WASHINGTON—An assistant administrator of a Houston hospital was arrested today on charges related to his alleged participation in a $116 million Medicare fraud scheme involving false claims for mental health treatment, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).

An indictment filed in the Southern District of Texas and unsealed today charges Mohammed Khan, 62, of Houston, with one count of conspiracy to commit health care fraud, one count of conspiracy to pay and receive illegal health care kickbacks and five counts of paying or offering to pay health care kickbacks. Khan is expected to make his initial appearance in federal court today in Houston.

“The indictment against Mr. Kahn alleges that he used his position as a hospital assistant administrator to submit millions in false claims to the Medicare program,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “According to the charges, he paid kickbacks to patient recruiters, owners of group homes and assisted living facilities and beneficiaries so that he could fill his hospital with patients for whom he could bill the government for medically unnecessary services or services that were never provided. We will continue aggressively to pursue individuals who attempt to enrich themselves at the expense of the Medicare program.”

“The defendant charged in this indictment is accused of stealing precious Medicare resources by billing for services that were medically unnecessary or never provided,” said Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office. “Our health care fraud efforts have never been more collaborative and aggressive. We will continue to work with our law enforcement partners to protect patients and fight against health care fraud.”

According to the indictment, Khan, as the assistant administrator of a Houston hospital, allegedly operated a scheme to defraud Medicare beginning in 2008 and continuing until his arrest today. Khan allegedly caused the submission of false and fraudulent claims for partial hospitalization program (PHP) services to Medicare through the hospital. A PHP is a form of intensive outpatient treatment for severe mental illness.

The indictment alleges that Khan paid kickbacks to owners and operators of group care homes and assisted living facilities and to patient recruiters in exchange for delivering ineligible Medicare beneficiaries to the hospital’s PHPs. The indictment alleges that Khan also paid kickbacks to Medicare beneficiaries who attended the hospital’s PHPs. These kickbacks included cigarettes, food, and coupons redeemable for items available at the hospital’s “country stores.” Khan and his co-conspirators submitted or caused to be submitted approximately $116 million in claims to Medicare for PHP services purportedly provided by the hospital to the recruited beneficiaries, when in fact, the PHP services were medically unnecessary or never provided.

Today’s charges were announced by Assistant Attorney General Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent in Charge 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); the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU); Special Agent in Charge Lucy R. Cruz of the Internal Revenue Service (IRS) Houston Field Office; Joseph J. Del Favero, Special Agent in Charge of the Chicago Field Office of the Railroad Retirement Board, Office of Inspector General (RRB-OIG); and Scott Rezendes, Special Agent in Charge of Field Operations of the Office of Personnel Management, Office of Inspector General (OPM-OIG).

The case is being prosecuted by Trial Attorney Laura M.K. Cordova, Attorney Allan Medina, Assistant Chief William Pericak and Deputy Chief Sam S. Sheldon of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG, MFCU, IRS, RRB-OIG and OPM-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas.

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 $3.2 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.

Assistant Administrator of Houston Hospital Indicted for Alleged Role in $116 Million Medicare Fraud Scheme | 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 NATHAN ROTHSCHILD, a former commissioner of the Monsey Fire District in Rockland County (the “Fire District”), was sentenced today in White Plains federal court by United States District Judge Kenneth M. Karas to 12 months and a day in prison for engaging in a mail fraud scheme that caused the Fire District to enter into a real estate transaction for the purpose of paying off his personal debt to his creditor. ROTHSCHILD pled guilty to one count of mail fraud before Judge Karas on June 30, 2011.

During his plea allocution, ROTHSCHILD admitted to participating in a scheme in which he proposed that the Fire District purchase a parcel of real estate from a creditor of his without disclosing ROTHSCHILD’s interest in the transaction. As part of the scheme, ROTHSCHILD expected that the Fire District would purchase the real estate at a higher price than the creditor had paid. ROTHSCHILD intended the creditor’s profit, which he expected to be approximately $125,000, to serve as partial payment of his debt.

Mr. Bharara praised the outstanding investigative work of the FBI.

This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Douglas B. Bloom and Margery B. Feinzig are in charge of the prosecution.

