<h2>Federal Grand Jury Indicts Three in $6.5 Million Diamond Investment Fraud Scheme</h2>
<p><strong>DALLAS</strong> — A federal grand jury in Dallas has indicted three Texas residents on various charges stemming from their involvement in a diamond investment scheme they ran from approximately March 2011 to November 2013, announced U.S. Attorney John Parker of the Northern District of Texas.</p>
<p>Defendants Craig Allen Otteson, 64, of McKinney, Jay Bruce Heimburger, 58, of Dallas, and Christopher Arnold Jiongo, 55, of Houston, surrendered to federal authorities on Friday morning, September 9, 2016, and made their initial appearances that afternoon before U.S. Magistrate Judge David L. Horan. Each was released on bond.</p>
<p>Specifically, the 10-count indictment charges each defendant with one count of conspiracy to commit wire fraud and three counts of wire fraud. In addition, Otteson and Heimburger are each charged with six counts of mail fraud.</p>
<p>According to the indictment, Otteson acted as the Managing Member and Chief Compliance Officer of Stonebridge Advisors, LLC, located on Belt Line road in Dallas. Stonebridge Advisors was involved as the Managing Partner of Worldwide Diamond Ventures, L.P., located at 6029 Belt Line in Dallas, and it acted as the General Partner of Worldwide Diamond. Heimburger acted as a Principal Partner of Worldwide Diamond, and he was also listed as the registered agent and Director of JBH Securities, Inc. located on San Rafael in Dallas. JBH Securities was primarily involved in the business of providing investment advice. Worldwide Diamond was primarily involved in the business of buying and reselling diamonds on the international market. On October 1, 2013, Worldwide Diamond filed for bankruptcy in the Northern District of Texas.</p>
<p>According to the indictment, the defendants initially attempted to raise funds for their new business of purchasing and reselling diamonds by offering the sale of additional limited partnerships, in the minimum amount of $100,000, in Worldwide Diamond, but were unable to raise sufficient capital funds in this manner. Then, in March 2011, defendants attempted to raise additional needed start-up funds by offering “Non-Recourse Promissory Notes” (diamond notes). The defendants hired three outside companies to market and sell the diamond notes to investors in Texas, Pennsylvania and California. Each $50,000 diamond note had a nine-month maturity date and an 8% rate of return.</p>
<p>The indictment alleges that from approximately March 2011 through November 2011, Otteson, Heimburger and Jiongo defrauded their first round of investors when they fraudulently concealed material information from them, including how they used investor funds, and other information, which caused 57 investors to invest a total of $5,141,699 with Worldwide Diamond Ventures.</p>
<p>The indictment further alleges that from February 2012 through May 2013, Otteson and Heimburger defrauded the second round of investors when they fraudulently concealed material information from investors, including how they used investor funds and other information, which caused 20 new investors to invest a total of $1,333,000 with Worldwide Diamond Ventures.</p>
<p>Defendants promised investors that all investor funds would only be used to purchase and resell diamonds. However, as part of the fraudulent scheme, the defendants concealed from investors that defendants used nearly $2.5 million of investor funds to make unauthorized loans to third parties. As a result of the defendants’ investor fraud scheme, these 77 investors sustained a total loss of at least $4,922,811.</p>
<p>An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. However, if convicted, the maximum statutory penalty for <em>each</em> of the counts charged in the indictment is 20 years in federal prison and a $250,000 fine. The indictment also includes a forfeiture allegation that would require the defendants, upon conviction, to forfeit the proceeds obtained as a result of the offense. Restitution could also be ordered.</p>
<p>This case is one of several felony prosecutions of bankruptcy-related crimes generated by the Bankruptcy Fraud Initiative in the Northern District of Texas. Twenty defendants have been charged as part of that initiative; 16 were convicted, one resulted in a mistrial and three are pending trial.</p>
<p>The U.S. Postal Inspection Service is conducting the investigation. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.</p>
<p><a href="https://www.justice.gov/usao-ndtx/pr/federal-grand-jury-indicts-three-65-million-diamond-investment-fraud-scheme">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.
Financial Fraud: James P. Smith Charged With a Insurance Fraud Scheme
<h2 class="node-title">Insurance Agent Charged with Defrauding Clients, Money Laundering</h2>
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<p>Springfield, Ill. – A federal grand jury has indicted a Decatur, Ill., man who worked as an independent insurance agent. The indictment, returned Sept. 7, charges James P. Smith, 60, of the 5400 block of Traughber Road, with a fraud scheme that allegedly exposed clients to a potential loss of more than $250,000 from February 2011 to July 2016.</p>
<p>Smith is currently in custody on charges filed by the Macon County State’s Attorney’s Office. The U.S. Clerk of the Court will schedule a date for Smith to appear for arraignment in federal court in Urbana.</p>
<p>The Federal Bureau of Investigation and the Macon County Sheriff’s Office are conducting the investigation. Assistant U.S. Attorney Eugene L. Miller is prosecuting the case with the cooperation of the Macon County State’s Attorney’s Office.</p>
<p>According to the indictment, from at least February 2011 through July 2016, Smith represented that he was employed by or owned the Prairie State Insurance Agency in Decatur, Ill., and he acted as an independent agent. Smith solicited clients to purchase insurance, including whole life insurance, 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="598">financial</a> products, including annuities. As part of the alleged scheme, Smith falsely represented the minimum rate of return the annuities could obtain for his clients. Instead of investing clients’ money in insurance, annuities, or other financial products, Smith allegedly used the money for his own benefit.</p>
<p>As alleged in the indictment, Smith requested payments be made payable to “MSM, Inc.,” which he represented was the insurance company or the investment company for the annuity the clients were purchasing. In fact, as Smith knew, MSM, Inc., was actual “Main Street Marathon,” a gas station in Mt. Zion, Ill., owned by Smith. Rather than use the clients’ funds as represented, Smith used the money to finance the gas station without his clients’ knowledge. Smith also used his clients’ money to make <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/mortgage/" title="mortgage" data-wpil-keyword-link="linked" data-wpil-monitor-id="66">mortgage</a> payments on his personal residence.</p>
<p>Further, Smith allegedly cancelled or cashed out clients’ insurance policies or annuities without their knowledge or permission, and used the cash value and / or future premiums or payments for his personal benefit, including to pay his personal attorney’s fees, his personal bankruptcy fees, and as purported annuity payments to other clients to prevent them from discovering that he had not purchased their annuities as promised.</p>
<p>If convicted, the statutory maximum penalty for each count of mail fraud (two counts) and wire fraud (one count) is 20 years in prison, and a fine of up to $250,000, and the statutory maximum penalty for the offense of money laundering (one count) is 20 years in prison, and a fine of up to $500,000, or twice the value of property involved in the transactions, whichever is greater.</p>
<p>Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.</p>
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Identity Theft: ALDEN HALL Indicted For 4 Counts of Theft of Government Funds
<h2>School Owner And Ceo Indicted In Connection With Federal Financial Aid Scheme</h2>
<p>BATON ROUGE, LA &#8211; United States Attorney Walt Green announced today that a federal grand jury has returned an indictment against <strong>ALDEN HALL</strong>, age 57, of Baton Rouge, Louisiana. The Indictment charges <strong>HALL</strong> with four counts of theft of government funds, in violation of Title 18, United States Code, Section 641, one count of fraudulently obtaining financial assistance funds, in violation of Title 18, United States Code, Section 1097(a), one count of engaging in monetary transactions in property derived from specified unlawful activity, in violation of Title 18, United States Code, Section 1957, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1). The Indictment also includes a forfeiture allegation related to proceeds of the offenses.</p>
<p>The Indictment alleges that <strong>HALL</strong>, the owner and Chief Executive Officer of Alden’s School of Cosmetology and Alden’s School of Barbering in Baker, Louisiana, engaged in a scheme to steal Title IV funds, specifically, Pell Grant funds, from the Department of Education (“DOED”). As part of the alleged scheme, the Indictment alleges that <strong>HALL</strong> caused misrepresentations to be submitted to the DOED, including that certain students were enrolled in Pell Grant-approved programs of instruction when <strong>HALL </strong>knew that they were actually in programs of instruction which did not qualify for Pell Grants. The Indictment further alleges that <strong>HALL</strong> concealed from enrolling students that certain programs offered by her schools did not qualify for Pell Grants, and that <strong>HALL</strong> caused false and forged documents to be submitted as part of certain students’ <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="597">financial</a> aid packages for the purpose of qualifying students for Pell Grants. During a Program Review by the DOED, the Indictment further alleges that <strong>HALL</strong> concealed her school’s barbering program, which did not qualify for Pell Grants, by moving barbering students from a barbering classroom into a cosmetology classroom, giving barbering students badges that identified them as cosmetology students, and instructing her barbering instructors to not appear at the school during the DOED Program Review.</p>
