Fraud News August 2018: Public Corruption, a Jet-Setting Monk, and More

It is important to recognize that fraud comes in many forms and affects unsuspecting citizens here in the United States and abroad on a daily basis. Get tips to avoid becoming a victim by staying up-to-date on the latest fraud cases from the Department of Justice, the FBI, and various news outlets.

Keep reading to learn about August 2018 crime investigations and fraud cases from the FBI and the United States Department of Justice.

Cyber Crime

Read Article: Prolific Malware Developer Responsible for Countless Computer Intrusions

Hot Springs, AR—Not that they knew him personally, but Taylor Huddleston, a 27-year-old from Hot Springs, Arkansas, was for a time very popular among the world’s cyber criminals, thanks to a malicious piece of software he created called NanoCore RAT.

That malware allowed hackers to steal sensitive information from victims’ computers, including account numbers and passwords, and even allowed them to secretly activate the webcams of infected computers to spy on unsuspecting victims.

“Basically, the malicious software compromises victim computers and steals information,” said a special agent from the FBI’s Washington Field Office who investigated the case. “The NanoCore RAT has the ability to control a victim’s computer.”

This type of malware—a Remote Access Trojan (RAT)—is all the more insidious because in most cases victims have no idea their computers have been compromised. According to court documents, NanoCore RAT was used to infect and attempt to infect more than 100,000 computers.

RATs are not only a threat to individual users but to commercial enterprises as well. And if hackers decide to target U.S. infrastructure using this malware, the agent said, “there is a potential for national security implications.” Read More

Wire Fraud, Mail Fraud, Money Laundering

Read Article: Former Hillsborough Resident Indicted In Investment Fraud Scheme

San Francisco, CA—A federal grand jury in San Francisco indicted former Bay Area resident Michael James Frew charging him with wire fraud, mail fraud, and money laundering announced Acting United States Attorney Alex G. Tse, Federal Bureau of Investigation Special Agent in Charge John F. Bennett and Acting Special Agent in Charge Internal Revenue Service (IRS-CI) Tara Sullivan. The indictment was unsealed following Frew’s arrest in Beatty, Nevada, on the charges.

According to the indictment, beginning no later than 2010, Frew, 70, formerly of Hillsborough, Calif., solicited investments from numerous individuals on the premise that their money would be invested into real estate in the United States and abroad. After receiving misrepresentations in connection with Frew’s solicitations, several victim investors provided funds to Frew for the purpose of allowing him to invest funds on their behalf. In fact, Frew used these “investments” primarily to support his personal lifestyle, to speculate on the stock market using an account in his name, and/or to repay other victims a portion of their investments.

The indictment alleges that Frew convinced his victims he would make investments into real estate in the United States and foreign countries in areas under recent distress from natural disasters. The indictment describes how Frew allegedly persuaded one couple to transfer to him $380,000 in cash for the purpose of making investments in foreign real estate and a short-term investment that would yield a 10% return. Nevertheless, instead of investing the money as he promised, Frew used the money to make expenditures for personal expenses, to speculate on the stock market, and to repay other victim “investors.” The indictment describes similar transactions between Frew and four other victims during the period 2010 through 2014. Read More

Financial Fraud, Identity Theft

Read Article: Former Public Utility Employee Pleads Guilty In Theft Of More Than $4 Million From Public Utility And Customers

Manhattan, NY – Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that John Farchione, a former Manager at a public utility company (the “Public Utility”), pled guilty in Manhattan federal court to four felony counts in connection with a scheme to steal more than $4 million from the Public Utility and its customers between 2005 and 2016. During that time period, FARCHIONE obtained and kept millions of dollars in customer payments intended for the Public Utility and then manipulated the Public Utility’s computer and accounting systems to conceal the theft. FARCHIONE pled guilty before U.S. District Judge J. Paul Oetken to one count of honest services fraud, one count of mail fraud, one count of conspiracy to commit mail fraud, and one count of aggravated identity theft.

