Financial Fraud: Group of Individuals Charged in Connection With Schemes To Illegally Redeem Food Stamp Benefits in Exchange For Cash

Financial Fraud

12 Defendants Charged Federally with Collectively Receiving Over $20 Million from USDA by Fraudulently Trading Food Stamps for Cash

Twelve retail store owners, operators, and clerks, have been charged in connection with schemes to illegally redeem food stamp benefits in exchange for cash.

Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, Karen Citizen-Wilcox, Special Agent in Charge, U.S. Department of Agriculture, Office of Inspector General (USDA-OIG), George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Brian Swain, Special Agent in Charge, U.S. Secret Service (USSS), made the announcement.

The indictments allege that the retailers received more than $20 million in federal payments for transactions in which they did not provide any food, a fraud scheme commonly known as “food stamp trafficking.” Stores and vendors allegedly took illicit profits from the fraudulent transactions with food stamp recipients. This operation resulted in the largest combined financial fraud loss for a food stamp trafficking takedown in history.

“The Supplemental Nutrition Assistance Program offers nutrition assistance to millions of eligible, low-income individuals and families while providing economic benefits to communities,” stated Acting United States Attorney Benjamin G. Greenberg. “The exploitation of participants in the program by providing cash instead of nutrition for financial gain is criminal. The U.S. Attorney’s Office and our law enforcement partners are committed to investigating and bringing to justice those who engage in these fraudulent schemes.”

“The USDA-OIG conducts hundreds of criminal investigations relating to SNAP fraud across the nation each year. In this instance, eight small convenience stores in south Florida committed a staggering amount of fraud in a relatively short amount of time. These retailers created an illegal benefits exchange system that defrauded the American taxpayer and denied healthy foods to needy children and their families. The storeowners who allegedly orchestrated this trafficking scheme pocketed millions in “fees” which they charged for converting food assistance benefits into cash. Any retailer who chooses to defraud taxpayers through such schemes will continue to be aggressively investigated and prosecuted by USDA-OIG and its law enforcement partners,” stated Karen Citizen-Wilcox, Special Agent in Charge, USDA-OIG.

The Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, is a federally funded, national program established by the United States government to alleviate hunger and malnutrition among lower income families. The United States Department of Agriculture (USDA) administers SNAP through its agency, the Food and Nutrition Service (FNS). FNS is responsible for the authorization and disqualification of retail food establishments participating in the redemption of SNAP benefits.

In Florida, SNAP is administered by the State of Florida Department of Children and Families (DCF). DCF is responsible for overall program administration, as well as approving, denying or revoking assistance for recipients. FNS and the State of Florida share jointly in the cost of administering the SNAP. In 1998, DCF changed the format of SNAP benefits in Florida from a traditional paper coupon system to an Electronic Benefit Transfer (EBT) card system. Recipients use the EBT card, which contains an embedded magnetic strip, to purchase approved food items from participating retailers. Retailers must apply to and be approved by FNS to participate in the program. Authorized retailers use a point-of-sale (POS) terminal that checks the EBT card information and deducts the cash value of the purchase from the customer’s SNAP benefit balance. SNAP reimbursements are paid to retailers through electronic funds transfers. Retailers bill the government in return for providing approved food items. SNAP retailers, including the defendants, receive instruction regarding the requirements and regulations of the food stamp program, such as that only eligible food items can be exchanged for EBT benefits and that a retailer may never exchange EBT benefits for cash or non-food items.

According to some of the indictments listed below, the defendants owned, operated, or worked at stores in the Southern District of Florida that were authorized to accept SNAP. In other indictments, the defendants owned, operated, or worked at stores in the Southern District of Florida who were not authorized to accept SNAP but instead unlawfully utilized the POS terminals of authorized retailers. The defendants received instruction regarding the requirements and regulations of the food stamp program. The defendants allegedly exchanged EBT benefits for cash, in violation of the food stamp program rules. The defendants and/or their co-conspirators/employees swiped the recipient’s EBT card at a POS machine for an inflated amount, and paid the recipient, in cash, a reduced percentage of the value of food stamp benefits charged on the card. The defendants would realize a guaranteed, significant profit from each fraudulent transaction. In most situations, the recipient did not actually receive any food or eligible items in return for their food stamp benefits. As a result of the unlawful cash transactions, the defendants fraudulently obtained more than $20 million dollars in EBT deposits for transactions in which the stores did not provide food.

1. United States v. Hasan Saleh, et al., Case No. 17-20653-CR-Moreno

According to the indictment, Hasan Saleh, 59, managed a convenience store, Four Corners, located at 821 Northwest 6th Street, Fort Lauderdale, Florida. Despite not being authorized to participate in SNAP, Four Corners employees, including Saleh, were involved in a scheme in which they exchanged food stamp benefits for cash. These transactions were carried out using equipment registered to the convenience store Sparkle, located at 6530 NW 18th Avenue, Miami, Florida. Defendant Mohammad Alobaisi, 37, was the sole officer, director, and registered agent of Sparkle. Additionally, employees of Sparkle participated in the scheme by exchanging food stamp benefits for cash. Between April 2015 and August 2017, Saleh and Alobaisi, together with their employees, Reynold Francois, 38, Ihab Hassouna, 44, Mohammad Alteen, 33, Maria Jerdana, 36, and Joe Ann Baker, 56, redeemed and caused to be redeemed approximately $2 million in EBT food stamp benefits from the FNS.

2. United States v. Yousef Homedan Zahran, Case No. 17-60241-CR-Ungaro

On September 20, 2017, Yousef Homedan Zahran, a/k/a “Yuousef Hussein,” a/k/a “Joe,” 60, of Pompano Beach, was charged by complaint in connection with a food stamp fraud scheme. According to court documents, Zahran, worked as a clerk at a convenience store, Muna & Mona Inc., d/b/a Community Food Store #5, located at 401 NW 27th Avenue, in Pompano Beach, Florida. On multiple occasions between November 3, 2016, and January 11, 2017, Zahran illegally sold food stamp benefits in exchange for cash.

3. United States v. Omar Hajje and Jalal Hajyousef, Case No. 17-20622-CR-Gayles

According to the indictment, Omar Hajje, 43, of Miami, and Jalal Hajyousef, 42, of Miami, owned and operated convenience and grocery stores in Miami known as Steve Market 2 and Yum-Yum’s Grocery, located at 6804 NW 15th Avenue and 6813 NW 15th Ave in Miami, respectively. Omar Hajje applied for and obtained authorization for each of the two stores to participate in SNAP. From July 2014 through the date of the indictment, September 2017, Omar Hajje and Jalal Hajyousef were involved in a fraud and money laundering conspiracy in which they exchanged food stamp benefits for cash and fraudulently redeemed approximately $4.2 million in EBT food stamp benefits. Hajje and Hajyousef laundered the fraud proceeds through various accounts, by writing cashier’s checks, and by converting EBT funds to cash.

4. United States v. Andy Javier Herrera and Javier Herrera, Case No.17-20663-CR-Moore

According to the indictment, Andy Javier Herrera, 24, of Little Havana, owned a small grocery store, Santa Ana Market II, located at 1832 NW 17th Ave., Miami, Florida. Herrera applied for, and obtained, authorization to participate in SNAP. Javier Herrera, 49, of Coral Way, was a clerk that worked at both Santa Ana Market II, and a nearby convenience store named Santa Ana Market, located at 3000 NW 12th Avenue, Miami, Florida. Between April 2012 and September 2017, Andy Herrera and Javier Herrera were involved in a scheme in which they exchanged food stamp benefits for cash. During that time, Andy Herrera and Javier Herrera fraudulently redeemed approximately $10,000,000 in EBT food stamp benefits.

If convicted of the charged conduct, a defendant faces a possible maximum statutory sentence of 20 years’ imprisonment for conspiracy to commit wire fraud; 20 years’ imprisonment for wire fraud; and 5 years’ imprisonment for food stamp/EBT fraud.

Acting U.S. Attorney Greenberg acknowledged the dedicated efforts of the Florida Department of Children and Families and the Florida Department of Financial Services to provide services to the community and identify for prosecution those individuals who compromise public benefits. Mr. Greenberg also commended the investigative efforts of USDA-OIG, FBI and USSS, and expressed his gratitude to FLPD, DBPR-ABT, MPD and MDPD for their assistance with the investigation and law enforcement operation. Mr. Greenberg recognized Assistant United States Attorneys Yeney Hernandez, Lisa Miller, Frederic Shadley, and Anne McNamara, who are prosecuting these cases.

A complaint or an indictment is only an accusation and a defendant is presumed innocent unless and until proven guilty in a court of law.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at or on

Financial Fraud: James H. Brennan And Douglas A. Dyer Sentenced For Their Roles In a Wire Fraud And Tax Evasion Conspiracy

Financial Fraud

Two Chattanooga Residents Sentenced to Prison for Participating in a Conspiracy to Commit Wire Fraud And For Tax Evasion

CHATTANOOGA, Tenn. – On September 29, 2017, James H. Brennan, 68, and Douglas A. Dyer, 58, both of Chattanooga, Tennessee, were sentenced by the Honorable Travis R. McDonough, U.S. District Court Judge, to respectively serve 48 months and 60 months in federal prison for their roles in a wire fraud and tax evasion conspiracy. Upon their release, U.S. Probation will supervise them for three years. Brennan and Dyer were also ordered to pay over $4.9 million in restitution to over 200 victims in this case. Additionally, Brennan was ordered to pay restitution to the IRS in the amount of $184,022.84. Dyer was ordered to pay restitution to the IRS in the amount of $354,251.58.