<p>The Indictment also alleges that <strong>HALL</strong> caused misrepresentations to the DOED about the number of hours that certain students had attended class and further that certain individuals were students at the school when, in fact, such individuals had never attended class. The financial aid scheme, as alleged in the Indictment, resulted in <strong>HALL</strong> and her businesses fraudulently receiving over $100,000 in federal funds.</p>
<p>The Indictment further alleges that in the course of the scheme, <strong>HALL</strong> transferred criminally derived property of a value greater than $10,000 by causing a transfer of $50,000 from a bank account to a check issued to herself on or about December 21, 2011.</p>
<p>Finally, the Indictment alleges that during and in relation to the scheme, <strong>HALL</strong> used the social security number of another person to steal and embezzle Pell Grant funds in or about June of 2012.</p>
<p>This matter is being handled by the U.S. Attorney’s Office for the Middle District of Louisiana and the U.S. Department of Education – Office of the Inspector General, the Federal Bureau of Investigation, and the Internal Revenue Service. It is being prosecuted by Assistant United States Attorney Ryan Crosswell.</p>
<p><strong>NOTE:</strong> An indictment is an accusation by the Grand Jury. The defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.</p>
<p><a href="https://www.justice.gov/usao-mdla/pr/school-owner-and-ceo-indicted-connection-federal-financial-aid-scheme">Original PressReleases&#8230;</a></p>

Financial Fraud: David Bodian Sentenced For Wire Fraud
<h2>Long Island Attorney Is Sentenced To 28 Months In Prison For Stealing $1.3 Million From Trust Fund Clients</h2>
<p><strong>Trust Funds Diverted to Pay for Car, High-End Stereo Equipment, Home Renovations and International Vacations</strong></p>
<p>CENTRAL ISLIP, NY – Earlier today, David Bodian, a Long Island attorney, was sentenced at the federal courthouse in Central Islip, New York, to 28 months in prison following his March 2016 guilty plea to wire fraud for stealing more than $1.3 million from a trust fund for which he was the trustee. The sentencing proceeding was held before United States District Judge Arthur D. Spatt. As part of the sentence, Bodian was ordered to pay restitution in the amount of $1.3 million to the Lou Bacon Trust.</p>
<p>The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service (USPIS).</p>
<p>According to court filings and facts presented at the guilty plea and sentencing proceedings, in approximately 2000, Bodian was appointed the trustee of the Lou Bacon Trust, a trust fund that benefitted a number of individuals and charities. At the time of his appointment, the trust held over $1 million in total assets. In approximately 2005, Bodian began looting the fund of its assets to pay for his personal expenses, including a car, high-end audio equipment, home renovations, and international vacations. From approximately 2005 to 2015, he stole almost the entirety of the trust’s funds, leaving the trust with only $10,000 in cash. To perpetuate the scheme, Bodian lied to the beneficiaries about the amount of money in the trust bank accounts. For example, when a beneficiary asked for a copy of a trust bank statement, Bodian borrowed $150,000 from a friend to deposit in the trust’s account to inflate the trust’s assets. After providing a bank statement to the beneficiary that reflected the $150,000 Bodian had borrowed, he transferred the money back to his friend.</p>
<p>The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Tyler Smith is in charge of the prosecution.</p>
<p>This prosecution was the result of efforts by President Obama’s <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="Financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="596">Financial</a> Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since the fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, visit <a href="http://www.stopfraud.gov/"><u>http://www.StopFraud.gov</u></a>.</p>
<p><a href="https://www.justice.gov/usao-edny/pr/long-island-attorney-sentenced-28-months-prison-stealing-13-million-trust-fund-clients">Original PressReleases&#8230;</a></p>

Criminal Indictments Announced: Individuals Have Charged For Commit Bank Fraud, Reentry of Removed Alien, And False Statements
<h2>Federal Grand Jury Criminal Indictments Announced</h2>
<p>TULSA, Okla.— The results of the September 2016 Federal Grand Jury were announced today by Danny C. Williams Sr., United States Attorney for the Northern District of Oklahoma.</p>
<p>The following individuals have been charged with violations of United States law in indictments returned by the Grand Jury. The return of an indictment is a method of informing a defendant of alleged federal crimes which must be proven in a court of law beyond a reasonable doubt to overcome a defendant’s presumption of innocence.</p>
<p><strong><u>Brandon Lee Amend and Cory Dean Blanchard.</u></strong> <strong><em>Conspiracy to Commit Bank Fraud, Bank Fraud, Possession of Device Making Equipment, Theft of Receipt of Stolen Mail Matter, and Keys or Locks Stolen or Reproduced. </em></strong>Amend, 30, and Blanchard, 32, both of Wichita, Kansas, are each charged with, six counts of bank fraud, one count each of conspiracy to commit bank fraud, possession of device-making equipment, mail theft, and possessing and counterfeiting mail keys. Amend and Blanchard are accused of possessing equipment to make counterfeit checks, driver’s licenses and United States Postal Service collection box keys. The defendants are accused of stealing checks from collection boxes then making and using false identification documents to fraudulently obtain money from a local bank. The defendants fraudulently obtained over $10,000. If convicted, the statutory maximum penalty is 30 years in prison and a $1,000,000 fine. The United States Postal Inspection Service is the investigating agency.</p>
<p><strong><u>Octavio Gaytan-Veles.</u></strong><strong><em> Reentry of Removed Alien.</em></strong> Gaytan-Veles, 39, is charged with having returned to the United States unlawfully after being deported in June 2013 from Brownsville, Texas. If convicted, the statutory maximum penalty is 20 years in prison and a $250,000 fine. United States Immigration and Customs Enforcement is the investigating agency.</p>
<p><strong><u>Rigoberto Gomez-Mendez.</u></strong><strong><em> Reentry of Removed Alien.</em></strong> Gomez-Mendez, 29, is charged with having returned to the United States unlawfully after being deported in November 2012 from Laredo, Texas. If convicted, the statutory maximum penalty is 20 years in prison and a $250,000 fine. United States Immigration and Customs Enforcement is the investigating agency.</p>
<p><strong><u>Ethan Joseph Hernandez.</u></strong><strong><em> Aiming a Laser Pointer at an Aircraft.</em></strong> Hernandez, 24, of Sapulpa, is charged with aiming the beam of a laser pointer at a Tulsa Police Department helicopter. If convicted, the statutory maximum penalty is five years in prison and a $250,000 fine. The Department of Transportation is the investigating agency.</p>
<p><strong><u>Reuben Joe Mercado.</u></strong><strong><em> False Statements or Representations and Concealing a Person From Arrest. </em></strong>Mercado, 37, of Tulsa, is charged with making false statements to a Deputy United States Marshal regarding the whereabouts of a fugitive and for the offense of harboring and concealing the fugitive from arrest. If convicted, the statutory maximum penalty is five years in prison and a $250,000 fine for both offenses. The United States Marshals Service is the investigating agency.</p>
<p><strong><u>Daniel Vasquez-Garcia.</u></strong><strong><em> Reentry of Removed Alien.</em></strong> Vasquez-Garcia, 50, is charged with having returned to the United States unlawfully after being deported in July 2009 from Laredo, Texas. If convicted, the statutory maximum penalty is 20 years in prison and a $250,000 fine. United States Immigration and Customs Enforcement is the investigating agency.</p>

Tax Fraud: Eyob Tilahun Sentenced For Fraudulent Tax Return
<h2>Owner of Tax King Sentenced to Prison</h2>
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<p>Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced today that Eyob Tilahun, 30, of St. Louis, MO, was sentenced to 38 months in federal prison for defrauding the United States Treasury. Tilahun’s conviction and sentence arise from his operation of a fraudulent tax return preparation business known as Tax King, LLC.</p>
<p>Tilahun owned and operated several Tax King facilities located in St. Louis, MO. Tilahun also operated a Tax King located at 212 Collinsville Avenue in East St. Louis. On May 20, 2016, Tilahun pled guilty in Federal Court in East St. Louis to a charge of conspiring to submit false claims for tax refunds. As part of his guilty plea, Tilahun admitted that Tax King’s return preparers were trained and instructed to increase their customers’ refunds by falsifying certain information on their tax returns. The false information that was placed on the returns included: (1) false Business Income and Schedules Cs which caused the clients to qualify for larger Earned Income Credits (&#8220;EICs&#8221;); (2) false wages, which again caused the clients to qualify for larger EICs; (3) false education expenses which enabled the clients to qualify for American opportunity education credits; and (4) false information regarding fuel taxes which qualified the clients for federal fuel tax credits.</p>
<p>Tilahun admitted that he profited from the scheme by charging Tax King’s clients fees which ranged from approximately $400 to $650. The indictment in the case alleges that the return preparers also profited by requesting cash &#8220;tips&#8221; from the clients of approximately $100 to $1,000.</p>
<p>In addition to the 38-month prison sentence, Tilahun will be ordered to pay restitution to the United States Treasury. The exact amount of restitution will be determined at a later date, but is expected to exceed $2,000,000.</p>
<p>Two employees of Tax King were also sentenced today. Tanesa L. Beverly, 32, of East St. Louis, IL, and Melissa L. Wiley, 35, of Granite City, IL, were both sentenced to two years of probation. Beverly and Wiley both worked as return preparers at the East St. Louis Tax King for a couple of months during 2013. Both had previously pled guilty to participating in the conspiracy and filing false tax returns. In addition to their probation sentences, Beverly was ordered to pay $8,245 in restitution and Wiley was ordered to pay restitution of $13,401.</p>
