Healthcare Fraud: Vibra Healthcare LLC (Vibra) – False Claims Act by Billing Medicare

Healthcare Fraud

VIBRA HEALTHCARE TO PAY $32.7 MILLION TO RESOLVE CLAIMS FOR MEDICALLY UNNECESSARY SERVICES

WASHINGTON – Vibra Healthcare LLC (Vibra), a national hospital chain headquartered in Mechanicsburg, Pennsylvania, has agreed to $32.7 million, plus interest, to resolve claims that Vibra violated the False Claims Act by billing Medicare for medically unnecessary services, the Department of Justice announced today.

“Medicare beneficiaries are entitled to receive care that is determined by their clinical needs and not the financial interests of healthcare providers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “All providers of taxpayer-funded federal health care services, whether contractors or direct billers, will be held accountable when their actions cause false claims for medically unnecessary services to be submitted.”

Vibra operates approximately 36 freestanding long-term care hospitals (LTCHs) and inpatient rehabilitation facilities (IRFs) in 18 states.  LTCHs provide inpatient hospital services for patients whose medically complex conditions require long hospital stays and programs of care.  IRFs are intended for patients needing rehabilitative services that require hospital-level care.  The government alleged that between 2006 and 2013, Vibra admitted numerous patients to five of its LTCHs and to one of its IRFs who did not demonstrate signs or symptoms that would qualify them for admission.  Moreover, Vibra allegedly extended the stays of its LTCH patients without regard to medical necessity, qualification and/or quality of care.  In some instances, Vibra allegedly ignored the recommendations of its own clinicians, who deemed these patients ready for discharge.

“Pursuing and recovering fraudulent billing for unnecessary services is a priority of my office,” stated U.S. Attorney John E. Kuhn Jr. for the Western District of Kentucky.  “This significant case against Vibra Healthcare and today’s settlement agreement is but one example of the vigorous work against health care fraud taking place in the Western District of Kentucky and across the nation.”

As part of the settlement, Vibra also agreed to enter into a chain-wide corporate integrity agreement with the Inspector General of the U.S. Department of Health and Human Services.

“Medical necessity is fundamental if health providers wish to claim taxpayer funds for medical care,” said Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG).  “OIG is committed to protecting precious Medicare dollars and ensuring that beneficiaries receive quality, necessary long-term care.”

Part of the allegations resolved by this settlement was originally filed under the qui tam or whistleblower provisions of the False Claims Act by Sylvia Daniel, a former health information coder at Vibra Hospital of Southeastern Michigan.  Daniel filed her suit in the Southern District of Texas, where one of Vibra’s LTCHs was located.  Under the False Claims Act, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery.  Daniel will receive at least $4 million.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $30.7 billion through False Claims Act cases, with more than $18.5 billion of that amount recovered in cases involving fraud against federal healthcare programs.

This matter was handled by the Civil Division’s Commercial Litigation Branch; the U.S. Attorneys’ Offices for the Southern District of Texas in Houston and for the Western District of Kentucky; and the HHS-OIG.  The qui tam case is captioned United States ex rel. Daniel v. Vibra Healthcare, LLC, Civil Action No. 10-5099 (S.D. Tex.).

The claims resolved by the settlements are allegations only and there has been no determination of liability.

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Financial Fraud: Frederick Ippolito Sentenced For $548,487.00 Tax Evasion

Financial Fraud

Town Of Oyster Bay Commissioner Sentenced To 27 Months In Prison For Tax Evasion

Defendant Willfully Failed to Report Over $2 Million in Consulting Fees

Earlier today in Central Islip, New York, Frederick Ippolito, former Town of Oyster Bay Commissioner of Planning and Development, was sentenced to 27 months’ imprisonment, three years of supervised release, and $548,487.00 in restitution, following his guilty plea on January 26, 2016, to tax evasion.  The sentencing proceeding was held before U.S. District Judge Leonard D. Wexler.

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS).

In announcing the sentence, United States Attorney Capers stated, “Today’s sentence reinforces that no one is immune from the laws of the United States.  The defendant’s position as an influential official within a local municipality did not exempt him from paying his fair share of taxes, just like any other citizen.  He has now been held accountable for his actions.”  Mr. Capers extended his grateful appreciation to IRS-Criminal Investigation, the agency responsible for leading the government’s investigation.

From 2008 to 2013, Ippolito received over $2 million in consulting fees from Carlo Lizza & Sons Paving, Inc., a company located in Old Bethpage, New York, as well as from a principal of that company.  Ippolito evaded taxes on that income by willfully failing to report it on his personal tax returns or the returns of entities he controlled.  Ippolito is the President of CAI Associates, LTD, a consulting and snow removal business, and a former officer of CAI Restaurant, Inc., d/b/a Christiano’s, in Syosset, New York.

From 2009 through January 2016, Ippolito served as the Commissioner of Planning and Development for the Town of Oyster Bay (TOB), a municipality in Nassau County, New York.  The TOB’s Department of Planning and Development was responsible for the enforcement of all codes, rules, and ordinances pertaining to building and zoning, and supervised the issuance of permits for construction within the TOB.  As Commissioner, Ippolito oversaw the TOB Department of Planning and Development’s several divisions, which included, among others, the Building Division, the Code Compliance Bureau, the Division of Administration of Board of Appeals, and the Planning Division.  Ippolito’s resignation as a Commissioner was accepted by the TOB following his guilty plea.

The government’s case is being handled by the Office’s Long Island Criminal Section.  Assistant United States Attorneys Catherine M. Mirabile and Raymond A. Tierney are in charge of the prosecution.

The Defendant:

FREDERICK IPPOLITO
Age:  77
Syosset, New York

E.D.N.Y. Docket No. 15-CR-129 (LDW)

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Financial Fraud: Kara Hayden Charged In Bank Fraud and Aggravated Identity Theft

Financial Fraud

Anchorage Insurance Sales Woman Arrested on Charges of Bank Fraud and Aggravated Identity Theft

Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced that an Anchorage woman has been taken into custody today on charges of two counts of Bank Fraud and two counts of Aggravated Identity Theft.

Kara Hayden, Jr., 50, of Anchorage, is charged in a four-count indictment with a scheme to obtain money from banks through fraudulent pretenses using personal information of former insurance clients to obtain credit cards.

According to Assistant U.S. Attorney Aunnie Steward, who presented the case against Kara Hayden to the grand jury, from at least October 2014 to December 2015, Hayden applied for seventeen credit cards using the names, social security numbers, and dates of birth of nine different victims without their knowledge or authorization.  Hayden successfully obtained two credit cards before the investigation of this case interrupted her scheme.  The two credit cards were obtained using the personal identifying information of three of her former insurance clients.  Hayden obtained approximately $14,500 in cash and retail goods prior to the discovery of her scheme.

