The United States Department of Justice provides a wealth of valuable information to help you stay apprised of recent cases across the country involving alleged identity theft, money laundering, email scams, and other types of fraudulent activity. These cases can help you spot fraudulent activity, so you don’t become a victim yourself.
Read on to learn about fraud investigations appearing on the United States Department of Justice website.
Financial Fraud, Email Scams, Money Laundering
Read Article: Man Pleads Guilty to Laundering Proceeds from Romance and Cyber Scams
Southern District of Florida— Peter Vincent Cruz, a resident of Washington State and Alaska, pleaded guilty to money laundering charges, stemming from his decision to launder hundreds of thousands of dollars in fraud proceeds from online romance and business email compromise (“BEC”) scams, announced U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, Special Agent George L. Piro of the Federal Bureau of Investigation (FBI), Miami Field Office and Brian Swain, Special Agent in Charge, U.S. Secret Service (USSS), Miami Field Office.
According to documents filed with the court, from approximately June 2016 through June 2018, in Broward County, Florida, and elsewhere, Cruz knowingly and willfully agreed to participate in, and did participate in, a conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h). The purpose of the conspiracy was for Cruz and his co-conspirators to unlawfully enrich themselves, to hide illegal proceeds, and to further wire fraud schemes by, among other things, withdrawing, depositing, and transferring fraudulently obtained funds between federally insured credit unions, federally insured banks, and individuals, and converting the fraudulently obtained funds to cash and cryptocurrency. Cruz laundered proceeds from BEC and romance scams.
According to court documents, Cruz’s co-conspirators in Nigeria and elsewhere contacted businesses (the “business victims”) located throughout the United States, using email, social media, and other Internet-based methods of communication, and falsely and fraudulently posed as vendors seeking payment for services rendered, in order to facilitate the BEC scam. The co-conspirators, posing as vendors, used spoofed emails and email account takeover techniques to send emails falsely and fraudulently directing the business victims to make payments to various bank accounts, through wire transfers, in purported satisfaction of invoices due to the actual vendors.
The court docket further indicates that Cruz’s co-conspirators also used stolen and false identification information to create online personas, utilizing online dating applications, email, social media, and other forms of communication, in order to facilitate romance scams. The co-conspirators then pursued false and fraudulent relationships online with individual victims (the “romance scam victims” or “individual victims”) and tricked these victims into falling in love with them. Eventually, the co-conspirators would persuade these individuals to open bank accounts and shell companies; to conduct financial transactions (cash withdrawals or transfers) under false pretenses, such as to purportedly aid with medical bills or business expenses; and to send money from the victims’ personal savings, or in the form of iTunes gift cards. Read More
Financial Fraud
Read Article: Former Bank Tellers Plead Guilty To Stealing $1.6 Million From The Peoples Bank In Eatonton
Macon, GA – Two former bank tellers entered guilty pleas to one count of Conspiracy to Defraud a Financial Institution in federal court, said Charles “Charlie” Peeler, the U.S. Attorney for the Middle District of Georgia. Both Vicky Martin, 60, of Buckhead (Morgan County), and Brandy Mize, 42, of Eatonton, were employed as tellers by The Peoples Bank in Eatonton, Georgia, and used their positions to steal $1,663,205.25. Maximum penalties for the fraud charge are 30 years imprisonment, $1,000,000 fine and 5 years supervised release. The Honorable Tillman E. “Tripp” Self presided over Tuesday’s hearing, and sentencing is scheduled for March 5, 2019.
According to the plea agreement, Ms. Mize was the Head Teller and Ms. Martin was employed as the Assistant Head Teller at The People’s Bank. In these positions, the defendants were responsible for correcting mistakes indicated by the Branch Capture Correction Account (BCCA), a quality control feature used by the bank to reveal one-sided transactions and prevent mistakes or fraud. On a daily basis, the defendants were tasked with insuring that the cash counts in the teller drawers and the bank vault balanced, and were not the objects of theft, and overseeing the operation of both the BCCA and Teller Plus system that checks the accuracy of these cash balances and records. The defendants also placed orders for cash from the Federal Reserve Bank.