<p>In addition to Tilahun, Beverly, and Wiley, four other defendants in the case have previously pled guilty. Those defendants are Mason B. Richmond, 31, of St. Louis, MO; Lakesha R. Wilson, 28, of East St. Louis, IL; Edric A. Russell, 35, of East St. Louis, IL, and Pierre J. Carter, 34, of East St. Louis, IL. Wilson, Russell, and Carter all worked as return preparers at the East St. Louis Tax King. Richmond worked as a return preparer at a Tax King on North Grand in St. Louis.</p>
<p>Tilahun, Beverly, and Wiley are scheduled to be sentenced on September 9, 2016. Sentencing for Richmond will be October 7, 2016. Russell and Carter will be sentenced on January 27, 2017. Wilson’s sentencing hearing is scheduled for February 3, 2017.</p>
<p>The investigation is being conducted by agents from both the Fairview Heights, Illinois, and St. Louis, Missouri Offices of the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Scott A. Verseman. The United States Attorney’s Office for the Eastern District of Missouri has also prosecuted several return preparers who worked at Tax King locations in St. Louis, MO.</p>
<p><a href="https://www.justice.gov/usao-sdil/pr/owner-tax-king-sentenced-prison">Original PressReleases&#8230;</a></p>

Healthcare Fraud: Group Individuals Indictment for Health Care Kickbacks, and Health Care Fraud
<h2>Six Individuals Face 47-Count Second Superseding Indictment for Health Care Services Fraud</h2>
<p>U.S. Attorney Kenneth A. Polite announced that a Federal Grand Jury has returned a 46-count superseding indictment against six individuals charging approximately $13,655,094 in Medicare fraud.</p>
<p>Specifically, <strong>HENRY EVANS, </strong>age 71; <strong>MICHAEL JONES</strong>, age 47; <strong>PAULA JONES</strong>, age 45;<strong>SHELTON BARNES</strong>, age 62; <strong>GREGORY MOLDEN</strong>, age 60, all of New Orleans and <strong>JONATHON NORA</strong>, age 29, of River Ridge, were indicted yesterday for conspiracy to commit health care fraud, conspiracy to defraud the United States and to receive and pay health care kickbacks, and health care fraud. <strong>BARNES </strong>was also charged with obstruction of a federal audit.</p>
<p>The Indictment is the third one involving many of the same parties who were originally indicted in March of 2015. Nineteen individuals and/or companies have already pled guilty to charges associated with the original Indictment.</p>
<p>This Second Superseding Indictment is related to the Indictment returned in March 2015 charging Lisa Crinel and others, some of whom have entered guilty pleas. According to the Second Superseding Indictment, the defendants participated in a criminal organization for the purpose of fraudulently billing Medicare for medically unnecessary home health services for patients who were not homebound. <strong>DRS.</strong><strong>BARNES,</strong> <strong>EVANS,</strong> <strong>MOLDEN</strong> and <strong>MICHAEL JONES</strong>, known as “House Doctors,” ordered home health services for Medicare beneficiaries who had no legitimate medical necessity. The House Doctors falsely signed home health orders regardless of the beneficiary’s needs, homebound status, or diagnoses. In return, <strong>DRS. BARNES, EVANS</strong>, and <strong>MOLDEN </strong>received monthly payments fraudulently characterized as medical consultant or director fees for which they provided no services other than fraudulently certifying Medicare beneficiaries for unnecessary home health services. Instead of receiving monthly payments from the home health agency, Abide hired<strong> PAULA JONES, DR. MICHAEL JONES’</strong> wife and, thereafter, inflated salary payments to <strong>PAULA</strong> <strong>JONES</strong> represented<strong> MICHAEL</strong><strong>JONES</strong>’ fees for fraudulently certifying home health for ineligible Medicare beneficiaries.</p>
<p>Marketers contacted <strong>JONATHON NORA</strong> and others to confirm that the person fraudulently referred for home health was a Medicare beneficiary. Once <strong>NORA </strong>determined the referred individual was a Medicare beneficiary, <strong>NORA</strong> scheduled a physician visit, usually with an Abide House Doctor, well knowing that the individual referral to Abide was by a Marketer, instead of the beneficiary’s own health care professional.</p>
<p>Abide generated plans of care reflecting the falsely created assessments. The plans of care were given to<strong>DRS.</strong> <strong>BARNES, EVANS,</strong> <strong>MOLDEN</strong> and <strong>MICHAEL JONES</strong> to falsely certify and recertify medically unnecessary episodes of home health. <strong>PAULA JONES </strong>fraudulently billed Medicare, on behalf of Abide<strong>,</strong>for the medically unnecessary home health services.</p>
<p class="rtejustify">The Superseding Indictment also charges <strong>SHELTON BARNES </strong>with obstruction of a federal audit in connection with his billing to Medicare Part B of services related to the medically unnecessary home health services.</p>
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<p>If convicted, <strong>DR. SHELTON BARNES </strong>faces a possible maximum sentence of 170 years imprisonment;<strong>DR. HENRY EVANS</strong> faces a possible maximum sentence of 95 years imprisonment; <strong>DR. GREGORY MOLDEN </strong>faces a possible maximum sentence of 115 years imprisonment, and <strong>DR. MICHAEL JONES</strong>faces a possible maximum sentence of 125 years imprisonment. If convicted, <strong>JONATHAN NORA </strong>faces a possible maximum sentence of 25 years imprisonment and <strong>PAULA JONES </strong>faces a possible maximum sentence of 15 years imprisonment. For each count for which any defendant is convicted, they are subject to a maximum $250,000 fine.</p>
<p>U.S. Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendants must be proven beyond a reasonable doubt.</p>
<p>U.S. Attorney Polite praised the work of the Special Agents of the Federal Bureau of Investigation in investigating this matter. Assistant U.S. Attorneys Patrice Harris Sullivan, Hayden Brockett, Maria Carboni, and Sharan Lieberman are in charge of the prosecution.</p>
<p><a href="https://www.justice.gov/usao-edla/pr/six-individuals-face-47-count-second-superseding-indictment-health-care-services-fraud">Original PressReleasess&#8230;</a></p>
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Financial Fraud: Scott Raymond Beard Sentenced For Theft of Public Funds and Money Laundering
<h2>Former Deschutes County Sheriff Captain Sentenced to Five Years in Prison for Theft of Public Funds and Money Laundering</h2>
<p>EUGENE, Ore. – On Thursday, September 8, 2016, Scott Raymond Beard, 46, a former Deschutes County Sheriff Captain and resident of Deschutes County, Oregon, was sentenced to five years in prison by U.S. District Judge Michael J. McShane for stealing over $200,000 in public funds he was entrusted to manage. At least sixty-three times over a two-year period, Beard falsified records to steal money designated for use in combating drug crimes.</p>
<p>At the sentencing hearing, Deschutes County Sheriff Shane Nelson attested to the damage Beard’s abuse of trust caused to the community, and to the men and women working in law enforcement. Sheriff Nelson explained that Beard “betrayed the ideals of the law enforcement profession. He was in a position of absolute trust, and he abused this trust for his own gain.”</p>
<p>Judge McShane acknowledged the importance of citizens being able to have complete trust in those called to serve their communities as police officers. When imposing the sentence, he admonished Beard that the community has to know that this conduct will not be tolerated. Judge McShane pointed to Beard’s pervasive violation of the public trust placed in him by Sheriff Nelson, fellow law enforcement officers, state prosecutors, and his own community. Judge McShane further ordered Beard to serve three years of supervised release after he completes his prison term.</p>
<p>During the investigation, Beard told federal agents that he donated $10,000 of the stolen money to a South African orphanage. Orphanage records show that his actual donation was less than $92. In reality, Beard laundered the money through the bank account of his mistress, Krista Jean Mudrick, showering her with cash to support a lifestyle that included vacations and multiple cosmetic surgeries for Mudrick.</p>
<p>The sentencing followed Beard’s May 2016 guilty plea to two counts of theft concerning programs receiving federal funds and two counts of money laundering. An audit ordered by newly appointed Sheriff Nelson uncovered Beard’s crimes. After a federal grand jury returned an indictment against Beard and Mudrick, the Sheriff’s office fired him. Mudrick has also been federally charged with making materially false statements to federal agents investigating Beard’s crimes.</p>
<p>U.S. Attorney Billy J. Williams said “Law enforcement officers who steal public funds harm the entire community. We rely on the honesty and integrity of every law enforcement officer to do the right thing. Beard’s greed undermined the good work done by his fellow officers and this sentence sends a clear signal that crimes committed by law enforcement officers will be prosecuted to the full extent of the law.” Special Agent in Charge Darrell Waldon of IRS Criminal Investigation commented that “Criminals are sentenced to prison every day for actions driven by greed, but the level of greed that Beard sunk to is really beyond belief. This is an individual who, as a member of the law enforcement community, took an oath to uphold the law.”</p>
<p>The FBI and IRS-CI jointly investigated this case and it was prosecuted by Assistant U.S. Attorneys Christopher Cardani and Frank R Papagni, Jr.</p>
<p><a href="https://www.justice.gov/usao-or/pr/former-deschutes-county-sheriff-captain-sentenced-five-years-prison-theft-public-funds">Original PressReleases&#8230;</a></p>

Healthcare Fraud: Kerri L. Kaley Convicted For Medical Device Theft, Money Laundering and Home Mortgage Scam
<h2 class="node-title">Medical Device Saleswoman Convicted on Charges of Conspiring to Transport Stolen Medical Devices in Interstate Commerce, Money Laundering and Other Charges</h2>
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<p>A medical device saleswoman was convicted yesterday on charges of conspiring to transport stolen medical devices in interstate commerce, money laundering and other charges.</p>
