<h2>California Registered Broker Pleads Guilty To Participating In A $20 Million Market Manipulation Scheme</h2>
<h3>Defendant Helped Manipulate the Stock Price of a Company That Purported to Offer Users Access to a Cloud-Based Mobile Platform</h3>
<p>Earlier today, Darren Goodrich, a registered broker at a brokerage firm in El Segundo, California, pleaded guilty to conspiracy to commit <strong>securities fraud for manipulating the stock</strong> of Cubed, Inc. (Cubed), which traded under the ticker symbol CRPT. The guilty plea was entered before United States Magistrate Judge Vera M. Scanlon at the federal courthouse in Brooklyn, New York. When sentenced, Goodrich faces up to five years in prison, as well as restitution,<em> criminal forfeiture</em>, and a fine.</p>
<p>The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.</p>
<p>According to court filings and facts presented at the plea hearing, between March 2014 and July 2014, Goodrich and his co-conspirators engaged in a <strong>scheme to defraud investors</strong> and potential investors in Cubed by artificially controlling the price and volume of traded shares in the company through fraudulent concealment of the defendants’ and their co-conspirators’ ownership interests and engineering price movements and trading volume in the stock. In March 2014, Goodrich’s co-conspirators took Cubed public through an asset purchase agreement. On April 22, 2014, Cubed’s stock began trading in earnest. Between April 22, 2014 and April 30, 2014, Goodrich and his co-conspirators concocted trading volume in this stock by purchasing more than 50% of the total number of Cubed shares purchased during this period.</p>
<p>Between May 2, 2014 and June 29, 2014, law enforcement authorities conducted a judicially-authorized wiretap of one of Goodrich’s co-conspirator’s cellular telephone. The wiretap revealed that Goodrich and his co-conspirators fraudulently manipulated Cubed’s stock by artificially controlling the price and volume of that stock through orchestrated trading. Rather than generating significant market interest and causing a quick pump and dump that would elicit regulators’ scrutiny, the conspirators gradually increased the price of Cubed’s stock to give it the appearance of a legitimate company with genuine and steady market demand for the security. For example, on May 5, 2014, while Cubed was in a period of gradual increase from $5.20 on April 22, 2014 to $5.42 on May 22, 2014, a co-conspirator called Goodrich, and stated, “Can you buy a 100 and see if [the other market maker] moves?” Goodrich complied and then responded, “Yeah, they’re going.”</p>
<p>Goodrich and his co-conspirators used an attorney escrow account to successfully control the price and volume of Cubed’s stock. On June 23, 2014, Cubed reached its highest closing price of $6.75 per share, resulting in a market capitalization of approximately $200 million. Previously, Cubed filed with the SEC a Form 10-Q and reported less than $1,500 in cash, zero revenue, negative stockholders’ equity, a net loss of $15,000, and accrued professional fees of $131,824.</p>
<p>[separator type=&#8221;thin&#8221;]</p>
<p>The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Shannon C. Jones, Christopher L. Nasson, and Patrick Hein are in charge of the prosecution, with assistance provided by Assistant United States Attorney Claire S. Kedeshian of the Office’s Civil Division, which is responsible for the forfeiture of assets.</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="563">Financial</a> Fraud Enforcement Task Force. The task force was established 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 is 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 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, please visit <a href="https://www.stopfraud.gov/iso/opa/topic/california-registered-broker-pleads-guilty-participating-20-million-market-manipulation.html">ww.StopFraud.gov</a>.</p>
<p><strong><u>The Defendant</u></strong><strong>:</strong></p>
<p>DARREN GOODRICH<br />
Age: 37<br />
Residence: Manhattan Beach, California</p>
<p>E.D.N.Y. Docket No. 14-CR-399 (S-1) (ENV)</p>
<p><a href="https://www.justice.gov/usao-edny/pr/california-registered-broker-pleads-guilty-participating-20-million-market-manipulation">Original Press Releases &#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.
Two Man Were Indicted on Bank Fraud Charges Relating to Excel Bank
<h2>Banker Shaun Hayes and Real Estate Developer Michael Litz Indicted on Bank Fraud Charges</h2>
<p>St. Louis, MO – <strong>Shaun Hayes </strong>and <strong>Michael Litz </strong>were indicted on <strong>bank fraud charges</strong> relating to Excel Bank, which was closed by regulators in 2012.</p>
<p>The indictment was returned Wednesday by a federal grand jury in St. Louis. Hayes, from Frontenac, was arrested late Thursday. Litz, from Ladue, is expected to turn himself in early next week.</p>
<p>Hayes had ownership in and other associations with a number of banks in the St. Louis area. Litz was an owner of major real estate businesses in the area, Eighteen Investments and Bellington Realty. According to the indictment, Eighteen Investments was facing serious <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="562">financial</a> difficulties in 2009. At that time Hayes was the majority shareholder of the holding company through which Excel Bank operated. Through his efforts, Excel Bank opened up a <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/loans/" title="loan" data-wpil-keyword-link="linked" data-wpil-monitor-id="207">loan</a> production office in Clayton which Hayes controlled. (Excel Bank had its main office in Sedalia, Missouri, and principally served the western Missouri area.) Hayes and Litz were also co-owners of McKnight Man I LLC, through which they were attempting to develop property at the intersection of Manchester and McKnight Roads in St. Louis County.</p>
<p>Both Eighteen Investments and the McKnight Man entity were delinquent on loans at Centrue Bank, which, in June 2009, sued Eighteen Investments and Litz. Centrue Bank also threatened to sue Hayes and Litz as guarantors on a delinquent McKnight Man loan. These loans totaled over $4 million. The indictment charges a scheme in which Hayes used his status as an insider at Excel Bank to cause Excel Bank to buy the pool of delinquent Eighteen Investments loans at a discount, but hid that purchase from the bank’s board of directors. According to the indictment, Hayes and Litz then caused Excel Bank to issue a loan of approximately $3.3 million to a straw party only identified as LS. According to the indictment, some $2.4 million of the loan proceeds were used to pay Centrue Bank for the pool of Eighteen Investments loans purchased by Excel Bank, and $906,000 of the loan proceeds were used to pay off the McKnight Man loan at Centrue Bank, thereby relieving Hayes and Litz of that liability. According to the indictment, the purpose of the loan to LS was to benefit Eighteen Investments, Hayes and Litz, but the loan was set up in the name of a straw party to conceal that from bank officials, as well as federal and state bank regulators.</p>
<p>The indictment charges that federal bank regulators later adversely classified the loans to LS and other straw parties as substandard. The indictment refers to these as &#8220;friends of Shaun&#8221; loans, which were pushed through the bank due to Hayes’ influence and without adequate underwriting safeguards for the bank. These loans were, in effect, additional loans to Eighteen Investments which was already delinquent on loan payments and real estate taxes on many properties securing the loans. According to the indictment, these loans far exceeded the lending limit allowable by regulators for loans by Excel Bank to Eighteen Investments and the use of straw parties was designed to conceal that fact.</p>
<p>According to the indictment the use of $906,000 of the LS loan proceeds to pay the McKnight Man loan at Centrue Bank constituted a misapplication of Excel Bank funds and unlawful self-dealing by Hayes, an insider who exercised substantial control over the loan transactions at Excel Bank’s loan production office in Clayton. The Excel Bank records relating to the payment on behalf of McKnight Man made no reference to McKnight Man or any liability of McKnight Man to Excel Bank. As a result, there was no loan to McKnight Man shown on the Excel Bank books and, accordingly, Hayes and Litz made no payments to Excel Bank for McKnight Man.</p>
<p>&#8220;The abuse of public funds by trusted banking officials is a serious crime which the FBI will diligently investigate with our law enforcement partners to bring justice for American taxpayers,&#8221; said Steve D’Antuono, Acting Special Agent in Charge of the FBI St. Louis Division.</p>
<p>“Insider deals regarding pools of <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/mortgage/" title="mortgage" data-wpil-keyword-link="linked" data-wpil-monitor-id="48">mortgage</a> loans place risk on the housing/mortgage industry and the economy. This indictment is proof that matters involving insider deals and fraud concerning mortgage loans are being dealt with seriously,” stated Barry McLaughlin, Special Agent in Charge, Office of Inspector General, Federal Housing Finance Agency Mid-Western Region.</p>
<p>“Excel Bank lost millions of dollars from Hayes’ alleged crimes, did not repay the taxpayers’ $4 million TARP investment in the bank and did not make 11 dividend payments to Treasury, which lost nearly $5 million when the bank failed,&#8221; said Special Inspector General Christy Goldsmith Romero of the Troubled Asset Relief Program (SIGTARP). &#8220;SIGTARP stands united with our law enforcement partners to bring justice to bank officials and their associates who commit bank fraud.&#8221;</p>
<p>Hayes and Litz were indicted on one count of bank fraud and one count of misapplication of Excel Bank funds. Hayes was also indicted on the charge of causing false entries to be made in the Excel Bank records relating to the LS loan. Each count carries a maximum penalty of up to 30 years in prison and fines up to $1 million. In determining an actual sentence a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.</p>
<p>This case is being investigated by Special Agents from the Federal Bureau of Investigation, the Federal Finance Agency Office of Inspector General, the Federal Deposit Insurance Corporation Office of Inspector General and the Office of the Special Inspector General for the Troubled Asset Relief Program. Assistant United States Attorneys James E. Crowe, Jr., Reginald L. Harris and Gilbert C. Sison are handling the case for the U.S. Attorney’s Office.</p>
<p>As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.</p>
<p><a href="https://www.justice.gov/usao-edmo/pr/banker-shaun-hayes-and-real-estate-developer-michael-litz-indicted-bank-fraud-charges">Original PressReleases &#8230;</a></p>