U.S. Attorney Geoffrey S. Berman said: “As he has now admitted, for more than a decade, John Farchione abused his position to steal millions of dollars from his employer, a public utility company New Yorkers rely upon. We will continue to work aggressively to protect New York’s public utilities and their customers from such brazen criminal conduct.”

According to allegations contained in the Indictment and statements made in related court filings and proceedings, from at least in or about 2005, up to and including in or about November 2016, Farchione orchestrated fraudulent schemes that allowed him to steal millions of dollars from the Public Utility. Read More

Public Corruption

Read Article: Ongoing Federal Investigation Leads To Charges Against Three Former Top Buncombe County Officials

Asheville, NC—A federal grand jury in Asheville returned a criminal bill of indictment, charging three former top Buncombe County officials, Wanda Skillington Greene, 67, Jon Eugene Creighton, 66, and Amanda (Mandy) Louise Stone, 59, all of Buncombe County, with wire fraud and aiding and abetting; conspiracy to commit an offense against the United States; receipt of bribes and kickbacks and aiding and abetting; and federal program fraud and aiding and abetting, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.

“Rooting out public corruption at all levels of government is one of my Office’s most critical responsibilities,” said U.S. Attorney Murray. “I want to thank the FBI, IRS-Criminal Investigation Division, and the North Carolina State Bureau of Investigation for their incredible diligence and commitment to conducting a thorough and objective investigation, which has led to the indictment.”

“When public officials put aside the best interest of the American public and choose to line their own pockets, we are all impacted. These types of crimes are at the center of the fight against public corruption. The FBI is dedicated to working with our law enforcement partners in the Western District of North Carolina to root out public corruption at any level of office,” said John Strong, Special Agent in Charge of the FBI Charlotte Field Office. Read More

Public Corruption

Read Article: Dallas City Council Member and President of Force Multiplier Solutions Plead Guilty to Multi-Million Dollar Bribery Conspiracy

Dallas, TX—Dallas City Council Member and Mayor Pro Tem Dwaine Caraway, of Dallas, Texas, and Robert C. Leonard Jr., of New Orleans, Louisiana, appeared in federal court before Chief U.S. District Judge Barbara M.G. Lynn and pleaded guilty to federal conspiracy charges, announced Erin Nealy Cox, U.S. Attorney of the Northern District of Texas. Council Member Caraway pleaded guilty to one count of conspiracy to commit honest services wire fraud and one count of tax evasion. Robert Leonard pleaded guilty to one count of conspiracy to commit honest services wire fraud.

The law enforcement operation was led by the Federal Bureau of Investigation (FBI) and the Internal Revenue Service Criminal Investigation (IRS-CI).

“The pleas represent the meticulous and tireless efforts of the Federal Bureau of Investigation, the Internal Revenue Service, and the dedicated prosecutors of our office,” stated U.S. Attorney Nealy Cox. “These cases demonstrate our continued resolve to uncover corruption at the highest levels–the citizens of Dallas deserve honest government.” Read More

Fraud, Money Laundering

Read Article: Thai Monk Who Flew in High Style Gets Prison for Fraud

Bangkok, Thailand – A former Buddhist monk infamous for a jet-set lifestyle was sentenced to more than 100 years in prison in connection with funds he fraudulently raised from followers.

Wirapol Sukphol caused a scandal when he appeared in a 2013 YouTube video in his monk’s robes aboard a private jet wearing aviator sunglasses with a Louis Vuitton carry-on by his side. He was defrocked amid accusations that he had sexual relations with several women — a major violation of the precepts guiding monks’ behavior — and had impregnated one. There were also allegations he had sex with a 14-year-old girl.

Because of the furor, he fled to the United States, where he was arrested in 2016 and extradited last year.

The Ratchada Criminal Court in Bangkok sentenced him Thursday to 114 years in prison, although legal technicalities capped the actual time he must serve at 20 years. He was found guilty of fraud, money laundering and violation of the computer crime act for spending money he had solicited for Buddhist statuary and temple improvements instead on cars and luxury goods. Read More

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