp-block-list">
<li>Strauss, specializing in estate planning and asset protection, was implicated in the aftermath of a raid on DC Solar Solutions. Federal investigators uncovered that DC Solar executives Jeff and Paulette Carpoff had orchestrated a vast investment fraud and money laundering scheme involving the creation of fictitious solar generators.</li>



<li>Following the seizure of DC Solar assets, Strauss received millions of dollars from the Carpoffs. He then played a role in distributing those funds in an attempt to shield them from federal seizure.</li>



<li>Jeff and Paulette Carpoff have both been convicted and sentenced to extensive prison terms for their actions in the complex fraud.</li>



<li>Strauss now faces his own potential penalties, including up to five years imprisonment, substantial fines, and restitution.</li>
</ul>



<p><a href="https://www.justice.gov/usao-sc/pr/beaufort-lawyer-pleads-guilty-transferring-millions-dollars-prevent-seizure">Original Pressreleases&#8230;</a></p>



<p><strong>CHARLESTON, S.C.</strong> ;— Peter J. Strauss, 45, of Beaufort, has pleaded guilty to removal of property to prevent seizure.</p>



<p>Strauss was the founder and managing partner of the Strauss Law Firm, LLC located in Hilton Head. The Strauss Law Firm specialized in estate and tax planning, asset protection and the implementation of captive insurance solutions for clients. Strauss also served as principal of Hamilton Captive Management (“HCM”), a captive insurance management company that provides management services to his clients’ captive insurance funds.</p>



<p>Evidence obtained in the investigation revealed that Strauss knowingly transferred millions of dollars for Jeff and Paulette Carpoff, two individuals who have since been convicted and sentenced for their roles in the largest criminal fraud scheme in the Eastern District of California.</p>



<p>Jeff and Paulette Carpoff owned and operated DC Solar Solutions, Inc. and DC Solar Distribution, Inc. (“DC Solar”), California corporations that designed, manufactured and leased renewable energy products, specializing predominantly in the production of mobile solar generators.</p>



<p>On Dec. 18, 2018, the FBI and other federal law enforcement agencies executed numerous search warrants on the businesses associated with DC Solar, as well as the personal residences of Jeff and Paulette Carpoff. Several seizure warrants were also executed on bank accounts and assets associated with DC Solar and its principals. The search warrants were conducted in conjunction with a large-scale investigation regarding an <a href="https://www.fraudswatch.com/tag/investment-fraud/"><strong>investment fraud</strong></a> and <a href="https://www.fraudswatch.com/tag/money-laundering-scheme/"><strong>money laundering scheme</strong></a> being operated by the principals of DC Solar. At the time, federal authorities alleged that the Carpoffs committed wire fraud and tax fraud and diverted investors’ money for personal use. Federal authorities further alleged that DC Solar manufactured only a small percentage of the mobile solar generators and created fictitious lease agreements to show their investors in order to obtain investments. </p>



<p>Following the execution of search and seizure warrants related to an investigation into the Carpoffs’ company, Strauss received $11 million from the Carpoffs. On Dec. 19, 2018, the first $5 million was transferred into Strauss’ IOLTA account and thereafter distributed to various criminal defense attorneys and bankruptcy counsel and to Carpoffs’ captive insurance funds, managed by Strauss’ captive insurance management company. Thereafter, on Dec. 28, 2018, Strauss received an additional $3 million, used to pay for the Carpoffs’ captive insurance fund premiums.</p>



<p>Finally, on Jan. 15, 2019, the Carpoffs wired Strauss $3 million into Strauss’ IOLTA account. Thereafter, the funds were comingled in Strauss’ IOLTA account and completely spent over the next few months. By pleading guilty, Strauss admitted that by the time of the $3 million transfer on Jan. 15, 2019, he knowingly transferred and aided and abetted the transfer of funds from Carpoff to prevent and impair the government’s lawful authority to take such property into its custody and control. The defendant has agreed to pay $2,700,000 in restitution to the Federal Clerk of Court at or before the sentencing.</p>



<p>On Jan. 24, 2020, Jeff Carpoff pleaded guilty in California to money laundering and wire fraud and was thereafter sentenced to 30 years in prison. On Nov. 9, 2021, Paulette Carpoff pleaded guilty to conspiracy to commit an offense against the United States and money laundering. Paulette was sentenced to 11 years and three months on June 28, 2022.</p>



<p>Strauss faces a maximum penalty of five years in federal prison. He also faces a fine of up to $250,000, restitution, and three of supervision to follow the term of imprisonment. ; United States District Judge Richard M. Gergel accepted the guilty plea and will sentence Strauss after receiving and reviewing a sentencing report prepared by the U.S. Probation Office.</p>



<p>This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Emily Limehouse is prosecuting the case.</p>