Selim Zherka Sentenced for Making False Statements and Filing False Tax Returns
<h2 id="parent-fieldname-title" class="documentFirstHeading">Selim Zherka, Westchester Businessman, Sentenced in White Plains Federal Court to 37 Months for Conspiring to Make False Statements to a Bank and to File Materially False Federal Tax Returns</h2>
<p>Preet Bharara, the United States Attorney for the Southern District of New York, announced that Westchester businessman SELIM ZHERKA was sentenced today to 37 months in prison on charges that he conspired to make <strong>false statements</strong> to a bank in order to receive millions of dollars in loans and to file materially <strong>false tax returns</strong> with the IRS. ZHERKA pled guilty to the conspiracy on August 27, 2015, before U.S. District Judge Cathy Seibel, who imposed today’s sentence. In addition to the prison sentence, ZHERKA was ordered to forfeit $5.23 million in ill-gotten gains and to pay a $1.5 million fine.</p>
<p>U.S. Attorney Preet Bharara said: “Selim Zherka waged a years-long campaign of lies to banks and the IRS to obtain millions of dollars in loans and fraudulently reduce his tax liabilities. Now he faces prison and the forfeiture of over $5 million. I want to thank the IRS, the FBI, and the TARP Special Inspector General for their excellent work on this case.”</p>
<p>According to the Superseding Information to which ZHERKA pled guilty, and other court documents filed in this case:</p>
<p>From December 2005 through the present, ZHERKA conspired with others to obtain $63.5 million in loans from Sovereign Bank (now Santander) for the purchase of apartment house complexes in Tennessee by lying about the purchase price of the real estate he was acquiring and the amount of the down payments he was making toward the purchases in question. In addition, ZHERKA repeatedly submitted fraudulent tax returns to the IRS that overstated depreciation expenses and understated his capital gains for the real estate holding companies in which he was a partner, thereby reducing their tax liabilities.</p>
<p>Four other individuals have previously pled guilty in White Plains federal court to conspiring with ZHERKA to commit offenses related to the conduct to which ZHERKA pled guilty, and are awaiting sentencing.</p>
<p>In addition to the prison sentence and forfeiture, ZHERKA was ordered to make restitution as follows: $878,871 (plus interest and civil fraud penalties thereon) in federal taxes; $179,634 (plus interest and civil fraud penalties thereon) in New York State Taxes; $207,508 in Connecticut taxes; and $10,373 (plus interest and civil fraud penalties thereon) in Massachusetts taxes; and to pay a fine of $1.5 million.</p>
<p>SELIM ZHERKA, 48, of Somers, New York, has been detained at the Metropolitan Correctional Center in lower Manhattan since his arrest on August 27, 2014.</p>
<hr />
<p>Mr. Bharara praised the outstanding efforts of the IRS, the FBI, the Special Inspector General for the Troubled Asset Relief Program, and the Department of Justice’s Tax Division for their significant assistance in this investigation and prosecution.</p>
<p>This case is being handled out of the White Plains Division. Assistant United States Attorneys Elliott B. Jacobson and Perry A. Carbone and Special Assistant United States Attorney Andrew J. Kameros are in charge of the case.</p>
<p><a href="https://www.fbi.gov/newyork/press-releases/2015/selim-zherka-westchester-businessman-sentenced-in-white-plains-federal-court-to-37-months-for-conspiring-to-make-false-statements-to-a-bank-and-to-file-materially-false-federal-tax-returns">Original PressReleases &#8230;</a></p>

Paul Watterson Sentenced For Role In Multimillion-Dollar Mortgage Fraud
<h2>Property Manager Sentenced To 15 Months In Prison For Role In Multimillion-Dollar Mortgage Fraud</h2>
<p>CAMDEN, N.J. – A property manager was sentenced today to 15 months in prison for his role in a scheme to <strong>defraud financial</strong> institutions as part of a multimillion-dollar <strong>mortgage fraud</strong> that used phony documents and “straw buyers” to make illegal profits on over-developed condominiums in the Wildwood, New Jersey, area, U.S. Attorney Paul J. Fishman announced.</p>
<p>Paul Watterson, 55, of Mountainside, New Jersey, previously pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging him with one count of conspiracy to commit <strong>wire fraud</strong> and one count of conspiracy to commit <strong>money laundering</strong>. Judge Simandle imposed the sentence today in Camden federal court.</p>
<p>According to documents filed in this case and statements made in court:</p>
<p>Watterson and his conspirators identified homes in Wildwood and Wildwood Crest and recruited straw buyers to purchase those properties at the inflated rates. The straw buyers had good credit scores, but lacked the financial resources to qualify for <em><a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/mortgage/" title="mortgage" data-wpil-keyword-link="linked" data-wpil-monitor-id="47">mortgage</a> loans</em>. Watterson created <em>fraudulent <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/loans/" title="loan" data-wpil-keyword-link="linked" data-wpil-monitor-id="205">loan</a></em> applications that contained false information about the straw buyers’ employment, income, assets and intended use of the properties. Watterson also obtained on behalf of his conspirators false documents to support the phony loan applications for certain straw purchasers. Watterson’s actions were designed to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.</p>
<p>Watterson and his conspirators caused fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, to be submitted to mortgage brokers that the brokers knew were false. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings, Watterson’s conspirators took a portion of the proceeds, having funds wired or checks deposited into various accounts they controlled. They also distributed a portion of the proceeds to other members of the conspiracy for their respective roles. Watterson received $273,600 from five separate real estate transactions.</p>
<p>In addition to the prison term, Judge Simandle sentenced Watterson to three years of supervised release.</p>
<p>U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, for the investigation leading to today’s sentencing.</p>
<p>The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.</p>
<p>Defense counsel: Thomas R. Ashley Esq., Newark</p>
<p><a href="https://www.justice.gov/usao-nj/pr/property-manager-sentenced-15-months-prison-role-multimillion-dollar-mortgage-fraud">Original PressReleases &#8230;</a></p>

Bruce Swisshelm Pleaded Guilty to Bank Fraud and Money Laundering
<h2>Springfield Area Business Owner, Son Plead Guilty to $5.5 Million Fraud Scheme</h2>
<p>SPRINGFIELD, MO—Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the owner of several Springfield, Mo., area restaurants and his son pleaded guilty in federal court today, in two separate but related cases, to their roles in a more than $5.5 million bank fraud scheme.</p>
<p>Bruce Swisshelm, 68, of Battlefield, Mo., and his son, Bruce Swisshelm II, 43, of Springfield, pleaded guilty in separate appearances before U.S. Magistrate Judge David P. Rush. Swisshelm pleaded guilty to bank fraud and money laundering. Swisshelm II pleaded guilty to misprision of a felony.</p>
<p>Swisshelm was the owner of Horned Frog Deli, Inc., and Swisshelm Properties, Inc. These corporations, which specialized in the restaurant industry, owned and developed commercial properties in Springfield and elsewhere. Swisshelm owned and operated Burger King restaurants, Macaroni Grill restaurants, San Francisco Oven restaurants, McAlister’s Deli restaurants, Ebbett’s Field restaurants and a Fog City Coffee restaurant. Swisshelm II served as the president for Swisshelm Properties.</p>
<p>Swisshelm admitted that he submitted false <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="559">financial</a> documents to Great Southern Bank in order to receive four commercial loans, totaling $5,592,583, from February to June 25, 2011. The bank relied on the false information provided within the financial statements submitted by Swisshelm when it approved the commercial loans.</p>
<p>Swisshelm submitted financial statements to the bank that claimed his businesses earned a net income of more than $780,000 in 2010. Tax documents submitted by Swisshelm to the Internal Revenue Service revealed those businesses had losses that exceeded $1.8 million in 2010.</p>
<p>Swisshelm II admitted that he knew about his father’s bank fraud scheme. He was personally involved in the communications with Great Southern Bank, attended meetings at the bank and signed bank documents related to the issuance of the commercial loans. After Great Southern Bank had issued the loans, Swisshelm II was made aware of his father’s fraud scheme. Swisshelm II was made aware that financial statements submitted to the bank by his father were false. Despite possessing this knowledge, Swisshelm failed to notify authorities.</p>
<p>Swisshelm II admitted that he helped conceal his father’s crime after he became aware of the fraud scheme and delayed the fraud being reported to authorities by Great Southern Bank.</p>
<p>Under the terms of today’s plea agreement, Swisshelm must forfeit to the government $5,592,583, which constitutes the proceeds obtained from his criminal activity.</p>
<p>Under federal statutes, Swisshelm is subject to a sentence of up to 40 years in federal prison without parole, plus a fine up to $1,250,000 and an order of restitution. Swisshelm II is subject to a sentence of up to three years in federal prison without parole, plus a fine up to $250,000. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.</p>
<p>These cases are being prosecuted by Assistant U.S. Attorney Patrick Carney. They were investigated by the FBI and IRS-Criminal Investigation.</p>
<p><a href="https://www.fbi.gov/kansascity/press-releases/2015/springfield-area-business-owner-son-plead-guilty-in-5.5-million-fraud-scheme">Original PressReleases &#8230;</a></p>

Pennsylvania Man Sentenced for Fraud and Tax Charges
<h2 class="node-title">Chaka Fattah, Jr., Sentenced To Five Years In Prison For Fraud And Tax Charges</h2>
<p>PHILADELPHIA – Chaka Fattah, Jr., 33, of Philadelphia, PA, was sentenced today to 60 months in prison for 22 counts that included <strong>fraud and tax charges</strong>. On November 5, 2015, a federal jury found Fattah, Jr., guilty of <strong>bank fraud</strong>; making false statements to banks to obtain loans; making false statements to banks and the Small Business Administration to settle loans for less than what was owed; <em>filing false federal income tax returns</em> for tax years 2005, 2006, and 2008; failing to pay federal income tax; <strong>wire fraud</strong>; and theft from a program receiving federal funds. In addition to the prison term, U.S. District Court Judge Harvey Bartle III ordered restitution in the amount of $1,172,175, five years of supervised release, and a $2,125 special assessment.</p>
<p>Fattah, Jr., obtained numerous business lines of credit through <em>false and fraudulent statements</em> to local banks and used the funds primarily for personal expenses, rather than business expenses as the <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/loans/" title="loan" data-wpil-keyword-link="linked" data-wpil-monitor-id="203">loan</a> terms required. These false statements involved fictitious earnings information that Fattah, Jr., and an associate supplied for entrepreneurial companies which Fattah and the associate claimed they operated, including 259 Strategies, LLC (“259 Strategies”) and Chaka Fattah, Jr. &; Associates.</p>
<p>In 2011, Fattah, Jr., received a loan from United Bank for $50,000 intended for &#8220;working capital to support business operations.&#8221; Instead, he used the funds to make car payments, to pay down more than $40,000 in personal debt, including gambling debts.</p>
<p>Fattah, Jr., <strong>defaulted</strong> on several lines of credit and provided false information to two banks, to the United States Small Business Administration, which had insured the bank loans, and to a Small Business Administration investigator, to attempt to settle the debts for less than what was owed. Fattah, Jr., falsely claimed that 259 Strategies was out of business at the time he was attempting to settle his debts in 2010, and that he was earning only $2,500 per month. In fact, during 2010, Fattah, Jr.’s 259 Strategies, LLC was intact and he was earning between $6,250 per month and approximately $37,500 per month.</p>
<p>Fattah, Jr. <strong>filed false federal income tax returns</strong> and failed to pay federal taxes for tax years 2005, 2006, and 2008, and failed to timely pay taxes owed on his 2010 earnings, for a total loss to the IRS of more than $92,000.</p>
<p>Fattah, Jr., also <em>stole funds</em> supplied by the federal government to the Philadelphia School District. Fattah, while the Chief Operating Officer of Delaware Valley High School, a for-profit vendor which provided alternative educational services to the school district, provided false and fictitious expense information and inflated salary figures on budgets submitted to the school district. The school district made payments to Delaware Valley consistent with the budgets, and thus were defrauded of approximately $940,000 during the 2010-2011 and 2011-2012 school years. Some of those funds were paid through a false budget entry which concealed the true recipient of the payments, Fattah.</p>
<p>The case was investigated by the FBI, IRS Criminal Investigations, and the U.S. Department of Education, with the cooperation of the Philadelphia School District’s Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney Paul L. Gray of the Eastern District of Pennsylvania and Trial Attorney Eric Gibson of the Criminal Division’s Public Integrity Section.</p>
<p><a href="https://www.justice.gov/usao-edpa/pr/chaka-fattah-jr-sentenced-five-years-prison-fraud-and-tax-charges">Original PressReleases &#8230;</a></p>