The law provides for a maximum sentence of 30 years’ incarceration and a $1 million fine or both.

Under federal sentencing statutes, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

“Postal Inspectors worked closely with the U.S. Attorney’s Office and the Alaska State Troopers on this investigation,” said Seattle Division Inspector in Charge Anthony Galetti of the U.S. Postal Inspection Service. “We take identity theft and the violation of customers’ trust very seriously and will continue to vigorously protect the U.S. Mail and customers against all forms of criminal attack and misuse.”

The U.S. Postal Inspection Service, assisted by the Alaska State Troopers, conducted the investigation leading to the indictment in the case.

An indictment is only a charge and is not evidence of guilt.  A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilty beyond a reasonable doubt.

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Emai Scam: HEINEKEN PREMIUM PROJECT

HEINEKEN PREMIUM PROJECT

This is an email scam received about “ HEINEKEN PREMIUM PROJECT ” is a phishing scam and why not try to contact these people or log onto these sites and enter your data because you risk being stolen.

from:

HEINEKEN PREMIUM PROJECT

<infounzzz@gmail.com> via yahoo.com 

reply-to:HEINEKEN PREMIUM PROJECT

<mrs.sylviapieterse@hotmail.com>

to:
date:Mon, Sep 26, 2016 at 8:14 AM
subject:CONGRATULATIONS
signed-by:yahoo.com

PRIZE REDEMPTION CENTRE -39 1033 AP
AMSTERDAM THE NETHERLANDS


Dear Beneficiary,
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Investment Fraud: Ivan Valdes and 4 Other Charged for Investment Fraud and Kickback Scheme

Financial Fraud

Miami-Dade County Aviation Department Division Director and Four Others Charged in $5,000,000 Fraud and Kickback Scheme

The Miami-Dade County Aviation Department Division Director and four others were  charged in a $5,000,000 fraud and kickback scheme.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Katherine Fernandez Rundle, State Attorney for Miami-Dade County, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.

Ivan Valdes, 46, of Miami, the Division Director for the Aviation Terminal Building Maintenance for the Miami-Dade County Aviation Department, was charged in an Information with theft in programs receiving federal funds, in violation of Title 18, United States Code, Section 666. A separate Information charges Roy Jesus Bustillo, 37, Rolando Perez, 57, and Jose Barroso, 51, all of Miami, with conspiracy to commit mail fraud and wire fraud, in violation of Title 18, United States Code, Section 371.  Another Information charges Ygnacio Valdez, 45, of Miami, an employee in the Procurement Section of the Miami-Dade County Aviation Department, with misprision of a felony, in violation of Title 18, United States Code, Section 4.

“Taxpayers deserve to have their hard-earned monies fund local government, not the pockets of individuals who deprive South Florida residents of the benefit of honest services,” stated U.S. Attorney Ferrer. “Corruption by those who hold the public’s trust corrodes the practice of fair business dealings.  The U.S. Attorney’s Office, the FBI, and our partners at the State Attorney’s Office will continue to target for prosecution all corrupt officials, regardless of their position.”

“To most people, Ivan Valdes would have been a “Great American Success Story” as he rose from a simple worker to an upper-level manager of one of America’s most dynamic airports,” commented Miami-Dade State Attorney Katherine Fernandez Rundle.  “Instead, pure greed and a misplaced sense of self-entitlement led him to believe that he had a right to pocket taxpayer’s money. He was wrong.  My public corruption prosecutors, federal prosecutors from the U.S. Attorney’s Office, the Miami-Dade Police department and the FBI are constantly working to arrest and convict any public official who steals from the public.”

“When corrupt officials put self-interest and personal enrichment ahead of their obligation to be good stewards of taxpayer dollars, they breach the public’s trust,” said George L. Piro, Special Agent in Charge, FBI Miami.  “The FBI will continue to investigate and hold accountable any public official who utilizes their position for personal gain.  We encourage anyone who may have information about corruption to come forward and report it. This information is vital to our work.”

As set forth in the charging documents, Bustillo was the exclusive area representative in South Florida for the sale of certain LED light fixtures.   In or about 2010, Ivan Valdes told Barroso that he would request that the Miami-Dade County Aviation Department purchase the light fixtures represented by Bustillo, if he was paid a share of the proceeds.  Valdes and Barroso agreed and during the period of 2010 through and including 2015, the Miami-Dade County Aviation Department issued approximately twenty requests for Invitations to Quote for the purchase of millions of dollars of LED light fixtures.   Bustillo provided a quote to each of the vendors interested in competing for the Invitation to Quote.  Global Electrical & Lighting Supplies, Inc., owned by Rolando Perez, submitted bids and was awarded the contracts for each and every Invitation to Quote issued.  Perez and Bustillo had a secret agreement wherein Perez would be the only vendor who knew the actual price that Bustillo had agreed upon with the lighting manufacturer for the light fixtures and that a fake mounting accessory was included in the Invitations to Quote.  Knowing the additional profit that was to be received from each of the contracts, Bustillo and Perez were able to win the Invitation to Quote by keeping Perez’ bid price low.   In order to help ensure that Perez was awarded each of the contracts, Ivan Valdes paid thousands of dollars in cash to Ygnacio Valdez, whose duties in the procurement section in the Miami-Dade County Aviation Department, included collecting and tallying the bids and declaring the lowest responsive bidder on the Invitations to Quote.

On two occasions, Ivan Valdes instructed Barroso to direct Perez to bid on an Invitation to Quote for light fixtures, but he further instructed that the light fixtures should not be ordered from the lighting manufacturer.  Instead, on one occasion the conspirators used light fixtures already in stock at the Miami-Dade County Aviation Department to satisfy the purchase.  On the other occasion, no light fixtures were ever provided, not even from those already in stock.  Perez bid and won the contracts and he and his co-conspirators were paid approximately $500,000 for light fixtures that were never provided to Miami-Dade County Aviation Department.

During the course of the conspiracy, the co-conspirators defrauded the Miami-Dade County Aviation Department of approximately $5,250,000.  Barroso and Ivan Valdes split fraudulent proceeds of approximately $2.2 million.  Bustillo, through his companies, received fraudulent proceeds of approximately $764,000.  Perez received fraudulent proceeds of approximately $1.8 million.

If convicted, the defendants face a range of statutory penalties.  Ivan Valdes faces a statutory maximum term of imprisonment of 10 years and fines of up to $250,000.  Bustillo, Perez, and Barroso face a statutory maximum term of imprisonment of 5 years and a fine of up to $250,000.  Ygnacio Valdez faces a statutory maximum term of imprisonment of 3 years and a fine of $250,000.

Mr. Ferrer commended the investigative efforts of the FBI and the Miami-Dade County State Attorney’s Office and its Public Corruption Unit in connection with the investigation of this matter.  The case is being prosecuted by Assistant U.S. Attorney Jeffrey N. Kaplan.

