ALEXANDRIA, VA—Hamada Makarita, 50, of Oakton, Virginia, has been charged in a 15-count indictment of using his position as a dentist to illegally distribute prescription pills to patients, employees, and women he dated. He was also charged with allegedly using the identity of another dentist to fraudulently bill an insurance company of more than $160,000 in claims.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement.

Makarita was charged with conspiracy, health care fraud, aggravated identity theft, and 12 counts of dispensing controlled substances. If convicted, he faces a maximum penalty of 10 years in prison on the health care fraud charge, 20 years in prison for conspiracy on each dispensing controlled substances charge, and a consecutive two-year sentence for the aggravated identity theft charge.

According to the indictment, Makarita owns and operates a dental practice in Oakton, Virginia and advertised online at www.fixasmile.com. The indictment alleges that from about 2007 to 2012, Makarita distributed and dispensed thousands of dosages of prescription medicine to patients, employees, and girlfriends, all without a legitimate dental purpose and beyond the bounds of a dental practice. Makarita allegedly asked those who received the prescriptions he issued to return to him some or all the prescribed medicine. On numerous occasions, Makarita would distribute prescription pills to patients and girlfriends in social settings and for prurient purposes, including for consensual and non-consensual sex.

In addition, the indictment alleges that Makarita provided more than $160,000 in services to his family members and billed them to an insurance provider in violation of the provider’s contract. He allegedly billed the services under the name of another dentist who did not practice in Makarita’s office at that time. Makarita received more than $91,000 in reimbursement from the provider for these fraudulent claims.

The investigation was conducted by the FBI’s Washington Field Office. Special Assistant United States Attorney Mazen Basrawi is prosecuting the case on behalf of the United States.

This case is part of an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation (Operation Cotton Candy), which has been focusing on the illegal distribution by numerous doctors, pharmacists, nurses, and patients of pain medication. This OCDETF matter has secured more than 200 drug-trafficking convictions and guilty pleas.

Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.

Oakton Dentist Indicted for Alleged Illegal Distribution of Prescription Medicine, Health Care Fraud, and ID Theft | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

David B. Fein, United States Attorney for the District of Connecticut; Susan J. Waddell, Special Agent in Charge of U.S. Health and Human Services, Office of Inspector General for New England; William P. Offord, Special Agent in Charge of IRS Criminal Investigation in New England; and Kimberly K. Mertz, Special Agent in Charge of the Federal Bureau of Investigation, announced that Gary F. Anusavice, also known as “Gary Andrews,” “Gary Andrus” and “Gary Francis,” 59, of North Kingstown, Rhode Island; and Mehran Zamani, DDS, 47, of Pound Ridge, New York, were arrested today on federal charges related to their alleged involvement in a $20 million Medicaid fraud scheme.

“As alleged, these operators of dental practices throughout Connecticut defrauded the Medicaid program of more than $20 million over a two-year period,” said U.S. Attorney Fein. “We are committed to protecting American taxpayers from health care fraud, which can increase costs and jeopardize the integrity of our health care system. I want to commend HHS-OIG, IRS-Criminal Investigation, and the FBI for their investigative efforts and thank the Connecticut Attorney General’s Office, which provided invaluable assistance during the course of this investigation.”

“Although Gary F. Anusavice was barred from Medicare, Medicaid, and other government health programs back in 1998, he allegedly continued to defraud taxpayers by using an elaborate shield of companies and individuals—including Dr. Zamani—to hide his involvement,” said HHS-OIG Special Agent in Charge Waddle. “Working with federal and state partners, our investigators will penetrate such schemes and help bring suspects to justice.”

“To combat healthcare fraud, IRS Criminal Investigation provides the financial investigative expertise to follow the money trail from the crime to the culprit,” said IRS Criminal Investigation Special Agent in Charge Offord. “We are proud to work with our law enforcement partners to document the financial benefits derived from these fraudulent activities.”

“The FBI views health care fraud as a serious crime problem,” said FBI Special Agent in Charge Mertz. “It degrades the integrity of our health care system and legitimate patient care. Today’s arrests send a clear message to those persons who are defrauding our federal Medicare and Medicaid and private health insurance programs. The FBI remains committed to investigating health care fraud and bringing these individuals to justice. The FBI will continue to work aggressively with our law enforcement partners to investigate those who violate the public trust by stealing taxpayer money. We urge anyone with information regarding health care fraud activity to contact its nearest FBI field office.”

According to court documents, the Medicaid program is a joint federal-state program that provides funds for medical services to lower-income individuals who qualify for benefits. The program is jointly administered by the U.S. Department of Health and Human Services and supervised by the Centers for Medicare and Medicaid Services. In Connecticut, the Medicaid program is administered by the State of Connecticut Department of Social Services (DSS).

As alleged in court documents, Anusavice was previously a registered dentist in several states. In July 1997, Anusavice sustained a felony conviction in Massachusetts for submitting false health care claims. Based on that conviction, the U.S. Department of Health and Human Services notified Anusavice in April 1998 that he was being excluded from participation in Medicare and state health care programs, including Medicaid. As part of that notice, Anusavice was informed that, as an excluded individual, he may not “submit claims or cause claims to be submitted” for payment from the federal Medicaid program. Further, Anusavice was advised that Medicaid reimbursement payments are prohibited to any entity in which he serves as an “employee, administrator, operator, or in any other capacity….”

In November 2005, Anusavice surrendered his right to practice dentistry in Rhode Island, and the Massachusetts Board of Registration in Dentistry permanently revoked Anusavice’s license to practice dentistry in Massachusetts in 2006.

The criminal complaint alleges that Anusavice established several dental practices in Connecticut, which were operated by other dentists, including Zamani. These dental practices received millions of dollars in Medicaid reimbursements from the Connecticut Medicaid program, which payments were prohibited given Anusavice’s exclusion from the Medicaid program. The dental practices operated by Anusavice and Zamani included Landmark Dental in West Haven, Dental Group of Connecticut in Trumbull, and Dental Group of Stamford. Despite his permanent exclusion, Anusavice was involved in reviewing patient charts, suggesting dental procedures to be performed, reviewing billing records, reviewing income reports, interviewing and hiring dentists, and providing overall management direction to the offices.

It is alleged that Anusavice hired Zamani at Landmark Dental in October 2008 and that Zamani soon became aware of Anusavice’s disciplinary history. In January 2009, Zamani submitted a Medicaid Provider Enrollment Application with the DSS in order to obtain a Medicaid provider number for Mehran Zamani LLC, listing his group practice name as Landmark Dental. In May 2009, Zamani submitted an application with the DSS for a Medicaid provider number for Landmark Dental. In the applications Zamani submitted, he failed to disclose that Anusavice had an ownership or control interest in Landmark Dental, even though Zamani knew that Anusavice was running the practice and profited from it. From approximately February 2009 to March 2011, Mehran Zamani LLC and Landmark Dental received more than $12.9 million in Medicaid reimbursement payments.

It is further alleged that in April 2009, Zamani and “Haven Consulting,” an entity Anusavice created, entered into a Business Consultant Contract for the Dental Group of Stamford, a practice that Zamani had operated previously. Although the contract provided that Haven Consulting was a “business consultant” to the Dental Group of Stamford, Anusavice had an ownership interest in the practice and acted in an ownership and managerial capacity. Zamani’s DSS application in May 2009 failed to disclose Anusavice’s involvement in the practice and his disciplinary history. From approximately June 2009 to March 2011, the Dental Group of Stamford received more than $4.4 million in Medicaid reimbursement payments.

It is further alleged that Zamani’s April 2010 DSS application for a Medicaid provider number for the Dental Group of Connecticut also failed to disclose Anusavice’s involvement in the practice. From approximately August 2010 to March 2011, the Dental Group of Connecticut received more than $3.5 million in Medicaid reimbursement payments.

It is further alleged that on April 13, 2011, the DSS suspended Medicaid payments to Mehran Zamani, DDS, Landmark Dental, Dental Group of Stamford, and Dental Group of Connecticut based upon a pending investigation of a credible allegation of fraud. As a result, the last Medicaid payment to any of these entities occurred on or about March 22, 2011. By that time, it is alleged that the Anusavice-Zamani entities had collectively received nearly $21 million in Medicaid reimbursement funds. Further, according to Zamani’s accountant’s records, between February 2009 and March 2011, Anusavice-controlled entities received more than $3 million in payments from Zamani-related entities.

It is further alleged that Anusavice and another dentist are now operating a new set of dental clinics, doing business as Alpha Dental Group in Cromwell, Dental Group of New Britain, and Hartford Dental Care. Between November 2011 and March 2012, Arbor Dental has received more than $2.6 million in Medicaid funds. Anusavice also has recently reopened a dental practice at the former location of Dental Care of Connecticut in Trumbull.

Anusavice was arrested this morning at his home in North Kingstown, Rhode Island on a federal criminal complaint charging him with conspiring to commit health care fraud, committing health care fraud, and making false statements involving federal health care programs. Zamani was arrested today at his home in New York on a criminal complaint charging him with the same offenses. Both appeared this afternoon before United States Magistrate Judge Holly B. Fitzsimmons in Bridgeport.

In association with today’s arrests, investigating agencies conducted court-authorized searches of Anusavice’s Rhode Island residence and dental clinics he is allegedly operating in New Britain and Trumbull.

The government also has filed a civil forfeiture complaint against the real property located at 229 Potter Road, North Kingstown, Rhode Island, an 8,145 square foot home on 9.66 acres of land, where Anusavice resides. The forfeiture complaint alleges that this property was purchased in February 2011 for $695,000 by AMZ Consulting Inc., a nominee entity controlled by Anusavice and that proceeds used to purchase the property stem from Anusavice’s alleged Medicaid fraud scheme.