Joseph Nocito Sentenced For Commit Bank Fraud and Filing a False Tax Return
<h2 class="node-title">Allegheny County Businessman Sentenced to 16 Months in Prison for Fraud Scheme</h2>
<div class="field field--name-field-pr-body field--type-text-long field--label-hidden">
<div class="field__items">
<div class="field__item even">
<p>PITTSBURGH – An Allegheny County businessman was sentenced today in federal court to sixteen months imprisonment, followed by two years of supervised release, restitution of $1,872,935 and a fine of $25,000, on his convictions of conspiracy to commit <strong>bank fraud and filing a false tax return</strong>, United States Attorney David J. Hickton announced today.</p>
<p>United States District Court Judge Arthur J. Schwab imposed sentence upon Joseph Nocito, Jr. of Sewickley, Pennsylvania.</p>
<p>According to information presented to the Court, Nocito knowingly and willfully conspired with other individuals to commit an offense against the United States, that is, <em>bank fraud</em>, in connection with Nocito’s purchase of the real property located in Longboat Key, Florida. Nocito purchased the property on July 27, 2007, with a <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/mortgage/" title="mortgage" data-wpil-keyword-link="linked" data-wpil-monitor-id="45">mortgage</a> loan from Washington Mutual Bank in the amount of $2,377,000. In <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/loans/" title="loan" data-wpil-keyword-link="linked" data-wpil-monitor-id="202">loan</a> documents submitted by Nocito to the bank, Nocito falsely represented that the purchase price of the property was $3,000,000 and that a $600,000 cash deposit had been made by or on behalf of Nocito toward the purported $3,000,000 sales price. As part of the conspiracy, $458,350 of the mortgage loan monies were paid to Nocito as kickbacks, without the knowledge or approval of Washington Mutual Bank.</p>
<p>Nocito also filed a <em>false tax return</em> for calendar year 2007 in which Nocito reported that his total adjusted gross income was $88,269, whereas, as he knew and believed, his correct total adjusted gross income was $529,619.</p>
<p>Assistant United States Attorney Mary McKeen Houghton prosecuted this case on behalf of the government.</p>
<p>U.S. Attorney Hickton commended the United States Secret Service and the Internal Revenue Service, Criminal Investigation, for the investigation leading to the successful prosecution of Nocito.</p>
<p><a href="https://www.justice.gov/usao-wdpa/pr/allegheny-county-businessman-sentenced-16-months-prison-fraud-scheme">Original PressReleases &#8230; </a></p>
</div>
</div>
</div>

Richard Altomare Sentenced For His Participation In A Securities Fraud “Pump And Dump” Scheme
<h2 class="node-title">Former CEO Of Publicly Traded Company Sentenced In Securities Fraud Scheme</h2>
<p class="pr" align="justify">Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that <strong>Richard Altomare</strong>, 65, of Palm Beach County, was sentenced yesterday for his participation in a securities fraud “pump and dump” scheme. Altomare was sentenced to 37 months in prison, to be followed by three years of supervised release.</p>
<p class="pr" align="justify">On February 21, 2014, a federal jury in Fort Lauderdale convicted Altomare on four counts, including one count of mail fraud and three counts of securities fraud.</p>
<p class="pr" align="justify">According to the indictment and evidence presented during the trial, Altomare was the former CEO of Universal Express, Inc. Between 2000 and 2003, Altomare and other company insiders sold 500 million unregistered shares of Universal stock to the public, and then issued a series of false press releases in order to offset the resultant negative pressure on the stock price. On March 8, 2007, a Final Judgment in a civil action brought by the Securities and Exchange Commission was entered against Altomare. Among other things, the order prohibited Altomare from “participating in an offering of penny stock, including engaging in activities with a broker, dealer, or issuer for the purposes of issuing, trading or inducing or attempting to induce the purchase or sale of any penny stock.”</p>
<p class="pr" align="justify">Despite the order, Altomare persuaded a start-up <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="558">financial</a> services firm based in Jacksonville called Sunset Brands, Inc. (SSBN), whose shares traded on the over the counter “penny stock” market, to bring him in as a consultant to attract investors and help write their press releases. Instead, Altomare used his access to the company to carry out a “pump and dump” scheme to defraud investors. In early 2013, Altomare met with a former business associate and conceived a scheme to artificially inflate the share price and trading volume of SSBN stock to enrich himself and his associate. Unbeknownst to Altomare, his former associate had become an informant for the FBI. During recorded conversations and meetings with the informant, Altomare promised to compensate him with SSBN stock to induce his cooperation in the scheme. Altomare’s plan was to have his former associate purchase shares of SSBN stock to mislead investors into believing that SSBN&#8217;s share price was rising, and that there was a public market for SSBN stock. Altomare also used his access to SSBN’s press releases to further the scheme. Altomare agreed to cause SSBN, which was unaware of his plans, to issue positive press releases about the company to follow and coincide with the illegally induced purchasing by the informant. The purpose of the press releases was to make it appear that SSBN’s stock price was rising because of the positive news, and to conceal the market manipulation scheme from regulatory authorities. Altomare’s plan was to sell, or “dump,” the stock he and the informant controlled after the share price had been artificially inflated, and then split the proceeds with the informant.</p>
<p class="pr" align="justify">Mr. Ferrer commended the investigative efforts of the FBI, and the assistance of the Miami Regional Office of the Securities and Exchange Commission. The case was prosecuted by Assistant U.S. Attorneys Alejandro O. Soto and Kevin J. Larsen.</p>
<p class="pr" align="justify"><a href="https://www.justice.gov/usao-sdfl/pr/former-ceo-publicly-traded-company-sentenced-securities-fraud-scheme">Original PressReleases &#8230;</a></p>

Karen Galstian Was Sentenced For Two Fraud Schemes
<h1 class="node-title">Man Sentenced to More Than Eight Years in Prison for two Fraud Schemes, Including one that Cost Verizon $17 Million</h1>
<p class="rtecenter"><strong>Assistant U. S. Attorneys Joseph Green (619) 546-6955 and Jennifer Resnik (213) 894-6595</strong></p>
<p>SAN DIEGO – The owner of a Glendale-based ride-sharing business was sentenced in federal court today to more than eight years in prison in two separate fraud cases, including one involving the sale of more than 30,000 Apple iPhones fraudulently obtained from Verizon Wireless at substantially discounted prices.</p>
<p>Karen “Kevin” Galstian, 38, of Chatsworth, California, was sentenced by U.S. District Judge Barry Ted Moskowitz to 100 months in the scheme against Verizon Wireless that generated illegal profits of more than $13 million, and 87 months for defrauding Bank of America out of almost $700,000. The sentences are to run concurrently.</p>
<p>Judge Moskowitz also ordered Galstain to pay $17 million in restitution to Verizon and more than $200,000 in restitution to Bank of America.</p>
<p>Galstian pleaded guilty in November in San Diego to one count of wire fraud, admitting that he committed the offense while on pre-trial release in the case involving Bank of America. In that case, Galstian pleaded guilty in January 2014 to bank fraud.</p>
<p>As part of the scheme involving the iPhones, Galstian admitted that he used his company, Toro Ride, Inc., to induce Verizon Wireless to provide the business with more than 30,000 iPhones at a substantial discount. He purchased most of the mobile phones that usually sell for more than $500 for only 99 cents each – in connection with a two-year contract.</p>
<p>Galstian claimed that the phones would be used by drivers for Toro Ride’s ride-sharing service and that Toro Ride, which had only been operating in the Los Angeles area, was poised to expand nationwide. Galstian falsely told Verizon that Toro Ride had received $20 million from investors. When he brokered the deal with Verizon last year, Galstian failed to disclose the he was awaiting sentencing in the bank fraud case and thus would be incarcerated and unavailable to lead the company in the expansion.</p>
<p>As Verizon provided the iPhones that supposedly would be used by Toro Ride’s drivers, Galstian sold the vast majority of the devices to companies engaged in the international re-sale of consumer electronics. Thousands of the iPhones that Verizon shipped to Toro Ride were never used on its network and instead were activated in countries such as Vietnam, Iraq, China and Saudi Arabia.</p>
<p>Galstian fraudulently convinced Verizon to provide him with iPhones worth more than $19.4 million. In less than six months, Galstian generated illegal proceeds of more than $13 million by re-selling the iPhones. Toro Ride used some of the illicit proceeds derived from iPhone sales to make required monthly payments to Verizon, which enabled Galstian to continue to order thousands of additional iPhones.</p>
<p>In the bank fraud scheme, Galstian orchestrated a conspiracy to defraud Bank of America of approximately $689,000. As part of the scheme, members of the conspiracy opened over 90 accounts at Bank of America and engaged in a series of transactions that allowed them withdraw funds before Bank of America learned that there were not sufficient funds in the target accounts to cover the withdrawals.</p>
<p>In yet another scheme, Galstain admitted to cashing checks drawn on accounts in which fraudulently-obtained tax returns had been deposited.</p>
<p>Galstian used approximately $2.5 million of the proceeds from the Verizon fraud to purchase several properties, including a penthouse condominium in the Palms Casino in Las Vegas, and a Mercedes S550. The court ordered the forfeiture of various assets obtained by Galstian through the fraud scheme, including real properties in Northridge, Sherman Oaks, Tujunga and Las Vegas, as well as more than $200,000 seized from bank accounts and a number of vehicles.</p>
<p><strong><u>DEFENDANTS</u> </strong></p>
<p>Karen “Kevin” Galstian Age: 38 Newport Beach, CA</p>
<p><strong><u>SUMMARY OF CHARGES</u> <u>Case Number 15cr2509</u> </strong></p>
<p>15cr2509-BTM (Verizon iPhone scheme)</p>
<p>Wire Fraud, 18 USC 1343; Commission of an Offense While on Release, 18 U.S.C. 3147</p>
<p>Max penalties: 30 years prison, a fine in the amount of twice the gross gain or loss resulting from the offense, $100 special assessment, 3 years supervised release</p>
<p><strong><u>SUMMARY OF CHARGES</u> <u>Case Number 13cr3481</u></strong></p>
<p>13cr3481-BTM (Bank of America scheme)</p>
<p>Conspiracy to Commit Bank Fraud, 18 U.S.C. 1349</p>
<p>Max penalties: 30 years prison, $1,000,00 fine, $100 special assessment, 3 years supervised release</p>
<p><strong><u>AGENCIES</u></strong></p>
<p>Federal Bureau of Investigation</p>
<p>Internal Revenue Service</p>
<p><a href="https://www.justice.gov/usao-sdca/pr/man-sentenced-more-eight-years-prison-two-fraud-schemes-including-one-cost-verizon-17">Original PressReleases &#8230;</a></p>