An Information is only an accusation and a defendant is presumed innocent unless and until proven guilty.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

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Mortgage Fraud: Sam Ames Sentenced In A Conspiracy to Commit Mortgage Fraud

Mortgage Fraud

Lansing Man Sentenced In Federal Mortgage Fraud Probe

Sam Ames Sent to Prison for Role in Mortgage Fraud Conspiracy

 GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced today that Sam Ames, 33, of Charlotte, Michigan was sentenced to eight months in prison for his role in a conspiracy to commit mortgage fraud in connection with his dealings with CDC Investments and Hometown Financial. He was also ordered to pay a fine of $7,500 and restitution in the amount of $285,000 to the financial institutions defrauded. The sentence was imposed by Chief U.S. District Judge Robert J. Jonker.

On March 15, 2016, Ames pled guilty to conspiring with others to commit bank fraud in connection with real estate in and around Lansing, Michigan, from in or about 2006 to 2007. The conspiracy, which resulted in losses to mortgage lenders exceeding $550,000, enabled the perpetrators to use bank funds to enrich themselves as a result of sham real estate transactions.

Judge Jonker decided to sentence Ames below the recommended range of 30-37 months because he felt Ames had turned his life around since committing his crimes. But the Judge rebuffed a defense request for a probationary sentence. While the Judge declared himself persuaded that Ames was a different person than the one who defrauded banks and mortgage companies, the Judge stated that it was important for the public to see that a prison term awaits anyone who engages in mortgage fraud as rampant as the Ames conspiracy was.

Ames’s prosecution is the result of a continuing investigation by the Mortgage Fraud Task Force, comprised of federal investigators including the FBI, U.S. Secret Service, the U. S. Postal Inspection Service and the HUD Office of Inspector General. The task force also includes the Lansing Police Department, investigators employed by the Michigan Attorney General’s Office and other state agencies. To date, eighteen individuals have been convicted of mortgage fraud as part of this effort, resulting in prison sentences for all the defendants and restitution orders exceeding $14,000,000.

U.S. Attorney Miles praised the cooperation between federal, state and local investigators participating in the Mortgage Fraud Task Force. The prosecution was handled by Assistant U.S. Attorney Timothy VerHey.

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Tax Fraud: LESTER MORRISON Sentenced For Large-Scale Tax Fraud Scheme

Tax Fraud

Manhattan Federal Court Permanently Bars Tax Preparer Who Orchestrated Tax Fraud Scheme And Four Of His Associates From Engaging In Tax Preparation Business

Preet Bharara, the United States Attorney for the Southern District of New York, announced today that U.S. District Judge Alison J. Nathan has permanently enjoined LESTER MORRISON, a tax preparer who pled guilty in 2010 to orchestrating a large-scale tax fraud scheme, from working as a federal income tax return preparer or engaging in any conduct that interferes with the administration and enforcement of federal tax laws.  Judge Nathan previously issued permanent injunctions against four of Morrison’s associates who also had pled guilty to tax fraud, Paulette Bullock, Gary Hanna, Joy David, and Kevin Vaden, to bar them from engaging in the tax preparation business.

Manhattan U.S. Attorney Preet Bharara said:  “The injunctions against Lester Morrison and his cohorts make clear that tax preparers who defraud the IRS will not only face criminal charges but will also be barred from working in the tax return preparation business.  This Office is committed to using all the enforcement tools at its disposal to protect the integrity of the federal tax system and public funds.”

As alleged in the Complaint and the United States’ filings:

Between 2000 and 2008, MORRISON and his associates orchestrated a tax fraud scheme involving the preparation of thousands of false and fraudulent tax returns through a tax preparation business located in the Bronx and Englewood, New Jersey.  The fraudulent tax returns prepared by MORRISON and his associates sought improper deductions by, among other things, using stolen identities of deceased children to claim dependent deductions, and claiming phony business losses for non-existent businesses.  In 2010, MORRISON and his four associates pled guilty to tax fraud in federal court.  As of April 2016, MORRISON and his associates have all been released from prison.

In connection with entering the injunction against MORRISON, the Court found, among other things, that:

  • Morrison was the organizer and leader of a tax preparation fraud scheme;
  • Morrison caused loss of tax receipts to the United States in excess of $17 million;
  • Morrison lied to the IRS during the course of the IRS’s investigation into his conduct; and
  • Enjoining Morrison from acting as a tax return preparer is needed to protect the integrity of the federal tax system.

Based on those findings, the Court permanently enjoined MORRISON, either personally or by acting in concert with others, from acting as a federal income tax preparer for compensation, providing tax advice or services for compensation, or representing any person or entity before the IRS for compensation.  The Court also permanently enjoined MORRISON from engaging in conduct that interferes with the administration or enforcement of federal tax laws.  The Court further empowered the Government to take appropriate steps to monitor MORRISON’s compliance.

The Court previously made similar findings and imposed similar injunctions against each of MORRISON’s four associates.

The case is being handled by the Office’s Tax and Bankruptcy Unit.  Assistant U.S. Attorney Li Yu is in charge of the case.

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Financial Fraud: George E. Smith Sentenced For a Fraud Scheme

Financial Fraud

Chicago Businessman Sentenced to Two Years in Prison for Grant Fraud Scheme

Springfield, Ill. – A Chicago businessman has been ordered to serve 24 months in prison for a fraud scheme that resulted in two state agencies awarding separate, but nearly identical, grants to his not-for-profit entity in September 2008. U.S. District Court Judge Sue E. Myerscough sentenced George E. Smith, 66, and ordered that Smith pay restitution of nearly $500,000 to the state. Judge Myerscough allowed Smith to self-report as directed by the federal Bureau of Prisons to begin serving his prison sentence. Smith waived indictment and pled guilty in March 2016, to two counts of mail fraud and one count of money laundering.

In rendering today’s sentence, Judge Myerscough noted that Smith exploited his personal relationship with a former director of the Illinois Department of Children and Family Services related to a grant in the amount of $450,000 awarded by the agency on Sept. 2, 2008, under the Students at Risk Program. On Sept. 8, 2008, the Illinois Board of Education awarded Smith’s not-for-profit a similar grant in the amount of $342,000. According to the terms of the grants, both provided for similar services to be provided to the same at-risk population in the Chicago area during fiscal year 2009. The populations served, sources of referral, services to be provided, and the goals for each grant were essentially identical. Neither DCFS nor ISBE were aware of the issuance of an identical grant by the other state agency. Smith then converted the duplicate funding to his personal and business use.