U.S. Attorney Fein stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

This matter is being investigated by the U.S. Department of Health and Human Services, Office of Inspector General; the Internal Revenue Service-Criminal Investigation; and the Federal Bureau of Investigation. The Connecticut Attorney General’s Office provided assistance and cooperation throughout the investigation.

This case is being prosecuted by Assistant United States Attorneys Susan Wines and Richard Molot, and Special Assistant United States Attorney Sean Beaty. The United States Attorney’s Office for the District of Rhode Island and Assistant United States Attorney Paul Daly have provided valuable assistance.

U.S. Attorney Fein encouraged individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force at 203-777-6311 or 1-800-HHS-TIPS.

Dental Practice Operators Charged in $20 Million Medicaid Fraud Conspiracy | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

LOS ANGELES—A principal figure in the domestic arm of an international “phishing” operation that used spam e-mails and bogus websites to collect personal information used to defraud American banks was sentencing this morning to five years in federal prison.

Nichole Michelle Merzi, 26, of Oceanside, was sentenced in the fraud case by Senior United States District Judge Terry J. Hatter, Jr.

After a six-week trial last year, Merzi was found guilty of bank and wire fraud conspiracy, aggravated identity theft, computer fraud conspiracy, and money laundering conspiracy charges.

Along with her then-boyfriend—Kenneth Joseph Lucas, II—Merzi was a lead defendant named in an indictment returned in the fall of 2009 as part of Operation Phish Phry, a multinational investigation conducted in the United States and Egypt that led to charges against 100 individuals—the largest number of defendants ever charged in a cybercrime case. As a result of Operation Phish Phry, 47 people have been convicted in federal court in Los Angeles. Lucas was sentenced in 2011 in two federal cases—one stemming from the phishing scheme and one from a indoor marijuana grow operation that he constructed—to a total of 13 years in federal prison (see: http://www.justice.gov/usao/cac/Pressroom/2011/092.html).

Operation Phish Phry revealed how Egyptian hackers obtained bank account numbers and related personal identification information from bank customers through phishing—a technique that involves sending e-mail messages that appear to be official correspondence from banks or credit card vendors. Bank customers who received the spam e-mails were directed to phony websites purporting to be linked to financial institutions, where the customers were asked to enter their account numbers, passwords, and other personal identification information. Because the websites appeared to be legitimate—complete with bank logos and legal disclaimers—the victims did not realize that the websites were not related to legitimate financial institutions.

Armed with the bank account information, members of the conspiracy hacked into accounts at two banks. Once they accessed the accounts, the individuals in Egypt coordinated transfers of funds from the compromised accounts to newly created fraudulent accounts and other accounts used as part of the scheme. “Records at trial show that, from February 2008 through September 2008, defendant [Merzi] opened numerous BOA [Bank of America] accounts in her name at a variety of branches, and the amount of unlawful ‘phishing’ transfers into those accounts alone was $14,000,” prosecutors wrote in a sentencing memorandum filed with the court. From October 2008 to early 2009, Merzi and Lucas also had the individuals in Egypt make unlawful transfers from phished accounts to other fraudulent accounts opened in Southern California and elsewhere.

The United States part of the ring was overseen by Lucas, who directed associates to recruit “drops” to set up and use bank accounts where stolen funds could be held. A portion of the illegally obtained funds were transferred via wire services to the Egyptian co-conspirators. When Lucas was sentenced, a federal judge determined the total amount of intended loss in the case was more than $1 million.

“The harm done by [Merzi]’s activities is undisputed,” according to the goverment’s sentencing memo. “Although BOA and Wells Fargo reimbursed the individual victims whose accounts were compromised, it is undeniable that the scheme affected a large number of victims,” given that the illegal phishing transfers “occurred in amounts around $1,000 at a time.”

Marzi has been in custody since she was found guilty at trial in March 2011.

The investigation in the United States was conducted by the Federal Bureau of Investigation, which received support from the Electronic Crimes Task Force in Los Angeles and the Social Security Administration’s Office of Special Investigations.

SoCal Manager of International Computer Hacking Ring Sentenced to Five Years in Federal Prison for Defrauding Banks | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

CAMDEN—Three people from southern New Jersey are being arraigned today on charges of conspiracy to commit mail and wire fraud, mail and wire fraud, and conspiracy to commit money laundering in a $2.6 million time share mortgage fraud, U.S. Attorney Paul J. Fishman announced.

Ashley Lacerda, 32, of Egg Harbor Township, New Jersey; Francis Santore, 52, of Northfield, New Jersey; and Brian Corley, 27, of Egg Harbor, New Jersey, are scheduled to appear before U.S. District Judge Noel L. Hillman in Camden federal court to be arraigned. Four more defendants also charged in the indictment: Adam Lacerda, 28, of Egg Harbor Township, New Jersey; Steven Cox, 48, of Ventnor City, New Jersey; Alfred Giordano, of Hurry County, South Carolina; and Joseph Diventi, 32, of Somers Point, New Jersey, and they are scheduled to be arraigned before Judge Hillman on May 21 at 12:15 p.m.

The seven people listed above and nine others were arrested on April 17, 2012 on a complaint that charged them with conspiracy to commit mail and wire fraud. Additional substantive counts of mail fraud and wire fraud and conspiracy to commit money laundering were added when they were charged by an indictment returned by a federal grand jury May 3, 2012.

The nine other defendants—Ian Resnick, 37, of Absecon, New Jeresy; Ryan E. Bird, 34, of Clementon, New Jersey; Catherine Bannigan, 57, of Egg Harbor Township; Vincent Giordano, 27, of Margate, New Jersey; Joseph Saxon, 38, of St. Thomas, Virgin Islands; Aimee Allen, of Little River, South Carolina; Genevieve Manzoni, 46, of Lake Worth, Florida; Eric Reilly, 33, of Galloway, New Jersey; and Eric K. Reiff, 40, of Williamsburg, Virginia—remain under the charge in the complaint.

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

In July 2010, law enforcement officers began investigating The Vacation Ownership Group, (a/k/a VO Group LLC). The investigation revealed that from at least March 2009 and to September 1, 2011, the defendants, through the VO Group, participated in a fraudulent scheme in which representatives of the VO Group, often using false identities, telephoned owners of timeshare vacation properties purchased from Flagship Resort Development, Wyndham Vacation Resorts Inc., and other timeshare developers. They convinced the owners in some cases to submit money to the VO Group, purportedly to pay off the owners’ “mortgages” on their timeshares. The VO Group claimed that the timeshare owner could pay off the mortgage balance at a substantially reduced amount—often by as much as 50 percent the amount of the owner’s original mortgage—by mailing payment to the VO Group at a post office box in Pleasantville, New Jersey. The VO Group representatives also got timeshare owners to send the VO Group money, purportedly to have timeshares cancelled or sold. After receipt of payments for the VO Group’s “service,” the conspirators caused those payments to be deposited into a bank account in the name of the VO Group. Rather than paying off the timeshare owner’s mortgage, cancelling the owner’s timeshare, or selling the timeshare, the conspirators used the timeshare owner’s money for their personal use.

The investigation also revealed that in an attempt to cover up the scheme, the conspirators in most cases engaged in a “bait and switch” tactic by purchasing an additional timeshare in the victim’s name without the victim’s knowledge. The victim purportedly had assented to the purchase based on documents the VO Group previously emailed to the victim for signature even though the victim had been led to believe he or she was simply paying off the original timeshare mortgage.

During the course of the investigation, law enforcement officers interviewed approximately 225 victims of the conspirators’ scheme identified to date. Many of the victims are elderly. Law enforcement has determined that the conspirators defrauded the victims of more than $2.6 million.

Since the arrests, the VO Group changed its name to VO Financial Corp.

The investigation also revealed that Adam Lacerda, Ashley Lacerda, and Brian Corley sought and received unemployment compensation during the time they were working at the VO Group. The indictment charges them with mail fraud in connection with this related scheme.

The charges in the Indictment are:

The mail and wire fraud conspiracy charge, and mail and wire fraud charges each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. The conspiracy to commit money laundering charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Michael B. Ward in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Robert Panella, New York Region, for their roles in the ongoing investigation. He also thanked the New Jersey Department of Labor, Benefit Payment Control Unit for their assistance.

The government is represented by Assistant U.S. Attorneys R. Stephen Stigall and Alyson M. Oswald of the U.S. Attorney’s Office Criminal Division in Camden.

Anyone who believes they are a victim of the fraud should contact the FBI’s Atlantic City Resident Agency at 609-677-6400.

Three People to be Arraigned on Time Share Mortgage Fraud Charges in 29-Count Indictment | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

BIRMINGHAM—Two more people face federal charges of fraudulently claiming disaster benefits following the April 27, 2011, tornadoes that struck northern Alabama, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Patrick J. Maley, and Department of Homeland Security, Office of the Inspector General, Special Agent in Charge James E. Ward.

In separate indictments returned today, a federal grand jury charged ANGELA MICHELLE ANDERSON, 42, of Tuscaloosa, and DONNIE LEE BURLESON, 37, of Hackleburg, with making fraudulent representations to the Federal Emergency Management Agency in an application for disaster benefits concerning their places of residence on the day of the tornadoes. These indictments bring to 11 the number of people who have been charged in federal court in the Northern District of Alabama with fraudulently claiming benefits intended for victims of the April 2011 storms.

According to the indictment against Anderson, she falsely represented that she lived at a Crescent Lane residence in Tuscaloosa that had been damaged by the storm. She is also charged with falsely stating on a FEMA form that all the information she provided in her application for disaster benefits was true and correct.

Burleson is charged with falsely claiming that he owned a dwelling on Nix Road in Hackleburg that had been damaged by the storm.