Jae Ho Chung Sentenced For Multi-Million Dollar Bank ‘Bustout’ Scheme that used Counterfeit Checks
<h2 class="node-title">Leader of Multi-Million Dollar Bank ‘Bustout’ Scheme that used Counterfeit Checks Sentenced to over 5 Years in Federal Prison</h2>
<p><em>LOS ANGELES</em> – A West Los Angeles man who masterminded a bank account ‘bustout’ scheme that defrauded financial institutions such as Bank of America and Chase Bank and cumulatively caused more than $15 million in losses has been sentenced to serve 63 months in federal prison.</p>
<p>Jae Ho Chung, 46, who resides in Westwood, received the prison sentence on May 12 from United States District Judge John A. Kronstadt, who also ordered the defendant to pay nearly $2.1 million in restitution to a variety of banks.</p>
<p>The overall scheme involved approximately $15 million in losses, but Chung was directly involved in criminal conduct that netted him approximately $2 million – money that prosecutors said Chung used to support his lifestyle, which included a home in Bel Air and gambling at casinos.</p>
<p>Chung pleaded guilty in October 2015 to two counts of bank fraud, admitting that he “conspired over a period of more than five years with 14 others to defraud banks by depositing fraudulent checks to inflate account balances so that, in the brief period that credited and reflected those deposits, defendant and others could withdraw provisionally-granted funds for their benefit,” according to a sentencing memorandum recently filed in federal court. “This scheme was defendant’s brain child.”</p>
<p>According to documents filed in the case, beginning in July 2008 and continuing until October 2013, Chung conspired with Michael Yeon Cho and 13 other co-defendants to defraud banks through the bustout scheme that used counterfeit checks to inflate account balances so that withdrawals could promptly be made before the banks learned that the deposited checks were worthless. Chung created and directed others to create counterfeit checks, directed others to arrange the establishment of “shell” corporations make it appear that bank accounts were legitimate; and withdrew funds from bustout accounts and transferred the fraudulent proceeds to himself and others.</p>
<p>“While members of the public may be familiar with high-tech scam such as so-called phishing schemes, they may not have heard of bustout schemes that have plagued <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="557">financial</a> institutions for years,” said United States Attorney Eileen M. Decker. “This type of fraud is very common and the threat is growing. Whether it is one person with a stolen credit or a sophisticated operation with numerous participants, the losses from one bustout scheme can be huge. We are continuing to work with the financial industry to address the problem and to prosecute those responsible for exploiting the goodwill banks extend to their customers.”</p>
<p>“This case shows that the appearance of success can be a mask for a tangled financial web of lies,” stated acting Special Agent in Charge Anthony J. Orlando for IRS Criminal Investigation’s Los Angeles Field Office. “Bustout schemes can thrive for a while until the source of funds is scrutinized and the perpetrators are identified. Now that time is gone, and as this sentence shows, it’s time for Mr. Chung to be held accountable.”</p>
<p>Cho, who was Chung’s primary co-conspirator, a 32-year-old Pacific Palisades resident, previously pleaded guilty and is scheduled to be sentenced by Judge Kronstadt on December 1.</p>
<p>Out of the remaining 13 defendants, the charges against 12 of them have been resolved either through pre-trial diversion or through guilty pleas. Several of those defendants have been sentenced to prison terms as long as 33 months. One remaining defendant is scheduled to go on trial in September.</p>
<p>The case against Chung, Cho and the 13 other defendants is the result of Operation “Check Kkang,” a multi-agency investigation into the bustout scheme that victimized financial institutions such as Bank of America, JPMorgan Chase, U.S. Bank and Wells Fargo Bank. Check Kkang refers to a Korean term that describes check kiting.</p>
<p>The investigation was jointly conducted by special agents with the Federal Bureau of Investigation and IRS Criminal Investigation.</p>

Rosa E. Castrillón-Sánchez Was Sentenced To Defraud Individuals And Financial Institutions
<h2 class="node-title">Puerto Rico Resident Sentenced to More Than 13 Years in Prison for Bank Fraud Scheme</h2>
<p>On April 4, 2016, <strong>Rosa E. Castrillón-Sánchez</strong>, a resident of Puerto Rico, was sentenced to 159 months in prison, to be followed by three years of supervised release, and was ordered to pay $5 million in restitution to victims affected by a scheme to <strong>defraud individuals and financial institutions</strong> on the island.</p>
<p>Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Pedro Gomez, Special Agent in Charge, United States Secret Service (USSS), Puerto Rico Office, Carlos Cases, Special Agent in Charge, Federal Bureau of Investigation (FBI), Puerto Rico Office, and Monsita Lecaroz, Assistant United States Trustee, Office of the United States Trustee, made the announcement.</p>
<p>Castrillón-Sánchez pled guilty on December 13, 2013 to one count of conspiracy to commit bank fraud and wire fraud, in violation of Title 18, United States Code, Section 1349, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028(a)(1).</p>
<p>According to court documents, Castrillón-Sánchez befriended individuals and falsely represented that she was the beneficiary to a Certificate of Deposit (“CD”) or trust for a large amount of money that was frozen at a local bank in Puerto Rico. Castrillón-Sánchez would request that an individual provide her with a sum of money or take out a personal <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/loans/" title="loan" data-wpil-keyword-link="linked" data-wpil-monitor-id="201">loan</a> to assist in the releasing of the funds – with full repayment promised as soon as the CD was unfrozen. As part of the scheme, Castrillón-Sánchez and other co-conspirators used false documents and lease agreements to obtain some of the loans and would distribute payments to individuals using Western Union wire transfers and money orders. From April 2005 to March 2010, Castrillón-Sánchez and her co-conspirators fraudulently induced over 90 individuals to loan the defendant over $5,000,000 in cash, based on false representations and promises that the individuals would be repaid in a short period of time.</p>
<p>Castrillón-Sánchez’s conspired with her mother <strong>Rosa Sanchez Mercado</strong>, <strong>Jorge Rivera Izquierdo</strong>, and others to use proceeds from the fraudulent scheme. Castrillón-Sánchez stored documents used to facilitate the scheme at the home she shared with Sanchez Mercado. Rivera Izquierdo assisted with the purchase of a Toyota Sequoia on September 13, 2008, using $40,000 of proceeds from the fraudulent scheme as down payment. On May 29, 2009, Rivera Izquierdo assisted with the purchase of a second vehicle, a BMW 335i, using $63,419.50 of proceeds from the scheme as payment for the vehicle.</p>
<p>Rivera Izquierdo was found guilty, at trial, of two counts of money laundering in connection with the purchase of the two vehicles using money derived from the fraudulent scheme. Rivera Izquierdo was sentenced on April 27, 2015 to 42 months in prison, to be followed by three years of supervised release, and was ordered to pay restitution in the amount of $201,503.73.</p>
<p>Co-defendants <strong>Carmen Sosa Barreto</strong>, <strong>Luis Roriguez Barreto</strong>, <strong>Limarie Amalbert Birriell</strong>,<strong>Amarilys Pagan Estrella</strong>, and <strong>Noemi Delgado Alice</strong> previously pled guilty and were sentenced to probation.</p>
<p>Sanchez Mercado pled guilty on February 1, 2013 to one count of conspiracy to commit bank fraud and wire fraud, in violation of Title 18, United States Code, Section 1349. Sanchez Mercado is scheduled to be sentenced on May 3, 2016.</p>
<p>Mr. Ferrer commended the investigative efforts of IRS-CI, USSS, and FBI, and thanked the United States Trustee’s Office for its assistance. The case was prosecuted by Assistant United States Attorney H. Ron Davidson and Special Attorneys to the Attorney General Charles R. Walsh and Luke V. Cass.</p>
<p>A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at <a href="http://www.usdoj.gov/usao/fls"><u>www.usdoj.gov/usao/fls</u></a>. 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/"><u>www.flsd.uscourts.gov</u></a>or on <a href="http://pacer.flsd.uscourts.gov/"><u>http://pacer.flsd.uscourts.gov</u></a>.</p>
<p><a href="https://www.justice.gov/usao-sdfl/pr/puerto-rico-resident-sentenced-more-13-years-prison-bank-fraud-scheme">Original PressReleases &#8230;</a></p>

Geoffrey W. Nehrenz Sentenced for Defrauding Investors out of $5.6 Million
<h2 class="node-title">Uniontown man sentenced to nearly five years in prison for defrauding investors out of $5.6 million</h2>
<div class="field field--name-field-pr-body field--type-text-long field--label-hidden">
<div class="field__items">
<div class="field__item even">
<p>A Uniontown man was sentenced to nearly five years in prison for operating a scheme in which 19 investors lost approximately $5.6 million, law enforcement officials said.</p>
<p>Geoffrey W. Nehrenz, 37, previously pleaded guilty to one count of <strong>wire fraud</strong> and two counts of <strong>money laundering</strong>.</p>
<p>U.S. District Court Judge Christopher Boyko sentenced Nehrenz to 55 months in prison and ordered him to pay $5.6 million in restitution.</p>
<p>Nehrenz promoted and sold investment contracts to clients through Keystone Capital Management, LLC (“KCM”) an investment adviser company located in Uniontown, which is an Ohio limited liability company registered as an investment adviser firm, but not registered with the Securities and Exchange Commission. This took place between 2009 and 2013. Nehrenz was the managing member, president, and chief executive officer of KCM, according to court documents.</p>
<p>Nehrenz induced 19 clients to invest in Keystone by promoting KCM’s ability to generate positive investment returns in equity markets while mitigating risk. He falsely represented to potential clients that their funds would be pooled, invested during the day in large- and mid-capitalization, publicly traded U.S. securities exclusively, and converted to cash overnight. Rather than investing the funds, Nehrenz used client money to pay his personal expenses, to pay business expenses to promote and prolong his investment scheme, and to make speculative, high-risk trades with domestic and overseas private placement vehicles without his clients’ authority, transactions known as “side pocket investments,” according to court documents.</p>
<p>Nehrenz induced at least 19 clients to invest approximately $7 million into his hedge fund, resulting in losses to his clients in the amount of approximately $5.6 million.</p>
<p>The indictment was presented by AUSA Christos N. Georgalis after an investigation by agents of the Federal Bureau of Investigation and Internal Revenue Service.</p>
<p><a href="https://www.justice.gov/usao-ndoh/pr/uniontown-man-sentenced-nearly-five-years-prison-defrauding-investors-out-56-million">Original PressReleases &#8230;</a></p>
</div>
</div>
</div>