Rockland County Fire Commissioner Sentenced to 12 Months and a Day in Prison for Engaging in Scheme to Defraud the Public | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

WASHINGTON—A Baton Rouge area-resident pleaded guilty today for his role in a Medicare fraud scheme involving false claims for unnecessary durable medical equipment (DME), announced the Department of Justice, the FBI, the Department of Health and Human Services (HHS) and the Louisiana State Attorney General’s Office.

Rodney D. Taylor, 45, pleaded guilty before U.S. District Judge James J. Brady of the Middle District of Louisiana to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and to pay and receive health care kickbacks.

According to court documents, Taylor worked as a recruiter for Healthcare 1 LLC, Medical 1 Patient Services LLC and Lifeline Healthcare Services Inc., Louisiana-based companies that fraudulently billed DME to the Medicare program from 2004 to 2009. He and other recruiters were hired to obtain prescriptions for DME such as leg braces, arm braces, power wheel chairs and wheel chair accessories. Taylor obtained information from Medicare beneficiaries as well as prescriptions for medical equipment from the beneficiaries’ physicians. Taylor then sold these prescriptions so they could be used by Healthcare 1, Medical 1 Patient Services and Lifeline Healthcare Services to submit fraudulent claims to the Medicare program.

The indictment alleges that from 2004 to 2009 Medicare was billed more than $21 million as part of this conspiracy.

Taylor faces a maximum penalty of 15 years in prison and a $500,000 fine. A sentencing date has not yet been set.

Today’s plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Donald J. Cazayoux Jr. of the Middle District of Louisiana; Mike Fields, Special Agent in Charge of the Dallas Region for the HHS Office of the Inspector General (HHS-OIG); David Welker, Special Agent in Charge of the FBI’s New Orleans Division; and Louisiana State Attorney General James Buddy Caldwell.

The case is being prosecuted by Trial Attorneys David Maria and Abigail Taylor and Assistant Chief William Pericak of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG and the Medicaid Fraud Control Unit of the Louisiana State Attorney General’s Office (MFCU), and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Louisiana.

Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,160 defendants that collectively have billed the Medicare program for more than $2.9 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.

Louisiana Patient Recruiter Pleads Guilty in Health Care Fraud Scheme | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

PLANO, TX—A 45-year-old DeSoto, Texas man has been found guilty by a jury in a mortgage fraud scheme that involved homes in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Rodney Lavann Giles was convicted of conspiracy to commit bank fraud on Jan. 25, 2012, following a three-day trial before U.S. District Judge Richard Schell.

According to the indictment, from Aug. 8, 2005, to May 30, 2006, Giles, operating as RLG Properties, conspired to defraud Long Beach Mortgage Company by finding buyers for properties for amounts in excess of the sellers’ asking prices. To facilitate the fraud, Giles created false lease agreements, created false letters representing a buyer had agreed to move his business to the area, overstated the monthly income of buyers, and deposited funds in a buyer’s account to falsely represent the buyer had funds available to purchase a property. As a result of Giles’ scheme, buyers purchased property in Denton, Texas on Camelot Court for $450,000 and Yoakum Drive for $340,000. Both loans resulted in defaults and foreclosures.

Giles faces up to 30 years in federal prison. A sentencing date has not been set.

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.

This case is being investigated by the FBI, IRS-CI, HUD-OIG, and the Secret Service and prosecuted by Assistant U.S. Attorneys Christopher A. Eason and J. Andrew Williams.

Jury Convicts Dallas County Man in Mortgage Fraud Scheme | 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, and Kimberly K. Mertz, Special Agent in Charge of the Federal Bureau of Investigation, announced that GREGORY VIOLA, 59, of Orange, waived his right to indictment and pleaded guilty today before United States District Judge Vanessa L. Bryant in Hartford to two counts of mail fraud stemming from his operation of a Ponzi scheme that defrauded more than 50 investors of a total of more than $2.5 million.

“This defendant stole millions of dollars from more than 50 victim investors,” stated U.S. Attorney Fein. “This case serves as another reminder that the investing public must be rigorous in its due diligence when considering whether and where to place investment and retirement funds. I commend the FBI, the Stamford Police and the Connecticut Department of Banking, all members of our Connecticut Securities, Commodities and Investor Fraud Task Force, for bringing this defendant to justice.”