The public can report fraud, waste, abuse or allegations of mismanagement involving disaster relief operations through the National Disaster Fraud Hotline, toll free, at 1-866-720-5721, or by e-mailing disaster@leo.gov. The telephone line is staffed by a live operator 24 hours a day, seven days a week.

The FBI and Department of Homeland Security’s Office of Inspector General investigated both cases. The U.S. Attorney’s Office for the Northern District of Alabama is prosecuting the cases.

Members of the public are reminded that an indictment contains only charges. A defendant is presumed innocent of the charges and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.

Federal Grand Jury Indicts Two People for Disaster Fraud | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

DETROIT—Twenty-two Detroit-area residents were charged today for their roles in psychotherapy, home health care, and infusion therapy schemes to submit more than $58 million in false billing to Medicare, announced the Departments of Justice and Health and Human Services. Including these charges, Medicare Fraud Strike Force operations in Detroit have charged a total of 164 individuals in cases involving approximately $244 million in fraudulent billings to Medicare.

The charges in Detroit are part of a nationwide takedown by Medicare Fraud Strike Force operations in seven cities that led to charges against 107 individuals for their alleged participation in schemes to collectively submit more than $452 million in fraudulent claims to Medicare. This takedown involved the highest amount of false Medicare billing in a single takedown in strike force history.

“The results we are announcing today are at the heart of an administration-wide commitment to protecting American taxpayers from health care fraud, which can drive up costs and threaten the strength and integrity of our health care system,” said Attorney General Eric Holder. “We are determined to bring to justice those who violate our laws and defraud the Medicare program for personal gain. As today’s takedown reflects, our ongoing fight against health care fraud has never been more coordinated and effective.”

United States Attorney for the Eastern District of Michigan Barbara L. McQuade stated, “A disturbing new trend we are seeing is the exploitation of adults in foster care. Providers bill Medicare for home health and psychotherapy services for disabled adults that are unnecessary or not provided.”

“Those who seek to steal from Medicare and exploit the system will be vigorously pursued and brought to justice,” stated Special Agent in Charge of the FBI’s Detroit Division Andrew G. Arena. “These arrests are the result of a tremendous amount of hard work by FBI and HHS-OIG agents.”

“Today’s indictments and arrests in the areas of home health care, psychotherapy, or infusion therapy fraud demonstrate that HHS-OIG agents will untangle even the most complex fraud schemes and hold those responsible accountable for their criminal actions,” said Lamont Pugh III, Special Agent in Charge of the Department of Health & Human Services Office of Inspector General for the Chicago Region, which includes Detroit. “Through collaboration with our law enforcement partners, HHS-OIG will bring to justice those who waste Medicare’s limited resources and prevent the most vulnerable members of our society from receiving vital health care services.”

Court documents unsealed today in the Eastern District of Michigan charge defendants including owners and operators of companies, social workers, office employees, and patient recruiters with submitting fraudulent claims for services that were never rendered. Eighteen of the defendants were either arrested this morning or will be self surrendering this week and four defendants remain at large. In addition, law enforcement agents today executed search warrants at nine locations and seizure warrants of 14 bank accounts related to the alleged fraud schemes. The following charges were unsealed:

United States v. Rahman, et al.

Five individuals were charged in a superseding indictment with conspiracy to commit health care fraud for their roles in a $13.8 million scheme to defraud Medicare by submitting fraudulent claims for home health care services. One of the defendants was also charged with conspiracy to pay or receive kickbacks to refer Medicare beneficiaries for the fraudulent services. The indictment alleges that the fraudulent claims were submitted by four home health agencies operating in Livonia, Michigan: Physicians Choice Home Health Care, LLC; First Care Home Health Care, LLC; Quantum Home Care, Inc.; and Moonlite Home Care, Inc.

The defendants charged in the superseding indictment are: Bilal Akbar, 49, formerly of Canton, Michigan; Joann Terrell, 49, of Detroit; Madhur Thawani, 27, of Auburn Hills, Michigan; Shahzad Mirza, 41, of Canton, Michigan; and Ankit Patel, 27, of Plymouth, Michigan.

United States v. Mehmood, et al.

Two individuals were charged in a superseding indictment with conspiracy to commit health care fraud for their roles in a $33 million scheme to defraud Medicare by submitting fraudulent claims for home health care services, as well as conspiracy to pay or receive illegal kickbacks. The indictment alleges that the fraudulent claims were submitted by four home health agencies operating in Ypsilanti, Michigan and Detroit, Michigan: Access Care Home Care, Inc.; Patient Care Home Care, Inc.; Hands On Healing Home Care, Inc.; All State Home Care, Inc.

The defendants charged in the superseding indictment are: Badar Ahmadani, 45, of Ypsilanti Michigan and Falusic Ashford, 47 of Detroit, Michigan.

United States v. Sharma, et al.

Four individuals were charged in an indictment with conspiracy to commit health care fraud for their roles in a $23 million scheme to defraud Medicare by submitting fraudulent claims for home health care services and psychotherapy services. Three of the individuals were also charged with conspiring to pay or receive illegal kickbacks. The indictment alleges that the fraudulent claims were submitted by three home health agencies and an adult day care center. The home health agencies operating in Madison Heights, Michigan and Sterling Heights, Michigan are: Reliance Home Care, LLC; First Choice Home Health Care Services, Inc.; and Associates in Home Care, Inc. The adult day care center operating in Detroit Michigan is Haven Adult Day Care Center, LLC.

The defendants charged in the indictment are: Sachin Sharma, 36, of Shelby Township, Michigan; Dana Sharma, 29, of Shelby Township, Michigan; Abdul Malik Al- Jumail, aka “Tony,” 52, of Brownstown, Michigan; and Felicar Williams, 49, of Dearborn, Michigan.

United States v. English, et al.

Six individuals were charged in an indictment with conspiracy to commit health care fraud for their roles in a $2.8 million scheme to defraud Medicare by submitting fraudulent claims for psychotherapy services. Two of the defendants are also charged with additional health care fraud counts. The indictment alleges that the fraudulent claims were submitted by an adult day care center operating in Flint, Michigan: New Century Adult Day Program Services, LLC.

The defendants charged in the indictment are: Glenn English, 52, of Detroit, Michigan; Gregory Lawrence, 54, of Detroit, Michigan; Richard Hogan, 65, of Flint, Michigan; Donald Berry, 65, of Detroit, Michigan; Felicia Marsh, 44, of Detroit, Michigan; and Jamie Moreau, 34, of Davison, Michigan.

United States v. Thompson, et al.

Two individuals were charged in an indictment with conspiracy to commit health care fraud and additional counts of health care fraud for their roles in a $20 million scheme to defraud Medicare by submitting fraudulent claims for psychotherapy services. The indictment alleges that the fraudulent claims were submitted by two psychotherapy clinics and an adult day care center operating in Detroit, Michigan: TGW Medical, Inc.; Caldwell Thompson Manor, Inc. And P&C Adult Day Care Center, LLC.

The defendants charged in the indictment are: Louisa Thompson, 62, of Detroit, Michigan and Checarol Robinson, 41, of New Baltimore, Michigan.

United States v. Edwards, et al.

Two individuals were charged in an indictment with conspiracy to commit health care fraud and additional counts of health care fraud for their roles in a $3 million scheme to defraud Medicare by submitting fraudulent claims for psychotherapy services. The indictment alleges that the fraudulent claims were submitted by a psychotherapy clinic operating in Southfield, Michigan and Detroit, Michigan: Funderburg Clinical and Community Services, Inc.

The defendants charged in the indictment are: Sanyani Edwards, 32, of Taylor, Michigan and Angel Williams, 27, of Southfield, Michigan.

United States v. Raymond Arias

Raymond Arias, 40, of Troy, Michigan was charged in an indictment with six counts of health care fraud for his leading role in a $12.5 million scheme to defraud Medicare by submitting fraudulent claims for infusion therapy treatments. The fraudulent claims were submitted by Arias’s clinic Elite Wellness, LLC, operating in Westland, Michigan.

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,330 defendants who collectively have falsely billed the Medicare program for more than $4 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams comprised of attorneys from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Southern District of Florida, the Eastern District of Michigan, the Southern District of Texas, the Central District of California, the Middle District of Louisiana; the Northern District of Illinois, and the Middle District of Florida; and agents from the FBI, HHS-OIG, and state Medicaid Fraud Control Units.

The cases in the Eastern District of Michigan are being prosecuted by Assistant Chief Gejaa T. Gobena and Trial Attorneys Catherine K. Dick and William G. Kanellis of the Criminal Division’s Fraud Section, and Assistant United States Attorney Philip Ross of the U.S. Attorney’s Office for the Eastern District of Michigan.

An indictment is merely a charge and defendants are presumed innocent until proven guilty.

To learn more about HEAT, go to: www.stopmedicarefraud.gov.

- Related Department of Justice press release

Twenty-Two Detroit-Area Residents Charged in Nationwide Medicare Fraud Strike Force Takedown | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

WASHINGTON—The president of a Costa Rican company that sold reinsurance bonds to life settlement companies was found guilty by a federal jury in Richmond, Virginia today for carrying out a half-billion-dollar fraud scheme that affected more than 2,000 victims throughout the United States and abroad.

U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Assistant Attorney General Lanny A. Breuer of the Criminal Division made the announcement following the jury’s verdict.

“Mr. Vargas lied to investors across the globe to sell almost half-a-billion dollars worth of ‘guaranteed’ bonds, which turned out to be worthless,” said U.S. Attorney MacBride. “His fraud affected thousands of victims around the world, many of whom invested their life savings with life settlement companies because of the worthless guarantees PCI made. Mr. Vargas may have thought he was safe operating his scheme from overseas, but his conviction is yet another example to global fraudsters: You can run, but you can’t hide. This verdict demonstrates our ability to pursue justice on behalf of U.S. victims regardless of where the fraudsters may be hiding.”