The defendants used their positions of trust to embezzle and misapply bank money by transferring bank funds into their personal bank accounts or into the accounts of family members and associates. The defendants took cash from their teller drawers and, in Ms. Mize’s case, directly from the vault. The defendants also issued cashier’s checks for their benefit, all without valid checks or cash being deposited to the bank to support these transactions. To cover the thefts, the defendants corrected errors indicated in the BCCA, and hid losses by inflating the vault cash balance, as they were the employees responsible for counting the cash in the vault and ordering the cash to replenish the fault from the Federal Reserve Bank. The bank began their internal investigation in March 2016, following reports from colleagues regarding suspicious activity on the bank’s general ledger. The defendants were suspended on March 14, 2016. In a telephone conversation with the President of The Peoples Bank, Ms. Mize estimated she had been taking money from the bank for three to four years. Read More
Elder Justice, Financial Fraud, and Securities, Commodities, & Investment Fraud
Read Article: Advertising Executive Sentenced To Forty Years In Federal Prison For Fraud Scheme
Tampa, FL — United States Attorney Maria Chapa Lopez announces that U.S. District Judge Elizabeth Kovachevich sentenced Gary Todd Smith (49, Fayetteville, North Carolina) to 40 years in federal prison for wire fraud and conspiracy to commit wire and mail fraud. The court also ordered Smith to forfeit $63 million, an amount traceable to proceeds of the offense. Smith had pleaded guilty on June 7, 2017.
According to court records, Smith ran Smith Advertising, which turned into a massive fraud scheme. Smith borrowed money from more than 150 people, and each earlier loan was repaid from subsequent loans. Smith lied about the purpose of the loans, and he and his co-conspirators created fake documents to mask the scheme. Over the course of the five-day sentencing hearing, the court heard from more than 50 victims who described the devastation wrought upon their lives by Smith’s massive fraud scheme. The victims suffered bankruptcies, loss of their homes, loss of retirement funds, and loss of their children’s education funds.
“This was a crime motivated by greed and a desire to fund an extravagant lifestyle,” said U.S. Attorney Chapa Lopez. “We will continue to work with our law enforcement partners to vigorously prosecute those who defraud and steal from honest, hardworking Americans.” Read More
Mail Fraud
Read Article: Social Services Worker Indicted On Charges Of Defrauding A Client Out Of A Car And Lying To The FBI
Buffalo, NY— U.S. Attorney James P. Kennedy, Jr. announced that a federal grand jury has returned an indictment charging Rhonda Henderson, 47, of Cheektowaga, NY, with mail fraud and making false statements. The charges carry a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorney Joseph M. Tripi, who is handling the case, stated that according to the indictment, between September 2013 and January 3, 2014, the defendant devised a scheme to defraud Victim A of a 1999 Honda Accord, which belonged to the victim’s deceased mother. Henderson worked as a social services manager for a local social services agency. The defendant met Victim A, who suffered from a variety of mental health issues and only completed formal education through seventh grade, through her employment at the agency where Victim A received services.
As part of the scheme, Henderson reminded Victim A of the things that Henderson did for Victim A and Victim A’s mother prior to her death and advised Victim A that Victim A should do the defendant a favor as a result. Henderson asked Victim A to allow her son, D.H., to drive the 1999 Honda Accord for a temporary period of time because Henderson was having financial trouble and could not get her son a car. Victim A gave the defendant and her son physical possession of the vehicle.
Henderson deceived Victim A into signing Department of Motor Vehicle (DMV) documents that would allow the defendant to obtain a duplicate title for the 1999 Honda Accord. Henderson took Victim A to the DMV branch on Sheridan Drive in Amherst, NY, at which time Victim A filled out and signed an application for a duplicate title. The application was then processed by L.Y., an associate of Henderson. A duplicate title was issued in the name of Victim A’s deceased mother, but with Henderson’s home address in Cheektowaga listed on the title. Victim A did not fill out the address portion of the form and did not know that it included Henderson’s address.
Subsequently, the defendant forged Victim’s A’s signature on the duplicate title, listing Victim A as the “seller,” and listing herself as the “buyer.” Henderson then registered the 1999 Honda Accord in her name. The defendant’s actions resulted in the DMV mailing the defendant title to the vehicle and defrauding Victim A of the 1999 Honda Accord. Read More
Public Corruption
Read Article: Two Former Police Officers Admit to Federal Corruption Charges
St. Louis, MO – Mark Taylor, 49, and Marlon Caldwell, 51, admitted to accepting bribes in exchange for un-redacted accident reports while police officers with the City of St. Louis, bringing to an end an investigation that led to charges against four former police officers, a local chiropractor and his wife.