According to court documents and statements made in court, VIOLA, who was not a licensed investment adviser, operated an investment business in Orange, Conn. From approximately 2007 to July 2011, VIOLA engaged in a scheme to defraud investors who had provided him with investment funds. As part of the scheme, VIOLA used funds obtained from investors to make payments to earlier investors. In order to prevent his investors from becoming aware that he was using new investor funds to make returns to older investors, VIOLA created and mailed fraudulent online account statements that falsely portrayed the value of investment accounts.

As of May 2011, VIOLA falsely represented to victim investors that they had more than $10 million on account. In truth, $10 million in funds did not exist, and the funds that did exist were not fully invested in online trading accounts but were commingled with funds in VIOLA’s own personal bank accounts. In addition to paying earlier investors with invested funds, VIOLA also used invested funds to pay personal expenses, including his mortgage.

When he is sentenced, VIOLA faces a maximum term of imprisonment of 40 years, a maximum fine of more than $5 million, and an order of restitution.

VIOLA was arrested on August 11, 2011.

This matter is being investigated by the Federal Bureau of Investigation with the assistance of the Stamford Police Department and the Connecticut Department of Banking. This case is being prosecuted by Senior Litigation Counsel Richard J. Schechter, with the assistance of Victim-Witness Coordinator, Linda Corraro.

U.S. Attorney Fein and FBI Special Agent in Charge Mertz stated that the investigation is ongoing and asked individuals who believe they may be a victim of this scheme, and have not already been in contact with the FBI, to contact FBI Special Agent Wendy Bowersox at (203) 777-6311.

In December 2010, the U.S. Attorney’s Office and several law enforcement and regulatory partners announced the formation of the Connecticut Securities, Commodities and Investor Fraud Task Force, which is investigating matters relating to insider trading, market manipulation, Ponzi schemes, investor fraud, financial statement fraud, violations of the Foreign Corrupt Practices Act, and embezzlement. The Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service—Criminal Investigation; U.S. Secret Service; U.S. Postal Inspection Service; U.S. Department of Justice’s Criminal Division, Fraud Section and Antitrust Division; U.S. Securities and Exchange Commission (SEC); U.S. Commodity Futures Trading Commission (CFTC); Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); Office of the Chief State’s Attorney; State of Connecticut Department of Banking; Greenwich Police Department and Stamford Police Department.

Citizens are encouraged to report any financial fraud schemes by calling, toll free, 855-236-9740, or by sending an e-mail to ctsecuritiesfraud@ic.fbi.gov.

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.

For more information on the task force, please visit www.StopFraud.gov.

Orange Resident Admits Operating Multi-Million-Dollar Ponzi Scheme | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

PROVIDENCE, RI—Mario Perretta, 36, of Cranston, R.I., owner of M&M Ironworks in Providence, pled guilty in federal court in Providence today to eight counts of wire fraud and two counts of tax evasion in a fraud scheme that bilked investors in his company out of approximately $4.2 million. Perretta admitted to the court that he promised inventors high rates of return on investments into projects that did not exist. Instead, Perretta admitted, he spent the majority of money for gambling purposes, to purchase personal items and to pay for personal expenses.

M&M Ironworks performs structural steel work, primarily as a subcontractor, on construction projects.

Perretta’s guilty plea was announced by U.S. Attorney Peter F. Neronha; Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office; and William P. Offord, Special Agent in Charge of the Boston office of the Internal Revenue Service-Criminal Investigation.

Perretta, who was charged in U.S. District Court by way of an Information on November 20, 2011, admitted to the court today that in late 2007, he hired an individual to recruit investors in his company. Perretta provided the employee with false and fraudulent information regarding projects that did not exist, in order to induce investors to provide money to M&M. Among the projects Perretta claimed his company was involved in included construction of a YMCA on Martha’s Vineyard, Mass., and a construction project at MGM Grand at Foxwoods Resort and Casino in Mashantucket, CT. M&M ironworks was not involved in projects at either location.

Perretta also admitted to the court that he had an attorney draft promissory notes which he gave to investors which outlined the terms of their investment and falsely promised a high rate of return, around 12-14 percent. Perretta admitted that he pressed investors to provide him with cash investments in M&M by falsely representing to them that the company was in dire need of immediate cash infusions in order to continue operations. In addition, Perretta falsely represented to the investors that their investments would be safe because the construction projects were insured, when they were not.