“Mr. Vargas reaped millions in profit from a sprawling scheme to defraud investors seeking to hedge their risk in the life settlements market,” said Assistant Attorney General Breuer. “He used his ill-gotten gains to fund a soccer team and to provide financial comfort for his family and for himself. Today, a Virginia jury told Mr. Vargas that he would be held accountable, hopefully bringing some measure of peace to the investors he defrauded.”

Minor Vargas Calvo, 60, a citizen and resident of Costa Rica, is the present and majority owner of Provident Capital Indemnity (PCI) Ltd., an insurance and reinsurance company registered in the Commonwealth of Dominica and doing business in Costa Rica. He was convicted of one count of conspiracy to commit mail and wire fraud, three counts of mail fraud, three counts of wire fraud, and three counts of money laundering. He faces a maximum penalty of 20 years in prison on each fraud count and up to 10 years in prison on each money laundering count when he is sentenced on October 23, 2012.

According to court records and evidence at trial, PCI sold financial guarantee bonds to companies selling life settlements, or securities backed by life settlements, to investors. These bonds were marketed to PCI’s clients as a way to alleviate the risk of insured beneficiaries living beyond their life expectancy. The clients, in turn, typically explained to their investors that the financial guarantee bonds ensured that the investors would receive their expected return on investment irrespective of whether the insured on the underlying life settlement lived beyond his or her life expectancy.

Evidence at trial showed that Calvo and PCI’s purported independent auditor for PCI, Jorge Castillo, 56, of New Jersey, used lies and omissions to mislead PCI’s clients and investors regarding its ability to pay claims when due on the financial guarantee bonds that PCI issued. Calvo caused Castillo to prepare audited financial statements that falsely claimed that PCI had entered into reinsurance contracts with major reinsurance companies. These false claims, which were supported by a letter from Castillo stating that he conducted an audit of PCI’s financial records, were used to assure PCI’s clients that the reinsurance companies were backstopping the majority of the risk that PCI had insured through its financial guarantee bonds. The fraudulent financial statements PCI distributed showed significant assets and relatively small liabilities.

From 2004 through 2010, PCI sold at least $485 million of bonds to life settlement investment companies located in various countries, including the United States, the Netherlands, Germany, Canada, and elsewhere. PCI’s clients, in turn, sold investment offerings backed by PCI’s bonds to thousands of investors around the world. Purchasers of PCI’s bonds were required to pay up-front payments of 6 to 11 percent of the underlying settlement as “premium” payments to PCI before the company would issue the bonds.

Evidence at trial showed that Vargas sent more than $23 million of his ill-gotten gains to fund his professional soccer team in Costa Rica, to his unrelated companies, to his family and to himself. Due, in part, to these expenditures, when it came time to make good on PCI’s promises to pay bond holders, Vargas resorted to yet more lies to justify PCI’s inability to do so.

Castillo, who was a PCI employee prior to becoming PCI’s “outside auditor,” pleaded guilty on November 21, 2011, to conspiring to commit mail and wire fraud, which carries a maximum penalty of 20 years in prison. Castillo is scheduled to be sentenced on May 22, 2012. In addition, the corporation, PCI, pleaded guilty on April 18, 2012, to conspiring to commit mail and wire fraud, which carries a maximum term of five years’ probation.

This continuing investigation is being conducted by the U.S. Postal Inspection Service, Internal Revenue Service, and FBI, with assistance from the Virginia State Corporation Commission, the Texas State Securities Board, and the New Jersey Bureau of Securities. This case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica Aber Brumberg of the Eastern District of Virginia and Trial Attorney Albert B. Stieglitz Jr. of the Criminal Division’s Fraud Section.

The U.S. Securities and Exchange Commission (SEC) conducted a parallel investigation and in January 2011 filed a parallel civil enforcement action against PCI, Vargas and Castillo. The department thanks the SEC for its assistance in this matter.

The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia specifically. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.

President Obama established the Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

President of Costa Rican Company Convicted in Half-Billion-Dollar Fraud Scheme with Thousands of Victims Worldwide | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

EUGENE, OR—Joene Pearl Clyde LaCoste, age 46, the spouse of Joseph Anthony LaCoste, former Chief Executive Officer of Willamette Development Services LLC (WDS), was arraigned in federal court yesterday. She was added as a defendant to an indictment charging her husband Joseph LaCoste; Angela Marie McCoy, the former Investment Relations Manager for WDS; and the WDS Corporation with securities fraud, mail and wire fraud, and money laundering. The 22-count superseding indictment alleges that she committed these offenses as an executive with Witham Investments LLC. The indictment also alleges that Joseph LaCoste committed bank fraud and bankruptcy fraud.

The indictment alleges that from April 2006 through January 2008, through misrepresentations by Joseph LaCoste and McCoy, WDS obtained $5,285,300 from investors for the ostensible purpose of developing at least 10 real estate projects. The indictment also alleges that WDS incurred $10,795,200 of additional indebtedness from lenders. By January of 2008, none of the projects were completed and WDS was insolvent. The investors lost their entire investment. Secured lenders recovered portions of their loans through foreclosure actions.

The indictment alleges that Joseph LaCoste lied about his academic background and prior experience by failing to tell investors that he had previously been fired from a financial institution for engaging in fraud and that he had previously filed bankruptcy. He and McCoy are also alleged to have told investors that their money would be placed in an investment holding account until certain financial goals were reached, although in almost every project that did not occur. Investors were also told that their money would be used for specific projects, but in fact the funds were allegedly diverted to non-project purposes without investor consent.

The indictment also alleges that between January 2008 and June 2010, through Witham Investments LLC, Joene and Joseph LaCoste caused victims to lose more than 1000 acres of property. According to the indictment, due to misrepresentations by the LaCostes, one couple lost 889 acres and another couple lost more than 200 acres that had been in their family since the 1860s. The indictment also alleges that Joene LaCoste laundered money through Witham Investments and that Joseph LaCoste committed bankruptcy fraud. The indictment alleges that Joseph LaCoste failed to disclose a variety of assets in a bankruptcy petition he filed in February 2009.

Trial of the matter is currently scheduled to occur before U.S. District Judge Michael R. Hogan on June 27, 2012, although the matter has been referred to U.S. Magistrate Judge Thomas M. Coffin for rescheduling of the trial date due to the superseding indictment. On February 8, 2011, former WDS Chief Financial Officer Anthony James Tuomi pled guilty to conspiring with LaCoste and McCoy to commit securities fraud. He is scheduled to be sentenced on August 7, 2012 before U.S. District Judge Michael R. Hogan.

The maximum statutory penalty for securities fraud is 20 years in prison and a $5,000,000 fine, followed by a three-year term of supervised release. The maximum statutory penalty for mail fraud and wire fraud is 20 years in prison and a $250,000 fine, followed by a three-year term of supervised release. The maximum statutory penalty for bank fraud is a 30 years in prison and $1,000,000 fine, followed by a five-year term of supervised release. The maximum statutory penalty for bankruptcy fraud is five years in prison and a $250,000 fine, followed by a three-year term of supervised release. The maximum statutory penalty for money laundering is 20 years in prison and $500,000 fine, followed by a three-year term of supervised release.

A criminal indictment is only an allegation and not evidence of guilt. Defendants are presumed to be innocent unless and until proven guilty

The case is being investigated by the Federal Bureau of Investigation, the Oregon Division of Finance and Corporate Securities, and the Internal Revenue Service Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Sean B. Hoar.

Spouse of Willamette Development Services Executive Indicted for Fraud with Witham Investments | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

FBI’s Top Ten News Stories for the Week Ending April 20, 2012 | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

NORFOLK, VA—Eric H. Menden, 53, of Chesapeake, Virginia, pled guilty today to engaging in a $41 million bank fraud scheme that contributed to the failure of the Bank of the Commonwealth. He also pled guilty to a separate fraud involving a six-year historic tax credit scheme that cost state and federal governments over $12 million and investors more than $8 million.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; John Boles, Special Agent in Charge of the FBI’s Norfolk Field Office; Eric C. Hylton, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office; Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC-OIG), made the announcement after the plea was accepted by United States Magistrate Judge F. Bradford Stillman.

“Today, Eric Menden admitted to carrying out a massive fraud that played a part in the collapse of the Bank of the Commonwealth,” said U.S. Attorney MacBride. “Mr. Menden used his relationship with bank insiders to use the bank as his own personal ATM. He raked in millions telling big, fat lies to get loans, secure funding from investors, and defraud state and federal tax authorities. Over the last few years, many people in this country have begun to understandably question our financial institutions. Unfortunately, this case indicates that those concerns are sometimes well-founded.”

“The IRS-Criminal Investigation takes allegations of this nature very seriously,” said Eric Hylton, Acting IRS Special Agent in Charge. “IRS Criminal Investigation will vigorously investigate those individuals who willfully exploit our tax system for personal gain.”

“Menden’s scheme helped insiders at the Bank of the Commonwealth fraudulently conceal the extent of the bank’s non-performing assets, contributed to the bank’s eventual collapse, and ultimately had an impact on everyone in the community who relied on the bank,” said Special Inspector General Romero. “At the time of its failure, Menden and his business partner owed the bank, which applied for TARP funds in late 2008, more than $40 million. Fraud of this type contributed to and severely worsened our nation’s financial crisis, and perpetrators of white-collar crime will be brought to justice by SIGTARP and our partners in law enforcement.”

