There are several great resources, including the U. S. Department of Justice, the Federal Bureau of Investigation, and credible news sources, available to help you stay up-to-date on the types of fraud occurring in the United States. By staying alert, you can help protect yourself or your business from falling victim to a scam or fraudulent activity.
Continue reading to learn about March 2019 crime investigations and fraud cases from the United States Department of Justice.
Mail Fraud
Southern District of Florida— Thomas Michael White, 60, of Parkland, Florida was recently sentenced to 14 years in prison for leading a multi-year conspiracy that robbed over a dozen senior citizens of their retirement money.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Ron Rubin, Commissioner, Florida Office of Financial Regulation (OFR), made the announcement.
A jury in Miami found White guilty, on December 13, 2018, of one count of conspiracy to commit mail and wire fraud and four counts of mail fraud, in connection with the scheme to fraudulently raise $2 million from over a dozen elderly victims throughout the United States (Case No. 18-60174-CR-Bloom). U.S. District Judge Beth Bloom sentenced White (the mastermind of the fraud scheme) to a total of 168 months in prison. He was also ordered to pay $1,936,400 in restitution to his victims and serve three years of supervised release.
According to the court record, including evidence introduced at trial, White was President and CEO of First Call Ventures, LLC, the parent company of First Call Movers & Transport of Florida, LLC, a moving company that also brokered customer moves for other companies. From November 2011 through mid-2014, White ran the Broward-based moving business’ call center that booked moves throughout the Southeast. He also oversaw a “phone room” out of his corporate offices to raise money from investors. During telephone calls, White and his co-conspirators used false statements, manipulation, and high-pressure tactics to target elderly investors (“vulnerable, elderly victims”) and their retirement money. The victims included retired teachers, farmers, small business owners, and homemakers, from across the United States. When his targets did not have available funds to invest, White tricked them into converting their Individual Retirement Account (“IRA”) money and transferring the funds to his corporate bank account. As a result, White and his conspirators were given a total of more than $2 million from over a dozen senior citizens.
In truth and fact, White and his partners used the investors’ money for themselves, including millions in cash and bank check payments. Bank records also demonstrated that over the course of the fraud scheme, White withdrew over $130,000 in investor proceeds at the Seminole Coconut Creek casino. White and his partners siphoned all profits and victim money to their own personal accounts, declared a $1.8 million “loss,” and shuttered the business. As a result of the fraudulent scheme, some of the senior citizens are now living on food stamps, lost their homes, or were forced to take on odd jobs for income. Read More
Wire Fraud
Read Article: Former Cisco Systems Employee Arrested
San Francisco, CA – Prithviraj R. Bhikha, a former employee of Cisco Systems, Inc. (Cisco), was charged in a criminal complaint with wire fraud, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The criminal complaint was recently unsealed following Bhikha’s arrest on Friday, March 1, 2019, at the San Francisco International Airport.
According to an affidavit filed by a special agent of the Federal Bureau of Investigation, Bhikha, 50, of San Francisco, was employed until mid-2017 by Cisco as a director in its global supply unit in San Jose, Calif. That unit was in charge of working with suppliers and vendors to obtain parts for Cisco products. In or about 2013, Bhikha is alleged to have begun advocating within Cisco for the approval of a new project, of which he would be in charge, the goal of which was for Cisco to retain third-party vendors to negotiate savings with manufacturers on small parts used in Cisco products. The complaint affidavit alleges that Bhikha devised, participated in, and executed a scheme to defraud Cisco by establishing overseas business entities, then directing and approving Cisco contracts to these entities pursuant to the aforementioned project, and failing to disclose his ownership interest in the overseas entities. The affidavit alleges that Cisco wired approximately $6.5 million to one of these entities and approximately $2.8 million to another. The affidavit also alleges more than $8.5 million was wired from bank accounts associated with these two overseas entities to U.S. bank accounts either controlled jointly by Bhikha and his wife or by his wife alone.
The complaint affidavit also alleges that, when Cisco employees became suspicious regarding one of Bhikha’s overseas entities in 2016, Bhikha and another Cisco employee worked together to create documentation to send to Cisco employees regarding that company. The other Cisco employee is also alleged to have asked a third party to pose as the CEO of the overseas entity in a meeting with Cisco employees in July 2016. Bhikha is charged with one count of wire fraud, in violation of 18 U.S.C. § 1343. Read More
Financial Fraud
Read Article: Former Bank Tellers Sentenced To Prison, Ordered To Pay Back $1.6 Million To The Peoples Bank In Eatonton
Macon, GA — Two former bank tellers were sentenced to prison and ordered to pay more than $1.6 million dollars to the institution they defrauded, announced Charles “Charlie” Peeler, the U.S. Attorney for the Middle District of Georgia. Vicky Martin, 60, of Buckhead (Morgan County), and Brandy Mize, 42, of Eatonton, pled guilty in December to one count of Conspiracy to Defraud a Financial Institution. The Honorable Tillman E. “Tripp” Self-sentenced Ms. Martin to 21 months imprisonment and Ms. Mize to 41 months imprisonment, five years supervised release and were ordered to pay restitution jointly and severally to The Peoples Bank in Eatonton, Georgia the entire amount stolen, $1,663,205.25. There is no parole in the federal prison system.
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. The defendants used their positions of trust starting sometime during 2012 or 2013 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. 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 all, $1,663,205.25 was stolen from The Peoples Bank.