In May 2017, both Dyer and Brennan pleaded guilty to conspiring to steal approximately $4.9 million from investors and evading the assessment and payment of their true taxes due and owing by mischaracterizing the stolen money as capital gains instead of income, thus paying at a fraudulently derived lower tax rate. Dyer also pleaded guilty to criminal contempt for dispersing funds contrary to an order in a civil case filed by the Securities and Exchange Commission for securities fraud.

According to documents on file with the U.S. District Court, between 2008 and 2016, Brennan and Dyer sought and received funds from numerous investors by promising them that their money would be used to capitalize limited liability corporations which would merge with companies seeking to transition to public ownership on a public stock exchange. Instead, they diverted the funds to their personal use. Although the general practice is to report stolen funds as income, Brennan and Dyer mischaracterized the funds they stole as capital gains and paid taxes at the lower capital gains rate, effectively evading paying taxes at the correct rate.

The case was investigated by the Federal Bureau of Investigation (FBI) and Internal Revenue Service (IRS) Criminal Investigation. Assistant U.S. Attorneys James T. Brooks and Anne-Marie Svolto represented the United States.

U.S. Attorney Nancy Stallard Harr said, “The U.S. Attorney’s Office will continue to pursue prosecution of fraudulent offenders, such as Brennan and Dyer, who effectively steal money from both innocent individuals and the United States by failing to pay taxes.”

“Fraudulent investment schemes continue to bring financial ruin to many Americans,” stated Tracey D. Montaño, Special Agent in Charge, IRS-Criminal Investigation. “We are proud of the work of our special agents who utilize their specialized forensic accounting skills to unravel complex financial schemes. The prosecution of individuals who intentionally conceal their income and evade taxes is a key priority for IRS Criminal Investigation. Mr. Dyer and Mr. Brennan stole investors’ hard-earned money, used it for their own personal benefit, and evaded the federal tax owed on the stolen funds. This case should serve as a reminder, no matter the source of income, all income is taxable.”

“The public’s faith in the integrity of investment markets, particularly those involving capital for new companies, is essential for the continued success of our country’s economic stability and growth,” stated Renae McDermott Special Agent in Charge of the Knoxville FBI. “The sentencing today demonstrates the commitment of the FBI and our investigative partners to bring to justice those who prey upon unsuspecting investors.”

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Financial Fraud: Eight Individuals Charged With Stealing Social Security And Other Retirement Benefits

Financial Fraud

Eight from Ohio indicted for Social Securiy fraud after collecting benefits of the deceased

United States Attorneys Justin E. Herdman and Benjamin C. Glassman announced charges brought in eight separate Social Security fraud and other benefits cases statewide.

The cases are part of the national Social Security Administration (SSA) Fraud Prosecution Project, a collaboration with SSA’s Office of the General Counsel, Office of the Inspector General and the Department of Justice. From early 2016 to date, Special Assistant United States Attorneys around the country have secured over 300 federal convictions, leading to judicial orders for more than $34 million in restitution to SSA and other agencies.

In Ohio, eight individuals were charged this month with stealing Social Security and other retirement benefits totaling more than $796,000. The defendants illegally collected Social Security benefits that were paid to a deceased relative or friend in seven of the eight cases. In one case, the defendant stole the identity of a living 65-year-old doctor and used it to collect the doctor’s Social Security benefits.

In the Northern District of Ohio, Special Assistant United States Attorney Lisa J. Sanniti indicted three cases.

Norman C. Thompson, III, 47, of Chagrin Falls, is charged for allegedly wrongfully converted his deceased mother’s Title II disability benefits. Every month after his mother’s death, defendant intercepted checks from the Social Security Administration issued to his mother. Thompson signed his mother’s name and his own to endorse and deposit the checks, causing a total loss of approximately $39,000.

From approximately November 2011 through May 2017, James C. Bohanon, Jr., 69, of Cleveland, allegedly wrongfully received and converted to his own use approximately $48,000 from his deceased wife’s Supplemental Security Income. In addition, he received financial assistance from the U.S. Department of Housing and Urban Development, and was obligated to report his income accurately to his residential property management each year. Bohanon concealed his receipt of his deceased wife’s Social Security benefits from HUD, and, as a result, received approximately $38,500 in Housing Assistance Payments to which he was not entitled.

Alturik R. Plummer, 51, of University Heights, allegedly wrongfully converted his deceased grandmother’s Title II Retirement Insurance benefits from approximately August 2013 through October 2016, causing a loss of approximately $45,000.

“These defendants stole tens of thousands of dollars from taxpayers,” said Herdman, the U.S. Attorney for the Northern District of Ohio. “We will continue to work with all our law enforcement partners to root out fraud, including those who steal from Social Security.”

In the Southern District of Ohio, Special Assistant United States Attorney Timothy Landry is prosecuting five cases.

Jesse Larry, 71, of Columbus, Curtis Joash, 73, of Cincinnati and Dolores Stacy, 70, of Hamilton were each charged by criminal complaint for allegedly illegally collecting Social Security benefits paid to their respective mothers after their deaths. Each defendant was a co-signatory on their mother’s savings or checking account, allowing them to withdraw the Social Security money each month.

Larry collected $273,000 in benefits that were paid to his mother after she died in 1993, Joash collected nearly $188,000 since his mother’s death in 1990 and Stacy collected nearly $121,000 since her mother died in 2005.

Era Jenkinson, 42, of Columbus, was also charged by criminal complaint for allegedly illegally collected nearly $29,000 in Social Security benefits that were paid to her for the benefit of another person.

Jenkinson had been serving as the person’s representative payee, and therefore was responsible for notifying Social Security when the person died in 2015. Instead, it is alleged that Jenkinson spent the benefits on her own expenses after the person died. In April 2017, Jenkinson allegedly had a friend pose as the deceased person in a telephone call with a Social Security employee in an attempt to convince Social Security that the person was still alive.

Chucky Scott, 25, of Columbus, was charged by a Bill of Information. Scott is scheduled to plead guilty in U.S. District Court next week, and, according to the plea agreement, filed a claim for retirement benefits using the identity of a 65-year-old doctor, but using Scott’s own address to receive the payments. In this manner, Scott illegally collected approximately $14,500 in Social Security benefits.

“Taking Social Security benefits intended for another is a theft from all of us,” said Glassman, U.S. Attorney for the Southern District of Ohio. “Through our partnership with the Social Security Administration, the Southern District of Ohio is cracking down on this fraud as never before.”

Through its Fraud Prosecution Project, the Department of Justice and SSA pool legal resources to prosecute individuals who defraud Social Security programs. SSA’s Office of the General Counsel currently employs agency attorneys to serve as Special Assistant United States Attorneys in 13 United States Attorney Offices, two of which are located in the Southern and Northern Districts of Ohio, to lead these prosecution efforts.

For more information on SSA’s Fraud Prosecution Project and the agency’s other anti-fraud efforts, please visit

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Financial Fraud: Kamlesh Patel Plead Guilty to Aiding And Abetting Untaxed Shipments of Tobacco Products

Financial Fraud

Pennsylvania Tobacco Distributor Agrees to Plead Guilty to Aiding Tobacco Trafficking in Massachusetts

BOSTON – A Pennsylvania wholesale tobacco distributor agreed to plead guilty yesterday in federal court in Boston to aiding and abetting untaxed shipments of tobacco products into Massachusetts and evading financial reporting requirements.

Kamlesh Patel, 60, was charged and agreed to plead guilty to one count of aiding and abetting a large Norwood-based customer to violate the Prevent All Cigarette Trafficking Act (PACT Act) and one count of failing to report large cash transactions to the IRS.

Patel owned and operated RDK Distributors (RDK) and MV Distributors (MV) in Stroudsburg, Penn., through which he distributed wholesale quantities of cigars, smoking tobacco and smokeless tobacco (such as snuff and chewing tobacco), among other products.

Title 15 of the PACT Act requires people who sell, advertise for sale, transfer or ship for profit smokeless tobacco between states to file a statement with the Attorney General and the tobacco tax administrator in the states to which they ship their products. The PACT Act also requires them to file with the tax administrator a monthly record of each shipment of smokeless tobacco that they transport into the state.

Beginning in approximately January 2013, Patel sold large quantities of tobacco products to a Norwood wholesaler, often worth more than $100,000 at a time. The Norwood wholesaler typically paid Patel for tobacco products in cash. To evade financial reporting requirements that would have notified the IRS of the size, nature and income of the Norwood wholesaler’s business, Patel falsely divided among multiple invoices the bulk cash payments he received. Patel created and instructed his employees to record the large cash payments he received as if there had been numerous sales over numerous days among numerous companies, each less than $10,000, rather than the single sale for which he had received one or two sizeable cash payments, often amounting to more than $100,000 at a time.

The charge of structuring cash transactions to evade financial reporting requirements provides for a sentence of no greater than 10 years in prison, three years of supervised release, a fine of up to $500,000 and forfeiture. The charge of aiding and abetting violation of the PACT Act provides for a sentence of no greater than three years in prison, up to one year of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Acting United States Attorney William D. Weinreb and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. The Massachusetts Department of Revenue also provided valuable assistance. Assistant U.S. Attorney Stephen Heymann of Weinreb’s Economic Crimes Unit is prosecuting the case.

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Financial Fraud: Zions First National Bank Settled Allegations Facilitated Consumer Fraud By Providing Payment Processing Services To Telemarketing And Internet Merchants

Financial Fraud

U.S. Attorney Announces $3.6 Million Settlement With Bank Accused Of Consumer Fraud – Zions First National Bank

PHILADELPHIA – ZB, N.A, formerly known as Zions First National Bank, N.A. (Zions), of Salt Lake City, Utah, settled allegations by the United States Attorney’s Office for the Eastern District of Pennsylvania that Zions and its affiliated payment processor facilitated consumer fraud by providing payment processing services to telemarketing and Internet merchants that were debiting money illegally from consumers’ bank accounts. Under a civil settlement reached between ZB and the government, the bank will pay a civil money penalty of $3.6 million to the United States Treasury, announced Acting United States Attorney Louis D. Lappen.