“The Federal Deposit Insurance Corporation (FDIC) Office of Inspector General is pleased to join the U.S. Attorney for the Eastern District of Virginia and our law enforcement colleagues in announcing the charges against Mr. Menden for his role in this complex fraud scheme,” said FDIC Inspector General Rymer. “It is especially important for us to investigate and prosecute cases where unscrupulous individuals use financial institutions to carry out fraudulent activities that cause harm to the institution and undermine the integrity of the financial services industry as a whole. We are committed to preventing and addressing such threats to the safety and soundness of FDIC-insured banks throughout the country.”

Today, Menden pled guilty to conspiracy to commit wire fraud, making false statements, and conspiracy to commit bank fraud. He faces a maximum penalty of five years in prison for each count when he is sentenced on July 23, 2012 by United States District Judge Raymond A. Jackson.

According to the statement of facts filed with his plea agreement, from January 2008 through August 2011, Menden admitted that he and his business partner performed favors for insiders at the Bank of Commonwealth in exchange for preferential lending treatment and assisted insiders in concealing the extent of the bank’s non-performing assets by purchasing bank-owned property.

At the time the bank failed on September 23, 2011, Menden and his business partner owed the bank approximately $41 million, and the total approximate loss related solely to the loans outlined in court records is at least $13,263,443.

345 Granby Street Project

Menden admitted that he and his business partner submitted construction draw requests to the bank with inflated amounts owed subcontractors and included work that was not completed. However, a bank conspirator approved and funded the requests without performing an inspection or requiring any support for the requested amounts. With the help of a bank conspirator, Menden and his business partner cashed multiple six-figure checks drawn on this construction account but used for their own personal purposes.

By July 2009, the original loan of $16 million was fully funded but the renovations were far from complete. Bank conspirators caused the bank to approve an additional $2.45 million loan to Menden and his business partner, who used $550,000 of the loan to pay down negative balances the partners had incurred in their checking accounts.

By April 2011, the bank charged off approximately $12.5 million of this loan relationship as a loss, and the property—which a bank conspirator had fraudulently appraised at $20 million in 2008—was appraised anew in September 2011 as being worth $2.8 million.

Favors and Bank-Owned Property

In court papers, Menden admitted that, starting in January 2008, he and his business partner conspired with bank insiders to purchase underperforming bank-owned properties. Bank insiders would typically advance loan proceeds to the two men to facilitate the purchases, loans that the bank would later write off at significant losses.

On multiple occasions, at the request of a bank insider, Menden and his business partner would bid on bank-owned properties being sold at a foreclosure auction up to a specific price so that the bank could pay off the underlying loan for the properties. Again, the bank insiders conspired to fund loans to the two men to facilitate these fraudulent transactions. In one instance, the bank funded more than $900,000 to purchase property at auction in 2008. In April 2011, the bank obtained an appraisal that indicated that the building had no useful life, and the bank charged off more than $500,000 of this loan as a loss.

In addition, Menden admitted that he and his partner also purchased properties owned by a bank insider through loans facilitated by other bank insiders to complete the purchases. In these instances, the bank insider was either no longer liable for large loans or made a profit on the sale. As with the other loans to Menden and his partner, the bank eventually was required to charge off these loans at a considerable loss.

Menden also admitted that he paid more than $6,000 to help upgrade a bank conspirator’s kitchen.

TARP Application

Court records indicate that in November 2008, the bank sent to the Federal Reserve an application requesting approximately $28 million from the Troubled Asset Relief Program (TARP). Based on its regulator’s concerns about the health of the bank, the Federal Reserve later requested that the bank withdraw its TARP application, which the bank did.

In July 2010, the bank entered into an agreement with the Federal Reserve and other regulators that specifically prohibited the bank from extending, renewing, or restructuring any loans to specific troubled borrowers, which included Menden and his business partner.

Despite this prohibition, bank insiders continued to sell and attempt to sell underperforming bank-owned property to Menden through a nominee borrower.

Historic Tax Credit Fraud

According to court records, Menden admitted that, from January 2006 through March 2012, he and his business partner borrowed funds from financial institutions to purchase and renovate properties that could qualify for historic rehabilitation tax credits.

Menden admitted that they purchased and renovated properties located at 345 Granby Street and 742 West Princess Anne Road in Norfolk, as well as two additional properties located at 430 Boush Street and 3700 Hampton Boulevard in Norfolk. During these renovation projects, Menden and his partner applied for federal and state historic tax credits; they had no personal use for the tax credits, but they instead sold them to investors in need of reducing their own tax liability.

In total, corporate investors paid Menden and his business partner approximately $8.7 million for illegitimate tax credits. As a result, the United States of America suffered a loss of approximately $6.2 million and the Commonwealth of Virginia suffered a loss of approximately $6.3 million.

Menden’s business partner, George P. Hranowskyj, 47, of Chesapeake, Virginia, was charged on April 18, 2012 in a 14-count indictment involving the alleged historic tax credit fraud scheme. The public is reminded that criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.

This ongoing investigation is being conducted by the FBI’s Norfolk Field Office, IRS-CI, SIGTARP, and the FDIC-OIG, with cooperation from the Virginia Department of Historic Resources and U.S. Department of the Interior National Park Service. Assistant United States Attorneys Melissa E. O’Boyle, Katherine Lee Martin, and Uzo Asonye are prosecuting the case on behalf of the United States.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.

Hampton Roads Developer Pleads Guilty to Massive Bank and Historic Tax Credit Fraud | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

PHOENIX—Yesterday, Eitan Maximov, 40, a citizen of Israel and lawful permanent resident of the United States, was sentenced by U.S. District Judge David G. Campbell to nearly eight and half years in federal prison. A jury found Maximov guilty in November, following a six-day jury trial, on one count of conspiracy to commit wire and bank fraud and one count of wire fraud as a result of his leadership role in a 2006-2008 cash-back mortgage fraud scheme.

“This is yet another reminder of the damage that mortgage fraud has caused to our community,” said Acting U.S. Attorney Ann Birmingham Scheel. “The mortgage crisis wasn’t just the result of an economic downturn. Its impact was enhanced, and it affected more lives, because criminals fraudulently purchased luxury homes when they didn’t have the financial means to do so. Mr. Maximov committed fraud at the expense of other homeowners and lenders all in the name of greed and in order to live an unsustainable lavish lifestyle.”

“Today’s sentence signifies the continued commitment by the FBI, the Arizona Mortgage Fraud Task Force, and the United States Attorney’s Office in targeting mortgage fraud,” said James L. Turgal, Jr., FBI Special Agent in Charge, Phoenix Division. “The FBI and its law enforcement partners will continue to aggressively pursue those who are involved in these types of fraudulent schemes. Mortgage fraud has greatly impacted the citizens of Arizona over the past few years and will continue to remain a top criminal priority of the FBI.”

Evidence presented at trial showed that Maximov played a leadership role in the underlying conspiracy, which involved at least nine residential properties in the Scottsdale area. The objective of the conspiracy was to recruit unqualified borrowers as straw buyers, submit fraudulent loan applications on their behalf and on behalf of Maximov, obtain mortgage loans in excess of the selling price of the property, and then take the excess amount of the loans out through escrow in what is known as a “cash-back” scheme. Not only did Maximov recruit straw buyers and work with an escrow officer in to carry out the scheme, but he also financially benefitted from their involvement in the scheme. The purchase prices on many of the properties involved in the scheme exceeded a million dollars.

Evidence at trial showed that Maximov had no legitimate employment, income, or assets to afford the numerous million-dollar properties. After a foreclosure on Maximov’s primary residence, the home was stripped of its assets, further depreciating its value and the value of the homes in close proximity. Evidence at sentencing demonstrated that Maximov returned to purchase his foreclosed property using a false name. His last address before being arrested in 2008 was a luxury condominium in the Esplanade. All of the homes purchased through the conspiracy have been foreclosed or sold at a loss to the lending institutions. Three other co-conspirators were also charged and have pleaded guilty for their involvement in the conspiracy. The conspiracy resulted in approximately $5,000,000 in loans obtained by fraud and an actual and intended loss to lending institutions of nearly $6,500,000.

The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution was handled by Kevin M. Rapp and Monica B. Klapper, Assistant U.S. Attorneys, District of Arizona, Phoenix.

Real Estate Investor Sentenced to 97 Months for His Leadership Role in Mortgage Fraud Conspiracy | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

NEW HAVEN, CT—Two individuals involved in an Eastern Connecticut mortgage fraud scheme have been sentenced in U.S. District Court in Hartford, Connecticut to federal prison, U.S. Attorney for the District of Connecticut David B. Fein announced today. Yesterday, Senior U.S. District Judge Alfred V. Covello sentenced Yunio Gonzalez, 60, of New London, Connecticut, to 24 months in prison, followed by two years of supervised release. Today, Judge Covello sentenced Jane Soulliere, 45, of New London, to 21 months in prison, followed by two years of supervised release. Gonzalez and Soulliere each previously pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud.

According to court documents and statements made in court, from approximately 2004 to 2007, Jose Guzman, Maurizio Lancia, Stacey Petro, and others used mortgage brokerage, property management, and home improvement companies to arrange for individuals to purchase real estate, primarily residential housing properties located in New London County, Connecticut, by obtaining funding from various mortgage companies and mortgage originators after submitting false information on the borrowers’ mortgage loan applications. The fraudulent information included information regarding income, assets, employment, and rent history, as well as the borrowers’ intention to make the properties their primary residence. The borrowers were compensated for participating in the scheme.