JOSEPH HAL KINLAW, JR. Pleads Guilty To Bank Fraud
<h2 class="node-title">Bald Head Island Attorney And Real Estate Developer Pleads Guilty To Bank Fraud</h2>
<div class="field field--name-field-pr-body field--type-text-long field--label-hidden">
<div class="field__items">
<div class="field__item even">
<p><strong>RALEIGH</strong> – The United States Attorney’s Office announced that today in federal court, <strong>JOSEPH HAL KINLAW, JR., </strong>63, of Bald Head Island, North Carolina<strong>, </strong>pled guilty to <strong>Bank Fraud</strong>.</p>
<p>Based upon the Criminal Information and evidence offered at the time of <strong>KINLAW’s</strong> guilty plea, <em>KINLAW</em> was a licensed North Carolina attorney who operated various alleged real estate investment and development entities on behalf of investors. <strong>KINLAW</strong> used the entities to obtain <strong>real estate development loans</strong> from Branch Banking and Trust (BB&;T), and First Citizens Bank. BB&;T and First Citizens Bank <em>extended loans</em> to these entities under the auspices that the entities would be engaged in the development of residential <strong>real estate</strong> in various subdivisions in the area of Camp Lejeune in Onslow County.</p>
<p>Between January of 2011 and April of 2013, KINLAW used the <em>real estate development entities to defraud</em> BB&;T and First Citizens Bank by falsifying the legal descriptions of the <a class="wpil_keyword_link" href="https://www.fraudswatch.com/category/loans/" title="loan" data-wpil-keyword-link="linked" data-wpil-monitor-id="197">loan</a> collateral, and by falsifying releases of the collateral. Bydrafting a false legal description of the property, KINLAW was able to use the collateral for other real estate investment activities and loans. By <em>fraudulently releasing the banks</em>’ collateral before the banks’ loans had been satisfied, <strong>KINLAW </strong>was able, in several instances, to convey the collateral to third parties for value and continue the scheme.</p>
<p>To perpetuate the scheme and prevent its discovery,KINLAWalso used outside funds, that is, funds unrelated to the real estate development activity that was the subject of each loan, to make ongoing loan interest payments to BB&;T and First Citizens Bank. In some instances,KINLAW used loan proceeds on one transaction to make loan interest payments on another transaction. In other instances,KINLAW<strong> fraudulently</strong> extracted funds from other investors and their business interests to make payments on the loans.</p>
<p>Ultimately, banks stopped loaning money toKINLAW and his related companies and investors. As a result, the existing loans went into default. BecauseKINLAW had substituted false legal descriptions of bank collateral, and fraudulently conveyed bank collateral, BB&;T and First Citizens Bank were unable to capture their loan losses in foreclosure. Various title insurance companies and investors also lost substantial funds due to the scheme. While the exact amount of the loss remains the subject of investigation, losses are presently anticipated to exceed $18 Million.</p>
<p>At sentencing,KINLAW faces up to 30 years in prison and 5 years of supervise release. The defendant also faces a fine of up to $1 Million, and an order of restitution to victims.</p>
<p>The investigation of this case was conducted by the Federal Bureau of Investigation, with assistance of the United States Postal Inspection Service. Assistant United States Attorney William M. Gilmore of the <a href="https://www.fraudswatch.com/financial-scams-most-common-ways/"><strong>Economic Crimes</strong></a> Section represents the United States.</p>
</div>
<p><a href="https://www.justice.gov/usao-ednc/pr/bald-head-island-attorney-and-real-estate-developer-pleads-guilty-bank-fraud">Original PressReleases &#8230;</a></p>
</div>
</div>

SALLY A. CLAASSEN Pleads Guilty to Federal Charges of Stealing
<h2>Former Winnebago County Purchasing Director Sally Claassen Pleads Guilty to Federal Charges of Stealing over $400,000</h2>
<p>ROCKFORD — The former Winnebago County Purchasing Director pleaded guilty today before U.S. District Judge Frederick J. Kapala to two counts of theft from a program receiving federal funds. SALLY A. CLAASSEN, 57, of Roscoe, Ill., was an employee of Winnebago County from March 3, 1997, until she resigned on Sept. 11, 2015. Claassen’s job title prior to her resignation was Purchasing Director.</p>
<p>According to the written plea agreement, as Purchasing Director for Winnebago County, Claassen was responsible for receiving and reviewing invoices submitted by vendors and submitting payment to vendors. As stated in the plea agreement, from Feb. 25, 2014 through April 27, 2015, Claassen used her position as the approver for payments from Winnebago County to vendors to steal approximately $368,137 from the County. Claassen admitted that she accomplished this theft by asking two Winnebago County vendors to submit false invoices to Winnebago County for work that was not performed, which Claassen then paid with County funds. Claassen then directed the two vendors to provide her with checks made out to “Cash” or to “JP Morgan Chase” for the full amounts that the vendors were paid. As Claassen further admitted, she told the two vendors that she needed them to submit the false invoices and then provide her with the checks for the full amount of the payments to help her allocate Winnebago County money to a project being funded by a charitable organization. In reality, Claassen stole the money by depositing the checks into her personal bank accounts. One of the vendors provided Claassen with 5 checks that totaled $45,000. The other vendor provided Claassen with 7 checks that totaled $323,137. No money given to Claassen by either vendor was ever used for the purpose for which she told the vendors that it was to be used.</p>
<p><a href="https://www.fraudswatch.com/sally-a-claassen-pleads-guilty-to-federal-charges-of-stealing/stealing-clients/" rel="attachment wp-att-28124"><img class="alignright wp-image-28124 size-medium" src="https://www.fraudswatch.com/wp-content/uploads/2016/06/stealing-clients-490x315.jpg" width="490" height="315" /></a>As further stated in the plea agreement, in her position as Purchasing Director, Claassen held a Winnebago County-issued credit card that she was authorized to use to make purchases for official County business. Claassen was required to submit invoices and supporting documentation to the County to demonstrate that items purchased were for County business. Claassen also had the ability to purchase items for Winnebago County by requesting that Winnebago County issue a check to a particular vendor. Claassen was required to submit invoices and supporting documentation to Winnebago County to demonstrate that the requested check was to be used to purchase items for Winnebago County business. Claassen admitted in the plea agreement that from April 15, 2014 to July 1, 2015, she used her Winnebago County-issued credit card and checks from Winnebago County to purchase items for her personal use, including home remodeling items and personal vacations. Claassen admitted she primarily accomplished this by either using her Winnebago County-issued credit card to make personal purchases and then submitting false or altered supporting documentation so the County would pay for the charges, or modifying or creating false invoices and submitting them to Winnebago County so the County would issue a check for the purchase.</p>
<p>According to the plea agreement, as an example of using the Winnebago County-issued credit card to accomplish the theft, on Jan. 29, 2015, Claassen used the credit card at a local vendor to purchase granite countertops for her kitchen in the amount of $6,109. While the sales order for this purchase listed the customer as Claassen at her home address, on Feb. 12, 2015, Claassen submitted an altered version of the sales order to the County listing Winnebago County as the customer with an altered description of the items purchased.</p>
<p>Another example in the plea agreement was that on May 20, 2014, Claassen ordered approximately $13,214 worth of furniture for her home and gift cards from a vendor. The sales order provided to Claassen noted that the customer was Claassen at her home address and listed various items of furniture that had been ordered. On the same date, Claassen caused an employee in her department to submit a request for Winnebago County to issue a payment by check to that vendor in the amount of $13,125. In the plea agreement, Claassen admitted that with the request she submitted an altered sales order from that vendor that listed Winnebago County as the customer with an altered description of the items purchased.</p>
<p>In total, using these methods, it is the government’s position in the plea agreement that Claassen stole approximately $451,353 from Winnebago County in 2014 and 2015. In the plea agreement, Claassen reserved the right to dispute this amount. Claassen also agreed in the plea agreement to the entry of a forfeiture judgment to the United States all right, title, and interest that she has in any property constituting or derived from proceeds obtained, directly or indirectly and further agreed not to contest forfeiture of approximately $292,525 already seized by the United States.</p>
<p>On each count Claassen faces a maximum sentence of up to 10 years’ imprisonment, a fine of up to $250,000, or twice the gross gain or gross loss resulting from that offense, whichever is greater, and full restitution. In addition, Claassen faces a term of supervised release of up to 5 years following imprisonment. Claassen remains free on her own recognizance pending sentencing, which U.S. District Judge Frederick J. Kapala set for September 13, 2016, at 9:30 a.m.</p>
<p>The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.</p>
<p>The government is represented by Assistant U.S. Attorney Margaret J. Schneider.</p>
<p><a href="https://www.justice.gov/usao-ndil/file/863296/download" target="_blank" rel="noopener">Plea Agreement</a></p>
<p><a href="https://www.justice.gov/usao-ndil/pr/former-winnebago-county-purchasing-director-sally-claasen-pleads-guilty-federal-charges">Original PressReleleases&#8230; </a></p>