The government alleges that Zions and its affiliate Modern Payments provided ACH debit processing services to a number of telephone and Internet marketing merchants that were engaged in fraud against consumers. The government further alleges that Zions and Modern Payments knew or were willfully blind to the fact that the marketing merchants were engaged in fraud campaigns against consumers. Modern Payments, through Zions, debited money from consumers’ bank accounts and transferred that money to the marketing merchants.

Banks are a critical key in many consumer fraud schemes. After a fraudulent marketer obtains bank account information from a consumer, the fraudulent marketer still needs to gain access to the banking system in order to take the consumer’s money. Fraudulent marketers have a difficult time opening their own bank accounts because of laws designed to prevent criminals from accessing the banking system. To overcome this obstacle, fraudulent marketers often obtain indirect access to the banking system through a third-party payment processor that can more easily establish a relationship with a bank.

The government alleges that Zions and Modern Payments knew of, or were willfully blind to, ten Modern Payment’s telemarketing and Internet marketing clients using Modern Payments to access the banking system through Zions to engage in consumer fraud schemes. Specifically, the government alleges that Zions and Modern Payments knew of or were willfully blind to indicators of consumer fraud, including high rates of ACH debit transactions returned from consumers’ accounts as unauthorized. The government also alleges that Zions and Modern Payments facilitated the fraud campaigns of two marketers by initiating debits against consumers’ bank accounts despite knowledge or being willfully blind to the fact that the debits violated rules that prohibited both processing payments associated with outbound telemarketing, and recurring payments pursuant only to a voice-authorization. The government also alleges that Modern Payments failed to conduct sufficient due diligence of certain of its marketing clients before providing them with access to consumers’ bank accounts — despite Zions’ internal skepticism of the marketers’ business practices and acknowledgement that Zions would be at risk for the marketers’ conduct.

The government contends that Zions and Modern Payments’ conduct violated the Financial Institutions Reform, Recovery and Enforcement Act, 12 U.S.C. § 1833a (“FIRREA”). FIRREA authorizes the imposition of civil monetary penalties for violations of enumerated criminal statutes affecting a federally-insured financial institution. These crimes include mail fraud and wire fraud.

Modern Payments received $1.2 million in fee revenue from the fraudulent marketers. In addition to the $3.6 million penalty paid to the United States Treasury in connection with this settlement, pursuant to a separate class action settlement approved by a Federal court, ZB has established a $37.5 million compensation fund for the victims of the frauds.

The case was handled by Assistant United States Attorney Joel M. Sweet and Investigator Jeffrey R. Braun.

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HealthCare Fraud: Richard Zappala Pleaded Guilty To An Information Charging Him With Conspiracy To Commit Health Care Fraud

Health Care Fraud

Pharmaceutical Employee Admits Health Care Fraud Conspiracy Targeting State Health Benefits Programs

CAMDEN, N.J. – A Northfield, New Jersey, man today admitted defrauding New Jersey state health benefits programs and other insurers out of millions of dollars by submitting fraudulent claims for medically unnecessary prescriptions, Acting U.S. Attorney William E. Fitzpatrick and New Jersey Attorney General Christopher S. Porrino announced.

Richard Zappala, 45, a pharmaceutical sales representative, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with conspiracy to commit health care fraud.

According to documents filed in this case and statements made in court:

From January 2015 through April 2016, Zappala recruited individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from an out-of-state pharmacy, identified in the informations as the “Compounding Pharmacy.” The conspirators learned that certain compound medication prescriptions – including pain, scar, antifungal, and libido creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply.

The conspirators also learned that some New Jersey state and local government and education employees, including teachers, firefighters, municipal police officers, and state troopers, had insurance coverage for these particular compound medications. An entity referred to in the informations as the “Pharmacy Benefits Administrator” provided pharmacy benefit management services for the State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, and the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents. The Pharmacy Benefits Administrator would pay prescription drug claims and then bill the State of New Jersey for the amounts paid.

Zappala and conspirators working under him recruited public employees and other individuals covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications from the Compounding Pharmacy without any evaluation by a medical professional that they were medically necessary. In return, the pharmacy paid one of Zappala’s conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to Zappala and other members of the conspiracy.

Once he had recruited an employee covered by the Pharmacy Benefits Administrator, Zappala would obtain the employee’s insurance information and fill out a Compounding Pharmacy prescription form. He would select the compounded medications that paid the most without regard to their medical necessity.

Zappala would then get the prescriptions signed by doctors who never evaluated whether the patients had a medical necessity for the compounded medication. The prescriptions were then faxed to Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.

Zappala paid money and other benefits to doctors to reward them for signing prescriptions. He also paid recruiters under him and paid individuals with insurance coverage to reward them for agreeing to obtain prescriptions.

According to the information, the Pharmacy Benefits Administrator paid Compounding Pharmacy over $50 million for compounded medications mailed to individuals in New Jersey.

As part of his plea agreement, Zappala must forfeit $1,492,918.19 in criminal proceeds he received for his role in the scheme and pay restitution of at least $4,310,232.76.

Zappala faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 5, 2018.

Eight other conspirators – Matthew Tedesco, Robert Bessey, Michael Pepper, Thomas Hodnett, Steven Urbanski, John Gaffney, Judd Holt, and George Gavras – have pleaded guilty to their roles in the scheme and await sentencing.

Acting U.S. Attorney Fitzpatrick credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark, IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark, and the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael C. Mikulka in New York, with the investigation leading to the guilty plea. He also thanked the Division of Pensions and Financial Transactions in the State Attorney General’s Office, under the direction of Attorney General Porrino and Division Chief Eileen Schlindwein Den Bleyker, for its assistance in the investigation.

Defense counsel: Kevin E. Raphael Esq., Philadelphia, Pennsylvania

Financial Fraud: Jessica Godoy Ramos Charged With Mail Fraud And Aggravated Identity Theft

Financial Fraud

Law School Dropout Arrested for Impersonating New York Attorney and Defrauding Clients Who Paid for Immigration Services

LOS ANGELES – A Lynwood woman who dropped out of law school – but who later allegedly stole the identity and bar license number of a New York attorney – surrendered herself last night on federal charges that accuse her of filing immigration petitions on behalf of foreign nationals who believed she was a legitimate lawyer.

Jessica Godoy Ramos, 36, was taken into custody pursuant to a criminal complaint that charges her with mail fraud and aggravated identity theft. Ramos is expected to make her initial appearance this afternoon in United States District Court.

According to the criminal complaint, Ramos accepted thousands of dollars from several dozen aliens who sought her services in an attempt to obtain legal status in the United States. The complaint affidavit alleges that Ramos filed immigration petitions on the behalf of some aliens, but in other cases she never performed any services for her clients. In at least one instance, Ramos created counterfeit immigration parole documents which a client was able to use to enter the United States.

According to the complaint, Ramos’ clients initially believed she was a legitimate immigration attorney, but several became suspicious when Ramos directed them to appear at U.S. Citizenship and Immigration Services (USCIS) offices for interviews – but they did not have any scheduled appointments.

“The crimes alleged in this case victimized dozens of immigrants who were attempting to realize the American dream by paying someone they thought was a lawyer,” said Acting United States Attorney Sandra R. Brown. “This type of scam, which unfortunately targets new immigrants too often, undermines our immigration system and can shatter dreams of obtaining legal status to remain in the United States.”

“Unscrupulous immigration practitioners not only exploit the trust of their often-unwitting victims, but by filing fraudulent immigration applications they create a security vulnerability and potentially rob deserving immigrants of benefits they rightfully deserve,” said Joseph Macias, Special Agent in Charge for U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Los Angeles. “As these charges makes clear, HSI, in collaboration with its federal partners, is committed to targeting such scams and ensuring that those responsible are held accountable.”

Federal authorities began investigating Ramos in February after the HSI-led Document and Benefit Fraud Task Force received a tip from USCIS about five of Ramos’ clients who went to USCIS offices in downtown Los Angeles expecting to pick up their non-existent “Green Cards.”

“People who wish to file for benefits with U.S. Citizenship and Immigration Services have a right to proper representation,” said USCIS Los Angeles District Director Donna Campagnolo. “This case is a good example of all agencies involved working together to ensure that the integrity of the program is preserved and individuals are able to retain proper representation to aide them through the process.”

A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

If she were to be convicted, Ramos would face a statutory maximum penalty of 20 years in federal prison for the mail fraud count and a mandatory consecutive sentence of two years for the aggravated identity theft charge.

During the investigation into Ramos, HSI received substantial assistance from USCIS’ Fraud Detection and National Security Directorate and the San Gabriel Police Department.

This case is being prosecuted by Assistant United States Attorney Andrew Brown of the Major Frauds Section.

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Financial Fraud: David H. Lavine And Charles L. Tobias Indicted on Charges of Theft of Bank Funds By a Bank Officer And Bank Fraud

Financial Fraud

Former Bank President Indicted For Stealing From His Own Bank

Baltimore, Maryland – On September 26, 2017, a federal grand jury indicted David Harris Lavine, age 58, of Rockville, Maryland, on charges of theft of bank funds by a bank officer and bank fraud and Lavine and Charles L. Tobias, age 56, Potomac, Maryland for conspiracy to defraud the Internal Revenue Service and tax evasion.