Gonzalez, the owner of IEK Professional Services, a bookkeeping and tax preparation service, was instrumental in providing false information to the lenders in connection with the purchases of a small number of properties. In February 2006, in connection with the purchase of 10 Thompson Court in New London, Gonzalez signed a letter from IEK Professional Services on behalf of a borrower falsely stating that the borrower had been employed at The Cutting Edge, a home improvement contractor and landscaping company, as a landscaping maintenance supervisor. Gonzalez also made false statements to the lender when the lender sought to verify this employment information and also falsely stated to the lender that he had been preparing taxes for the borrower for at least three years.

In addition, Gonzalez, who also was a licensed real estate agent, recruited a member of his family to act a buyer in connection with a fraudulent real estate transaction in which Gonzalez acted as the seller. In June 2006, Gonzalez sold a property in New London. In order to secure funding from the lenders for this property, Gonzalez knowingly signed mortgage loan applications and supporting documents that contained materially false and fraudulent representations. He then signed an open-end mortgage deed and a HUD-1 settlement that also contained false information.

These two property transactions have resulted in losses of approximately $295,762 to lenders, and, as part of his sentence, Gonzalez was ordered to make full restitution. He also was ordered to forfeit $25,000 of fraudulently obtained proceeds.

Soulliere acted as a borrower in connection with the fraudulent purchase of five properties. She also recruited another individual who acted as a borrower in the purchase of four additional properties. Soulliere was paid a total of approximately $28,000 for participating in this conspiracy. However, her fraudulent conduct caused a loss of more than $1 million to lending institutions. As part of her sentence, Soulliere was ordered to make restitution of approximately $901,152 and to forfeit $28,000 of fraudulently obtained proceeds.

According to previously filed court documents, the government believes that more than 200 fraudulent mortgages were funded through this mortgage fraud scheme. Many of the properties have been foreclosed on, and lenders have suffered losses of approximately $9 million.

A total of 16 individuals have pleaded guilty to various charges stemming from this scheme. On April 3, 2012, Lancia, an attorney and mortgage broker, was sentenced to 27 months in prison. Guzman and Petro await sentencing.

This case is being investigated by the FBI and the U.S. Department of Housing and Urban Development-Office of Inspector General (HUD-OIG). The case is being prosecuted by Assistant U.S. Attorneys Michael S. McGarry and David T. Huang.

In July 2009, the U.S. Attorney’s Office for the District of Connecticut and the FBI announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force or by sending an e-mail to ctmortgagefraud@ic.fbi.gov.

The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office for the District of Connecticut; FBI; Internal Revenue Service-Criminal Investigation; U.S. Postal Inspection Service; HUD-OIG; Federal Deposit Insurance Corporation-Office of Inspector General; and State of Connecticut Department of Banking.

This case was brought in coordination with the President’s Financial Fraud Enforcement Task Force, which was established to wage an aggressive and coordinated effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.

Two Involved in Eastern Connecticut Mortgage Fraud Scheme Sentenced to Federal Prison | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that Gerard Canino, the president and owner of Long Island-based mortgage brokerage firm First Class Equities, pled guilty today to conspiring to commit wire fraud and bank fraud in connection with a $66 million mortgage fraud scheme. Canino pled guilty this afternoon before U.S. District Judge Robert P. Patterson.

Manhattan U.S. Attorney Preet Bharara said, “As the president and owner of First Class Equities, Gerard Canino should have promoted responsible homeownership and protected the integrity of the mortgage finance industry. Instead, he used his firm to commit a massive mortgage fraud scheme that left scores of foreclosed properties in its wake. With today’s plea, Canino now stands convicted for his role in this brazen scheme.”

According to the indictment previously filed in Manhattan federal court, as well as statements made in public proceedings:

Canino was the president and owner of First Class Equities, a mortgage brokerage firm with offices located in Oceanside and Old Westbury, New York.

From 2004 to 2009, Canino and his firm engaged in a massive mortgage fraud scheme that recruited “straw buyers”—individuals who posed as home buyers but had no intention of living in, or paying for, the mortgaged properties—to purchase homes from willing sellers, many of whom were in financial distress. Canino and his co-conspirators often paid the straw buyers for their participation in the scheme. At Canino’s direction, loan officers at First Class Equities submitted applications to banks and lenders on behalf of the straw buyers that made fraudulent representations about their net worth, employment, and income. They also fraudulently stated that the sham buyers planned to live in the properties for which the mortgage applications were made. After approving the loans, the lenders sent the mortgage proceeds to their attorneys, including several that were participants in the scheme. These attorneys submitted false statements to the lenders about how they were distributing the loan proceeds and then made huge illicit payments, typically totalling tens of thousands of dollars or more per transaction, from the loan proceeds to members of the conspiracy.

* * *

Canino, 51, of Merrick, New York, pled guilty to one count of conspiracy to commit wire fraud and bank fraud and faces a maximum sentence of 30 years in prison. Canino will be sentenced by Judge Patterson on September 17, 2012 at 4:00 p.m.

Mr. Bharara praised the FBI for its outstanding work in the investigation.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a co-chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

Charges are still pending against Canino’s co-defendants, and they are presumed innocent unless and until proven guilty. Trial of the remaining defendants is scheduled to begin on July 2, 2012.

This matter is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Nicole Friedlander and Niketh Velamoor are in charge of the criminal case.

Leader of $66 Milllion Mortgage Fraud Scheme Pleads Guilty in Manhattan Federal Court | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; Paula Reid, Special Agent in Charge, United States Secret Service, Miami Field Office; and Linda Charity, Interim Commissioner, State of Florida’s Office of Financial Regulation, announced that defendant Michelle Austin-Wilks, 38, of Parkland, Florida, pled guilty to conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349, and four counts of wire fraud, in violation of Title 18, United States Code, Section 1343, for her participation in two separate mortgage fraud schemes. Austin-Wilks faces up to 20 years’ imprisonment on the conspiracy count and up to 30 years’ imprisonment on each wire fraud count. Sentencing has been scheduled for June 15, 2012 at 9:00 a.m. before U.S. District Judge James I. Cohn.

In U.S. v. Ghaith Al Nahar et. al, Case No. 11-60183-CR-COHN, from February to November 2007, Ghaith Al Nahar, 40, formerly of Boynton Beach, identified residential properties in Palm Beach county and paid individuals to act as straw buyers for the properties. These straw buyers submitted loan applications and supporting documents containing false information to various mortgage lenders across the United States. After the lenders approved the loans based on the false information provided, defendant Austin-Wilks, who was the president and director of Direct Title & Escrow Services Inc., prepared HUD-1 Settlement Statements that contained false information. For example, the forms falsely represented to the lenders that the straw buyers were bringing their own money to closing. Austin-Wilks also falsely represented to the lenders that she had disbursed the loan proceeds in accordance with the lenders’ instructions. Instead, Austin-Wilks made unauthorized disbursements from the loan proceeds to one of her companies as “processing fees.” Based on these false statements and documents, the mortgage lenders issued more than $9 million in loans.

Ghaith Al Nahar pled guilty and was sentenced on January 27, 2012 to 63 months’ imprisonment, three years of supervised release, and ordered to pay $1,863,109.30 in restitution by U.S. District Judge James I. Cohn. An employee at Al Nahar’s office, Romy Defay, 28, of West Palm Beach, also pled guilty and was sentenced on January 27, 2012 to 33 months’ imprisonment, three years of supervised release, and ordered to pay $441,747 in restitution by Judge Cohn. The straw buyers, Jeffery Gilbert and Philip Jay Newman, pled guilty. Gilbert was sentenced to three years’ probation and ordered to pay $441,747 in restitution. Newman was sentenced to 21 months’ imprisonment, three years of supervised release, and ordered to pay $662,051.42 in restitution.

In the second case in Broward County, Case No. 12-60054-CR-COHN, from June to October 2007, defendant Austin-Wilks and others, through Direct Title & Escrow Services Inc., engaged in a scheme to enrich themselves by fraudulently buying and selling residential real estate property in Broward County through straw buyers. These straw buyers obtained high value mortgages based on mortgage loan applications and closing statements that contained false information. After the lenders approved the loans based on the false information on the loan applications, Austin-Wilks prepared HUD-1 Settlement Statements that, among other things, falsely represented to the lenders that the straw buyers were bringing their own money to closing. Austin-Wilks also created and submitted duplicate HUD-1 Settlement Statements for the same real estate transaction to the mortgage lenders, reflecting different sales prices to the seller and to the lender. The lender’s version reflected a significantly higher purchase price than the seller’s version of the HUD-1 Settlement Statement. After closing, the lenders wired a total of approximately $3 million in mortgage loan proceeds into a bank account controlled by Austin-Wilks.

Thereafter, Austin-Wilks made numerous wire transfers, including a transfer of $68,562 and $382,000, respectively, to a mortgage broker and a straw buyer for their assistance in the mortgage fraud scheme. The mortgage broker, Jinnie Mathurin, pled guilty to one count of wire fraud and was sentenced on March 7, 2012 to one year and one day of imprisonment, three years of supervised release, and ordered to pay $1.17 million in restitution by U.S. District Judge Donald M. Middlebrooks. The straw buyer, Guhier Florvilus, also pled guilty to one count of wire fraud and is scheduled to be sentenced on May 17, 2012 before U.S. District Judge Daniel T.K. Hurley. In addition to these wire transactions, Austin-Wilks was also convicted of two additional wire fraud transactions for two wires sent by national mortgage lenders.

Mr. Ferrer commended the investigative efforts of the FBI, the U.S. Secret Service, and Florida’s Office of Financial Regulation. Mr. Ferrer noted the assistance of the U.S. Marshals Service for their substantial efforts in locating defendant Austin-Wilks in Jamaica and returning her to United States. These cases were prosecuted by Assistant U.S. Attorneys Randy Katz and Armando Rosquete.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls.