Angelo Alleca Pleads Guilty to Orchestrating a Multi-Million Dollar Fraud Scheme
<h2>Former CEO of Summit Wealth Management Pleads Guilty to Orchestrating a Multi-Million Dollar Fraud Scheme</h2>
<p>ATLANTA – Angelo Alleca, the former CEO of Atlanta, Georgia, based Summit Wealth Management, has pleaded guilty to <strong>conspiring</strong> with a former business partner to <strong>defraud</strong> investors of over $35 million dollars. Alleca marketed several funds that were supposed to invest in certain assets/investments, such as hedge funds managed by a professional money manager or mortgage debt. Instead he used the money to pay redemptions to earlier investors, to acquire and operate several businesses, and to pay personal expenses.</p>
<p>“Instead of fulfilling promises of investments, investors were largely swindled out of their money in a <strong>Ponzi scheme</strong> which directly enriched Alleca,” said U.S. Attorney John Horn. “This case serves as another reminder that investors need to be careful, and do their research when deciding who to trust with their hard-earned money.”</p>
<p>“The guilty plea of Mr. Alleca is the culmination of a lengthy and extensive federal investigation examining the allegations of many years of <a href="https://www.fraudswatch.com/financial-scams-most-common-ways/"><strong>financial fraud</strong></a> which victimized so many investors out of millions of dollars. It is the FBI’s hope that today’s guilty plea will provide some sense of relief to those victims that have suffered so much by Mr. Alleca’s greed driven criminal conduct,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.</p>
<p>According to U.S. Attorney Horn, the indictment, and other information presented in court: From on or about 2004 until 2012, Alleca acted as the President and Chief Operating Officer of Summit Wealth Management, an investment adviser headquartered in Atlanta, Georgia. During that time, Alleca started several funds and falsely misrepresented that money would be invested in hedge funds and debt securities and managed by professional investment managers.</p>
<p>Instead of investing the money as advertised, Alleca allegedly lost a substantial portion of the funds through securities trading. In addition, Alleca improperly used the funds to operate Summit Wealth Management, make interest payments and redemptions to earlier investors, and to pay personal expenses. During the course of the scheme, fraudulent account statements were mailed to investors showing gains, when there was no money in the funds.</p>
<p>In 1997 Alleca and Mark Morrow, a co-defendant in the case, and Alleca’s former business partner, formed Summit Capital Trading, a registered investment advisor and broker dealer in New York and Ohio. Alleca led the Buffalo, New York office and Morrow ran the Cincinnati and Cleveland, Ohio offices.</p>
<p>In 2007, Morrow established Detroit Memorial Partners LLC, which sold promissory notes to acquire and manage cemeteries in Michigan.</p>
<p>Between 2007 and 2012, Morrow and Alleca marketed promissory notes in Detroit Memorial Partners to Summit Wealth clients in Atlanta, and throughout the country. Detroit Memorial Partners offered documents which contained material misrepresentations, including that the notes would be secured by real property. In fact, no security interest was ever recorded with respect to the notes. Moreover, shortly after receiving the note proceeds, Alleca and Morrow, diverted funds for improper purposes including, making interest payments and redemptions to investors in Summit Wealth Management funds and personal expenses. The indictment alleges that as a result of their <a href="https://www.fraudswatch.com/most-popular-fraud-schemes/"><em>fraud schemes</em></a>, over 300 investors lost over $35 million dollars invested in the Summit Funds and Detroit Memorial Partners LLC.</p>
<p>Sentencing for Angelo Alleca, 46, of Buffalo, New York, is scheduled for August 4, 2016 at 2:00 p.m., before United States District Judge Leigh Martin May.</p>
<p>This case is being investigated by the Federal Bureau of Investigation.</p>
<p>Assistant United States Attorney Jeffrey Brown is prosecuting the case.</p>
<p>For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov</p>
<div class="element-invisible">Email links icon</div>
<p>or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is <a href="https://www.justice.gov/usao-ndga">http://www.justice.gov/usao-ndga</a></p>
<div class="field__item even"><a href="https://www.justice.gov/usao-ndga/pr/former-ceo-summit-wealth-management-pleads-guilty-orchestrating-multi-million-dollar"> Original PressReleases &#8230;</a></div>
<div class="field__item even"></div>

Robert F. Arnold Indicted for Fraud and Related Charges
<h2 id="node-title">Tennessee Sheriff Indicted by Federal Grand Jury on Conspiracy, Fraud and Related Charges</h2>
<h3><strong><em>Chief Administrative Deputy and Sheriff’s Uncle also Indicted</em></strong></h3>
<p>A county sheriff and two other men were <strong>indicted</strong> for their roles in the formation, marketing and operation of a private company and the concealment and misrepresentation of their involvement with the business, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney Jack Smith of the Middle District of Tennessee.</p>
<p>Robert F. Arnold, 40, Sheriff of Rutherford County, Tennessee; Chief Deputy Joe L. Russell II, 49, also of Rutherford County; and John Vanderveer, 58, of Marietta, Georgia, Arnold’s uncle, were charged in a 14-count indictment with honest services <a href="https://www.fraudswatch.com/internet-fraud-tips-and-descriptions/">fraud</a>, <a href="https://www.fraudswatch.com/financial-scams-most-common-ways/">wire fraud</a>, bribery concerning federal programs, extortion under color of official right, obstruction of justice and conspiracy.</p>
<p>The indictment alleges that Arnold, Russell and Vanderveer devised a scheme to exploit Arnold’s and Russell’s official positions to make tens of thousands of dollars selling e-cigarettes in the Rutherford County Jail. Specifically, in October 2013, each defendant allegedly invested $3,000 to start <strong>JailCigs</strong> LLC, a private company that would allow friends and family members of inmates to purchase e-cigarettes online and have them shipped to the jail for distribution by jail personnel and use by inmates. As part of its marketing strategy, <em>JailCigs</em> allegedly promised a $5 commission for every e-cigarette sold to the jail or detention facility. In late 2013, Arnold and Russell introduced <strong>JailCigs</strong> into the Rutherford County Jail, JailCigs’s first and largest customer in Tennessee. Over the next year and a half, JailCigs allegedly sold approximately 10,500 e-cigarettes for delivery to Rutherford County Jail inmates, totaling $156,975 in revenue.</p>
<p>Arnold and Russell allegedly used their official positions to make JailCigs profitable, including by allowing the company’s e-cigarettes to be admitted into the Rutherford County Jail as non-contraband; directing jail employees to perform tasks beneficial to JailCigs on county time; promoting JailCigs to other sheriff offices and counties; and waiving Rutherford County’s customary commission from the sale of <strong>JailCigs</strong>. Arnold and Russell also failed to subject the business arrangement with <em>JailCigs</em> to a competitive bidding process and did not enter into a written contract with the company, despite being advised to do both things by the county attorney, according to the indictment. Between December 2013 and April 2015, Arnold allegedly received $66,790 from JailCigs and Russell and Vanderveer each received roughly $50,000.</p>
<p>On the eve of the 2014 election, in which Arnold was running for reelection as Sheriff of Rutherford County, Russell allegedly emailed a JailCigs customer and reminded the customer that it was Arnold who brought the JailCigs program to the Rutherford County Jail for the enjoyment of inmates and if Arnold was not reelected, the program would come to an end. The indictment alleges that Russell’s email implored the customer to “tell everyone you know to support Sheriff Arnold in his re-election.”</p>
<p>When various people raised questions and concerns about the propriety of the arrangement between JailCigs and Rutherford County, Arnold and Russell allegedly made misrepresentations that the arrangement had been approved by various officials, including the county attorney and the county auditor, and repeatedly denied that they were personally involved with JailCigs or were receiving any benefit from the sale of its product. <strong>The indictment</strong> also alleges that in an effort to protect JailCigs’s ongoing business, Arnold subsequently made several false and misleading statements to the media about his role in and knowledge of JailCigs, including saying that he was unaware of Russell’s involvement with JailCigs and that he was “shocked” and “taken back” by the discovery. Arnold allegedly also told the media that he had not received any income from JailCigs and had made a mistake when he listed JailCigs as a source of income on his state “Statement of Disclosure of Interests” form. The day before making this statement, however, Arnold allegedly had deposited a $3,900 check from JailCigs.</p>
<p>The<em> indictment</em> also alleges that on April 17, 2015, after learning of the media reports and pending criminal investigation, Vanderveer met with the Tennessee sales representative for JailCigs and told her that “Joe” wanted her to destroy her commission tabulation sheets, which contained evidence of the scheme.</p>
<p>The charges in the indictment are merely allegations. The defendants are presumed innocent until and unless convicted.</p>
<p>The Tennessee Bureau of Investigation and the FBI are investigating this case. Trial Attorney Mark Cipolletti of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Cecil W. Vandevender of the Middle District of Tennessee are prosecuting the case.</p>
<p><a href="https://www.justice.gov/opa/pr/tennessee-sheriff-indicted-federal-grand-jury-conspiracy-fraud-and-related-charges">Original PressReleases &#8230; </a></p>