The indictment was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Special Agent in Charge Kimberly Lappin of the Internal Revenue Service-Criminal Investigation; Assistant Inspector General Gerald Maye of the Federal Reserve Board Office of Inspector General and Special Agent in Charge Michael McGill of the Social Security Administration, Office of Inspector General.

From March 2010 until January 2011, David Harris Lavine was the Acting President of CFG Community Bank. From January 2011 until August 2011, Lavine was president of the bank affiliate, Capital Financial Ventures, LLC. According to the indictment, Lavine, while acting President, diverted $100,000 of bank funds to his own benefit. The indictment also charges that while president of the bank affiliate, Lavine devised a scheme to defraud CFG Community Bank, a state member bank supervised by the Federal Reserve Board, through the re-finance of bank-owned mortgage loans and the diversion of loan proceeds to his personal benefit and the benefit of a friend.

According to court documents, Lavine used his position at Capital Financial Ventures to pose as the CEO/President of CFG Community Bank. For example, Lavine invited the borrowers of two loans with balances totaling over $7.5 million, to refinance those loans with other financial institutions for a lower mortgage and pay off CFG Community Bank. At Lavine’s direction, the settlement company sent the mortgage loan payoff not to CFG Community Bank but to another company so that Lavine could divert in excess of $775,000. Lavine created false correspondence with the loan borrowers to provide to CFG Community Bank to conceal the diversion from CFG Community Bank.

According to the indictment, Lavine and Tobias owned Capital T Partners Brookfield, LLC, a Maryland limited liability corporation. In the fall 2011, Lavine and Tobias decided to realize a profit from a group of non-performing mortgages by fraudulently “donating” some of the mortgages to a charity as an in-kind donation and thereby receiving a valuable tax deduction for Capital T Partners Brookfield which would pass through to their personal income tax returns. Lavine is also charged with tax evasion for two years for failing to report the monies he received through the bank offenses and using the fraudulent charitable contribution as a deduction. Tobias is charged with tax evasion for failing to report income and also using the fraudulent charitable deduction.

The maximum possible penalties for the bank offenses are thirty years in prison and/or a $1 million fine per count and 5 years in prison and /or $250,000 per count for the tax charges.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

Acting United States Attorney Stephen M. Schenning commended the IRS, FBI, the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau and SSA-IG for their work in the investigation. Mr. Schenning thanked Assistant United States Attorney Joyce K. McDonald who is prosecuting the case.

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Mortgage Foreclosure Rescue Scams

Mortgage Foreclosure Rescue Scams

Tips for Avoiding Mortgage Foreclosure Rescue Scams

Beware of Unethical Mortgage Foreclosure Rescue Operators

A fairly new and dangerous threat has arisen for householders UN agency have fallen behind on their mortgage payments and will be in danger of proceeding – expedient firms.

They usually see themselves as a “foreclosure advisor” or “mortgage consultant,”
and market themselves as a “foreclosure service” or “foreclosure rescue agency.” They judge householders being vulnerable and desperate.

These firms claim they will assist householders facing proceeding with choices that permit them to stay their property, finance or modify Associate in Nursing existing mortgage, repair credit or facilitate “buy longer.” essentially, these “options” area unit meant to win over you to require the incorrect steps so that they will take your cash and probably your home.

Remember the recent speech, “If it’s too sensible to be true, it most likely is.” Be safe. it’s vital that you just take action by contacting your mortgage investor – or any legitimate money counselor – to search out real choices to avoid proceeding. variety of agencies offer free counselling services to householders UN agency area unit having hassle creating ends meet ( see the “Protect Yourself and Resources Sections” ).

These agencies will assist you explore your choices, which can vary from modifying your loan to refinancing your loan to commerce your home and exploitation any equity to begin over.

Watch Out for the Common proceeding Rescue Scams

Lease-Back or Repurchase Scams – during this situation, a promise is formed to pay off your delinquent mortgage, repair your credit and probably pay off credit cards and alternative debt. However, so as to try to to this, you need to “temporarily” sign your gift to a “third party” capitalist. you’re allowed to remain within the home as a renter with the choice to get the house back once a definite quantity of your time has passed or your money scenario improves. the difficulty is once you’ve got signed away your rights in your property, you will not be ready to repurchase the property later, even though you’ll and wish to. once the new owner takes possession of your property, the new owner will evict you. moreover, the sharpy is beneath no obligation to sell the house back to you. Typically, once the deed is signed away, the property changes hands various times. The sharpy could have taken a replacement mortgage out on your home for many thousands of greenbacks over your mortgage, creating it not possible for you to shop for back your home.

Partial Interest Bankruptcy Scams – The scam operator asks you to administer a partial interest in your home to 1 or additional persons. You then build mortgage payments to the scam operator in part of paying the delinquent mortgage. However, the scam operator doesn’t pay the present mortgage or look for new funding. every holder of a partial interest then files bankruptcy, one once another, with out your information. The bankruptcy court can issue a “stay” order on every occasion to prevent proceeding quickly. However, the keep doesn’t excuse you from creating payments or from repaying the complete quantity of your loan. This complicates and delays proceeding, whereas permitting the scam operator to keep up a stream of financial gain by collection payments from you, the victim. Bankruptcy laws offer vital protections to shoppers. This scam will solely quickly delay proceeding, and will keep you from exploitation bankruptcy laws licitly to deal with your money issues.

Refinance Scams– whereas there area unit legitimate refinancing programs offered, look out for folks motility as mortgage brokers or lenders giving to finance your loan thus you’ll afford the payments. The sharpy presents you with “foreclosure rescue” loan documents to sign. {you area unit|you’re} told that the documents are for a finance loan that may bring the mortgage current. What you don’t understand is that you just area unit surrendering possession of your home. The “loan” documents are literally deed transfer documents, and therefore the sharpy counts on your not really reading the work. Once the deed transfer is dead, you suspect your home has been reclaimed from proceeding for months or perhaps years till you receive Associate in Nursing eviction notice and see you now not own your home. At that time, it’s usually too late to try to to something concerning the deed transfer.

Internet and Phone Scams – Some scam lenders win over you to use for a low-interest real estate loan on the phone or net. They then extract important info, like your social insurance and checking account numbers. during this scam, the loan is straight away accepted, once that you begin faxing the documents and causation wire transfer payments to the phony company while not even meeting the investor. sadly, this scam can place you in double the maximum amount trouble–your personal details are purloined or sold , golf stroke you in danger of fraud, and your house is still in danger of proceeding.

Phantom facilitate Scams – The scam operator presents himself as somebody UN agency is in a position to counsel or facilitate a house owner out of proceeding. In exchange for his or her “services,” outrageous fees area unit charged and grand guarantees area unit created for strong illustration, that ne’er happens. The “services” performed entail light-weight work or occasional phone calls that you just may simply have created yourself. In the end, you’re worse off than before, as a result of you’ve got very little or no time to avoid wasting your home, or look for alternative help.

Caught in a very proceeding Scam?

If you get caught in one in every of these scams, it’s imperative that you just contact a professional person at once. Associate in Nursing professional will assist you as you navigate your method through the method. Lower financial gain people is also ready to realize free legal services; see If you suspect that you just area unit the victim of criminal activity, like cast documents being bestowed for your signature, you ought to contact your native enforcement agency.

How To Protect Your Business Or Small Business

Business Fraud

Protect your small business

How scammers con small businesses

Scams targeting small businesses come in various forms—from invoices for advertising or directory listings that were never requested to dubious office supplies that were never ordered.

Protect yourself and your business by being aware of the common scams targeting small businesses.

Small business scams are becoming increasingly sophisticated and scammers will go to great lengths to convince you that the documents they send you or the offers they make are legitimate.

However, they can easily copy or modify letterheads, names and logos to make them look real, or set up a professional-looking but fake website. Scammers can even gain access to your supplier’s email account and intercept emails without either of you realising.

Scammers recognise that small business operators are busy and have fewer resources than large businesses, so they aim to take advantage of that.

Common scams targeting small business

Investment schemes

Investment schemes involve getting you or your business to part with money on the promise of a questionable financial opportunity.

Online shopping scams

Oline shopping scams involve scammers pretending to be legitimate online sellers, either with a fake website or a fake ad on a genuine retailer site.

False billing

False billing scams request you or your business to pay fake invoices for directory listings, advertising, domain name renewals or office supplies that you did not order.

Overpayment scams

Overpayment scams work by getting you to ‘refund’ a scammer who has sent you a cheque for too much money for an item you are selling.

Malware & ransomware

Malware tricks you into installing software that allows scammers to access your files and track what you are doing, while ransomware demands payment to ‘unlock’ your computer or files.

Whaling & spear phishing

Whaling or spear phishing scams target businesses or organisations in an attempt to get confidential information for fraudulent purposes.

Running an online business can come with its share of risks – using the internet can open your business up to being targeted by scammers from anywhere in the world. Fortunately, there are plenty of resources online to help you out.

Learn to recognise common online scams to avoid getting caught out. These can include:

  • taxation scams – scammers can disguise themselves as government agencies, such as the Australian Taxation Office (ATO), to trick you into revealing details such as your tax file number (TFN) over the internet.
  • online transaction scams – including auction or shopping scams, spam offers, online banking or credit card scams, or spyware
  • internet domain name scams.

Internet domain name scams

These scams target businesses with websites by promising to renew or secure their domain name (or web address) before another business claims it. Business owners could be sent a legitimate-looking email or invoice with payment details for this service.

Under this scam you’ll be sent either an unsolicited invoice or email for an internet domain name registration usually very similar to your own business domain name. You could also be sent a renewal notice for your actual domain name. The notice could be from a business that supplies domain names trying to trick you into signing up to their service or it could be from a scammer trying to take your money.

The ACCC’s Scamwatch website provides information about the domain name renewal scam on its False billing webpage. Do your homework to avoid being caught out.