President of Broward Title and Escrow Company Pleads Guilty in Two Separate Multi-Million-Dollar Mortgage Fraud Schemes | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

NEWPORT NEWS, VA—Victoria L. Allen, 57, of Chesapeake, Virginia, was sentenced yesterday to 48 months in prison for conspiring to commit mail and wire fraud and was ordered to pay $1,940,000 in restitution. Allen, along with several conspirators, orchestrated a wide-ranging mortgage fraud scheme in the Tidewater area that resulted in losses of nearly $2,000,000 and involved over 30 property transactions.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement after sentencing by United States District Judge Robert G. Doumar. Allen pled guilty on December 15, 2010.

According to a statement of facts filed with her plea agreement, Allen was a loan originator and branch manager of First Horizon Home Loan Corporation, a mortgage lender located in Chesapeake. Ephrain Harris owned and operated Can Do Accounting in the city of Newport News and was engaged in preparing tax returns and other accounting services. Another conspirator, Shavonda York, worked as a mortgage broker and owned and operated USA Processing and Destiny Consulting. Tamiko Alston operated a local title company and Darrell Booker owned a local business.

The conspirators prepared and submitted numerous false documents to fraudulently obtain financing from First Horizon Home Loan Corp.—Allen’s former employer—to fund closings on various residential properties. The conspirators also used seller proceeds to fund the property transactions and purchase cashier’s checks without the knowledge or consent of the mortgage lender. These cashier’s checks were then used to provide the required buyer closing costs and down payment. In this manner, the conspirators concealed the true source of the required borrower funds and acted contrary to the instructions of the mortgage lender, which would not have approved this use of funds. Alston would create two HUD-1 Settlement Statements to conceal the disbursements.

A review of loan files and other documents showed that Allen knowingly submitted to the lender false paystubs and/or W-2 forms for at least 13 conventional loan transactions. In reliance on this false information, First Horizon Home Loan Corp. made loans on various subject properties. The notes on certain loans were subsequently purchased by other companies that sustained losses when the loans on a number of properties went into default and were sold at foreclosure. A review of FHA loan files and other documents indicated the defendant knowingly submitted to the lender false pay stubs and/or W-2 forms for at least 19 FHA-insured loan transactions. The FHA maintains a database named “Neighborhood Watch” that is used to track the performance of FHA-approved brokers and lenders. According to Neighborhood Watch, for the time period July 1, 2008 through June 30, 2010, the branch of First Horizon Home Loans that Allen supervised had a seriously delinquent ratio of 30.30 percent, the highest rate in the state of Virginia for that time period. Ephrain Harris pled guilty on October 21, 2010 and was sentenced to 41 months; Shavonda York pled guilty May 7, 2009 and was sentenced to 25 months; Tamiko Alston pled guilty July 13, 2010 and was sentenced to 25 months; and Darrell Booker pled guilty on October 6, 2010 and was sentenced to 21 months.

The case was investigated by the FBI and Housing and Urban Development’s Office of the Inspector General. Assistant United States Attorney Brian J. Samuels prosecuted this case on behalf of the United States.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

Lender Representative Sentenced for Mortgage Fraud Scheme | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

WASHINGTON—An owner and operator of a Houston durable medical equipment (DME) company was sentenced today in Houston federal court to 30 months in prison for his role in a Medicare fraud scheme, announced the Department of Justice, the FBI, and the Department of Health and Human Services (HHS).

Akinsunbo Akinbile, 44, of Richmond, Texas, was sentenced by U.S. District Judge Keith P. Ellison in Houston. In addition to his prison term, Akinbile was sentenced to three years of supervised release and was ordered to pay $471,022 in restitution.

Akinbile pleaded guilty on November 29, 2011 to eight counts of health care fraud.

According to court documents, Akinbile was the owner and operator of Hallco Medical Supply, a company that purported to provide orthotics and other DME to Medicare beneficiaries. According to court documents, Hallco submitted claims to Medicare for DME, including orthotic devices that were medically unnecessary and/or not provided. Many of the orthotic devices were components of an “arthritis kit,” and purported to be for the treatment of arthritis-related conditions. The arthritis kit generally contained a number of orthotic devices including braces for both sides of the body and related accessories such as heating pads. From June 2007 through May 2009, Akinbile submitted claims of approximately $737,770 to Medicare and was paid approximately $471,022.

Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office; Special Agent in Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG), Office of Investigations; Joseph J. Del Favero, special agent in charge of the Chicago Field Office of the Railroad Retirement Board Office of Inspector General; and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).

This case was prosecuted by Special Assistant U.S. Attorney Justin S. Blan and Trial Attorney Laura M.K. Cordova of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.

Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,190 defendants who collectively have falsely billed the Medicare program for more than $3.6 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

Owner of Houston Health Care Company Sentenced to 30 Months in Prison in Connection with Medicare Fraud Scheme | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

PHOENIX—On March 7, 2012, Paige Kinney, aka JamieLee Lawler, 43, of Phoenix, was sentenced to 15 years in prison by U.S. District Judge Neil V. Wake. Kinney had previously pleaded guilty to various charges related to a mortgage fraud scheme and to charges of bankruptcy fraud, wire fraud, mail fraud, and bank fraud in two separate indictments.

Ann Birmingham Scheel, Acting U.S. Attorney for the District of Arizona, highlighted the significance of this sentence by stating, “Mortgage fraud has deflated property values, harmed lending institutions, and ruined entire neighborhoods in our community. This defendant was undaunted by the mortgage fraud indictment and continued to commit fraud crimes while awaiting trial on those charges. I commend the IRS and the FBI on a tenacious and thorough investigation that led to this significant sentence.”

“This sentence signifies the continued determination by the FBI, the Arizona Mortgage Fraud Task Force, and the United States Attorney’s Office in targeting those individuals who conspire to commit mortgage fraud,” said FBI Special Agent in Charge James L. Turgal, Jr., Phoenix Division. “The FBI and its law enforcement partners will continue to aggressively pursue those who are involved in these types of fraudulent schemes. Mortgage fraud has had a tremendous adverse impact on both the economy and the citizens of Arizona. It will continue to remain a top criminal priority of the FBI.”

Dawn Mertz, special agent in charge of Internal Revenue Service Criminal Investigation said, “Ms. Lawler used her position as a loan officer to carry out a $40 million mortgage fraud scheme. After she was charged in the mortgage fraud case, she continued to commit egregious financial crimes. She used her position and her knowledge to manipulate and erode our financial systems. Ms. Lawler’s sentence reflects the severity of the financial crimes she imposed upon our community.”

According to court documents related to the first indictment, Kinney played a leadership role in a $40 million mortgage fraud scheme that targeted Countrywide Home Loans and other lenders. According to Kinney’s plea agreement on those charges, from January 2005 through December 2007, Kinney and others conspired to commit mortgage fraud by using unqualified straw buyers to purchase properties, knowing that the straw buyers did not intend to live in the homes or be responsible for the loan payments. As part of the scheme, Kinney would obtain mortgage financing to purchase homes in the names of the straw buyers by submitting fraudulent mortgage loan applications and altering documents, such as bank statements, to misrepresent the straw buyers’ assets, income, employment status, liabilities and other debts, sources of earnest money and down payments, and their intent to make the property a primary residence. Based on these misrepresentations regarding the buyers’ ability to qualify for loans, lenders issued loans that exceeded the homes’ sales prices. Once the funds were obtained from the lenders, the extra proceeds, known as “cash back,” were directed to bank accounts that Kinney controlled. In total, Kinney caused lending institutions to issue $38,745,215 in fraudulent loans. Out of those loan proceeds, $8,754,485.17 was directed as “cash back” to bank accounts controlled by Kinney and other conspirators. Kinney used the “cash back” for personal expenses; for the purchase of luxury vehicles, jewelry, and homes in Phoenix and San Diego; to make mortgage payments; and to compensate straw buyers for their involvement in the scheme.

Kinney continued her illicit activities while she was pending trial on the mortgage fraud indictment. According to her plea agreement on the second indictment, Kinney declared bankruptcy and then attempted to hide assets and liabilities from the bankruptcy court by falsifying her name and social security number. Kinney also committed additional financial fraud by arranging for friends to fraudulently obtain a loan to purchase a Mercedes. In addition, she committed insurance fraud by staging a phony burglary of her residence and then collecting $130,000 from Allstate Insurance Company.

Judge Wake noted that the defendant engaged in a “breathtakingly aggressive fraud” when sentencing Kinney to 10 years in prison on the mortgage fraud scheme and to five years in prison on the second indictment, to run consecutively to the mortgage fraud sentence. Judge Wake also ordered Kinney to pay $22,000,000 in restitution.

The investigation in this case was conducted by the Internal Revenue service, Criminal Investigations Division and the Federal Bureau of Investigation. The prosecution is being handled by Kevin M. Rapp and Monica B. Klapper, Assistant U.S. Attorneys, District of Arizona, Phoenix.

Former Countrywide Loan Officer Sentenced to 15 Years in Prison and Ordered to Pay $22 Million in Restitution | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

BALTIMORE—U.S. District Judge William D. Quarles, Jr. sentenced Charles Donaldson, age 58, of Bowie, Maryland, today to 41 months in prison followed by three years of supervised release for conspiracy to commit wire fraud in connection with a mortgage fraud scheme which caused the issuance of over $4.7 million in fraudulent mortgage loans and homeowners to lose over $1.2 million in equity in their homes.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Inspector General Jon T. Rymer of the Federal Deposit Insurance Corporation.

“Charles Donaldson promised to rescue homeowners who were behind in their mortgage payments, but instead he stole the equity from their homes and used it to buy his own house, “ stated U.S. Attorney Rod J. Rosenstein. “We are prosecuting mortgage fraud crimes thanks to the coordinated efforts of federal and state investigators.”