<p>Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Robert J. West, Special Agent in Charge, United States Food and Drug Administration (FDA), Office of Criminal Investigations, Miami Field Office, made the announcement.</p>
<p>Kerri L. Kaley, 50, of Cold Spring Harbor, New York, was convicted by a jury in Miami on seven felony counts in a criminal case arising out of a Miami-based FDA investigation. Operation Miami Device has led to convictions in over twenty cases of medical device theft and has resulted in forfeitures, fines, and restitution totaling more than $5 million.</p>
<p>Kaley was adjudicated guilty by the U.S. District Judge Darrin P. Gayles for her role in a conspiracy to transport and sell in interstate commerce various stolen prescription medical devices, the actual transport and sale of stolen medical devices, and money laundering associated with that activity. Kaley is scheduled for sentencing on December 2, 2016 at 9:30 a.m. She faces a term of imprisonment of up to 5 years on the conspiracy charge, a maximum sentence of up to 10 years on each of the 5 substantive counts of transporting stolen property, and up to 20 years on the money laundering conviction. In addition to the period of incarceration, Kaley is also subject to fines on each of the 7 counts of up to $250,000 per count, or twice the intended gain or loss caused by the relevant conduct. In lieu of facing a forfeiture hearing before the same jury, Kaley agreed to forfeit $500,000 to the United States, payable before her sentencing date. Kaley also faces sentencing based on a November 2014 conviction arising in the same matter for obstruction of justice, which carries a potential sentence of 10 years’ imprisonment and a fine of $250,000.</p>
<p>According to court records and testimony presented at trial, from approximately 1995 through February 2005, Kaley participated in a conspiracy with a group of individuals based in Long Island, New York. The entire group, including Kaley, were medical device sales representatives for subsidiaries of Johnson &; Johnson. The Miami-based conspirator solicited sales representatives and other employees of medical device manufacturers, seeking to purchase medical devices for re-sale. According to evidence presented in court, it was part of the conspiracy for Kaley and others working with her, to secure possession of significant quantities of prescription medical devices from hospitals they serviced for their employer, which were then forwarded to a conspirator in Delray Beach, Florida. These devices were often state-of-the-art equipment used for minimally invasive surgery and the suture materials used throughout hospitals. According to three of Kaley’s co-conspirators who testified at trial, the devices were acquired by theft and fraud from their customer medical facilities, which were all New York non-profit hospitals. In the course of the illegal activity, Kaley laundered over $2.2 million in payments through two sham construction corporations and used the funds to pay the co-conspirators, a home <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/mortgage/" title="mortgage" data-wpil-keyword-link="linked" data-wpil-monitor-id="65">mortgage</a>, home-renovation expenses, and child care.</p>
<p>Charges remain pending against Brian K. Kaley, but no trial date has been set.</p>
<p>Mr. Ferrer commended the investigative efforts of FDA- Office of Criminal Investigations. The current case is being prosecuted by Assistant United States Attorneys Thomas Watts-FitzGerald, Brooke Watson, and Alison Lehr. At the November 2014 trial, the United States was represented by Assistant United States Attorneys Thomas Watts-FitzGerald, Jerrob Duffy, and Alison Lehr.</p>
<p>In the lengthy period between the Superseding Indictment and the most recent trial, this matter was taken to the Eleventh Circuit Court of Appeals twice and later to the Supreme Court of the United States over issues relating to the pre-trial restraint of assets that the Grand Jury had included in the forfeiture allegation of the Indictment. The government prevailed in that case by a 6 – 3 margin. The United States was represented before the Eleventh Circuit by Assistant U. S. Attorney Madeleine Shirley of the Appellate Division of the U.S. Attorney’s Office.</p>
<p>Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov</p>
<p><a href="https://www.justice.gov/usao-sdfl/pr/medical-device-saleswoman-convicted-charges-conspiring-transport-stolen-medical-devices">Original PressReleases&#8230;</a></p>
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Environment: James Robert Liang Guilty to Commit Wire Fraud and to Violate the Clean Air Act
<h2>Volkswagen Engineer Pleads Guilty for His Role in Conspiracy to Cheat U.S. Emissions Test</h2>
<p>James Robert Liang, a Volkswagen engineer, pleaded guilty today for his role in a nearly 10-year conspiracy to defraud U.S. regulators and U.S. Volkswagen customers by implementing software specifically designed to cheat U.S. emissions tests in hundreds of thousands of Volkswagen “clean diesel” vehicles, the Justice Department announced today. Liang’s plea agreement provides that he will cooperate with the government in its ongoing investigation.</p>
<p>Liang, 62, of Newbury Park, California, pleaded guilty today to one count of conspiracy to defraud the United States, to commit wire fraud and to violate the Clean Air Act. He was indicted under seal on June 1, 2016, by a federal grand jury, and the indictment was unsealed today. The case has been assigned to U.S. District Judge Sean F. Cox of the Eastern District of Michigan.</p>
<p>According to the plea agreement, from 1983 until May 2008, Liang was an employee of Volkswagen AG (VW), working in its diesel development department in Wolfsburg, Germany. Liang admitted that beginning in about 2006, he and his co-conspirators started to design a new “EA 189” diesel engine for sale in the United States. According to Liang’s admissions, when he and his co-conspirators realized that they could not design a diesel engine that would meet the stricter U.S. emissions standards, they designed and implemented software to recognize whether a vehicle was undergoing standard U.S. emissions testing on a dynamometer or being driven on the road under normal driving conditions (defeat device), in order to cheat the emissions tests. Liang admitted that he used the defeat device software while working on the EA 189 and assisted in making the defeat device software work. In May 2008, Liang moved to the United States to assist in the launch of VW’s new “clean diesel” vehicles in the U.S. market, according to the plea agreement. While working at VW’s testing facility in Oxnard, California, he has held the title of Leader of Diesel Competence.</p>
<p>According to the plea agreement, employees of VW and its U.S. subsidiaries met with the EPA and the California Air Resources Board (CARB) to seek the certifications required to sell each model year of its vehicles to U.S. customers. Liang admitted that during some of these meetings, which he personally attended, his co-conspirators misrepresented that VW diesel vehicles complied with U.S. emissions standards and hid the existence of the defeat device from U.S. regulators.</p>
<p>As part of the certification process for each new model year, including model years 2009 through 2016, the co-conspirators continued to falsely and fraudulently certify to EPA and CARB that VW diesel vehicles met U.S. emissions standards and complied with the Clean Air Act, according to the plea agreement. Liang admitted that during this time, he and his co-conspirators knew that VW marketed its diesel vehicles to the U.S. public as “clean diesel” and environmentally-friendly, and promoted the increased fuel economy. Liang and his co-conspirators knew that these representations were false and that VW’s diesel vehicles were not “clean,” he admitted.</p>
<p>In connection with pleading guilty, Liang admitted that he and his co-conspirators continued to lie to the EPA, CARB and VW customers even after the regulatory agencies started raising questions about the vehicles’ on-road performance following an independent study commissioned by the International Council on Clean Transportation, which showed that the diesel vehicles’ emissions on the road were up to 40 times higher than shown on the dynamometer.</p>
<p>The FBI’s Detroit Office and EPA-CID’s Chicago Area Office are investigating the case. Deputy Chief Benjamin D. Singer and Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section, Trial Attorney Jennifer L. Blackwell of the Environment and Natural Resources Division, and Criminal Division Chief Mark Chutkow and Economic Crimes Unit Chief John K. Neal of the U.S. Attorney’s Office of the Eastern District of Michigan are prosecuting the case.</p>
<p><a href="https://www.justice.gov/usao-edmi/pr/volkswagen-engineer-pleads-guilty-his-role-conspiracy-cheat-us-emissions-test">Original PressReleases&#8230;</a></p>

Financial Fraud: Floyd Jay Mann Charged With 11 Counts of Wire Fraud and Eight Counts of Money Laundering
<h2 class="node-title">Washington Man Arrested, Charged with Defrauding Alaskans Out of Approximately $2.7 Million</h2>
<p class="node-subtitle center"><strong>His Wife was also Arrested, Charged with Social Security Fraud</strong></p>
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<p>Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that a Washington man has been charged in Alaska with 11 counts of wire fraud and eight counts of money laundering. His wife has been charged with one count of social security fraud in Washington. They were both arrested this morning in Washington.</p>
<p>Floyd Jay Mann, Jr., 55, of Puyallup, Washington, is charged in a 19-count indictment returned in Anchorage with a scheme to defraud victims in Alaska. His wife, Cheryl Mann, 51, also of Puyallup, Washington, is charged with one count of defrauding the Social Security Administration in an indictment returned in Seattle, Washington.</p>
<p>According to Assistant U.S. Attorney Aunnie Steward, who presented the case against Floyd Mann to the Alaska grand jury, Floyd Jay Mann, Jr. defrauded Alaskans of approximately $2.7 million by falsely leading the victims to believe that he was the recipient of a multimillion-dollar settlement from a class-action lawsuit with a pharmaceutical company. Mann told victims that if they helped to pay Mann’s medical bills and other lawsuit-related expenses, the victims would be paid back plus a substantial return on their money when Mann’s multimillion-dollar settlement was released by the court. In fact, Mann did not use the victim’s money to pay medical bills and there was no lawsuit settlement, and instead Mann used the money he obtained from the victims to gamble at a casino and win over $1 million over the course of the scheme.</p>