How to protect your business from internet scams

The ATO’s tips for recognising and avoiding tax-related scams and fraud include:

  • report emails that offer tax refunds in exchange for entering personal information
  • report emails which inform you that you owe the ATO money or your account is in arrears and you will be taken to court
  • always use ATO’s online services by visiting the ATO website
  • make sure you keep your tax file number (TFN) and passwords secure.

If you’re a small business owner, you need to be aware that you’re a target for scammers.

Scammers will often go to great lengths to convince you that their offer or request is legitimate, so it’s important that you remain aware of typical scams and know what to do if you’re targeted.

Common scams targeting business

  • Grant related scams
  • Tax time scams – this includes tax refund and phishing scams
  • Online scams – including internet website domain name scams
  • False billing scams
  • Identity theft scams
  • Charity scams.

Keep a watchful eye out for anything suspicious, and do your research into any offers you might receive, especially through your email. If you think you’ve been the victim of a scam, report the scam online to Scamwatch.

What to do…

Financial Fraud: LORENA COBURN Sentenced In a Fraud And Identity Theft Scheme

Financial Fraud

West Haven Woman Sentenced to Prison for Role in Fraud and Identity Theft Scheme

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that LORENA COBURN, 43, of West Haven, was sentenced today by U.S. District Judge Victor A. Bolden in Bridgeport to 16 months of imprisonment, followed by three years of supervised release, for her role in a fraud and identity theft scheme.

According to court documents and statements made in court, between approximately 2012 and July 2016, Jamila Williams-Stevenson and COBURN worked together to steal personal identifying information from victims and commit fraud using the stolen information. The sources of the personal identifying information included patients at Yale New Haven Hospital, where Williams-Stevenson worked as a care companion.

As part of the scheme, Williams-Stevenson and COBURN submitted to the U.S. Postal Service change of address applications for their victims so that the victims’ mail, including checks that were intended for the victims, would be diverted from the victims’ true addresses to addresses that were controlled by Williams-Stevenson and COBURN. Williams-Stevenson and COBURN also stole checks from residential and business mailboxes and then counterfeited the checks so that they were payable to their identity theft victims. They then opened bank accounts in the names of identity theft victims, deposited the stolen and counterfeit checks into those accounts, and then withdrew the funds from those accounts.

Williams-Stevenson and COBURN also obtained a life insurance policy in the amount of $75,000 in the name of an identity theft victim, and Williams-Stevenson was named as the beneficiary on the policy. Forensic analysis of Williams-Stevenson’s iPhone, which was seized at the time of her arrest, revealed a series of text messages between Williams-Stevenson and COBURN discussing how they might be able to cause the death of this victim in order to collect on the life insurance policy.

More than 30 individuals were victimized through this scheme, resulting in an attempted loss of more than $150,000 to banks and victims.

Williams-Stevenson was arrested on July 21, 2016. On that date, agents executed searches at her house and storage unit and found more than 200 unique credit and debit cards in the names of various identity theft victims.

COBURN was arrested on July 27, 2016. On November 30, 2016, she pleaded guilty to one count of bank fraud and one count of aggravated identity theft.

Judge Bolden ordered COBURN to pay restitution of $53,365.37 to various financial institutions and a university that suffered financial losses.

On December 12, 2016, Williams-Stevenson pleaded guilty to one count of bank fraud and one count of aggravated identity theft. On August 8, 2017, she was sentenced to 48 months of imprisonment, three years of supervised release, and $53,365.37 in restitution.

This matter was investigated by the U.S. Postal Inspection Service, the Internal Revenue Service – Criminal Investigation Division, the Connecticut Financial Crimes Task Force and the West Haven, New Haven and Orange Police Departments. The case was prosecuted by Assistant U.S. Attorney Sarala V.

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Financial Fraud: Peter Cash Doye And Raquel Reid, Indicted In a Massive Scheme In Fraudulently-Obtained Loan Proceeds

Financial Fraud

San Diego Finance Executive and Real Estate Broker Charged with $50 Million Fraud

SAN DIEGO – Financial executive Peter Cash Doye and notary public and real estate broker Raquel Reid were indicted today for their alleged roles in a massive scheme that generated nearly $50 million in fraudulently-obtained loan proceeds.

According to the indictment, the defendants defrauded lenders into making enormous loans against four multi-million dollar mansions in La Jolla and Del Mar, then used forged documents to make it appear that the loans had been paid off – thereby enabling them to secure additional loans from new lenders who believed the mansions were owned “free and clear.”

According to the indictment, Doye, a senior executive at the real estate investment firm known both as Conix, Inc. and Variant Commercial Real Estate (“VCRE”), negotiated the financing from unsuspecting lenders and investors based on a host of lies about the collateral used to secure the loans. To pull of the scam, Doye, Reid, 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. Reid notarized the forged documents, helping to make the fraudulent paperwork appear authentic.

Doye’s business partner Courtland Gettel and Arizona attorney Jeffrey Greenberg have each pleaded guilty to participating in the scheme. According to their plea agreements, Gettel was the owner of Conix and VCRE, which refurbished single-family homes, purchased distressed debt, and purchased and refurbished commercial real estate projects.

As part of his guilty plea in 2016, Gettel admitted that he and Doye acquired the high-end homes in La Jolla and Del Mar by claiming they would be used as luxury rentals and investment properties—although in fact, Gettel and Doye lived in the properties along with their families. When they needed money to fund other business deals, Gettel and Doye began negotiating with new lenders, pretending that the first loans never existed or had already been paid off. 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.

In late 2014, the lenders uncovered the fraud, and began to discover that their secured interests in the properties were worthless. In response to questions from these lenders, Doye, Reid and Gettel agreed to falsely deny knowing anything about the fraudulent loans, and created yet more fraudulent documents to cover their tracks. For example, Reid destroyed her notary book and cut up her notary stamp, and then falsely reported to the California Secretary of State that it had been lost.

But the group defaulted on their obligations to repay the loans, leaving the lenders to dispute the validity of their interests and resulting in tens of millions of dollars in losses from unpaid loans. As part of their pleas, Gettel and Greenberg must forfeit the proceeds they stole from the various lenders and pay restitution to the victims. Doye and Reid were charged with criminal forfeiture as part of the indictment.

Gettel has also admitted that after his guilty plea and while he was awaiting sentencing, he arranged even more fraudulent real estate transactions. He has agreed to recommend a correspondingly higher sentence as a result of his ongoing fraud. Gettel is scheduled to be sentenced before U.S. District Judge William Q. Hayes on October 17, 2017, at 10:00 am. Greenberg was disbarred from practicing law in Arizona on October 6, 2016. Greenberg is scheduled to be sentenced before U.S. District Judge William Q. Hayes on October 2, 2017, at 9:00 am.

Doye and Reid are expected to make their initial appearances before U.S. Magistrate Judge Karen S. Crawford on September 21, 2017 at 2:00 pm.

*The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.



Peter Cash Doye                                             Age: 41                       San Diego, CA

Raquel Reid                                                    Age: 38                       San Diego, CA




Count One (both defendants): Wire and Mail Fraud Conspiracy, in violation of 18 U.S.C. § 1349

Counts Two through Six (Doye only; both defendants as to Count Three): Wire Fraud, in violation of 18 U.S.C. § 1343

Counts Seven through Nine (Doye only as to Count Seven, both defendants as to Counts Eight and Nine): Mail Fraud, in violation of 18 U.S.C. § 1341

Maximum Penalties per count: 20 years’ imprisonment, $250,000 fine, $100 special assessment, restitution


Counts Ten and Eleven (both defendants): Aggravated Identity Theft, in violation of 18 U.S.C. § 1028A

Maximum Penalties: mandatory 2 years’ imprisonment, consecutive to any other term of imprisonment, $250,000 fine, $100 special assessment, restitution.


Count Twelve (Reid only): False Statements to Federal Agents, in violation of 18 U.S.C. § 1028A

Maximum Penalties: 5 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.




Jeffrey Greenberg, 16CR1076-WQH and 1077-WQH          Age: 67           Tucson, AZ

Courtland Gettel, 16CR1099-WQH                                       Age: 43           Coronado, CA


Wire Fraud Conspiracy, in violation of 18 U.S.C. § 1349

Maximum Penalties: 20 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.




Federal Bureau of Investigation

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Best Preventing Business Scam Tips

Business Scam

Top Business Security Tips

Congratulations on beginning your own business, or on obtaining your own address and gap your place of business. currently that you’re finished all that, let’s bring up security.

Whether you’re within the business of providing a service to a client or providing a product, there’ll forever be a risk issue with the data that you just handle: for each you and for your customers. it’s an honest plan to place safeguards in situ before any major downside comes up.

Protecting sensitive data may be a should, however ensuring your physical premises has safety precautions and safety plans in situ can build everybody feel relaxed and may be one thing that you just contemplate further.

Create a Code of correct Conduct

Before you rent the primary worker, you ought to establish a Code of Conduct. This document ought to define what’s acceptable or correct behavior inside workplace premises Associate in Nursingd what repercussions there’ll be if an worker violates the terms. tho’ this document doesn’t ought to detail all necessary actions, it’s best to stipulate necessary areas like protective company property and keeping sensitive data safe and inside company premises.

A Code of Conduct ought to be communicated to your staff upon hiring and that they ought to signify that they’re going to abide by it. If there square measure any changes you wish to create to the document, act and do therefore and guarantee all of your staff are going to be sophisticated of the changes.

A Code of Coduct document ought to even be accessible to your staff in the least times and may be enclosed in every one of their personal worker files.