Both grants were awarded to Diversified Behavioral Comprehensive Care, a not-for-profit entity owned and operated by Smith. In addition, Smith owned and operated three for-profit entities: Diversified Behavioral Services, Inc., Management Planning Institute, Inc., and the Institute for Positive Child and Family Development.  From 2005 through 2011, Smith, through both his not-for-profit and for-profit entities, received millions of dollars in funding from agencies of the state of Illinois, including DCFS, ISBE, and the Illinois Department of Human Services.

Smith further admitted that in February 2009, he caused Illinois DHS to award a third grant of $200,000 to DBCC to provide community services relating to the prevention, intervention, treatment and rehabilitation of alcohol and other drug abuse and dependency. In fact, Smith admitted that he submitted and caused to be submitted false and fraudulent documentation to DHS falsely representing the amount of community services DBCC actually provided under the DHS grant and fraudulently caused DHS to pay DBCC a total of $138,901.

Smith was ordered to pay restitution in the amount of $342,000 to the Illinois State Board of Education and $138,901 to the Illinois Department of Human Services – Division of Alcoholism and Substance Abuse.

Assistant U.S. Attorney Timothy A. Bass prosecuted the case on behalf of the U.S. Attorney’s Office for the Central District of Illinois. The investigation was conducted by the Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG) with the assistance and cooperation of the Office of Inspector General, Illinois Department of Children and Family Services; the Illinois Attorney General; the Illinois Board of Education, and the Illinois Department of Human Services.

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Financial Fraud: Christopher Swartz Guilty For Investment Fraud Scheme and Tax Evasion

Investment Fraud

New York Restaurant Entrepreneur Pleads Guilty to Ten-Year Investment Fraud Scheme and Tax Evasion

Defendant Deceived Investors, Diverted Funds and Dodged Tax Obligations

WASHINGTON – A Watertown, New York food and restaurant entrepreneur and franchisor pleaded guilty today to one count of wire fraud and one count of tax evasion announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Richard Hartunian for the Northern District of New York.

According to the criminal information and plea agreement filed with the U.S. District Court in Utica, New York, between 2005 and 2015, Christopher Swartz, 46, engaged in a promissory note scheme to defraud lenders and investors, as well as a scheme to evade taxes and obstruct the Internal Revenue Service (IRS).

“Mr. Swartz used his business enterprises to steal from lenders, investors, and the United States, hiding behind an elaborate web of entities and financial transactions,” said Principal Deputy Assistant Attorney General Ciraolo.  “This case serves as clear notice that no one is above the law, and those individuals who seek to evade their tax obligations will face prosecution and incarceration, regardless of the complexity of their schemes or economic status.”

“The defendant’s wide-ranging, persistent, and lengthy fraud and tax evasion schemes cost investors and the IRS millions of dollars,” said U.S. Attorney Hartunian.  “My office is pleased to be part of the efforts by the Tax Division and IRS-Criminal Investigation to hold him accountable for his brazen conduct.”

“As highly trained and experienced financial investigators, IRS special agents are particularly adept at tracing the flow of funds and uncovering hidden assets,” said Special Agent in Charge Shantelle P. Kitchen of IRS Criminal Investigation, New York Field Office.  “Mr. Swartz’s conviction serves as a warning to anyone who schemes to divert money from a business in order to conceal income and evade taxes.”

Swartz, using his multiple interests in various food and restaurant businesses, raised money by fraudulently inducing lenders with the promise of repayment at high-interest rates and ownership interests in his companies.  Swartz misappropriated and diverted funds received and when lenders and investors sought the return of their funds, Swartz attempted to lull them with false and fraudulent excuses, assurances, and partial payments, including payments by checks that he knew, would bounce.  Swartz also concealed his assets and income to avoid seizure and collection by lenders, investors, and judgment creditors, thereby attempting to prevent recovery of their funds.

As one part of the scheme, in 2009, Swartz used a promissory note and the offer of an equity interest in the Jreck Subs franchise to induce an investor group from New York City to provide $1.5 million in funds, including funds for the construction of new stores and the growth of the chain.  Swartz misappropriated and diverted a substantial portion of the funds.  Swartz then solicited additional loans from this same group, fraudulently inducing them with a series of additional promissory notes, which he failed to honor while misappropriating funds.  Swartz purported to secure some of the notes with fictitious and forged rebate agreements.

Swartz admitted that between 2005 and 2015, he also engaged in a 10-year tax evasion scheme, filing false tax returns that understated his personal income.  Swartz diverted money from business accounts and disguised these diversions in the company records as, among other things, loans and business expenses.  He made extensive use of cash to diminish the traceability of funds and concealed his ownership of various assets using multiple entities and nominees.  Swartz also falsified partnership tax returns and attempted to impede the IRS’s ability to collect employment taxes.

U.S. District Judge David N. Hurd scheduled sentencing for Jan. 19, 2017.  Swartz faces a statutory maximum sentence of 20 years in prison for his conviction on the wire fraud count, and five years in prison on the tax evasion count, as well as a period of supervised release and monetary penalties.  As a condition of the plea agreement, Swartz agreed to an order of restitution payable to any individuals and entities determined to be, at the time of sentencing, victims of his schemes.

The district court entered a preliminary order of forfeiture of assets, including forfeiture of Swartz’s interests in the Jreck Subs franchisor corporate business, which receives royalty payments from store owners based on a percentage of store sales.  Under current law, if a final forfeiture order is entered, criminally forfeited assets may be used as a source of funds to pay restitution to victims.  According to court documents, the number of victims may be in excess of 130.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Hartunian thanked special agents of IRS-Criminal Investigation and the FBI, and an IRS revenue agent, who conducted the investigation, as well as Assistant Chiefs John N. Kane, Jr. and Andrew Kameros, and Trial Attorney Abigail Burger Chingos of the Tax Division, who are prosecuting the case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

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Financial Fraud: Tyler Sutton Guilty In Bank Fraud Conspiracy And Stolen Identity

Bank Fraud

KC Man Pleads Guilty to Bank Fraud Conspiracy

KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man pleaded guilty in federal court today to his role in a bank fraud conspiracy in which he operated a flop house where he paid drug addicts for stolen identity information that was used to create counterfeit checks.

Tyler Sutton, 54, of Kansas City, pleaded guilty before U.S. Chief District Judge Greg Kays to participating in a conspiracy to commit bank fraud, possession of counterfeit securities, possession of stolen mail, and identity theft. Sutton also pleaded guilty to two counts of aggravated identity theft.

Sutton was a property manager residing in the 400 block of Gladstone Boulevard in Kansas City, although he only paid rent for one month and was evicted in October 2014. He used the house to conduct his illegal business by operating it as a flop house where he offered cash and/or drugs to drug addicts who brought him stolen mail, identities, addresses, credit card numbers and bank account information. Sutton often allowed the addicts to stay at the residence.