According to Donaldson’s plea agreement and court documents, co-conspirator Mary Dean was a loan originator and operated Sunset Mortgage Company from her home. Donaldson, who was also a loan originator, steered clients to Dean’s mortgage brokerage franchise.

Beginning in 2005, Donaldson identified homeowners who were in financial distress because they were unable to make the mortgage loan payments on their homes and enticed the homeowners to participate in a foreclosure “rescue” plan. Donaldson told the homeowners that he would locate “investors” to purchase their homes and thereafter, the homeowners would pay rent to the “investors,” who would pay the mortgage and receive a small percentage of the homeowners’ equity; that the remainder of the homeowners’ equity would be transferred to Donaldson, who would hold it in escrow; and that the homeowners would buy back their properties after 12 to 18 months, giving them time to “repair” their finances and credit while they continued to live in their homes.

Donaldson recruited family members and associates as “investors” to purchase the properties and paid them a small percentage of the seller’s equity at the time of settlement. Prior to the sales of the homes, Donaldson created and recorded second deeds of trust or promissory notes that purported to show debts owed by the homeowners to Donaldson, and which were secured by the existing equity in their home. At the closing of the home sales, the title companies disbursed funds to Donaldson’s bank account to payoff the liens he had created. Donaldson assured the homeowners and “investors” that he would assist them with their rent and mortgage payments, using that equity which he claimed he was holding in his “escrow account.” In fact, Donaldson and Dean knew that Donaldson was simply putting these funds into his personal checking account, and using them for personal and business purposes, including the purchase of a personal residence with a cashiers check in the amount of $169,132.60.

Donaldson and Dean obtained the new mortgage loans on the properties in the names of the “investors” with higher monthly mortgage payments, and most times, higher interest rates, than that which the homeowners were currently paying. In the loan applications Dean falsely represented that the “investors” intended to live in the homes as primary residents and inflated the incomes of the “investors.” In some instances, Dean submitted fraudulent loan applications for the same “investor” to purchase multiple properties as their “primary residence” in a short period of time. Donaldson assisted Dean by procuring false verification of employment letters.

Based on the false loan applications, lenders funded loans at high interest rates for the “investors,” yielding large transactional fees and premiums for Dean. Donaldson and Dean knew that the homeowners who sold their homes to the “investor” had lost control of their homes, could not afford the new mortgage loan with higher payments and interest, and could not qualify for a refinance.

The homeowners and “investors” were forced to use their personal savings and credit cards to make mortgage and rent payments until they were no longer able to do so. Donaldson only used a small amount of the equity from the sale of the homes to assist with the payments and the loans went into default. Fourteen of the homes have been foreclosed upon and foreclosure proceedings against two other homes are ongoing.

As a result of the scheme, lenders provided over $4.7 million in mortgage loans. Their final loss remains uncertain as some of the homes remain in foreclosure to this day. The homeowners lost over $1.2 million in home equity. More than 20 victims were defrauded by Donaldson and Dean.

Mary Anne Dean, age 57, of Severna Park, Maryland, pleaded guilty to the conspiracy and faces a maximum sentence of 20 years in prison and a fine of $250,000. Judge Quarles scheduled her sentencing for March 22, 2012.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention, and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the task force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available www.justice.gov/usao/md/Mortgage-Fraud/index.html.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

United States Attorney Rod J. Rosenstein praised the FBI and FDIC Office of Inspector General for their work in this investigation and thanked Assistant U.S. Attorney Mark W. Crooks, who prosecuted the case.

Loan Officer Sentenced in Fraudulent Mortgage Rescue Scheme Resulting in Losses of Over $1.2 Million to Homeowners in Financial Distress | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

DALLAS—Eugenio D. Leo and his wife Jody L. Meyer, formerly of Allen, Texas, pleaded guilty yesterday before U.S. District Judge Ed Kinkeade to their respective roles in a $3 million fraud scheme they ran from February 2004 to November 2004, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Leo, 30, pleaded guilty to one count of wire fraud and faces five years in prison and a fine of up to $250,000 or twice the loss to the victims. Meyer, 46, pleaded guilty to one count of mail fraud and faces a five-year term of probation and a fine of up to $250,000 or twice the loss to the victims. Both Leo and Meyer, who now reside in Harwood Heights, Illinois, will remain on bond pending sentencing, which is set for June 20, 2012 before Judge Kinkeade.

According to documents filed in the case, during the time of the fraud, Leo worked as a commodities broker at Compass Financial, a commodities brokerage firm located in Richardson, Texas. He devised a mail and wire fraud scheme that involved inducing the victims, K.P. and L.P., to invest their money by making short-term loans to museums in Europe. These loans would be secured by pieces of artwork worth significantly more than the loan value. At Leo’s request, K.P. provided a power of attorney to Leo so that he could make the necessary arrangements for the short-term loan. Leo falsely reported to K.P. that K.P.’s loan was repaid plus interest.

Instead of a short-term museum loan, however, Leo actually purchased art with K.P.’s money, and then sold that art to K.P., never disclosing that he put himself in the purchase chain and made more than $800,000 from the sale. Leo, aided and abetted by Meyer, falsely represented that Leo owned K.P.’s artwork so that Leo could obtain a loan (using the art as collateral) from Art Capital Group for approximately $300,000.

Leo made material misrepresentations to facilitate the scheme to defraud his victims. He used his authority under a power of attorney from the victim to act contrary to the victim’s instructions, contrary to the victim’s best interest and for his own personal benefit. Leo and Meyer defrauded K.P. and L.P. of more than $3 million.

The case was investigated by the FBI. Assistant U.S. Attorneys Aisha Saleem, Paul Yanowitch and Dayle Elieson are prosecuting.

Husband and Wife Plead Guilty to Roles in $3 Million Fraud Scheme Using Art as Collateral | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

NEWARK—A Bergen County, New Jersey woman who was a member of a large-scale and sophisticated identity theft scheme was sentenced to 41 months in prison today, U.S. Attorney Paul J. Fishman announced.

Jung-Sook Ko, a/k/a “Grace Lim,” 48, of Ridgefield, New Jersey, pleaded guilty on November 15, 2011 before U.S. Magistrate Judge Patty Shwartz to an information charging her with conspiracy to unlawfully produce identification documents and to commit credit card fraud (count one) and aggravated identity theft (count two). Ko was sentenced by U.S. District Judge Katharine S. Hayden today in Newark federal court.

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

Ko was arrested on September 16, 2010, in a coordinated law enforcement takedown of 53 individuals in connection with widespread, sophisticated identity theft and fraud, including 43 other individuals charged along with Ko with participating in one large-scale criminal enterprise.

Sang-Hyun Park, a/k/a “Jimmy,” is alleged to have been the leader of a criminal organization (the Park Criminal Enterprise) headquartered in Bergen County that obtained, brokered, and sold identity documents to customers for the purpose of committing credit card fraud, bank fraud, and tax fraud. The Park Criminal Enterprise obtained Social Security cards beginning with the prefix “586.” Social Security cards with that prefix were issued by the United States to individuals, usually from China, who were employed in American territories, such as American Samoa, Guam, and Saipan. The Park Criminal Enterprise sold these cards to its customers and then escorted the customers to various states to use them to obtain identification cards and driver’s licenses.

The Park Criminal Enterprise then engaged in the fraudulent “build-up” of credit scores associated with these fraudulently obtained identities. They did so by adding the identity as an authorized user to the credit card accounts of various co-conspirators who received a fee for this service—members of the enterprise’s credit build-up teams. By attaching the identities to these existing credit card accounts, the teams increased the credit scores associated with the identities to between 700 and 800. The members of the build-up teams knew neither the real person to whom the identity belonged nor virtually any of the customers who had purchased the identities.

After building the credit associated with these identities, Park and his co-conspirators directed, coached, and assisted his customers to open bank accounts and obtain credit cards.

Park and his co-conspirators then used these accounts and credit cards to commit fraud. Park relied on several collusive merchants who possessed credit card processing, or swipe, machines. For a fee, known as a “kkang fee,” these collusive merchants charged the fraudulently obtained credit cards, although no transaction took place. After receiving the money into their merchant accounts from the credit card related to these fraudulent transactions, the collusive merchants gave the money to Park and his co-conspirators, minus their “kkang fee.”

Ko was a customer of the Park Criminal Enterprise. She admitted that she obtained a Social Security card with the 586-prefix from the Park Criminal Enterprise and used it and other fraudulent documents to obtain an identification card and driver’s license in Illinois. Ko and her co-conspirators used these fraudulently obtained identity documents to obtain credit cards and open bank accounts. Ko admitted that in or around February 2010, she and her co-conspirators fraudulently obtained credit cards from Macy’s, Bloomingdale’s, Saks Fifth Avenue, Nordstrom, Citibank, Chase, Bank of America, and HSBC, among others. Ko and her co-conspirators used these fraudulently obtained credit cards to obtain hundreds of thousands of dollars in cash and merchandise.

In addition to the prison term, Judge Hayden sentenced Ko to three years of supervised release and ordered her to pay $124,598 in restitution.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark; IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge JoAnn Zuniga; the Department of Homeland Security’s Immigration and Customs Enforcement Homeland Security Investigations, under the direction of Special Agent in Charge Andrew McLees; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli; and the office’s Chief of Detectives Steven Cucciniello for their work leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Barbara R. Llanes of the U.S. Attorney’s Office Criminal Division and Anthony Moscato of the Office’s Organized Crime/Gangs Unit in Newark.

Defense counsel: Genesis A. Peduto Esq., North Bergen, New Jersey.

Member of Large-Scale Identity Theft Ring Sentenced | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.