Schedule a Weekly or Monthly Shredding

Protection of your documents shouldn’t solely be the protection you put in on your computers. Most of the documents that contain personal data for your customers or maybe for the business square measure hold on on paper. It’s safer to schedule a weekly or monthly shredding of documents. this fashion everybody are going to be wont to setting aside documents for shredding prior time.

If you discover weekly or monthly shredding to be a problem you’ll be able to additionally opt for a special schedule. the purpose is to create certain there’s a daily schedule followed in shredding and eliminating recent documents.

Schedule Audits

To more place grade of security on documents and knowledge, schedule audits annually. this suggests you’ll be ready to check on documents unbroken by your staff each in paper kind and in their computers. when you’ve done the audits, audits can enable you to spot areas wherever security may be improved.

Make the foremost out of the audits you conduct. when distinguishing the areas wherever security may be improved, see what may be done concerning it. don’t place it off: golf stroke it off can enable the likelihood of the weakness in your security to be exploited.

Audits aren’t there to seem for faults in your staff. they’re in situ to judge the protection measures that you just have found out on computers and around your workplace space. you ought to emphasize this once you apprise your staff of the audits. this fashion nobody can interpret your purpose in conducting the audit.

Designate laptop Access Levels

Whether your business utilizes one laptop or utilizes a network, it’s best you designate a username for every individual user. when you designate a username, you ought to additionally limit the access levels of the profile of your worker. This not solely guarantees you recognize what your worker will access however it additionally ensures that you just won’t have issues once it involves any unauthorized changes that may be created.

Protecting the countersign of every user is additionally a must; need that their personal passwords ought to have a upper case, a number, and a special character. Passwords should be modified when thirty or forty five days. If staff aren’t at their desks, build it a demand that they lock their computers to avoid unauthorized access. Your staff ought to even be liable for protective their countersigns and may not write them down on any piece of paper and most significantly ne’er share their password with anyone.

Emergency Plans

Be it reception or at the workplace, you ought to have already got set emergency plans. directions ought to embody what to try and do just in case of emergencies like hearth, robberies, theft, or tornadoes. Your safety set up ought to even have complete contact numbers for the police and emergency services.

An evacuation set up ought to even be made public and displayed during a outstanding space wherever your staff will read it and familiarise themselves with it. It’s additionally an honest plan to supply reminders or safety tips sporadically to staff.

Office Security

Keep in mind that putting safety measures for your workplace premises is best instead of anticipating one thing to happen to force you to place them up. investment during a sensible security company is usually recommended as protection are going to be found out round the clock. however before you get this feature you’ll be able to ensure that every one doors, windows and storage square measureas have their own locks which keys to every of those are properly monitored.

Your workplace ought to even be placed in {an square measurea|a neighborhood|a district|a region|a locality|a vicinity|a part|a section} which will be seen from the road simply as most thieves or burglars square measure interested in businesses that are hidden from read. If your business is hidden from read, Associate in Nursing audio alarm would possibly facilitate to scale back the risks of not being seen simply.

Adequate Lighting

Adequate lighting is very important not just for the inside of your building, however it’s additionally a requirement for the outside. For your workplace area, forever leave a lightweight on once you leave for the night therefore police or security will see into it. For the perimeter, forever maintain sensible lighting on doors and in parking tons.

This precaution is straightforward however it not solely keeps your area safe however it additionally keeps your staff safe if a need to increase their hours into the night.

These square measure solely tips that you just will contemplate when you’ve got found out your business, this can take time and energy on your half and can seemingly not be really low-cost to implement. however don’t ignore security measures just because of an extra value. the number of cash you’ll pay for security measures is considerably low compared to any instance your business would possibly suffer attributable to a breach in security.

Health Care Fraud: Emeka H. Chijioke Pled Guilty of Health Care Fraud Stemming From a Scheme

HealthCare Fraud

Owner of Durable Medical Equipment Company Pleads Guilty to Health Care Fraud

Defendant Admits Billing D.C. Medicaid for Supplies That Were Not Provided

WASHINGTON – Emeka H. Chijioke, 40, formerly of Atlanta, Ga., and Nigeria, pled guilty today to a federal charge of health care fraud stemming from a scheme in which he defrauded the District of Columbia’s Medicaid program out of more than $500,000.

The guilty plea was announced by U.S. Attorney Channing D. Phillips, Andrew Vale, Assistant Director in Charge of the FBI’s Washington Field Office, and Nicholas DiGiulio, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), for the region that includes Washington, D.C.

Chijioke pled guilty in the U.S. District Court for the District of Columbia. The charge carries a statutory maximum of 10 years in prison and potential financial penalties. Under federal sentencing guidelines, Chijioke faces a likely range of 24 to 30 months in prison and a fine of up to $95,000. The plea agreement calls for Chijioke to pay $552,343 in restitution to the D.C. Medicaid program and an identical amount in a forfeiture money judgment. The Honorable Senior Judge Paul L. Friedman scheduled sentencing for Dec. 13, 2017.

Chijioke was arrested in December 2016 in Germany and extradited to the United States in April 2017 to face charges in an indictment returned in the District of Columbia.

According to a statement of offense submitted to the Court, Chijioke was the majority owner, registered agent, and chief executive officer of Mead Medical Group, LLC, a durable medical equipment company organized in Maryland. Mead Medical provided medical equipment supplies, including incontinence supplies and garments, to District of Columbia Medicaid recipients.

Beginning in 2007 and continuing through 2012, Chijioke engaged in a scheme to defraud D.C. Medicaid by billing for incontinence supplies that were not provided, as detailed in the statement of offense. Chijioke instructed his office staff to complete doctor prescriptions calling for beneficiaries to receive the maximum amount of incontinence supplies allowed by D.C. Medicaid. At the same time, he had his office staff contact the Medicaid recipients to determine from them the actual amount of incontinence supplies they needed, and to provide them with those supplies. Chijioke hired a billing company to submit claims to the Medicaid contractor as if the maximum amount of supplies were provided to the recipients rather than the actual amount supplied. By arranging for the maximum amount of incontinence supplies to be billed, rather than the amount actually provided, Chijioke obtained approximately $580,000 that he was not entitled to receive from Medicaid.

During the investigation, $28,600 in funds generated through the scheme was administratively forfeited.

In announcing the plea, U.S. Attorney Phillips, Assistant Director in Charge Vale, and Special Agent in Charge DiGiulio expressed appreciation for the work performed by Special Agents from the FBI and HHS OIG. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Diane Lucas of the Asset Forfeiture and Money Laundering Section; former Assistant U.S. Attorney Lionel André; Paralegal Specialists Christopher Toms and Jessica Mundi; former Paralegal Specialists Corinne Kleinman and Kaitlyn Kruger, and Litigation Technology Specialist Claudia Gutierrez. Finally, they commended the work of Assistant U.S. Attorneys Virginia Cheatham and Kondi Kleinman, of the Fraud and Public Corruption Section, who are prosecuting the case.

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Preventing Insurance Fraud


Mechanics of a false insurance claim.

Before a business will have interaction in security to stop insurance fraud, it’s necessary to grasp the mechanics of insurance fraud and the way usually it happens.

Insurance fraud happens in virtually each business round the world and prices businesses, and people United Nations agency pay insurance premiums, billions of bucks per annum. there’s no explicit business that solely experiences insurance fraud, criminal activity may be known in most any field of business wherever insurance is carried and meant to shield shoppers.

The motive most frequently noted for somebody to commit insurance fraud is to achieve (monetarily) from some act which will be deuced on the insuring business. One variety of insurance fraud committed for gain is for associate degree mortal or business to inflate the worth of the property that’s being insured. Once the property is destroyed and also the insured should be remunerated by the nondepository financial institution, the insured stands to receive a bigger financial total than the destroyed property was truly value.

Business house owners wanting to get liability or property insurance ought to be cautious of insurance firms United Nations agency provide insurance for quite the worth of the property to be protected. usually insurance firms will get pleasure from over-insuring property through higher charged premiums.

Why false claims are tough to spot.

One of the foremost tough issues for businesses and insurers is that the inability to accurately discover insurance fraud cases. By the terribly nature of the crime, it’s meant to sometimes be delicate and well hidden by those perpetrating the fraud. the most effective any insurance watch cluster will do is to estimate the full lost per annum to insurance fraud.

One of the foremost recent estimates, provided by the Insurance info Institute, is or so $30 billion bucks of loss claims paid by insurance firms within the u. s. may be attributed to deceitful claims. Another estimate by the National Health Care Anti-fraud Association provides the figure of roughly $51 billion for medical claims, filed against insurance firms, attributed to deceitful claims. Here alone may be a discrepancy of $21 billion – thus you’ll be able to simply see why claims generally vary wildly.

Protecting businesses from false insurance claims.

The biggest question for firms to raise is, “How am i able to defend myself and my company from deceitful insurance claims?” the solution is typically straightforward vigilance and customary sense.

Insurance fraud, because of its prevalence all told kinds of businesses, is commonly tough to stop while not security measures like cameras and security personnel. particularly in businesses that have client United Nations agency enter their premises like grocery stores, banks and business retail have to be compelled to be watchful against insurance fraud.

  • Slip and fall claims may be one amongst the foremost tough deceitful insurance scams for an organization to fight in court. Security cameras square measure associate degree economical methodology for disproving a deceitful slip and fall claim against a business. whereas some could think about security cameras a fashionable investment, the direct price will usually be offset by the money saved once difference of opinion against a deceitful claim.
  • Security personnel square measure another methodology businesses will use to do to minimize the number and severity of deceitful insurance claims. Vigilant, trained security personnel square measure associate degree economical thanks to keep an eye fixed on customers and facilitate deter any criminal activity at business locations. Business house owners United Nations agency have customers, or the final public, getting into their locations on a routine would move to take a position in some reasonably visual security.Visual security will take the “he aforesaid, she said” factor of associate degree claim in court. Witnesses, together with video, will greatly scale back the quantity of insurance fraud a business needs to influence.
  • Another methodology which will be used by businesses to discover deceitful insurance claims is to trace all kinds of claims against their insurance. analysis into documented deceitful claims will assist business house owners in distinctive kinds of claims that square measure additional liable to being inflated or “faked” for financial gain.