Sutton also unlawfully obtained identity and account information belonging to other persons and businesses by stealing these items from businesses and from the mail. Sutton and co-conspirators used the stolen identity information to create counterfeit identifications and checks, which were cashed at retail stores and financial institutions.

Sutton did not usually create counterfeit identifications and checks himself, nor did he personally present counterfeit identifications and cash checks. Rather, he instructed others in the making and presenting of counterfeit identifications and checks, and shared the illegal proceeds with his co-conspirators. In this manner, Sutton attempted to insulate himself from liability.

Sutton admitted that the intended loss amount was $83,981.

Co-defendants Gary K. Keesler, 37, and Chad M. Mills, 28, both of Kansas City, Mo., and Christopher Hite, 33, of Windsor, Mo., have pleaded guilty to their roles in the conspiracy and have been sentenced.

Under federal statutes, Sutton is subject to a sentence of up to five years in federal prison without parole for the conspiracy, plus a mandatory consecutive sentence of two years in federal prison without parole for aggravated identity theft. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Kathleen D. Mahoney. It was investigated by the Kansas City, Mo., Police Department and the U.S. Postal Inspection Service.

Original PressReleases…

Financial Fraud: Yordan Gorotiza Sentenced For Tax Fraud Schemes

Financial Fraud

City of Miami Resident Sentenced to More Than 4 Years in Prison for Possessing 242 Stolen Identities Used in Unemployment and Tax Fraud Schemes

A City of Miami resident was sentenced to 51 months in prison, to be followed by three years of supervised release, for possessing 242 stolen identities used in unemployment and tax fraud schemes.

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), Rafiq Ahmad, Special Agent in Charge, United States Department of Labor, Office of Inspector General (DOL-OIG), Miami Office, and Steve Steinberg, Chief, Aventura Police Department, made the announcement.

Yordan Gorotiza, 26, was sentenced by U.S. District Judge Paul C. Huck to 51 months in prison, to be followed by three years of supervised release, a $200 special assessment, and $33,608 in restitution, stemming from his conviction on one count of possession of fifteen or more unauthorized access devices (Social Security numbers) with intent to defraud, in violation of Title 18, United States Code, Section 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.

According to court documents, during a traffic stop of Gorotiza’s vehicle, law enforcement officers found Gorotiza in possession of (among other items) four Florida unemployment cards in the names of other individuals; 26 Visa gift cards; a Florida driver’s license with Gorotiza’s picture but with another individual’s name; and a book bag containing personal identifying information (PII) of 242 different people, including employment records from a business and patient data sheets from a hospital. Several of the sheets contained handwritten driver’s license numbers and markings commonly used to represent tax or unemployment benefits filings.

Records from the Florida Department of Economic Opportunity show that between October 1, 2013, and July 11, 2014, at least 64 of the victims had their personal information used without authorization to obtain unemployment benefits, including the victims whose unauthorized unemployment cards Gorotiza possessed during the traffic stop. The total actual loss to the Florida Department of Economic Opportunity was $33,608, and the total intended loss attributable to Gorotiza was $281,009.

Mr. Ferrer commended the investigative efforts of IRS-CI, DOL-OIG, the Aventura Police Department and the Florida Department of Economic Opportunity.  The case is being prosecuted by Assistant U.S. Attorney Tonya R. Long.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Original PressReleases…

Financial Fraud: Jose Miguel Tapia Sentenced For Bank Fraud And Aggravated Identity Theft

Bank Fraud

Baltimore Fraudster Sentenced To Five Years In Federal Prison For Bank Fraud And Aggravated Identity Theft

Committed Multiple Fraud Schemes Over a Four-Year Period

Baltimore, Maryland – Chief U.S. District Judge Catherine C. Blake sentenced Jose Miguel Tapia, age 30, of Baltimore, to five years in prison, followed by five years of supervised release, for bank fraud and aggravated identity theft arising from several schemes in which Tapia fraudulently obtained over $130,000.  Chief Judge Blake also entered an order requiring Tapia to pay restitution in the full amount of the victims’ losses, which is $132,548.85.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Brian Murphy of the United States Secret Service – Baltimore Field Office; and Chief James W. Johnson of the Baltimore County Police Department.

According to Tapia’s plea agreement, from October 2010 through November 2014, Tapia devised multiple schemes to defraud financial institutions.  For example, during the time of the fraud Tapia obtained the personal identification information of an individual, which Tapia used to gain access to the victim’s credit accounts.  Tapia then made purchases totaling approximately $41,000 against the victim’s credit cards.  In addition, Tapia submitted fraudulent applications for the financing of automobiles, using the personal information of the victim in order to qualify for the loans and to purchase the vehicles.  Tapia obtained and attempted to obtain vehicles worth approximately $38,000, including a 2011 Infinity G37X luxury vehicle, which Tapia purchased on October 9, 2014, using the social security number of the victim.

From September through November 2014, Tapia and others posed as account holders of two businesses in order to gain access to their business accounts at a home improvement store.  Once he gained access to the accounts, he made purchases on the accounts and changed the phone numbers and passwords for the accounts without the knowledge and consent of the business owners.  Tapia made a total of approximately $48,000 in unauthorized purchases at the home improvement store against the business accounts of the victims.  To extend the scheme and have access to more credit, Tapia obtained the financial account information of a hotel.  Tapia withdrew approximately $45,000 from bank accounts owned by the hotel, which he used to pay down the account balances of the victim businesses at the home improvement store.  Tapia also posed as an employee of the hotel to open an account at a phone store in Fullerton, Maryland, then charged approximately $2,800 against that account, which was billed to the victim hotel.

Finally, Tapia gained access to Verizon account information of employees at a university in Baltimore, which he used to obtain approximately $9,199 in smartphones, and other goods and services.

The total actual loss to the victims as a result of Tapia’s fraudulent activities was $132,548.85.

The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information and protect citizens from identity theft.

Today’s announcement is part of the efforts undertaken in connection with the President’s Financial 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’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations.  Since the fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

United States Attorney Rod J. Rosenstein commended the U.S. Secret Service – Baltimore Field Office and Baltimore County Police Department for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Tamera L. Fine, who prosecuted the case.

Original PressReleases…

Financial Fraud: Morad Limlahi Sentenced For Wire Fraud

Wire Fraud

Fraudster sentenced to three years for £95,000 fraud

A fraudster who was the target in two separate police investigations has been jailed for three years following a Dedicated Card and Payment Crime Unit (DCPCU) investigation. Morad Limlahi, aged 27, of east London, was subject to two separate DCPCU investigations for stealing card details from customers at the shop on Oxford Street where he worked.

He used the details to load funds onto travel money cards, which were then used to purchase luxury goods from pawn shops. When he has arrested investigators from DCPCU found Limlahi had stolen the details of 139 cards, issued by a number of banks and card issuers. Limlahi stole confidential customer account details while an employee at a Vodafone store in Oxford Street.