Perretta is scheduled to be sentenced by U.S. District Court Judge John J. McConnell, Jr., on April 18, 2012. Perretta faces a maximum sentence of 20 years in federal prison followed by up to three years of supervised release and a fine of $250,000 on each count of wire fraud; and a maximum sentence of five years in prison followed by up to three years of supervised release and a fine of $100,000 on each count of tax evasion.

The case is being prosecuted by Assistant U.S. Attorney Luis M. Matos. The matter was investigated by the FBI and IRS-Criminal Investigation.

Rhode Island Steelworks Contractor Pleads Guilty in $4.2 Million Fraud Scheme | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

BATON ROUGE, LA—United States Attorney Donald J. Cazayoux, Jr. announced that CARLA CLARK, age 47, and LILLIE LAVAN, age 57, both of Pineville, Louisiana, pled guilty today before Senior U.S. District Court Judge Frank J. Polozola to counts of an indictment charging health care fraud.

The indictment arose from a health care fraud scheme involving two companies known as Fusion Services, L.L.C. (“Fusion”), and Grace Social Services, L.L.C. (“Grace”), which operated in Alexandria, Louisiana and the surrounding areas. CLARK and LAVAN were licensed clinical social workers who worked with Sonya Williams, the owner of Fusion and Grace. CLARK and LAVAN participated in creating false and misleading medical records for Fusion indicating that Medicare beneficiaries had received individual, face-to-face psychotherapy when, in fact, no such services had been provided. Williams then prepared false claims for the purported psychotherapy services to elderly patients and submitted them to Medicare for reimbursement. Medicare paid Fusion and Grace approximately $349,715 as a result of the billings, much of the profits were deposited into Williams’ personal accounts.

As a result of her guilty pleas, CLARK faces a maximum sentence of imprisonment of 20 years, a $500,000 fine, or both. As a result of her guilty plea, LAVAN faces a maximum sentence of imprisonment of 10 years, a $250,000 fine, or both. The court may also order CLARK and LAVAN to pay restitution. Sentencing has not yet been set for either defendant.

United States Attorney Donald J. Cazayoux, Jr. stated, “This plea is the result of another successful effort by the Medicare Fraud Strike Force to root out and prosecute health care fraud. Rest assured, we will continue to pursue these fraudsters who undermine our health care system. I commend our partners with the U.S. Department of Health and Human Services, the Federal Bureau of Investigation, the Internal Revenue Service, and AdvanceMed for their continued focus and diligence in finding and stopping fraud within our Medicare system.”

Assistant Special Agent in Charge William W. Root, Health and Human Services said, “We are proud of the outstanding work by the Medicare Fraud Strike Force. The guilty pleas today sends a message to other perpetrators that we will thoroughly investigate all allegations of health care fraud. Protecting the programs intended for our nation’s most vulnerable citizens is paramount to our mission.”

FBI Special Agent in Charge David W. Welker said, “Today’s guilty pleas are the result of the hard work of Agents and analysts from Health and Human Services, Internal Revenue Service-CID, the FBI as well as prosecutors from the United States Attorney’s Office. Gone unchecked conduct such as displayed by Ms. Clark and Ms. Lavan will continue to raise the cost of health care for every American citizen. The FBI and its law enforcement partners will continue to aggressively seek out and investigate health care fraud and bring to justice those perpetrators who would abuse the system.”

The investigation of this matter is ongoing, and is being conducted by the U.S. Department of Health and Human Services’ Office of Inspector General, the Federal Bureau of Investigation, the Internal Revenue Service, and AdvanceMed, the Medicare Program Safeguard Contractor which assists with health care fraud investigations. The case is being prosecuted by Assistant United States Attorneys Catherine M. Maraist and Leetra Harris.

Guilty Pleas in Health Care Fraud Case | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

NEWARK, NJ—The former chief financial officer of Columbus Hill Capital Management LP, an investment management firm based in Short Hills, N.J., today admitted to embezzling more than $10.4 million from his employer, announced U.S. Attorney Paul J. Fishman.

David Newmark, 39, of Towaco, N.J., surrendered to federal authorities today and pleaded guilty to an information charging him with one count of wire fraud and one count of tax evasion. Newmark entered his guilty plea before U.S. District Judge William H. Walls in Newark federal court.

“David Newmark admitted stealing from his own management company, creating a phony account to collect more than $10 million in fraudulent deposits,” said U.S. Attorney Fishman. “Making personal use of company cash, it was only a matter of time before he was caught with his hand in the piggy bank. Now not only will Newmark have to pay back the money he stole, he will have to pay a debt to society as a convicted felon.”