Automobile insurance fraud against businesses.

There is one style of insurance claims several businesses wouldn’t recognize to promptly determine as presumably deceitful. In 1996, a report by the Insurance analysis Council suggested or so twenty one to thirty six p.c of insurance claims were suspicious and may be thought-about presumably deceitful. Business house owners United Nations agency rely upon automobiles to take care of their resource ought to watch out for doable deceitful claims against their business insurance policies.

Opportunistic criminals could notice a vehicle with an organization name on that an honest target for a false claim. These kinds of insurance claims ordinarily utilize a bunch of individuals, sometimes in additional than one automotive, United Nations agency use stranger’s vehicles as targets for stern collisions. The vehicle that’s rear-ended is commonly full of passengers United Nations agency file false medical claims against the stranger’s insurance. this sort of false coverage and filing of false claims usually solely serves to draw near the victim’s insurance rates, and may be a reason for the paying nondepository financial institution to cancel a company’s policy.

Protecting the bottom line.

No matter the sort of insurance fraud claim perpetrated by criminals, businesses usually find yourself paying thousands and thousands of bucks through their insurance. whether or not it’s property insurance, liability insurance or automobile insurance, it’s vital for business house owners to be watchful with their daily interactions.

Tracking drivers’ delivery schedules will determine potential hazards throughout their routes, security cameras and security personnel will confute false injury and medical claims against a business and full analysis into competitive rates for his or her property insurance will avoid paying inflated premiums to unethical insurance agents.

It is vital for all business house owners to conjointly maintain applicable levels of insurance for his or her explicit style of business, so as to avoid paying in person for extremely inflated false insurance claims. Not solely will deceitful claims price an organization in payouts and insurance premiums, the business’ name may be damaged and business lost because of false claims that become public.

Investment Fraud: Wade Wylie Blackburn Sentenced To Conspiracy To Commit Mail Fraud

Investment Fraud

Dallas Man Sentenced in Connection with Denton County Highway Expansion Fraud

SHERMAN, Texas – A 34-year-old Dallas man has been sentenced to federal prison in connection with a Denton County highway expansion project in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

Wade Wylie Blackburn, pleaded guilty on Apr. 19, 2017, to conspiracy to commit mail fraud and was sentenced to 12 months and one day in federal prison on Sep. 14, 2017, by U.S. District Judge Marcia A. Crone. Blackburn was also ordered to pay restitution in the amount of $1 million to the Texas Department of Transportation.

According to information presented in court, from 2008 to 2011, Blackburn conspired with Kevin James Bollman to defraud the Texas Department of Transportation (TXDOT.) Blackburn and Bollman raised investment money and purchased Right-of-Way (ROW) along Interstate Highway 35 East in Denton County with the intent of quickly re-selling the ROW land tracts to TXDOT.

TXDOT acquired ROW through one of three methods: (1) Condemnation (normal acquisition); (2) Early Acquisition (EAQ); and (3) Advanced Acquisition (AAQ) through option contracts. The first two methods required environmental clearances before TXDOT was permitted to acquire the ROW and pay the landowner. The timing on these acquisitions, including the timing of the environmental clearance issued by the federal government, is unpredictable and often takes years to accomplish. The third method – the AAQ method through option contracts – permitted TXDOT to execute an option contract before environmental clearances were obtained, then pay the landowners a significant up-front option fee designed to keep the landowner from transferring or developing the property on the ROW that would later result in TXDOT likely having to pay more for the ROW. The landowner agreed not to develop the property in exchange for the up-front option fee, then closed on the sale and received the remainder of the purchase money after the environmental clearances were obtained.

As part of the scheme, Blackburn and Bollman intentionally caused false material information to be submitted to the TXDOT appraiser regarding, among other things, their development plans for the various properties. Blackburn and Bollman made these representations to the TXDOT appraiser even though they knew they had no intent to develop any of the properties. Blackburn also wrote a letter with material false statements to individuals at TXDOT. It claimed they were being forced to forego imminent development plans for the tracts, had been unable to successfully secure building permits, and were experiencing financial hardships as a result. Blackburn and Bollman also made false material oral misrepresentations to officials of TXDOT when they told them that they were experiencing financial hardships as a result of not being able to proceed with immediate development of the tracts, and that TXDOT should use the AAQ method to immediately purchase the tracts. Blackburn and Bollman made the material misrepresentations to TXDOT so they could ultimately benefit from the up-front option fee rather than wait for TXDOT acquisition by their usual course of condemnation. TXDOT used option contracts to purchase the tracts for higher prices than what Blackburn and Bollman paid for the tracts. Blackburn was indicted by a federal grand jury in April 2016.

According the general counsel for TXDOT, this is the first time a developer has been ordered to pay restitution for providing false information. Bollman is scheduled to be sentenced on Oct. 30, 2017.

This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Christopher A. Eason and J. Andrew Williams.

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Financial Fraud: LAWRENCE WYLLIE Indicted on Federal Fraud Charges For Allegedly Misappropriating School Funds

Financial Fraud

Former Lincoln-Way School Superintendent Indicted on Fraud Charges for Allegedly Misappropriating School Funds for His Own Benefit

CHICAGO — The former superintendent of Lincoln-Way Community High School District 210 has been indicted on federal fraud charges for allegedly misappropriating school funds for his own benefit and concealing the district’s true financial deficit from the public.

LAWRENCE WYLLIE fraudulently used at least $50,000 in school district funds to build and operate Superdog, a dog obedience training school that provided no benefit to the four high schools in the southwest suburban district, according to the indictment. Wyllie also misappropriated at least $16,500 of school district funds by paying himself a retirement stipend that was not in his employment contract, the indictment states. Wyllie fraudulently pocketed another $14,000 of school district funds by falsely describing it as compensation for unused vacation days – another benefit that was not in his contract, the charges state.

Wyllie also fraudulently inflated the district’s financial health by using bond funds to pay the district’s general operating expenses, causing the district to assume at least $7 million in additional debt.

The indictment was returned Wednesday in federal court in Chicago. It charges Wyllie, 79, of Naperville, with five counts of wire fraud and one count of embezzlement. Arraignment in U.S. District Court has not yet been scheduled.

The indictment was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Kathleen S. Tighe, Inspector General of the U.S. Department of Education.

District 210 operated four high schools that drew students from New Lenox, Frankfort, Mokena, Manhattan, Tinley Park and Orland Park. According to the indictment, one of the factors the district’s seven-member school board considered in renewing Wyllie’s employment contract was the financial performance of the district. In 2009, at the request of Wyllie and with approval of the school board, the district issued $29 million in bonds. Wyllie represented to the school board and bond purchasers that $10 million of the bond proceeds would be used for capital expenditures, including construction or renovation of the high schools, when in fact Wyllie knew that he would spend the money on the district’s general operating expenses and payroll, the charges allege. Wyllie transferred millions of dollars from a bank account where the district maintained its bond funds to a separate account that the district used for paying general operating expenses.

As a result, the district’s net operating expenditures and cost-per-pupil calculation appeared lower than they actually were, thus fraudulently inflating the district’s financial health, the charges state. Wyllie’s fraud scheme caused the district to assume at least $7 million in additional debt from the bond issuance, on which Lincoln-Way continues to pay interest, the indictment states.

Wyllie retired as district superintendent in June 2013.

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

Each count of wire fraud is punishable by up to 20 years in prison, while embezzlement carries a maximum sentence of ten years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Sunil Harjani.

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Financial Fraud: Eunises Llorca-Menses Guilty For Her Part in a Scheme to Use Skimming Devices on Gas Pumps to Steal Credit And Debit Card Numbers

Financial Fraud

Florida Woman Found Guilty in Gas Station Debit Card Skimming Operation that Involved Multiple States

Montgomery, Alabama- Eunises Llorca-Menses (30), of Naples, Florida, was found guilty by a federal jury Friday for her part in a scheme to use skimming devices on gas pumps to steal credit and debit card numbers, announced A. Clark Morris, Acting U.S. Attorney for the Middle District of Alabama, and Steven T. Marshall, Attorney General for the State of Alabama. The guilty verdict follows a multi-agency investigation that was initiated by the Ozark Police Department, the Alabama Attorney General’s Office, the United States Secret Service, and the Baldwin County Sheriff’s Office.

On February 15, 2017, Llorca Menses and her co-defendant Reiner Perez-Rives (34), of Houston, Texas, were charged by a federal grand jury with conspiracy to commit wire fraud, wire fraud, and aggravated identity theft. Perez-Rives pled guilty in July to conspiracy and identity theft charges.

As part of the scheme, Llorca-Menses and Perez-Rives, would rent vehicles and travel between Florida, Alabama, Tennessee and Virginia. During their travels, they would visit several gas stations and install a skimming device inside gas pumps. Through the skimming device, they collected gas station customers’ credit/debit card information and used that information to activate or reactivate credit, debit, or gift cards, and make unauthorized ATM cash withdrawals at gas stations and purchases at several places around the Southeast.

Law enforcement was able to uncover this scheme following multiple reports from victims concerning the unauthorized use of their debit cards. Working with financial institutions, the Ozark Police Department, along with state and federal partners, discovered that many of the victims had used their cards at the same gas station in Ozark, Alabama. At this station, they found a skimming device with Bluetooth capability installed on a gas pump. The Bluetooth technology allowed the defendants to collect a gas customer’s credit/debit information while sitting up to thirty-feet away from the gas pump.