<p>According to Special Assistant U.S. Attorney Benjamin Diggs, who presented the case against Cheryl Mann to the Western District of Washington grand jury, during the course of Floyd Mann’s scheme, he and his wife Cheryl Mann and their son collected approximately $56,000 in need-based Supplemental Security Income benefits. Cheryl Mann was the designated payee for Floyd Mann and their son and responsible for reporting any changes in the household income or assets. During this time, Cheryl Mann won approximately $125,000 at a casino. That income, as well as the funds obtained by her husband, would have disqualified the Manns from the public assistance they received.</p>
<p>For Floyd Mann’s charges, the law provides for a maximum sentence of 20 years’ incarceration and a $500,000 fine or both. For Cheryl Mann’s charge the law provides for a maximum sentence of five years’ incarceration and a $250,000 fine or both. Under federal sentencing statutes, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.</p>
<p>“Fraud comes in all shapes and sizes, but this particular fraud is rather peculiar. The accused not only bilked millions of dollars from Alaskans in a well-concocted scheme, they further squandered the ill-gotten gains on gambling all while collecting Social Security benefits for which they no longer qualified. Unfortunately for the defendants, IRS CI Special Agents are expertly and uniquely skilled to follow the money in these and other types of <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="595">financial</a> crimes,” stated Special Agent in Charge Darrell Waldon of IRC Criminal Investigation.</p>
<p>The IRS Criminal Investigations, FBI, and Social Security Office of Inspector General, conducted the investigation leading to the indictment in the case.</p>
<p>An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilty beyond a reasonable doubt.</p>
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Healthcare Fraud: Miguel Burgos Charged to Commit Health Care Fraud, One Count of Health Care Fraud
<h2>Florida Doctor Indicted For Role In $13.8 Million Medicare Fraud Scheme</h2>
<p>Tampa, FL – The medical director of a clinic in Orlando, Florida, was charged in a superseding indictment filed today for his alleged participation in a $13.8 million <strong>health care fraud scheme</strong> involving claims for expensive prescription drugs and physical therapy.</p>
<p>U.S. Attorney A. Lee Bentley III of the Middle District of Florida, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.</p>
<p>Miguel Burgos, M.D., 60, of Gotha, Florida, was charged with one count of conspiracy to commit health care fraud, one count of health care fraud and one count of conspiracy to make false statements relating to health care matters. He is charged along with Yosbel Marimon, 39, of Winter Park, Florida, who was charged in the original indictment filed in this case on June 15, 2016. Marimon faces one new count of health care fraud in connection with false claims submitted for physical therapy. A trial date on the superseding indictment has not yet been set.</p>
<p>Burgos was the medical director of several Orlando-area clinics, including Legend Medical &; Rehabilitation Inc., Incare Medical &; Rehab Center Inc., Assisting Health Center Inc. and CKD Health Care Inc. (collectively, the clinics). The superseding indictment alleges that from approximately July 2008 through December 2011, Burgos conspired with Marimon, one of the clinics’ owners, to defraud Medicare by causing the submission and concealment of false and fraudulent claims to Medicare. According to the indictment, Burgos allegedly signed fraudulent medical records that authorized the unnecessary treatment of Medicare beneficiaries and did so without examining the Medicare beneficiaries or the documents themselves. These documents were allegedly used to support fraudulent claims to Medicare for expensive prescription drugs and physical therapy that were not provided and were not medically necessary.</p>
<p>The indictment alleges that during the scheme, Burgos and his co-conspirators billed Medicare approximately $13.8 million based on the false and fraudulent claims.</p>
<p>An indictment is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.</p>
<p>HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Middle District of Florida. Fraud Section Trial Attorney Timothy Loper is prosecuting the case.</p>
<p>Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,900 defendants who have collectively billed the Medicare program for more than $10 billion. In addition, the HHS Centers for Medicare &; Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.</p>

Identity Theft & Tax Fraud: Jesse Scott Wilson Guilty to Defraud the Government With Respect to Tax Refund Claims
<h2>Three Prison Inmates Sentenced for Filing False Tax Refund Claims</h2>
<p>Anchorage, Alaska – Acting U.S. Attorney Bryan Schroder announced today that Jesse Scott Wilson, 41, was sentenced by U.S. District Judge Sharon Gleason to a total of 92 months in prison, followed by three years’ supervised release. Wilson had pled guilty to conspiracy to defraud the government with respect to tax refund claims on Feb. 26, 2016. In addition to his prison sentence, Wilson was ordered to pay restitution in the amount of $384,892.</p>
<p>Wilson was convicted of participating in a conspiracy to obtain tax refunds by filing fraudulent income tax returns. Between September 2008 and June 2012, Wilson and his co-conspirators prepared and submitted approximately 428 false tax returns claiming refunds of approximately $681,258.</p>
<p>At the sentencing hearing, U.S. District Judge Sharon Gleason pointed out the need for the sentence to address the severity of the crime and deter others in prison from committing similar crimes. Court documents revealed that Wilson conspired with his co-defendants and fellow prison inmates William Wesley Hines, aka Speedy, 54, Jason Donald Schmidlkofer, 34, and Nick Lewis Thurmond, 30, to obtain the names and social security numbers (SSNs) of individuals, many of whom were also inmates at correctional facilities. Wilson, Hines, Schmidlkofer, and Thurmond were State of Alaska prisoners who were incarcerated together at Red Rock Correctional Center in Eloy, Arizona, at the beginning of the conspiracy. Wilson and his co-conspirators prepared and filed false individual income tax returns using the names and SSNs of approximately 210 individuals. Wilson and his co-conspirators prepared false individual income tax returns claiming false wages and withholding amounts listed on the tax returns for which there were no Forms W-2 issued. Each return claimed that the taxpayer was owed thousands of dollars in refunds to which they were not entitled. The conspirators forged the individuals’ signatures on the tax returns and used their own personal addresses and fake addresses on the tax returns. The conspirators mailed the false income tax returns to the IRS. Wilson and his co-conspirators retained a portion of the money from the refunds, and then wired or mailed the remainder of the refunds to other co-conspirators.</p>
<p>Wilson, Hines, and Schmidlkofer are residents of Alaska. Thurmond is currently a resident of Colorado. Wilson, Hines, Schmidlkofer, and Thurmond were indicted by a federal grand jury in December 2015 for conspiracy to defraud the government with respect to false claims. Their current status is as follows:</p>
<ul>
<li>Hines pled guilty to conspiracy to defraud the government with respect to claims in May 2016 and was sentenced to 51 months in prison on Aug. 2, 2016;</li>
<li>Schmidlkofer pled guilty to conspiracy to defraud the government with respect to claims in March 2016 and was sentenced to 56 months in prison on July 8, 2016; and</li>
<li>Thurmond pled guilty to conspiracy to defraud the government with respect to claims in July 2016 and is scheduled to be sentenced on Oct. 5, 2016.</li>
</ul>
<p>This investigation was an expansion of another prisoner tax refund scheme investigation involving Steven McComb, Michael Sexton, Paulando Williams, and Helen Maloney. Those defendants all pled guilty and were sentenced as follows:</p>
<ul>
<li>McComb pled guilty to conspiracy to defraud the government with respect to claims, mail fraud, and aggravated identity theft in June 2013 and was sentenced to nine years in prison on Aug. 22, 2013;</li>
<li>Sexton pled guilty to conspiracy to defraud the government with respect to claims, mail fraud, and aggravated identity theft in December 2013 and was sentenced to 80 months in prison on Feb. 18, 2014;</li>
<li>Williams pled guilty to conspiracy to defraud the government with respect to claims, mail fraud, and aggravated identity theft in June 2013 and was sentenced to 66 months in prison on Nov. 6, 2013; and</li>
<li>Maloney pled guilty to conspiracy to defraud the government with respect to claims and mail fraud in April 2013 and was sentenced to 28 months in prison on July 2, 2013.</li>
</ul>
<p>“The vast majority of Americans work hard and pay their taxes. A scheme to defraud the IRS like this takes money from all legitimate taxpayers,” stated Acting U.S. Attorney Bryan Schroder. “Plus, this scheme used identity theft as its vehicle. In the modern electronic age, identity theft rightly concerns all citizens. The U.S. Attorney’s Office for the District of Alaska, along with our law enforcement partners, is dedicated to protecting the earnings of hard-working Alaskans from fraud and theft.”</p>
<p>“For IRS Criminal Investigation, identity theft is a top priority which we will diligently pursue no matter where it hides. This investigation shows that this particular crime knows no boundaries as the victims of this fraud scheme were inmates in a correctional facility, a fact that makes this scheme especially troublesome,” stated Special Agent in Charge Darrell Waldon of IRS Criminal Investigation. “We warn all people everywhere to safeguard their private information and beware those would-be identity thieves are constantly lurking and looking for victims.”</p>
<p>Mr. Schroder commends the Internal Revenue Service, Criminal Investigation, State of Alaska Department of Corrections, and the Colorado Department of Corrections Office of the Inspector General for the successful investigation and prosecution of this case.</p>