The stolen card details were used to make purchases online and Limlahi was reported to the DCPCU after Vodafone and HSBC provided evidence which showed he was the common point of compromise for a number of bank cards in which fraud had occurred. In a separate DCPCU investigation, Limlahi was arrested for using compromised bank cards to load £5,000 onto a travel money card. An accomplice of Limlahi’s used the travel money card to buy phones and gold jewellery from two pawnbrokers; CCTV showed Limlahi was present at both scenes.

The compromised bank card used to load funds onto the travel money card belonged to a customer Limlahi had served at Vodafone. Limlahi committed fraud worth £95,000 and attempted a further £96,000, with the crimes committed between October 2012 and October 2014.

He pleaded guilty to fraud by abuse of a position of trust at the Old Bailey and was sentenced today (1 August 2016). Det Insp Sarah Ward, of the DCPCU, said: “Would-be fraudsters need to know many organisations are looking out for their criminal activity and will ensure they are brought to justice. “The sentence given to Morad Limlahi shows there is no defence for abusing a position of trust and the police, banks, businesses and other organisations will do everything they can to identify and prosecute fraudsters.”

Established in April 2002, the DCPCU has since achieved an estimated £479 million in savings from reduced fraud activity.

Original PressReleases…

Financial Fraud: Mark Anderson Jones Guilty For Multi-Million Dollar Ponzi Scheme

Million Dollar Ponzi Scheme

Former Massachusetts Man Pleads Guilty to Multi-Million Dollar Ponzi Scheme

BOSTON – A former Massachusetts-resident pleaded guilty on Friday, Sept. 16, 2016, in U.S. District Court in Boston in connection with running a $10 million Ponzi scheme.

Mark Anderson Jones, 64, pleaded guilty to one count of wire fraud and one count of engaging in monetary transactions in proceeds of unlawful activity.  U.S. District Court Senior Judge Mark L. Wolf scheduled sentencing for Dec. 21, 2016.

Between 2008 and 2015, Jones obtained approximately $10 million in investments from over 20 individuals by leading them to believe that they would be providing financing to Jamaican businesses.  Jamaican banks can take time to close loans to businesses and Jones claimed that he was offering these businesses “bridge loans” as an interim measure (i.e., to “bridge” the gap between the date a loan was sought from Jamaican banks and the distribution of funds by those banks).  However, Jones made misrepresentations to investors about the purported bridge loan investments and how their money would be used.  Specifically, rather than investing in bridge loans and paying returns based on investments, Jones paid a significant amount of investment returns, or repaid investment principal, to investors from new capital provided by other investors.

For example, in January 2015, a Massachusetts-based investor invested approximately $200,000 with Jones.  Later that month, Jones used approximately $180,000 of that investor’s money to pay four other investors.

U.S. Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement.  Valuable assistance was also provided by the U.S. Postal Inspection Service and the Internal Revenue Service’s Criminal Investigations in Boston.  The case is being prosecuted by Assistant United States Attorney Sarah E. Walters, Chief of Ortiz’s Economic Crimes Unit, and Special Assistant U.S. Attorney Eric A. Forni from the SEC.

Original PressReleases…

Financial Fraud: Karamchand “Raj” Doobay Charging With Conspiracy to Commit Mail and Wire Fraud

Mail and Wire Fraud

Canadian Man Ordered Detained Pending Federal Trial Relating To An RV Park And Immigrant Investor Fraud Scheme

Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Karamchand “Raj” Doobay (42, Ontario, Canada and Orlando, Florida) with conspiracy to commit mail and wire fraud and substantive counts of mail and wire fraud. If convicted on all counts, he faces a maximum penalty of 20 years in federal prison on each count. The indictment also notifies Doobay that the United States intends to forfeit $8,248,547, representing the amount of proceeds obtained as a result of the offenses, and several parcels of real property in Hamilton County, Florida, and a residence in Winter Garden, Florida, which are also alleged to be traceable to proceeds of the offenses. Doobay was arrested on September 1, 2016, and was ordered detained pending trial.

According to the indictment, Doobay operated business entities in Hamilton County, through which he acquired a parcel of land located at 7516 SE 113th Blvd., in Jasper. From about March 2009, through December 2015, Doobay solicited investors to purchase subdivided lots on the land, guaranteeing them returns between 9 percent and 41 percent for investments in RV lots and other lots for sale by his entity, Florida Gateway Resort. He utilized various bank accounts to collect funds for the purchase of RV lots that he purported to sell to investor purchasers. However, Doobay failed to disclose that he had previously contracted to sell and purportedly sold the same RV lots to other investors.

The indictment also alleges that, from about May 2011, through about May 2016, Doobay conspired to commit wire fraud by promising to immigrant investors to use their investments for the development, renovation and/or new construction of Senior Premier Living, a retirement community in the city of Jasper. In fact, Doobay used a portion of the investors’ funds to pay Florida Gateway Resort investors and for his own personal use and enjoyment. This included a withdrawal of $190,000 in immigrant investor funds on or about October 27, 2014.

An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.

This case was investigated by the Federal Bureau of Investigation, the Florida Department of Law Enforcement, and the Hamilton County Sheriff’s Office. It will be prosecuted by Assistant United States Attorney Kelly S. Karase.

Original PressReleases…

Financial Fraud: Domonic McCarns with Other 14 Defendants Sentenced to Commit Mail Fraud and Mortgage Fraud

Financial Fraud

Final Defendant Sentenced to 14 Years in Prison for Nationwide Foreclosure Rescue Scam

Over $90 Million in Fraudulent Loans and Hundreds of Homes Stolen from Homeowners

SACRAMENTO, Calif. — On Wednesday, September 14, 2016, Domonic McCarns, 41, of Irvine, was sentenced to 14 years in prison by U.S. District Judge Kimberly J. Mueller for conspiracy to commit mail fraud for his participation in a nationwide foreclosure-rescue scam, Acting U.S. Attorney Phillip A. Talbert announced.

McCarns is the final defendant to be sentenced for a pair of schemes that lured homeowners with the promise to help them avoid foreclosure and repair their credit. Two indictments were brought in 2008. Four defendants were convicted after two jury trials, 13 defendants pleaded guilty, and now, all 17 defendants have been sentenced. On September 9, 2013, Charles Head was sentenced to 35 years in prison, and on October 29, 2014, his brother and fellow leader in the scheme Jeremy Michael Head was sentenced to 10 years in prison.

Acting U.S. Attorney Talbert said: ‘This scheme purposely targeted the financially vulnerable during their time of greatest distress with promises of help. The defendants tricked the victims into handing over their most valuable assets, their homes. Few economic crimes are more reprehensible. This final sentence, in this case, will bring some measure of justice for their victims.”