“Scheming to make money by lying and defrauding others will land you in prison,” said Charles “Charlie” Peeler, the U.S. Attorney for the Middle District of Georgia. “It’s a top priority of the U.S. Attorney’s Office to protect law abiding citizens and businesses from fraud. The money these defendants stole should have been used to benefit the bank and its employees, shareholders and account holders, not to enrich Ms. Mize and Ms. Martin. With the assistance of our law enforcement partners, we will continue to uncover these conspiracies and prosecute people who abuse their positions of trust.” Read More
Financial and Tax Fraud
Read Article: Miami CPA Sentenced to Prison for Tax Evasion
Southern District of Florida— A Miami, Florida, certified public accountant (CPA) was sentenced to 39 months in prison for tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, and Chief Don Fort, Internal Revenue Service-Criminal Investigation (IRS-CI).
“Tax professionals, such as Darryl Sharpton, who use their expertise to commit tax fraud and enrich themselves rather than to assist honest taxpayers will be fully prosecuted by the Department of Justice and held accountable for their criminal conduct,” stated Principal Deputy Assistant Attorney General Zuckerman. “Employment tax fraud is a violation of the trust of employees and all honest taxpayers.”
U.S. Attorney Fajardo Orshan stated, “Rather than uphold the ethical obligations and professional code of conduct of a dutiful tax professional, Darryl Sharpton defrauded the federal government to avoid paying his own taxes, as well as taxes withheld from his employees’ pay. As millions of hard-working taxpayers prepare and file their tax returns this season, today’s prison sentence should serve as a reminder of the stiff penalties that will be imposed on those who undermine the integrity of the U.S. tax system.”
“For years, Darryl Sharpton, a CPA with three decades of public accounting and consulting experience, cheated the government and egregiously evaded the payment of substantial amounts of income taxes,” stated Chief Don Fort, Internal Revenue Service-Criminal Investigation (IRS-CI). “Today’s sentencing is an important victory for American taxpayers who play by the rules and have no tolerance for those who fail to pay their fair share. IRS-CI will continue to investigate and recommend prosecution for individuals such as Mr. Sharpton who ignore the law and shun their tax responsibilities.”
In December 2018, Darryl Sharpton, a CPA living in Miami, Florida, pleaded guilty to willfully evading the payment of federal income taxes for tax years 2004 through 2008, and 2010. Sharpton was an owner of The Sharpton Group, formerly known as Sharpton, Brunson and Company. The Sharpton Group specialized in financial and management consulting, audit and attestation, and tax and wealth planning. Sharpton filed personal income tax returns for years 2004 through 2008 and 2010, but willfully evaded payment of the taxes he owed for those years. To facilitate his fraud, Sharpton caused The Sharpton Group to pay his personal expenses through its corporate bank accounts, and then falsely stated to an IRS Revenue Officer that he did not pay his personal expenses from the corporate bank accounts. Read More
Financial Fraud: Securities, Commodities, & Investment Fraud
Read Article: Former Equifax Executive Pleads Guilty to Insider Trading
Atlanta, GA – Jun Ying, who committed insider trading by exercising his company stock options ahead of Equifax’s public announcement of its massive data breach, pleaded guilty to a charge of securities fraud.
“Insider trading is an abuse of trust and victimizes everyone who invests in the stock market,” said U.S. Attorney Byung J. “BJay” Pak. “Our office will continue its work to keep the stock market fair for all investors.”
“We must not allow company insiders to have an advantage over regular investors, otherwise the integrity of the markets and confidence of investors deteriorates,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI will do everything in its power to maintain a fair and equitable stock market for everyone.”
According to U.S. Attorney Pak, the charges and other information presented in court: Equifax Inc. is a consumer credit reporting agency headquartered in Atlanta, Georgia. During the summer of 2017, Equifax was the victim of a data breach, where hackers acquired names, Social Security numbers, birth dates, and addresses of over 145 million Americans. At the time, Jun Ying was the chief information officer of Equifax U.S. Information Solutions. In that role, he was provided sensitive information that led him to conclude that Equifax was the victim of the data breach before it was made public.
On Friday, August 25, 2017, Ying texted a co-worker that the breach they were working on “Sounds bad. We may be the one breached.” The following Monday, Ying conducted web searches on the impact of Experian’s 2015 data breach on its stock price. Later that morning, Ying exercised all of his stock options, resulting in him receiving 6,815 shares of Equifax stock, which he then sold. He received proceeds of over $950,000, and realized a gain of over $480,000, thereby avoiding a loss of over $117,000. On September 7, 2017, Equifax publicly announced its data breach, which resulted in its stock price falling. Read More
Securities, Commodities, & Investment Fraud
Read Article: Long Island Woman Arrested for Stealing More Than $10 Million in Fraudulent Real Estate Investment Scheme
Eastern District of New York – An indictment was recently unsealed in federal court in Brooklyn charging Grace Kay with wire fraud related to a long-running scheme to solicit funds from real estate investors. Kay was arrested today and is scheduled to be arraigned this afternoon before United States Magistrate Judge James Orenstein.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.
According to the indictment, between January 1, 2010 and April 15, 2018, Kay and co-conspirators falsely represented to investors that she had inherited real estate in Japan, including three skyscraper buildings, and required funds to pay various fees and taxes in order to sell the properties and return a large profit to the investors. Relying on Kay’s false representations, investors provided Kay with more than $10 million, which she stole for her personal use.
“As alleged in the indictment, Kay devised a real estate scheme built on tall tales to fleece investors out of millions of dollars,” stated United States Attorney Donoghue. Read More
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Veriti provides fraud investigation and dispute services to uncover fraud schemes and minimize the resulting damages. If you think that you have been the victim of fraud or suspect that others are engaging in fraudulent activity, call the fraud experts at Veriti Consulting today at (877) 520-1280 to speak with a professional.
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