Loan Fraud: Courtland Gettel And Jeffrey Greenberg Steal More Than $30 Million
<h2 class="node-title">Coronado Businessman and Arizona Lawyer Steal More Than $30 Million</h2>
<p>SAN DIEGO – San Diego businessman Courtland Gettel and Arizona attorney Jeffrey Greenberg pleaded guilty this week to participating in a massive scheme in which they obtained tens of millions of dollars in <strong>fraudulently-obtained loan proceeds</strong>.</p>
<p>The conspirators generated the money by taking out huge loans against multi-million dollar homes in La Jolla and Del Mar, then pretending those loans had been paid off in order to secure more<strong> loans</strong> from new lenders &#8212; who were led to believe by forged documentation that the homes were debt-free.</p>
<p>To pull of the <em>scam</em>, Gettel, Greenberg, and their co-conspirators created forged real estate lien “releases” and recorded fraudulent records at the San Diego County Recorder’s Office, wreaking havoc on the chain of title for these homes. They then defaulted on their obligations to repay the loans, leaving the lenders to dispute the validity of their secured interests, and causing millions of dollars in losses from unpaid loans.</p>
<figure id="attachment_27990" aria-describedby="caption-attachment-27990" style="width: 337px" class="wp-caption alignright"><a href="https://www.fraudswatch.com/loan-fraud-courtland-gettel-and-jeffrey-greenberg-steal-more-than-30-million/loan-fraud-2/" rel="attachment wp-att-27990"><img class="size-full wp-image-27990" src="https://www.fraudswatch.com/wp-content/uploads/2016/05/Loan-Fraud-2.jpg" alt="Loan Fraud" width="337" height="253" /></a><figcaption id="caption-attachment-27990" class="wp-caption-text"><em><strong>Loan Fraud</strong></em></figcaption></figure>
<p>Gettel ran a real estate investment firm known both as Conix, Inc. and Variant Commercial Real Estate (“VCRE”), which refurbished single-family homes, purchased distressed debt, and purchased and refurbished commercial real estate projects. As part of his plea, Gettel admitted that he and his informal business partner acquired high-end homes in La Jolla and Del Mar by pretending to real estate lenders that they intended to use the homes as luxury rental properties—although in fact, they lived in the properties along with their families. When they needed money to fund other business deals, Gettel and his partner began negotiating with new lenders, pretending that the first loans never existed or had already been paid off.</p>
<p>Their attorney, Greenberg, admitted that he used his expertise as a lawyer to generate and record fraudulent records, making it appear that prior loans were paid off, to help close the fraudulent deals. This went on for more than a year, during which time Gettel, Greenberg, and their co-conspirators obtained at least $33.6 million in fraudulent proceeds from no less than eight multi-million dollar fraudulent loans.</p>
<p>Greenberg also pled guilty to participating in an equally massive fraud that occurred in Tucson, Arizona, where he worked for Conix and VCRE. In that scheme, Greenberg admitted that he and his co-conspirators obtained tens of millions of dollars in unearned payments from a real estate financing firm by creating false invoices and expense reports for work purportedly performed on their commercial real estate portfolio. Instead of using the money to refurbish their commercial properties as required, Greenberg and his co-conspirators used the tens of millions of dollars they generated for their own personal use and benefit.</p>
<p>Gettel relied on Greenberg to help hide the true nature of the transactions. He directed the proceeds to Greenberg’s attorney-trust bank accounts before distributing the money further. He also relied on other co-conspirators to forge his own signature and then fraudulently notarize the forgeries, so documents would be harder to trace back to the perpetrators. In late 2014, the lenders uncovered the fraud, and began to discover that their secured interests in the properties were worthless. Gettel and his partner agreed to conceal their fraud by falsely denying any knowledge about the fraudulent loans. They also tried to cover up the scheme further by creating yet more fraudulent documents to hide their tracks. Another co-conspirator – who was a notary public – notarized fraudulent documents, hid or destroyed her notary book, and then falsely reported it lost to the California Secretary of State.</p>
<p>As part of their pleas, Gettel and Greenberg agreed to forfeit the proceeds they stole from the various lenders and pay restitution to the victims.</p>
<p>“Wealth and privilege will not insulate anyone from aggressive prosecution for their crimes,” said U.S. Attorney Laura E. Duffy. “These defendants thought they could hide behind their status to pull off an extraordinary fraud—but as this case demonstrates, I am devoted to making sure the playing field is level and all criminals are held accountable.”</p>
<p>“The defendants in this case used their professional business and legal experience to feed their greed,” said FBI Special Agent in Charge, Eric S. Birnbaum. “The FBI is committed to pursuing those who engage in fraudulent schemes that line their pockets at the expense of others.”</p>
<p>Greenberg, who was charged in Tucson and San Diego before the cases were transferred to the Southern District of California, made his initial appearance in San Diego on May 17, 2016 before U.S. Magistrate Judge Karen S. Crawford, and entered his guilty pleas the following day. Gettel made his initial appearance today, also before Judge Crawford. Both defendants are scheduled to be sentenced before U.S. District Judge William Q. Hayes on August 8, 2016.</p>
<p>The swift resolution of this elaborate fraud case is the result of close collaboration and invaluable assistance from the U.S. Attorney’s Office in the District of Arizona, FBI Tucson Resident Agency and the IRS Criminal Investigations in Tucson.</p>
<p><strong><u>DEFENDANTS</u>:</strong></p>
<p>Jeffrey Greenberg, 16CR1076-WQH and 1077-WQH Age: 66 Tucson, AZ</p>
<p>Courtland Gettel, 16CR1099-WQH Age: 42 Coronado, CA</p>
<p><strong><u>CHARGES</u></strong></p>
<p>Wire Fraud Conspiracy, in violation of 18 U.S.C. § 1349</p>
<p>Maximum Penalties: 20 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.</p>
<p>Conspiracy, in violation of 18 U.S.C. § 371</p>
<p>Maximum Penalties: 5 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.</p>
<p><strong><u>AGENCIES</u></strong></p>
<p>Federal Bureau of Investigation</p>
<p><a href="https://www.justice.gov/usao-sdca/pr/coronado-businessman-and-arizona-lawyer-steal-more-30-million">Original PressReleases &#8230;</a></p>

Gregg R. Mulholland – Orchestrator Of More Than 40 Pump And Dump Schemes And Secret Owner Of Offshore Brokerage Firm
<h2 class="node-title">Orchestrator Of More Than 40 Pump And Dump Schemes And Secret Owner Of Offshore Brokerage Firm Pleads Guilty To$250 Million Money Laundering Scheme</h2>
<p class="node-subtitle center"><strong>Defendant Used Offshore Shell Companies in Belize and the West Indies to Perpetrate Numerous Schemes, Including the Manipulation of Cynk Technology Corp (CYNK)</strong></p>
<p>BROOKLYN, N.Y. – Earlier today, Gregg R. Mulholland, a dual U.S. and Canadian citizen and secret owner of Legacy Global Markets S.A. (Legacy), an offshore broker-dealer and investment management company based in Panama City, Panama, and Belize City, Belize, pleaded guilty to <strong>money laundering</strong> conspiracy for <strong>fraudulently manipulating</strong> the stocks of more than 40 U.S. publicly-traded companies and then laundering more than $250 million in profits through at least five offshore law firms. Pursuant to his plea agreement with the government, Mulholland has agreed to forfeit, among other things, a Dassault-Breguet Falcon 50 aircraft, a Range Rover Defender vehicle, two real estate properties in British Columbia, and funds and securities on deposit at more than a dozen bank and brokerage accounts. When sentenced, Mulholland faces up to 20 years in prison.</p>
<p>The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York (IRS-CI); and Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement’s (ICE), Homeland Security Investigations, New York (HSI).</p>
<ul>
<li>“Mulholland’s staggering <a href="https://www.fraudswatch.com/category/fraud/">fraud</a> perpetrated on the investing public was built on an elaborate offshore shell game, which included his secret ownership of an offshore brokerage firm. Through manipulative trading, Mulholland generated profits of more than $250 million and used a corrupt lawyer to launder the proceeds into the United States to pay his<em> fraudulent network</em> of stock promoters and broker-dealers,” stated United States Attorney Capers. “We are steadfast in our commitment to protect the investing public and will vigorously prosecute those who seek to abuse 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="548">financial</a> markets through fraudulent means.” Mr. Capers thanked the Securities and Exchange Commission (SEC), the Department of Justice’s Office of International Affairs (OIA), the Department of State’s Diplomatic Security Service (DSS), and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group (FINRA CPAG) for their cooperation and assistance in the investigation.</li>
<li>“Mulholland pleaded guilty today for his role in a stock manipulation and profit hiding scheme totaling more than $250 million. Making sure our markets are fair to all investors and bringing charges against those who profit illegally remains a top priority for the FBI,” stated FBI Assistant Director-in-Charge Rodriguez.</li>
<li>“This investigation highlights the government’s ability and resolve to combat global money laundering, in this case, the laundering of illicit proceeds from a stock manipulation scheme,” stated IRS-CI Special Agent-in-Charge Kitchen. “Prospective money launderers should take note of Mr. Mulholland’s conviction and think twice about the consequences of such actions. The same holds true for individuals who attempt to criminally circumvent IRS reporting requirements regarding foreign accounts, as their actions will attract the attention of IRS-Criminal Investigation.”</li>
<li>“Laundering more than a quarter of a billion dollars, this defendant used multiple schemes including manipulating the stocks of more than 40 companies in order to line his pockets at the expense of the U.S. financial system. HSI remains committed to using its unique authorities to arrest those that seek to conceal and launder illicit proceeds, causing harm to our economy,” said Special Agent-in-Charge Melendez.</li>
</ul>
<p>Between 2010 and 2014, Mulholland controlled a group of individuals (the Mulholland Group) who together devised three interrelated schemes to: (1) induce U.S. investors to purchase stock in various thinly-traded U.S. public companies through fraudulent promotion of the stock, concealment of their ownership interests in the companies, and fraudulent manipulation of artificial price movements and trading volume in the stocks of those companies; (2) circumvent the IRS’s reporting requirements under the Foreign Account Tax Compliance Act (FATCA); and (3) launder the fraudulent proceeds from the stock manipulation schemes to and from the United States through five offshore law firms. Through these schemes, the Mulholland Group laundered more than $250 million in fraudulent proceeds.</p>
<p>To facilitate the interrelated schemes, the Mulholland Group used shell companies in Belize and Nevis, West Indies, which had nominees at the helm. This structure was designed to conceal the Mulholland Group’s ownership interest in the stock of U.S. public companies, in violation of U.S. securities laws, and enabled the Mulholland Group to engage in more than 40 “pump and dump” schemes. For example, this structure enabled the Mulholland Group to manipulate the stock of Cynk Technology Corp, which traded on the U.S. OTC markets under the ticker symbol CYNK. Using aliases such as “Stamps” and “Charlie Wolf,” Mulholland was intercepted on a court-authorized wiretap on May 15, 2014, admitting to his ownership of “all the free trading” or unrestricted shares of CYNK. Prior to this conversation between Mulholland and his trader at Legacy, there had been no trading in CYNK stock for 24 trading days. Over the next two months, the stock of CYNK rose from $0.06 per share to $13.90 per share, a more than $4 billion stock market valuation for a company that had no revenue and no assets.</p>
<p>Mulholland used the services of a U.S.-based lawyer to launder the more than $250 million generated through his stock manipulation of CYNK and other U.S. companies – directing the fraud proceeds to five law firm accounts and transmitting them back to members of the Mulholland Group and its co-conspirators. These concealment schemes also enabled Mulholland to evade reporting requirements to the IRS.</p>
<p>Today’s guilty plea took place before United States District Judge I. Leo Glasser.</p>
<p>The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jacquelyn Kasulis, Winston Paes, and Michael Keilty are in charge of the prosecution. Assistant United States Attorney Brian Morris of the Office’s Civil Division will be responsible for the forfeiture of assets.</p>
<p>The charges were brought in connection with the President’s <a href="https://www.fraudswatch.com/financial-scams-most-common-ways/">Financial Fraud</a> Enforcement Task Force. The task force was established 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 is 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 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, please visit www.StopFraud.gov.</p>
<p><strong><u>The Defendant</u></strong><strong>:</strong></p>
<p>GREGG R. MULHOLLAND<br />
Age: 46<br />
San Juan Capistrano, California<br />
Vancouver, Canada</p>
<p>EDNY Docket No. 14-CR-476 (ILG)</p>
<p>[mks_separator style=&#8221;double&#8221; height=&#8221;2&#8243;]</p>
<p><a href="https://www.justice.gov/usao-edny/pr/orchestrator-more-40-pump-and-dump-schemes-and-secret-owner-offshore-brokerage-firm" target="_blank" rel="noopener">Original PressRelease</a> &#8230;</p>