According to court documents, between 2007 and 2016, Dr. Mitchell Davis owned and operated Davis Chiropractic Clinic, now known as City Health and Chiropractic. Located on Lindell Blvd in St. Louis, the clinic primarily provided services to accident victims. Galina Davis assisted Dr. Davis in identifying, soliciting, and scheduling potential accident victims.
According to SLMPD policy, the SLMPD will provide un-redacted accident reports only to persons involved in the accidents, the companies insuring them, or the lawyers representing them. Un-redacted accident reports contain detailed information, including addresses, telephone numbers, birthdates, and insurance information of the occupants of the vehicles. Dr. Davis and Galina Davis knew that the SLMPD would not disclose un-redacted police reports to them. To get around this policy, Galina Davis and Dr. Davis recruited, solicited, and paid individual SLMPD police officers to obtain un-redacted accident reports for them.
Using the information from the un-redacted reports, Galina Davis contacted accident victims, identified herself as Gail, Allison, Kelly, Laura, or Shannon, and offered the accident victims free services at Davis Chiropractic. Dr. Davis and Galina Davis focused on identifying accident victims from neighborhoods where there was a large concentration of low-income victims. They believed that low-income individuals would be more receptive to their solicitations and offers of free services.
Taylor and Caldwell both admitted to facilitating this exchange of cash for reports. Caldwell admitted to identifying other officers to continue the arrangement after his retirement. Caldwell pleaded guilty to conspiracy to accept bribes. Taylor admitted to a substantive count of bribery. They appeared before Judge Stephen N. Limbaugh, Jr. who accepted their pleas and set sentencing for March 6, 2019. Read More
Financial Fraud
Read Article: Pinellas Men Plead Guilty In Telemarketing Scam
Tampa, FL – United States Attorney Maria Chapa Lopez announces that Gary Kinard (40, St. Petersburg), Martin Steele (46, Largo), and Mark Boring (47, St. Petersburg) have each pleaded guilty to one count of conspiracy to commit wire fraud and one count of aggravated identity theft. Each faces a maximum penalty of 20 years in federal prison for the wire fraud conspiracy and a minimum mandatory consecutive term of 2 years’ imprisonment for the aggravated identity theft.
Pursuant to their plea agreements, Kinard has agreed to pay restitution to the scheme’s numerous victims in the amount of $1,555,860.21; Steele has agreed to pay restitution in the amount of $1,768,163.60; and Boring has agreed to pay restitution in the amount of $853,392.03. Each has also consented to a forfeiture money judgment of $75,000.
According to the plea agreements, from 2016 through at least 2018, Kinard, Steele, and Boring conspired with each other and others to take money from victims throughout the United States who wanted to sell their timeshare properties or other land parcels. The conspirators placed telephone calls to these victims impersonating real estate professionals. They misled the timeshare owners to believe that the conspirators had identified buyers for the victims’ timeshares and other properties. The conspirators further advised the victims that the timeshare and property sales could be consummated if the victims made one or more advanced payments to the conspirators for various fees purportedly associated with the sales, such as closing costs, courier services, title searches, transfer and legal fees.
Once the victims agreed to pay the bogus advance fees, the conspirators directed the victims to send funds via wire transfers to one of the conspirators. That conspirator then withdrew the fraud proceeds and shared them with the others, based upon each conspirator’s role in the fraudulent transaction. The conspirators often repeatedly re-contacted their victims and fraudulently advised them that additional fees were needed in order to complete the sales, and they continued to dupe the victims into sending bogus advance fees until the victims either ran out of money or became aware of the scam. Read More
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Veriti Consulting specializes in fraud investigation and dispute services to uncover fraud schemes and minimize the resulting damages. Do you suspect that you may have been a victim of fraudulent financial activities? Call the experts at Veriti Consulting to speak with a professional. Our fraud and forensic accounting firm services clients across the United States. Contact us at (877) 520-1280.
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