“In large fraud schemes like the one devised by Charles Head, we can’t forget about the individual homeowners who comprised the millions of dollars in losses,” said Monica M. Miller, Special Agent in Charge of the Sacramento division of the FBI. “Today’s sentencing ends an investigation that has been ongoing for more than 10 years and brings some closure to the innocent people who were victimized by Head’s callous scheme.”

“Dominic McCarns and his co-conspirators assured innocent homeowners across the country facing foreclosure that they could turn around their misfortunes and keep their homes,” said Michael T. Batdorf, Special Agent in Charge, IRS-Criminal Investigation. “However the defendants had other plans which resulted in one of the most harmful mortgage fraud schemes in the country. The sentence handed down today by the court is befitting of this defendant and his actions.”

According to court documents, the defendants solicited homeowners facing foreclosure, and through misrepresentations, fraud, and forgery, substituted straw buyers for the victim homeowners on the titles of properties without the homeowners’ knowledge. These straw buyers were often friends and family members of the defendants or were solicited on the internet. Once the straw buyers were on the title to the homes, the defendants applied for mortgages to extract the maximum available equity from the homes. The defendants then shared the proceeds of the ill-gotten equity and the “rent” that the victim homeowners paid them. Ultimately, the victim homeowners were left with no home, no equity, and with damaged credit ratings.

Initially, the scam focused on distressed homeowners in California before expanding throughout the United States. In the course of the schemes, between January 2004 and June 2006, the defendants obtained over $90 million in fraudulent loans, caused estimated losses of over $50 million, and stole title to over 300 homes.

On December 2, 2013, McCarns was convicted after a five-week trial along with Charles Head, 36, of Pittsburgh, Pennsylvania, (formerly of Los Angeles); and Benjamin Budoff, 46, of Colorado Springs, Colorado. Head had been previously convicted in a trial in a nearly four-week trial in May 2013 with his brother Jeremy Michael Head, 34, of Huntington Beach.

This case was the product of an investigation by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorneys Michael D. Anderson and Matthew Morris prosecuted the case.

Fourteen other defendants have been sentenced:

Elham Assadi, 39, of Irvine, sentenced to 5 years’ probation with 6 months of home detention;

Leonard Bernot, 50, of Laguna Hills, sentenced to 18 months in prison;

Akemi Bottari, 36, of Los Angeles, sentenced to 3 years’ probation with 6 months of home detention;

Keith Brotemarkle, 51, of Johnstown, Penn., sentenced to 5 years, 10 months in prison;

Benjamin Budoff, 49, Colorado Springs, Colo. sentenced to 4 years in prison;

Joshua Coffman, 37, of North Hollywood, sentenced to 20 months in prison;

John Corcoran, 61, of Anaheim, sentenced to 4.5 years in prison;

Sarah Mattson, 33, of Phoenix, Ariz., sentenced to 3 years’ probation with 3 months of home detention;

Omar Sandoval, 36, of Rancho Cucamonga, sentenced to 4 years and 10 months in prison;

Xochitl Sandoval, 37, of Rancho Cucamonga, sentenced to 8 months in prison;

Lisa Vang, 31, of Westminster, sentenced to 3 years’ probation;

Andrew Vu, 38, of Santa Ana, sentenced to 6 months in prison with 6 months of home detention;

Justin Wiley, 37, of Irvine, sentenced to 18 months in prison, and

Kou Yang, 40, of Corona, sentenced to 4 years in prison.

This case was part of the President’s Financial 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’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. For more information on the task force, please visit www.StopFraud.gov.

Original PressReleases…

Financial Fraud: Sherman Carl Vaughn Pleaded Guilty In An Investment Fraud Scheme

Financial Fraud

Former Owner of Investment Firms Pleads Guilty to $9 Million Fraud

RICHMOND, Va. – Sherman Carl Vaughn, 45, of Blackstone, pleaded guilty today to charges related to his role in an investment fraud scheme that caused more than $9 million in losses to over 50 investors.

According to the statement of facts filed with the plea agreement, in 2009, Vaughn and co-conspirator Merrill Robertson, Jr., 36, of Chesterfield, started Cavalier Union Investments, LLC, and Black Bull Wealth management, LLC. From 2009-2016, Vaughn and Robertson solicited individuals to invest money in private investment funds that they managed, as well as distinct investment opportunities that they proposed. Robertson identified potential investors through various contacts; including contacts he developed playing football at Fork Union Military Academy, the University of Virginia, and the National Football League, while Vaughn focused on developing investment opportunities.

According to the statement of facts, Vaughn and Robertson led individuals to believe they have experienced investment advisors, and that they employed other experienced investment advisors to manage their investment funds. For example, Vaughn represented that he was a long-time investor and philanthropist with extensive experience in business and real estate. In fact, Vaughn filed for personal bankruptcy four times, including twice during the time he was soliciting investors for Cavalier.

As a result of this conspiracy, Vaughn and Robertson fraudulently obtained more than $9 million from over 50 investors, spending much of the money on their own personal living expenses, including mortgage and car payments, school tuitions, spa visits, restaurants, department stores, and vacations.

Vaughn faces a maximum penalty of 20 years in prison when sentenced on December 14. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Thomas Jankowski, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI); Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office; and Terrence P. McKeown, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after the guilty plea was accepted by U.S. District Judge John A. Gibney, Jr. Assistant U.S. Attorney Katherine Lee Martin is prosecuting the case.

This investigation was initiated based on information received from the U.S. Securities and Exchange Commission (SEC).

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16-cr-111.

Original PressReleases…

Financial Fraud: Josiah Larkin Convicted Of Tax Fraud

Financial Fraud

San Francisco-Based Tax Preparer Convicted Of Tax Fraud

Defendant Owned Storefront in the Bayview/Hunter’s Point Neighborhood and Advertised Refunds for the Unemployed

SAN FRANCISCO – A federal jury convicted Josiah Larkin of conspiracy to file false claims and presenting false claims to the IRS, announced United States Attorney Brian J. Stretch and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Michael T. Batdorf.  The guilty verdicts, reached yesterday, followed a six-day jury trial before the Honorable Susan Illston, U.S. District Court Judge.

Evidence at trial showed that Larkin, 40, of San Francisco, set up a storefront on Third Street in the Bayview/Hunter’s Point neighborhood of San Francisco in December of 2012.  Although not authorized to do so, he identified the shop as a Colbert Ball Tax franchise.  Larkin advertised “Get Up to $600- Even if Unemployed, On SSA or SSI.”  Larkin prepared false tax returns for clients, reporting that they had no income and that they paid $4,000 in qualified education expenses to attend college.  This combination of zero income and $4,000 in qualified education expenses resulted in a $1,000 tax refund based on the American Opportunity Tax Credit (“AOTC”).  Larkin took approximately half of the fraudulently-obtained tax refunds and gave the remaining half to his clients.  Larkin was indicted on January 6, 2015, and charged with one count of conspiracy to file false federal income tax returns as well as multiple counts of filing false claims and aiding and abetting filing false claims, all in violation of 18 U.S.C. §§ 286 and 287.  The jury found Larkin guilty of the conspiracy charge and five counts of filing false claims.