OLAF – Fighting The Illicit Activities of Organised Criminals In The Field of EU Financing
<h2>OLAF and the Italian National Prosecutor exchange expertise</h2>
<p> ;</p>
<p><strong>EU funding provides opportunities to generate economic growth and to promote job creation across Europe. It is crucial that this funding fulfils its purpose and does not fall into the hands of networks of organised criminals whose sole intention is to draw illicit profit, defrauding the EU and national budgets alike. Given the increased need for coordinated action by law enforcement agencies to combat illicit activities, the OLAF Director-General, Giovanni Kessler, met with the Italian National Anti-Mafia and Anti-Terrorism Prosecutor, Franco Roberti, in Rome this week. </strong></p>
<p>The discussion focussed on the possible infiltration of criminal networks in the processes of applying for and receiving EU agricultural funds. A roundtable was organised by the National Anti-Mafia and Anti-Terrorism Directorate (DNAA) between <a href="http://ec.europa.eu/anti-fraud/">OLAF</a> investigators specialised in this field and several national prosecutors from the Italian regions most affected by this phenomenon. They discussed better ways to coordinate their investigative activities and to reinforce their cooperation, within the ambit of their respective competences. With a view to further strengthening the protection of the EU’s financial interests, the representatives of <a href="http://ec.europa.eu/anti-fraud/">OLAF</a> and the DNAA also exchanged views on a possible formal update of the existing Cooperation Arrangement that exists between the two bodies. This would allow OLAF and the DNAA to boost the efficiency of their joint work, identifying complex fraud structures and bringing fraudsters to justice more promptly.</p>
<p><strong><span class="custom3">OLAF mission, mandate and competences:</span></strong></p>
<p class="custom3">OLAF’s mission is to detect, investigate and stop fraud with EU funds.</p>
<p><a href="http://ec.europa.eu/anti-fraud/"><strong>OLAF</strong></a> fulfils its mission by:</p>
<ul>
<li>carrying out independent investigations into fraud and corruption involving EU funds so as to ensure that all EU taxpayers’ money reaches projects that can stimulate the creation of jobs and growth in Europe;</li>
<li>contributing to strengthening citizens’ trust in the EU Institutions by investigating serious misconduct by EU staff and members of the EU Institutions;</li>
<li>developing a sound EU anti-fraud policy.</li>
</ul>
<p class="custom3">In its independent investigative function, OLAF can investigate matters relating to fraud, corruption and other offences affecting the EU <a class="wpil_keyword_link" href="https://www.fraudswatch.com/tag/financial-fraud/" title="financial" data-wpil-keyword-link="linked" data-wpil-monitor-id="547">financial</a> interests concerning:</p>
<ul>
<li class="custom3">all EU expenditure: the main spending categories are Structural Funds, agricultural policy and rural development funds, direct expenditure and external aid;</li>
<li class="custom3">some areas of EU revenue, mainly customs duties;</li>
<li class="custom3">suspicions of serious misconduct by EU staff and members of the EU institutions.</li>
</ul>
<p> ;</p>
<p>[columns_row width=&#8221;half&#8221;]<br />
[column]</p>
<p><a href="https://www.fraudswatch.com/cdbqrxsuaaaoa0l/" rel="attachment wp-att-27918"><img class="wp-image-27918 size-medium alignleft" title="Silvana ENCULESCU" src="https://www.fraudswatch.com/wp-content/uploads/2016/05/CdBQrxsUAAAoa0L-490x315.jpg" alt="Silvana ENCULESCU" width="490" height="315" /></a></p>
<p>Silvana ENCULESCU<br />
<span class="custom3">Deputy Spokesperson </span><br />
<span class="custom3">European Anti-Fraud Office (OLAF) </span><br />
<span class="custom3">Phone: +32 2 29 81764 </span><br />
<span class="custom3">E-mail: </span><a class="custom3" href="mailto:olaf-media@ec.europa.eu"><u><span style="color: #0066cc;">olaf-media@ec.europa.eu</span> </u></a><br />
<a style="box-sizing: border-box; color: #0065a2; text-decoration: none; font-family: Arial, Helvetica, sans-serif; font-size: 15.96px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 22.8px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; background-color: #ffffff;" title="//ec.europa.eu/anti_fraud<;br />; " href="http://ec.europa.eu/anti_fraud"><u><span style="color: #0066cc;">http://ec.europa.eu/anti_fraud</span></u></a><br />
Twitter: <strong><u><span style="color: #0066cc;"><a title="@OLAFPress" href="https://twitter.com/OLAFPress" target="_blank" rel="noopener">@OLAFPress</a> </span></u></strong>[/column][column]</p>
<p> ;</p>
<figure id="attachment_27919" aria-describedby="caption-attachment-27919" style="width: 464px" class="wp-caption alignleft"><a href="https://www.fraudswatch.com/alina-burea/" rel="attachment wp-att-27919"><img class="wp-image-27919 size-medium" src="https://www.fraudswatch.com/wp-content/uploads/2016/05/Alina-BUREA-464x315.jpg" alt="Alina BUREA" width="464" height="315" /></a><figcaption id="caption-attachment-27919" class="wp-caption-text">Alina BUREA</figcaption></figure>
<p>Alina BUREA<br />
<span class="custom3">Spokesperson </span><br />
<span class="custom3">European Anti-Fraud Office (OLAF) </span><br />
<span class="custom3">Phone: +32 2 29 57336 </span><br />
<span class="custom3">E-mail: </span><a class="custom3" href="mailto:olaf-media@ec.europa.eu"><u><span style="color: #0066cc;">olaf-media@ec.europa.eu</span> </u></a><br />
<a style="box-sizing: border-box; color: #0065a2; text-decoration: none; font-family: Arial, Helvetica, sans-serif; font-size: 15.96px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 22.8px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; background-color: #ffffff;" title="//ec.europa.eu/anti_fraud<;br />; " href="http://ec.europa.eu/anti_fraud"><u><span style="color: #0066cc;">http://ec.europa.eu/anti_fraud</span></u></a><br />
Twitter: <strong><a title="@OLAFPress" href="https://twitter.com/OLAFPress" target="_blank" rel="noopener"><u><span style="color: #0066cc;">@OLAFPress</span></u></a></strong></p>
<p>[/column]<br />
[/columns_row]</p>

Lee Vaccaro Charged In $5 Million Investment Fraud Scheme
<h2 class="node-title">Nevada Man Charged In $5 Million Investment Fraud Scheme</h2>
<div class="field field--name-field-pr-body field--type-text-long field--label-hidden">
<div class="field__items">
<div class="field__item even">
<p>NEWARK, N.J. – A Nevada man was arrested today and charged with <strong>defrauding investors</strong> out of more than $5 million dollars, U.S. Attorney Paul J. Fishman announced.</p>
<p><strong>Lee Vaccaro</strong>, 44, of Las Vegas, Nevada, was arrested by special agents of the <a href="https://www.fbi.gov/">FBI</a> and charged by complaint with one count of conspiracy to commit securities <a href="https://www.fraudswatch.com/category/fraud/"><strong>fraud</strong></a> and one count of <em>securities fraud</em>. He is scheduled to appear later today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.</p>
<p><strong>According to documents filed in this case and statements made in court:</strong></p>
<p><em>Vaccaro</em> and “Conspirator #1” allegedly sold investors interests in companies they controlled, and falsely represented to investors that the companies held warrants in eAgency, a California-based company developing mobile security products. Warrants are derivative securities that give the holder the right to purchase common stock at a specific price within a certain time frame.</p>
<p><em>Vaccaro</em> and conspirator #1 allegedly made oral and written misrepresentations concerning the existence, number, validity, and term of eAgency warrants purportedly owned by the investment companies, as well as about the amount of money conspirator #1 had personally invested in and raised for eAgency, and conspirator #1’s current position at eAgency.</p>
<p><em>Vaccaro</em> and conspirator #1 also allegedly created and showed to investors numerous forged documents purporting to reflect the issuance of warrants to entities controlled by Vaccaro, and the transfer of those warrants to a company controlled by conspirator #1. Most of the eAgency warrants purportedly transferred by Vaccaro to conspirator #1’s company had, in fact, never been issued.</p>
<p>Beginning in January 2011, the dollar amount of interests Vaccaro and conspirator #1 sold in the investment companies began to surpass the dollar amount of valid warrants held by the investment companies. Neither Vaccaro nor conspirator #1 disclosed to investors the risk that their investments would be diluted by the sale of additional interests in the companies.</p>
<p><em><strong>Vaccaro and conspirator #1’s actions allegedly defrauded investors of more than $5 million.</strong></em></p>
<p>The conspiracy to commit securities <a href="https://www.fraudswatch.com/category/fraud/"><strong>fraud</strong></a> count carries a maximum potential penalty of five years in prison and a fine of up to $250,000, or twice the gross amount of pecuniary gain or loss resulting from the offense. The securities <a href="https://www.fraudswatch.com/category/fraud/"><em>fraud</em></a> count carries a maximum potential penalty of 20 years in prison and a fine of up to $5 million.</p>
<p>U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, for the investigation. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Sanjay Wadhwa and the New Jersey Bureau of Securities, under the direction of Laura Posner.</p>
<p>The government is represented by Assistant U.S. Attorney Daniel Shapiro of the U.S. Attorney’s Office Economic Crimes Unit in Newark.</p>
<p>If you believe you are a victim of or otherwise have information concerning this alleged scheme, you are encouraged to contact the FBI at 973-792-3000.</p>
<p>The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.</p>
<p>Today’s charges are part of efforts underway by President Obama’s <a href="https://www.fraudswatch.com/financial-scams-most-common-ways/">Financial Fraud</a> Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute <em><a href="https://www.fraudswatch.com/financial-scams-most-common-ways/">financial crimes</a></em>. 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 <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="546">financial</a> crimes</strong>; 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 fiscal year 2009, the Justice Department has filed over 18,000 <a href="https://www.fraudswatch.com/financial-scams-most-common-ways/"><em>financial fraud</em></a> cases against more than 25,000 defendants. For more information on the task force, please visit <a href="http://www.stopfraud.gov/">www.StopFraud.gov</a></p>
<p>Defense counsel: Robert C. Scrivo Esq., Newark</p>
<p> ;</p>
<p><a href="https://www.justice.gov/usao-nj/pr/nevada-man-charged-5-million-investment-fraud-scheme">Original PressRelease&#8230; </a></p>
</div>
</div>
</div>