<p><a href="https://www.justice.gov/usao-ak/pr/three-prison-inmates-sentenced-filing-false-tax-refund-claims">Original PressReleasess&#8230; </a></p>

Healthcare Fraud: Beverly Stubblefield and John Teal Guilty of Conspiracy to Commit Health Care Fraud
<h2 id="node-title">Two Psychologists Plead Guilty in $25 Million Nursing Home-Testing Scheme</h2>
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<p>Two clinical psychologists pleaded guilty today for their involvement in a fraudulent psychological testing scheme that preyed upon Medicare recipients living in nursing homes throughout the Southeastern United States.</p>
<p>Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana, Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) Dallas Regional Office and Special Agent in Charge Jeffrey S. Sallet of the FBI’s New Orleans Field Office made the announcement.</p>
<p>Beverly Stubblefield, Ph.D., 62, of Slidell, Louisiana, and John Teal, Ph.D., 46, of Jackson, Mississippi, each pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Carl Barbier of the Eastern District of Louisiana. They were charged in a superseding indictment on Oct. 22, 2015, along with co-defendants Rodney Hesson, Psy.D., 46, and Gertrude Parker, 62, both of Slidell, who were originally charged in June 2015 in connection with a large-scale Medicare Fraud takedown.</p>
<p>According to admissions made in connection with their plea agreements, Stubblefield and Teal practiced as clinical psychologists at Nursing Home Psychological Services, Inc. (NHPS) and Psychological Care Services, Inc. (PCS). Stubblefield and Teal admitted that NHPS and PCS were owned and operated by Hesson and Parker, who is Hesson’s mother. NHPS and PCS billed Medicare claiming that NHPS and PCS psychologists, including Stubblefield and Teal, administered psychological tests to nursing home residents throughout Mississippi, Louisiana, Florida and Alabama. In addition, Teal and Stubblefield admitted that a large number of these tests were not medically necessary and many testing services were not provided. According to the plea agreements, Teal and Stubblefield repeatedly tested the same nursing home residents even though some were incapacitated and could not meaningfully participate in testing.</p>
<p>From 2010 through 2015, Stubblefield and Teal were responsible for more than $5.6 million in fraudulent claims submitted to Medicare, according to the plea agreements.</p>
<p>Hesson and Parker are scheduled to begin trial on Oct. 11, 2016. According to the superseding indictment, from 2009 through 2015, NHPS and PCS submitted more than $25.2 million in claims to Medicare. An indictment is merely an allegation, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.</p>
<p>The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Louisiana. Trial Attorneys William Kanellis, Katherine Payerle and Katherine Raut of the Criminal Division’s Fraud Section are prosecuting the case.</p>
<p>Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,900 defendants who have collectively billed the Medicare program for more than $10 billion. In addition, HHS’s Centers for Medicare &; Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.</p>
<p>To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to<a href="http://www.stopmedicarefraud.gov/">www.stopmedicarefraud.gov</a>.</p>
<p><a href="https://www.justice.gov/opa/pr/two-psychologists-plead-guilty-25-million-nursing-home-testing-scheme">Original PressReleases &#8230;</a></p>
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Financial Fraud: EMANUEL COHEN Sentenced for Orchestrating a Fraudulent Scheme In Loans
<h2>Owner And Chief Executive Officer Of Beauty Products Company Sentenced In Manhattan Federal Court For Multimillion-Dollar Accounting Fraud Scheme</h2>
<p>Preet Bharara, the United States Attorney for the Southern District of New York, announced that EMANUEL COHEN, the former chief executive officer of a Florida-based wholesaler and distributor of beauty products (the “Company”), was sentenced today to 27 months in prison for orchestrating a fraudulent scheme to obtain millions of dollars in loans by making false statements and providing fraudulent documents to two commercial banks based in New York (the “Banks”). COHEN pled guilty on June 23, 2015, before U.S. Magistrate Judge Sarah Netburn. Today’s sentence was imposed by U.S. District Judge Lewis A. Kaplan.</p>
<p>Manhattan U.S. Attorney Preet Bharara said: “Emanuel Cohen and his co-conspirators blatantly lied about their company’s <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="594">financial</a> condition to obtain millions of dollars in loans, which the company later defaulted on. I want to thank the FBI for their excellent investigative work on this case.”</p>
<p>According to the allegations contained in the information to which COHEN pled guilty, other documents filed in Manhattan federal court, and statements made in court proceedings:</p>
<p>From 2007 through March 2014, COHEN and others engaged in a scheme to fraudulently induce the Banks to lend millions of dollars to the Company. Among other things, COHEN knowingly made false representations to the Banks, concealed material facts from the Banks, and submitted false and fraudulent documents to the Banks, including fabricated borrowing base certificates. Specifically, COHEN falsely inflated the Company’s sales and accounts receivable on borrowing base certificates that were provided to the Banks pursuant to <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/loans/" title="loan" data-wpil-keyword-link="linked" data-wpil-monitor-id="220">loan</a> agreements between the Banks and the Company. COHEN used those falsely inflated sales and accounts receivable to mislead the Banks about the Company’s true financial performance so that the Company could secure and draw down millions of dollars in loans from the Banks that the Company would not otherwise have been entitled to receive.</p>
<p>In March 2014, the Company defaulted on the loans at issue. At that time, the outstanding balance on the loans was more than $4.8 million.</p>
<p>In addition to his prison term, COHEN, 73, of Boca Raton, Florida, was sentenced to three years of supervised release, and ordered to pay forfeiture and restitution, both in the amount of $4,888,460.35.</p>
<p>Three other defendants in this matter, Jay Sosonko, the chief financial officer of the Company, Thomas Thompson, the sales manager of the Company, and Marc Wieselthier, the Company’s outside accountant, pled guilty for their roles in the fraudulent scheme. Sosonko, Thompson, and Wieselthier were sentenced to 16 months, 21 days, and 27 months in prison, respectively.</p>
<p>Mr. Bharara praised the investigative work of the FBI.</p>
<p>The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Edward A. Imperatore is in charge of the prosecution.</p>

Financial Fraud: David Cary Ford Sentenced For Money Laundering Scheme And Defrauding Estates
<h2>Louisville Attorney Sentenced To 48 Months In Federal Prison For Money Laundering Scheme And Defrauding Estates Of More Than $1.6 Million</h2>
<p><em>Ordered to pay $1,602,327.14 to multiple victims including $268,459.06 to St. Mary’s Church and $245,993.67 to WHAS Crusade for Children</em></p>
<p>LOUISVILLE, Ky. – United States Attorney John E. Kuhn, Jr. announced today that David Cary Ford, 54, of Louisville, Kentucky, was sentenced to 48 months in federal prison following his conviction on criminal counts of wire fraud and money laundering, stemming from Ford’s actions while he was a practicing attorney and the executor of seven estates in Louisville.</p>
<p>“Attorneys are professionally and ethically bound to serve their clients’ best interests,” stated U.S. Attorney John Kuhn. “We simply cannot tolerate attorneys or any other fiduciaries using their positions of trust to steal from those they are obligated to protect. This prosecution serves the principle of justice and vindicates the breach of a trust that is an absolutely essential component of a multitude of professional relationships.”</p>
<p>Ford previously pled guilty to charges alleging that from November 6, 2008, through February 11, 2015, Ford, while serving as executor of the estates of Saundra A. Benzinger, Kenneth L. Keith, William T. Lawson, Mary Helen Pfeffer, Elinor E. Starr, Mary Augustine Starr, and Richard Steinmetz, defrauded those estates of approximately $1,666,671.18, and used those estates’ funds for personal expenses and enjoyment, including significant gambling activity.</p>
<p>Ford also pled guilty to laundering proceeds of his fraud by using funds belonging to one estate to conceal the depletion of funds from another estate. In pleading guilty, Ford admitted using his escrow account for this purpose with the intent to promote the carrying on of his fraud and to conceal or disguise the nature of the proceeds of his fraud.</p>
<p>As part of his sentence, Ford was ordered to pay over $1.6 million in restitution to 21 different victims who would have received that amount, according to bequests in the wills written by the individuals whose estates were defrauded, if not for Ford’s fraud. Those victims and the restitution they are owed include $245,993.67 that would have gone to the WHAS Crusade For Children and $5,598.59 for the Little Sisters of the Poor.</p>
<p>The restitution order also includes several Catholic religious organizations. Local victims included St. Mary’s Church ($268,459.06), St. Francis of Assisi Church ($44,743.18), Holy Family Catholic Church ($2,799.30), Our Mother of Sorrows Catholic Church ($2,799.30) and the Archdiocese of Louisville ($89,486.35).</p>
<p>Other victims included the Passionist Community ($245,993.67), the Passionist Nuns ($245,993.67), the National Shrine of St. Elizabeth Ann Seton ($134,229.53), the Franciscan Sisters of Allegany, Inc. ($134,229.53), the Catholic Foreign Mission Society of America, Inc. ($44,743.18), the Sisters of Charity of St. Joseph’s ($44,743.18), the Nazareth Literary and Benevolent Institution, Inc. ($44,743.18).</p>
<p>In addition, restitution was ordered for seven individuals, named only by their initials in court documents, who would have received bequests from the wills at issue if not for Ford&#8217;s fraud.</p>
<p>The case was prosecuted by Assistant United States Attorney Jason Snyder, and it results from an investigation conducted by the Internal Revenue Service – Criminal Investigation Division and the Federal Bureau of Investigation.</p>