At the time of their arrest on December 21, 2016, Llorca-Meneses and Peres-Rives were found to be in possession of thirty-nine credit/debit cards that had been re-encoded with stolen credit/debit card numbers, along with an additional 317 gift cards. A Wal-Mart gift card that contained the stolen account information from a victim’s Capital One credit card and a key used to gain access to the inside of a gas pump was found in Llorca-Meneses’ purse. Law enforcement also found a homemade device with connectors that matched the connections on the skimming device found in the gas pump in Ozark in their luggage.

Llorca-Menses and Perez-Rives each face a maximum sentence of 30 years in prison and payment of restitution to their victims. Their sentencings will take place within the next few months.

“It is incredibly difficult for the average person to determine if a gas pump has a skimmer,” stated Acting U.S Attorney Morris. “This is because many are placed inside the gas pump with no visible evidence of tampering. While the crooks may be getting smarter, law enforcement continues to work hard to stay a step ahead. This conviction shows that our office will continue to work with our partners to identify criminals that seek to victimize our citizens.”

“This conviction should send a strong message to debit card skimmers seeking to target unsuspecting Alabamians: you will be caught and brought to justice,” said Attorney General Marshall. “Special thanks to agents of the Alabama Attorney General’s Office, the U.S. Secret Service, the Ozark Police Department and the Baldwin County Sheriff’s Office for their teamwork in quickly uncovering this multi-state electronic crime spree and capturing the criminals, and to the U.S. Attorney’s Office for the Middle District of Alabama for this successful prosecution.”

“I would like to thank all law enforcement partners who brought these criminals to justice,” stated Ozark Police Chief Marlos Walker. “This is a win for all our communities as well as the men and women who stand up for justice every day. Teamwork is essential to the very being of a law enforcement professional. The Ozark Police Department was happy to do our part and will continue the fight against crime and disorder.”

Resident Agent in Charge Clayton Slay, with the United States Secret Service Montgomery Resident Office, stated, “the Secret Service has established an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes with local and state law enforcement partners and the U.S. Attorney’s Office. Through this effort, Mrs. Llorca-Menses was successfully prosecuted and found guilty by a jury of her peers.” RAC Slay also stated that he “would like to personally thank the Ozark Police Department, Baldwin County Sheriff’s Department and the Alabama Attorney General’s Office for their work and assistance in this case.”

To avoid becoming a victim of this type of fraud, customers should pay inside the store or use pumps that are visible to store employees and video surveillance cameras. Criminals commonly target pumps that allow them to install skimming devices undetected. Unfortunately, it is impossible to prevent all types of fraudulent charges from taking place. This is why early detection is so important. Citizens are encouraged to monitor their bank and credit card accounts frequently and immediately report any unusual activity to their financial institution.

This case was a joint investigation involving the Ozark Police Department, the Alabama Attorney General’s Office, the United States Secret Service, and the Baldwin County Sheriff’s Office. Assistant United States Attorney Denise O. Simpson and Assistant United States Attorney Steven Lee prosecuted this case.

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Tax Fraud: MARCEL A. WALTON Sentenced In Fraudulent Tax Returns

Tax Fraud

Self-Proclaimed “Grand Sheik” of Moorish Temple Sentenced to Nearly 6 Years in Prison for Scheming to Defraud the IRS out of $3.2 Million

CHICAGO — The self-proclaimed “Grand Sheik” of a Moorish temple in Chicago has been sentenced to nearly six years in federal prison for causing the Internal Revenue Service to issue more than $3.2 million in fraudulent tax returns.

MARCEL A. WALTON filed three fraudulent returns seeking $900,000 in refunds, causing the IRS to issue him more than $300,000. Walton also recruited individuals, including the elderly and homeless, to join a Chicago branch of the Moorish Science Temple of America and file similarly fraudulent returns on the false pretense that temple members were entitled to remuneration from the United States government for its purported use of Moorish lands. Walton claimed to be the “Grand Sheik” of the Chicago branch of the temple. At least 17 individuals filed nearly 50 returns seeking more than $15 million in refunds, ultimately obtaining more than $3.2 million from the IRS.

Walton, 47, of Chicago, pleaded guilty last year to one count of mail fraud. U.S. District Judge Thomas M. Durkin on Friday imposed the 68-month sentence in federal court in Chicago.

The sentence was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.

“Walton exploited a vulnerability in our tax system and filed blatantly false trust tax returns,” Assistant United States Attorney Carol A. Bell argued during the sentencing hearing. “He used his position to recruit individuals to further his tax scheme.”

In 2010 and 2011, Walton told numerous individuals that, if they became members of the temple, they could claim the money purportedly owed to the Moors by the federal government. Walton told the potential recruits that the Moors were the original discoverers of America and that a Moorish prophet was given a deed to lands making up North America. Walton executed the scheme by preparing and causing the preparation of trust or estate tax returns for himself and the others that contained false information regarding the purported trust’s income, fiduciary fees, exemptions and federal tax withheld.

Walton stood to gain from the returns filed by his temple members because he instructed them to pay him ten percent of the money they received from the IRS through the filing of the fraudulent returns. One of the temple members paid Walton $90,000 after receiving $900,000 in refunds from the IRS in 2010.

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Healthcare Fraud: Family Medicine Centers of South Carolina LLC Has Agreed to Pay to Resolve a False Claims Act

Health Care Fraud

South Carolina Family Practice Chain, Its Co-Owner, and Its Laboratory Director Agree to Pay the United States $2 Million to Settle Alleged False Claims Act Violations for Illegal Medicare Referrals and Billing for Unnecessary Medical Services

Family Medicine Centers of South Carolina LLC (FMC), has agreed to pay the United States $1.56 million, and FMC’s principal owner and former chief executive officer, Dr. Stephen F. Serbin, and its former Laboratory Director, Victoria Serbin, have agreed to pay $443,000 to resolve a False Claims Act lawsuit alleging that they submitted and caused the submission of false claims to the Medicare and TRICARE programs. FMC is a physician-owned chain of family medicine clinics located in and around Columbia, South Carolina, whose practices include Springwood Lake Family Practice, Woodhill Family Practice, Midtown Family Medicine, Saluda Pointe Family Medicine, Lake Murray Family Medicine, and the now closed Rice Creek Family Medicine.

The settlements announced today resolve allegations that FMC, as directed by Dr. Serbin, submitted claims to the Medicare Program that violated the physician self-referral prohibition, commonly known as the Stark Law, which is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives. The Stark Law forbids a clinic from billing Medicare for certain services ordered by physicians who have a financial relationship with the entity. In this case, the government alleged that the Stark Law was violated by FMC’s incentive compensation plan that paid FMC’s physicians a percentage of the value of laboratory and other diagnostic tests that they personally ordered through FMC, which FMC then billed to Medicare. Dr. Serbin, FMC’s co-owner and chief executive, allegedly initiated this program and reminded FMC’s physicians that they needed to order tests and other services through FMC in order to increase FMC’s profits and to ensure that their take-home pay remained in the upper level nationwide for family practice doctors.

“Financial arrangements that compensate physicians for referrals can sometimes encourage physicians to make decisions based on financial gain rather than patient needs,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice is committed to preventing illegal financial relationships that undermine the integrity of our public health programs and drive up the cost of healthcare for taxpayers.”

The settlements also resolve allegations that FMC, Dr. Serbin, and Victoria Serbin submitted and caused the submission of false claims to Medicare and TRICARE for medically unnecessary laboratory services by creating custom laboratory panels comprised of diagnostic tests not appropriate for routine measurement, performing these tests without an order from the treating physician, implementing standing orders to assure these custom panels were performed with defined frequency and not in reaction to clinical need, and programming FMC’s billing software to systematically change certain billing codes for laboratory tests to ensure payment by Medicare.

“Healthcare decisions should be made by physicians based on medical science and not with regard to maximizing the doctor’s own income,” said U.S. Attorney Beth Drake for the District of South Carolina. “Our goal in bringing this case was not only to recover money for improper healthcare claims, but also to deter similar conduct and promote health care affordability.”

The allegations settled today arose from a lawsuit filed by a physician formerly employed by FMC, Dr. Catherine A. Schaefer, under the whistleblower provisions of the False Claims Act. Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. Dr. Schaefer will receive $340,510.

As part of the settlement announced today, FMC and the Serbins have also agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General (HHS-OIG), which ensures the Serbins will have no management role in FMC for five years and obligates FMC to undertake other substantial internal compliance reforms, including hiring an independent review organization to conduct annual claims reviews.

“Patients and taxpayers should expect that doctors’ best medical judgement is not clouded by what amount to thinly-veiled bribes,” said Special Agent in Charge Derrick L. Jackson for HHS-OIG. “We will work tirelessly with our law enforcement partners to preserve government health funds by bringing violators to justice.”

“We applaud the Department of Justice and the U.S. Attorney for the District of South Carolina for holding this provider accountable for its actions,” said Deputy Director Guy Kiyokawa of the Defense Health Agency. “The provider’s actions targeted American service members, veterans and their families, diverting valuable resources through unnecessary tests. The Defense Health Agency continues to work closely with the Justice Department and other state and federal agencies to investigate all those who participated in these nefarious, fraudulent practices.”

This case was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of South Carolina, HHS-OIG and the Defense Health Agency.

The litigation and settlement of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).

The claims resolved by this settlement are allegations only, and there has been no determination of liability. The case is captioned United States ex rel. Schaefer v. Family Medicine Centers of South Carolina, LLC, Stephen F. Serbin, M.D. and Victoria Serbin, No. 3:14-cv-342-MBS (D.S.C.).

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