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

Newmark admitted that between February 2008 and March 2011, he embezzled from his former employer by requesting checks and wire transfers from custodians of the investment management company accounts and diverting the funds to bank accounts he controlled. Newmark deposited the checks and wires—including a single wire transfer of more than $2.4 million in April 2010—into a bank account he set up with a name similar to that of his employer. The majority of the $10.4 million that Newmark embezzled came from the management company, rather than investor funds.

For the 2008 tax year, Newmark did not disclose to the Internal Revenue Service (IRS) more than $2.8 million he received in connection with the fraudulent scheme. That failure resulted in a tax loss to the United States of $1,012,441.

The wire fraud charge carries a maximum penalty of 20 years in prison and a $250,000 fine, or twice the pecuniary gain or loss resulting from Newmark’s criminal conduct. The tax evasion charge carries a maximum penalty of five years in prison and a $250,000 fine. Sentencing is currently scheduled for April 24, 2012.

As part of his guilty plea, Newmark has agreed to make full restitution to the victims of his offenses for all losses resulting from his crime and has agreed to forfeit $10,442,379.90 to the United States. Newmark paid an initial installment of $525,165.65 today.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark; and IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge JoAnn S. Zuniga in Newark, for the investigation leading to today’s guilty plea. U.S. Attorney Fishman also thanked Columbus Hill Capital Management for its cooperation in the investigation.

The government is represented by Assistant U.S. Attorney Charlton A. Rugg of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

Former CFO of New Jersey Investment Management Company Pleads Guilty to Wire Fraud and Tax Evasion | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

PITTSBURGH, PA—A resident of Washington, Pennsylvania has been sentenced in federal court to 57 months in prison on his convictions for mail fraud, United States Attorney David J. Hickton announced today.

United States District Judge Arthur J. Schwab imposed the sentence on Kenneth McGavitt, 58. The sentence imposed also required McGavitt to pay restitution in excess of $3,000,000.

According to information presented to the court, McGavitt participated in a scheme to defraud lenders in connection with $4,000,000 of commercial loans. The loans were collateralized by a buildings that the defendant owned. The defendant made false representations to the lenders about the amount of lease tenants in those buildings were paying. In addition, the defendant presented the lenders with a forged amendment to a lease agreement and other fraudulent documents to secure the loans.

Assistant United States Attorney Brendan T. Conway prosecuted this case on behalf of the government.

U.S. Attorney Hickton commended the Mortgage Fraud Task Force for the investigation leading to the successful prosecution of McGavitt. The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigation; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff’s Office; the Pennsylvania Attorney General’s Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee’s Office.

Washington County Man Sentenced to 57 Months in Prison 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.

Preet Bharara, the United States Attorney for the Southern District of New York, and Janice K. Fedarcyk, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a nine-count indictment charging VLADIMIR ZDOROVENIN and his son, KIRILL ZDOROVENIN, two Russian citizens, with conspiracy, mail fraud, wire fraud, computer fraud, aggravated identity theft, and securities fraud. They were indicted under seal in May 2007. VLADIMIR ZDOROVENIN was apprehended on March 27, 2011, in Zurich, Switzerland, and arrived in New York yesterday following his extradition by Swiss authorities. He will be presented and arraigned before U.S. Magistrate Judge Gabriel W. Gorenstein in Manhattan federal court later today. KIRILL ZDOROVENIN remains at large.

Manhattan U.S. Attorney Preet Bharara said: “Cyber crime is a pandemic that makes geography meaningless. From far away, with the click of a mouse, the cyber criminal can victimize millions of people in the U.S. As alleged, Vladimir Zdorovenin and his son did exactly that; they engaged in serial cyber crimes in Russia that targeted Americans and wrought havoc with their personal and financial information, using it to make phony purchases and to manipulate stock prices. As the unsealing of today’s Indictment demonstrates, we will reach out across the globe, and wait as long as it takes to bring cyber criminals to justice.”