<p><a href="https://www.justice.gov/usao-wdky/pr/louisville-attorney-sentenced-48-months-federal-prison-money-laundering-scheme-and">Original PressReleases&#8230;</a></p>

Financial Fraud: WILLIAM J. WELLS Sentenced For Securities – Wire Fraud and Ponzi-Like Scheme
<h2>Man Sentenced In Manhattan Federal Court To 46 Months In Prison In Connection With $1.5 Million Ponzi Scheme</h2>
<p>Preet Bharara, the United States Attorney for the Southern District of New York announced that WILLIAM J. WELLS was sentenced today in Manhattan federal court to 46 months in prison for <strong>securities and wire fraud</strong> charges stemming from his <strong>scheme to defraud</strong> more than 30 investors, including friends, colleagues, and family, of more than $1.5 million through a <strong>Ponzi-like scheme</strong>, over the course of nearly six years until his arrest in October 2015. WELLS was arrested on October 1, 2015, and pled guilty on March 18, 2016, before United States Magistrate Judge Henry B. Pitman. Today’s sentencing was presided over by United States District Judge Kimba M. Wood.</p>
<p>U.S. Attorney Preet Bharara said: “William Wells repeatedly lied to his investors, falsely claiming positive returns when his trading was, in fact, calamitous. Buttressing his lies with fake account statements, he used investor money to pay personal expenses and to pay back other investors. For depriving his clients of their money – and sometimes their life savings – Wells has been sentenced to a substantial term in prison.”</p>
<p>Among other false and misleading statements, WELLS lied to prospective and existing investors by representing, including in fictitious account statements prepared by WELLS, that he had achieved consistently positive trading returns. In fact, WELLS’s trading was remarkably unsuccessful and he realized trading losses every year from 2009 until his arrest in October 2015. Of the money WELLS did not lose in securities trading, WELLS routinely converted investor funds to his own use to pay personal expenses and used new investor funds to pay back other investors in a Ponzi-like fashion.</p>
<p>Many of WELLS’s victims, several of whom submitted letters to the Court or spoke today at WELLS’s sentencing, lost their life savings to <em>WELLS’s scheme</em>, <strong>including money saved for retirement, medical bills, tuition, or wedding costs, or to purchase a family home</strong>.</p>
<p>According to the Complaint, the Indictment, and statements made in open court, including at the sentencing proceeding today:</p>
<p>From September 2009 through the present, WELLS, through his investment firm Promitor Capital LLC (“Promitor Capital”), engaged in a <em>fraudulent scheme</em> to obtain investments by falsely representing that he had achieved consistently positive trading returns in the U.S. equity markets, including through the successful use of options to hedge risk. In truth, WELLS’s trading was remarkably unsuccessful. Between 2009 and the present, WELLS realized trading losses every year and, in total, trading losses in excess of $500,000. In fact, as of September 2015, Promitor Capital had less than $1,000 under management.</p>
<p>In connection with the scheme, WELLS made a series of false and misleading representations to investors, including: (a) that WELLS’s trading was generating consistently positive returns when, in fact, his trading was consistently unsuccessful; (b) that investors were invested in certain stocks at certain times when, in fact, none of the accounts held by Promitor or WELLS held those stocks; and (c) that WELLS had created so-called sub-accounts for clients, for which WELLS purported to execute individualized trading strategies, when, in fact, no such sub-accounts were ever funded. In addition to false and misleading representations made orally and in writing, WELLS also generated wholly fictitious account statements that he provided to his clients.</p>
<p>As a result of these misrepresentations, WELLS obtained more than $1.5 million in investments from more than 30 investors, many of whom were friends, colleagues, or family members. Of the money he did not lose in securities trading, WELLS routinely converted investor funds to his own use in the form of cash withdrawals and to pay personal expenses, including more than $500,000 for, among other things, credit card bills, payments for WELLS’s automobile, and for private school tuition. In addition, to hide his trading losses and continue to fund his personal lifestyle, WELLS used new investor funds to pay back other investors in a <strong>Ponzi-like fashion</strong>. In total, WELLS distributed less than approximately $500,000 back to investors.</p>
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<p>In addition to the 46-month prison sentence, WELLS, 43, formerly of Manhattan and New Jersey, now living in Valley Cottage, New York, was sentenced to three years of supervised release. The Court further ordered WELLS to forfeit the proceeds of the scheme and to pay restitution in an amount to be determined.</p>
<p>Mr. Bharara praised the work of the Federal Bureau of Investigation and thanked the U.S. Securities and Exchange Commission for their assistance with the investigation.</p>
<p>The charges were brought in connection with the President’s <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="Financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="593">Financial</a> Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute <strong>financial crimes</strong>. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to <em>combat fraud</em>. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of <em>financial crimes</em>; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since the fiscal year 2009, the Justice Department has filed over 18,000 <strong>financial fraud</strong> cases against more than 25,000 defendants. For more information on the task force, please visit <a href="http://www.stopfraud.gov/"><u>www.StopFraud.gov</u></a>.</p>
<p>This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Andrea M. Griswold is in charge of the prosecution.</p>
<p><a href="https://www.justice.gov/usao-sdny/pr/man-sentenced-manhattan-federal-court-46-months-prison-connection-15-million-ponzi">Original PressReleases &#8230;</a></p>

Financial Fraud: Cristopher Santiago Guilty to Commit Mail Fraud and Scheme to Defraud Insurance Companies
<h2>Stockton Man Pleads Guilty to Staging Car Accidents in a Scheme to Defraud Insurance Companies</h2>
<p>FRESNO, Calif. — Cristopher Santiago Sanchez-Becerra, 32, of Stockton, pleaded guilty today to conspiracy to commit <strong>mail fraud</strong> and admitted that he staged car accidents in a scheme to <strong>defraud insurance</strong> companies, Acting U.S. Attorney Phillip A. Talbert announced.</p>
<p>According to court documents, from at least October 2011 until August 2014, Sanchez-Becerra conspired with at least six other individuals to stage dozens of car accidents and submit false claims seeking compensation for the damage caused by the staged accidents. Commonly, the defendants would also offer to repair the recruited individual’s vehicle at automobile repair shops that Sanchez-Becerra or a co-defendant owned, usually with less-than-complete repair work, for a fee less than the payment from an insurance company. In all, Sanchez-Becerra caused at least $210,000 in <em>false insurance claims</em> to be paid as a result of the <em>conspiracy to defraud</em>.</p>
<p>In each staged accident, Sanchez-Becerra and other defendants utilized two or three vehicles and caused about $5,000 to $10,000 in damage to each vehicle. After each staged collision, the defendants submitted a similar cover story to an insurer that concealed the true cause of the accident. The cover story would commonly use aliases, <em>false identities</em>, and <em>false addresses</em> when describing the defendants. The defendants also commonly used different vehicles in the staged collisions. They were able to do this by obtaining many different vehicles and using <strong>false identities</strong> to both register the vehicles with the Department of Motor Vehicles and obtain insurance policies for the vehicles. The defendants operated in this manner to avoid scrutiny by an insurer that reviewed the false claims regarding a staged accident.</p>
<p>The indictment further alleges that Sanchez-Becerra and other defendants were able to repeat the scheme in dozens of crashes by recruiting other individuals to participate in the staged collisions. These individuals would allow their vehicles to be damaged and submit their own claim for damages. In many instances, false claims were submitted to the recruited individual’s insurance company.</p>
<p>“<strong>Fraud schemes</strong> like the one uncovered in this case are growing at an alarming rate, and unfortunately, it’s consumers who ultimately pay the price,” said Ryan Spradlin, special agent in charge for HSI San Francisco. “As this probe makes clear, HSI is committed to working with its law enforcement partners to target those who seek to game the system for their own enrichment and ensure they’re held accountable for their crimes.”</p>
<p>“California is ground zero for auto <strong>insurance fraud</strong>,” said Insurance Commissioner Dave Jones. “Sanchez-Becerra&#8217;s <em>million-dollar conspiracy</em> to rip-off insurers victimizes California consumers who end up paying for <em>auto fraud</em> losses through higher insurance premiums.”</p>
<p>This case is the product of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the California Department of Insurance, Fraud Division. Assistant United States Attorneys Patrick R. Delahunty and Henry Z. Carbajal III are prosecuting the case.</p>
<p>Sanchez-Becerra is scheduled to be sentenced by U.S. District Judge Dale A. Drozd on November 28, 2016. Sanchez-Becerra faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.</p>
<p>Charges are pending against co-defendants Juan Ortiz Rivas, 39, of Ceres; Oscar Diaz Landa, 46, of San Jose; Victor Hugo Soriano-Villafan, 26, of Modesto; Liobigildo Vargas, 46, of Turlock; Juan Marquez Cadenas, 30, of Patterson; and Alfonso Apu, 47, of Modesto. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.</p>

Financial Fraud: Manoel Antonio Errico Extradited For Defrauding Investors
<h2 class="node-title">International Fugitive Extradited To United States To Face Charges Regarding Alleged Cedar Funding Investment Fraud Scheme</h2>