The fraudulent preparation of tax returns is an insidious drain on the public fisc,” said U.S. Attorney Brian J. Stretch.  “This office will continue to devote resources to prosecute those who seek to profit by submitting fraudulently prepared tax returns to the IRS.”

“Josiah Larkin’s verdict today marks another example of a tax return preparer who preyed on the vulnerable,” said Michael T. Batdorf, Special Agent in Charge IRS Criminal Investigation.  “He used personal identifying information to make a quick buck. Educating the public about these schemes is a continuing focus for IRS-CI.   Tax preparers should take note that if they attempt to defraud the IRS they will be caught and held accountable.”

Defendant’s sentencing hearing is scheduled for January 13, 2017, before Judge Illston.  The maximum statutory penalty for conspiracy to file false claims is ten years’ imprisonment and a fine of $250,000.  The maximum statutory penalty for presenting false claims to an agency of the United States is five years’ imprisonment and a fine of $250,000, plus restitution if appropriate.  However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorneys Cynthia Stier and Laurie Gray prosecuted the case.  The prosecution is the result of an investigation by the Internal Revenue Service.

Original PressReleases…

Financial Fraud: SALVATORE CRIBARI Indicted And Charged For Wire Fraud With a Scheme to Defraud

Financial Fraud

Lake in the Hills Man Charged with $340,000 Scheme to Defraud

ROCKFORD — A Lake in the Hills, Ill. man appeared today before U.S. Magistrate Judge Iain D. Johnston on wire fraud charges.

SALVATORE CRIBARI, also known as “Sal Fradillio,” 59, was indicted on Sept. 13, 2016, by a federal grand jury in Rockford and charged with nine counts of wire fraud, in connection with a scheme to defraud “Company A,” an operator of a nationwide chain of home improvement stores. Cribari was arrested on Sept. 15, 2016, in Algonquin, Ill. Cribari pleaded not guilty during his arraignment today before U.S. Magistrate Judge Iain D. Johnston, and he was ordered detained pending a hearing scheduled for Sept. 19, 2016 at 1:00 p.m.

According to the indictment, Cribari knowingly and intentionally stole merchandise from Company A stores located in the Northern District of Illinois. The indictment alleges that Cribari returned the stolen merchandise to Company A without receipts, and he falsely and fraudulently presented the stolen merchandise as legitimately having been purchased from Company A. Cribari received store credit in the form of Company A gift cards during those non-receipted returns. The indictment alleges that Cribari fraudulently obtained more than $340,000 in Company A gift cards as part of the scheme to defraud, and Cribari subsequently used those gift cards to purchase over $310,000 of merchandise and services from Company A. It is alleged that Cribari provided over 1,300 false Illinois driver’s license and state identification numbers to conduct non-receipted returns of stolen merchandise at Company A.

Wire fraud carries a maximum penalty of 20 years in prison, and a maximum fine of $250,000, or an alternate fine totaling twice the loss or twice the gain derived from the offense, whichever is greater.  The Court may also impose a sentence of probation of one to five years, a term of supervised release of up to three years, and restitution.  If Cribari is convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The indictment and arrest were 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 Federal Bureau of Investigation. The Lake Zurich and Lake in the Hills Police Departments provided assistance in the investigation.

The government is represented by Assistant U.S. Attorney Talia Bucci.

Original PressReleases…

Email Scam Examples: GOOGLE YEARLY ANNIVERSARY

GOOGLE ANNIVERSARY

This is an email received about “ GOOGLE YEARLY ANNIVERSARY ” is a phishing scam and why not try to contact these people or log onto these sites and enter your data because you risk being stolen.

from:

GOOGLE YEARLY ANNIVERSARY

<orenliat@netvision.net.il>

reply-to:coordinatoredith65@yahoo.com.hk
to:
date:Sat, Aug 20, 2016 at 5:30 AM
subject:GOOGLE YEARLY ANNIVERSARY

GOOGLE CORPORATION THAILAND
Soi Soonvijai 7, New Petchburi road, Bangkapi,
bangkapi huaykwang 10310 Thailand
BANGKOK THAILAND

Winning No: GILP/5975/107/2016
Ticket No: GILP/3081/039/2016

GOOGLE YEARLY ANNIVERSARY WINNING NOTIFICATION
We wish to congratulate you on this note, for being part of our selected winners in our just concluded internal promotion draw this year, this promotion was set-up to encourage the active users of Google products and its software services.
Hence we do believe with your winning prize, you will continue to be an active patronage to Google products and its software services. Google Corporation develops and markets software, services, and hardware that deliver new opportunities, greater convenience, and enhanced value to people’s lives. We ran an online e-mail beta draw which your email address won One Million United States Dollar ( $1,000.000.00 USD). We wish to formally announce to you that you have successfully passed the requirements, statutory obligations, verifications, validations and satisfactory report Test conducted for all online winners.
A winning check will be issued in your name by Google Promotion Award; for the sum of One Million United States Dollar ( $1,000.000.00 USD) and also a certificate of the prize, claims will be sent alongside your winning check cashable at any bank.
You are advised to contact the assigned Google Program Administrator/Coordinator with the following details to avoid unnecessary delay and complications:
VERIFICATION AND FUNDS RELEASE FORM
(1) Your Contact Address/Private Email Address:
(2) Your Tel/Fax Numbers:
(3) Your Nationality/Country:
(4) Your Full Name:
(5) Occupation/Company:
(6) Age/Gender:

Mrs.Edith Nimlaoo
E-mail: coordinatoredith@gmail.com

Google values your right to privacy! Your information is 100% secured and will be used exclusively for the purpose of this award only.
The Google Promotion Award Team has discovered a huge number of double claims due to winners informing close friends relatives and third parties about their winning and also sharing their pin numbers. As a result of this, these friends try to claim the lottery on behalf of the real winners. The Google Promotion Award Team has reached a decision from its headquarters that any double claim discovered by the Lottery Board will result to the canceling of that particular winning, leading to a loss for both the double claimer and the real winner, as it is taken that the real winner was the informer to the double claimer about the lottery. So you are hereby strongly advised once more to keep your winnings strictly confidential until you claim your prize.
Congratulations from the Staffs & Members of the Google interactive Lotteries Board Commission.
Yours faithfully,
MD Matt Brittin,
Chairman of the Board and Managing Director,
2016Google Corporation.