FBI Assistant Director in Charge Janice K. Fedarcyk stated: “Mr. Zdorovenin’s egregious behavior illustrated the true colors of the cyber underground, as he and his son allegedly defrauded consumers of hundreds of thousands of dollars using methods that included compromised credit cards, all fronted through fictitious companies they had created. In addition, Zdorovenin allegedly installed malware to access victims’ brokerage accounts, trading victims’ securities and manipulating the price of stocks Zdorovenin already owned. This should serve as a stark reminder to anyone who believes he can commit cyber crime and hide behind the safety and anonymity of a Russian IP address; you are not beyond the reach of the FBI.”

According to the indictment unsealed today in Manhattan federal court:

At various times between 2004 and 2005, VLADIMIR ZDOROVENIN and his son KIRILL ZDOROVENIN allegedly engaged in a series of crimes in Russia that victimized citizens of the United States through the use of stolen credit card information, multiple phony websites, and bank accounts in Russia and Latvia. Specifically, the indictment alleges that the ZDOROVENINs stole victims’ personal identification information, including credit card numbers, through the use of computer programs that were surreptitiously installed on victims’ computers and that recorded the information as it was entered. The ZDOROVENINs also allegedly purchased stolen credit card numbers from other individuals, and used the stolen credit card information to make what appeared to be legitimate purchases of goods from various Internet businesses that they ran. However, as alleged, the purchases were fraudulent and were used as a means of deceiving banks, credit card service processors, credit card holders, and others, thereby enabling the ZDOROVENINS to steal the money they directed to their websites.

Additionally, as alleged in the indictment, the ZDOROVENINs, used the Internet to unlawfully access the financial services accounts of victims located in the United States and then transferred or attempted to transfer hundreds of thousands of dollars from those accounts to bank accounts under the ZDOROVENINs’ control. Finally, the Indictment charges that after taking over victims’ online brokerage accounts, the ZDOROVENINs bought and sold thousands of shares of certain companies’ stock in an effort to manipulate the prices of those stocks. The ZDOROVENINs allegedly realized profits through this scheme by simultaneously purchasing or selling shares of the same stocks through their own online brokerage account, maintained in the name of Rim Investment Management, Ltd.

* * *

VLADIMIR ZDOROVENIN, 54, of Moscow, Russia, faces a maximum sentence of 142 years in prison in connection with the charges in the indictment. The case has been assigned to U.S. District Judge Paul G. Gardephe.

Mr. Bharara praised the outstanding investigative work of the FBI. He also thanked the Office of International Affairs in the U.S. Department of Justice’s Criminal Division for its assistance with the extradition.

This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys James J. Pastore, Jr. and Thomas G.A. Brown are in charge of the prosecution.

The charge and allegations contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Manhattan U.S. Attorney and FBI Assistant Director in Charge Announce Extradition of Russian Citizen to Face Charges for International Cyber Crimes | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

NEWARK, NJ—A former employee of a Parsippany, N.J., mortgage lender admitted today to taking $138,402 in illegitimate proceeds of multiple home sales as a result of a mortgage fraud scheme, U.S. Attorney Paul J. Fishman announced.

Jorge Abbud, 33, of Dover, N.J., pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an Information charging him with wire fraud.

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

In 2008, Abbud was an employee of a Parsippany mortgage lender. He admitted that he targeted homeowners in New Jersey who had equity in their homes, but were facing foreclosure because of their inability to pay their monthly mortgage payments. Abbud falsely promised to help these homeowners avoid foreclosure, keep their homes, and repair their damaged credit. He instructed the homeowners to permit the titles of their homes to be recorded in the names of third-party purchasers ( “straw buyers”) for approximately one to three years, promising the homeowners that he would improve their credit scores during that time, obtain mortgages with more favorable interest rates for them and return the titles of the homes to the homeowners.

Abbud said he then recruited straw buyers with good credit scores to act as buyers of the homes facing foreclosure. He told the straw buyers they were helping the homeowners keep their homes, and that the straw buyers would make money when the homes were sold back to the original homeowners. Abbud admitted that on certain occasions, and notwithstanding his promises to the homeowners and straw buyers, the homes fell into foreclosure.

Abbud sometimes caused the straw buyers to misrepresent their incomes in loan applications and other documents in order to secure the loans to purchase the homes. Abbud caused the funds disbursed by the financial institution or lender underwriting the loan to be sent to individuals and entities that were not legally entitled to them. Abbud personally obtained $138,402 in illegitimate proceeds of the home sales as a result of his scheme and artifice to defraud.