<p class="node-subtitle center"><strong>Former Monterey-area man accused in multi-million-dollar fraud scheme apprehended in Argentina after nearly seven years</strong></p>
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<p>SAN JOSE &#8211; A former Monterey-area man, Manoel Antonio Errico, was extradited to the United States from Argentina on August 23, 2016, to face fraud charges brought against him in September 2009, announced United States Attorney Brian J. Stretch, Monterey County District Attorney Dean D. Flippo, United States Postal Inspection Service Inspector in Charge Rafael Nuñez, and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.</p>
<p>In a federal indictment returned on September 8, 2009, Errico, 62, is accused of defrauding investors in Cedar Funding, a Monterey-based “hard money” lender. Errico allegedly induced victims to invest in loans purportedly secured by deeds of trust and in a fund that invested in those same loans. According to the thirty-one count indictment, Cedar Funding had more than 1,000 investors while in existence.</p>
<p>The indictment describes various ways in which Errico allegedly defrauded investors by inducing them to purchase fractional interests in loans secured by deeds of trusts, and shares of Cedar Funding <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/mortgage/" title="Mortgage" data-wpil-keyword-link="linked" data-wpil-monitor-id="64">Mortgage</a> Fund, LLC. According to the indictment, Errico engaged in a scheme, plan and artifice to defraud his targets, failed to disclose material facts, and made materially false statements. Specifically, the indictment alleges that, among other things, by using documents provided to investors, advertisements, interest payments and verbal communications, Errico participated in creating the false and misleading appearance that the investors’ funds were invested in sound, secured real estate loans, which offered high returns and safety of principal. In truth, by in or about 2004 and increasingly thereafter, most of the loans were not performing, and the investors’ funds were not secure. Moreover, as borrowers increasingly failed to pay off loans, Errico, without the investors’ prior knowledge or consent, allegedly participated in extending the <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/loans/" title="loan" data-wpil-keyword-link="linked" data-wpil-monitor-id="219">loan</a> maturity dates and advanced more investor funds, which caused the loan balances to balloon beyond the initial loan amounts, diluted the investors’ fractional interests in the loans and increased the likelihood that they would lose some or all of their principal.</p>
<p>The indictment also alleges that, unknown to investors, the source of a substantial part of the interest that Errico caused Cedar Funding to pay to existing investors came from new investors’ funds rather than from performing borrowers.</p>
<p>Errico was arrested in April 2016 when he traveled from his home country of Brazil to Argentina. He was arrested by Argentine authorities based on an Interpol “Red Notice” that had been submitted by the United States. The United States thereafter made a formal extradition request to Argentina, and on August 1, 2016, the Argentine authorities ordered Errico extradited to the United States.</p>
<p>After being extradited, Errico made his initial appearance in federal court in San Jose on September 1, 2016, before U.S. Magistrate Judge Howard R. Lloyd. On that date, Judge Lloyd conducted a bail hearing and ordered that Errico be detained pending trial. The defendant’s next scheduled appearance is September 19, 2016, before U.S. District Judge Edward J. Davila.</p>
<p>Errico is named in each of the thirty-one counts alleged in the indictment. The charges and maximum statutory penalties for each count in the indictment are as follows:</p>
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<li>Count 1, conspiracy, in violation of 18 U.S.C. § 1349: twenty years’ imprisonment, a fine of $250,000 or twice the amount of gain or loss, whichever is greater, three years supervised release.</li>
<li>Counts 2 through 12, mail fraud, in violation of 18 U.S.C. § 1341: twenty years’ imprisonment, a fine of $250,000 or twice the amount of gain or loss, whichever is greater, three years supervised release.</li>
<li>Counts 13 through 20, wire fraud, in violation of 18 U.S.C. § 1343: twenty years’ imprisonment, a fine of $250,000 or twice the amount of gain or loss, whichever is greater, three years supervised release.</li>
<li>Counts 21 through 31, securities fraud and aiding and abetting, in violation of 15 U.S.C. §§ 78j(b) and 78ff; 17 C.F.R. §§ 240.10b-5 and 240.10b5-2; and 18 U.S.C. § 2: twenty years’ imprisonment, a fine of $5,000,000 or twice the amount of gain or loss, whichever is greater, three years supervised release.</li>
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<p>The court may also order that the defendant pay restitution, if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.</p>
<p>Please note, an indictment contains only allegations against an individual and, as with all defendants, Mr. Errico must be presumed innocent unless and until proven guilty.</p>
<p>Assistant U.S. Attorney Kyle F. Waldinger is prosecuting the case with the assistance of paralegal Beth Margen and legal assistant Stephanie Mitchell. The prosecution is the result of a sixteen-month joint investigation by the United States Postal Inspection Service, the Federal Bureau of Investigation, and the Monterey County District Attorney’s Office. The U.S. Attorney’s Office recognizes the substantial assistance provided by the Monterey County District Attorney’s Office in this case.</p>
<p><a href="https://www.justice.gov/usao-ndca/pr/international-fugitive-extradited-united-states-face-charges-regarding-alleged-cedar">Original PressReleases &#8230;</a></p>
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Cyber Criminals: Steven Ray Convicted of Mail Fraud and Forging Treasury Checks
<h2>Former Brockport Fireman Sentenced For Mail Fraud, Forging Treasury Checks And Obstruction Of Justice</h2>
<p>ROCHESTER, N.Y. &#8211; U.S. Attorney William J. Hochul, Jr. announced today that Steven Ray, 51 of Brockport, NY, who was convicted of mail fraud, forging treasury checks, and obstructing an official proceeding, was sentenced to 84 months in prison by U.S. District Court Judge David G. Larimer. The defendant was also ordered to pay $309,511 in restitution to the United States.</p>
<p>Assistant U.S. Attorney Craig R. Gestring, who is handling the case, stated that federal law enforcement agents first encountered Ray related to his role in a mail fraud scheme involving stolen United States Treasury checks. In that case, Ray cashed more than 120 forged checks worth more than $400,000 over an 18-month period of time. The checks were stolen from residents in the New York City Area as well as from people in other parts of the United States. The stolen checks were mailed to Ray via the United States Postal Service at his Brockport home.</p>
<p>During that investigation, federal agents identified at least 13 area bank accounts controlled by the defendant under various names, including his own as well as a company he owned named Steray of Rochester. Ray took the stolen checks he received by mail and deposited them across multiple accounts. Many of the checks belonged to people who received Social Security payments, tax refunds, and other money drawn from the United States Treasury to help the intended recipients. As a result of the defendant’s scheme to defraud, Ray obtained more than $400,000, however, the United States was able to recover almost $100,000 from the banks during the investigation.</p>
<p>While out of custody awaiting sentencing on that case, the defendant filed a sentencing statement with the Court in May 2015. Among the items submitted to the Court in support of a downward departure sentence were several claims about Ray’s alleged heroic service as a Brockport Fireman. Specifically, the defendant claimed that he dove into a Brockport swimming pool and pulled a three-year-old unconscious child from the water and then performed CPR until help arrived. Ray also claimed that he was the first on the scene of an incident at SUNY Brockport in which a student fell down a stairwell. In that incident, the defendant claimed to have performed an emergency tracheotomy on the victim using only his penknife. However, the facts showed that his statements were all lies, and that Ray actually did none of these things.</p>
<p>In that same request for a downward departure sentence, the defendant also submitted a letter from a local resident attesting to Ray’s character and truthfulness. However, it turned out the letter was actually a forgery. Federal agents met with the witness who confirmed that he never wrote a letter in support of Ray, did not say the things in the letter, and pointed out that many of the things in the letter, including the spelling of the witness’ own name was wrong. Based on this, the Government filed a notice with the Court pointing out that the defendant submitted false material to the Court for sentencing. Ray received a copy of that statement the day it was filed.</p>
<p>Within hours of receiving that statement, the defendant went to the home of that witness, who is wheelchair bound, and coerced and intimidated him into submitting a false affidavit saying that he had actually written the letter to the Court. Ray did this late at night while the witness was already in bed. The defendant then had the false affidavit notarized and submitted to the Court.</p>
<p>Ray was an Officer with the Brockport Fire Department for the entire time he was engaged in the fraudulent scheme to defraud the United States. He was fired in March of 2015 following his felony plea to mail fraud but retained his Fire Department Badge and ID, which he continued to use after his termination.</p>
<p>The sentencing is the culmination of an investigation on the part of Inspectors from the United States Postal Inspection Service, under the direction of Shelly Binkowski, Inspector In Charge of the Boston Division, and Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the Direction of Special Agent in Charge of the New York Field Office, Shantelle P. Kitchen.</p>
<p><a href="https://www.justice.gov/usao-wdny/pr/former-brockport-fireman-sentenced-mail-fraud-forging-treasury-checks-and-obstruction">Original PressReleases &#8230;</a></p>