The wire fraud count to which Abbud pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine or twice the gross amount of any pecuniary gain or loss resulting from the offense. Sentencing before Judge Walls is scheduled for April 17, 2012.

Anyone who has information about this case or believes he or she may have been a victim is asked to contact the Newark office of the FBI at (973) 792-3000.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward, for the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Aaron Mendelsohn of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

This case was brought in coordination with 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.

Defense counsel:
Assistant Federal Public Defender Patrick McMahon, Newark

Former Employee of Parsippany Mortgage Lender Pleads Guilty to Fraud | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

HOUSTON—James Maceo Ramey, 64, of Houston, has been sentenced to 188 months’ imprisonment on 25 counts of bankruptcy fraud and mail fraud arising from a an Internet scam to sell gold, United States Attorney Kenneth Magidson announced today. U.S. District Judge Keith P. Ellison handed down the sentence against Ramey this morning in Houston.

Ramey was convicted by a jury in July 2010 on all 25 counts as alleged in an indictment relating to bankruptcy fraud and for operating a fraudulent Internet gold sales company in which victims lost in excess of $400,000. Seventeen counts of conviction were for conspiracy to commit bankruptcy fraud, concealment of assets, false oaths and false declarations relating to the filings of 15 bankruptcies in various jurisdictions. The remaining eight counts of conviction arose from a mail fraud scheme arising from the operation by Ramey of Internet gold sales through auctions and The Manhattan Gold Inc. website between August 2003 and May 2004.

Ramey’s convictions came after a five-day trial in July 2010, during which testimony and evidence proved Ramey, who had filed 15 bankruptcy cases between August 2001 and December 2005, made false statements regarding his address and residence and failed to state he had repeatedly filed for bankruptcy in various jurisdictions. Witness testimony also established Ramey intentionally ignored and refused to comply with orders issued by the bankruptcy court prohibiting him from filing additional bankruptcy cases.

During the period of the bankruptcy scheme, Ramey set up and operated a fraudulent Internet gold website using the U.S. Mail. Ramey set up a business in the name of Manhattan Gold Inc. and solicited purchases of gold coins, including American Gold Eagles, Australian Kangaroos, South African Kruegerands, Canadian Maple Leafs and Credit Suisse gold bars. Ramey concealed in his numerous bankruptcy petitions the more than $400,000 in income he received from the sale of gold, not to mention the fact that he never had gold to sell and did not provide gold nor a refund to any of the victims whom he had defrauded.

The investigation of the case was conducted by the Houston offices of the FBI, the U.S. Trustee’s Office, and the United States Postal Inspection Service. Assistant United States Attorneys Quincy L. Ollison and Cedric L. Joubert prosecuted the case.

Internet Gold Scam Lands Houston Man 15 Years in Federal Prison | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

WASHINGTON—The owners of a property management company, Bryan W. Talbott, 48, and Chester D. Ransom, Jr., 44, have pleaded guilty to defrauding their clients, mortgage lenders, and the government out of more than $2.8 million.

The guilty pleas were announced by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Daniel S. Cortez, Inspector in Charge, Washington Division, U.S. Postal Inspection Service; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; and Eric Hylton, Acting Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation.

The defendants each pleaded guilty in the U.S. District Court for the District of Columbia to charges of conspiracy to commit bank fraud, conspiracy to commit mail fraud, and conspiracy to defraud the government. Talbott appeared in court on January 9, 2012, and Ransom appeared on January 6, 2012. The Honorable Robert L. Wilkins presided over both of the hearings.

As part of their plea agreements, the defendants agreed to criminal forfeiture and restitution of more than $2.8 million. Under the voluntary federal sentencing guidelines, Talbott and Ransom each face between 46 to 57 months of incarceration. Talbott’s sentencing is scheduled for May 29, 2012, and Ransom’s sentencing is scheduled for April 23, 2012.

According to the government’s evidence, Talbott was the president and Ransom was the vice president of a property management company located in Washington, D.C., that operated under multiple names, including Esquire LLC, Federal City Mowbray, and Private Properties Inc. (collectively referred to as “Esquire”). The defendants also lived together at a residence on North Portal Drive NW , Washington, D.C.

From 2004 to the present, the defendants engaged in three separate fraudulent schemes, resulting in more than $2.8 million in losses to the victims.

Fraud Relating to Property Management

Through their property management company, Esquire, the defendants entered into contracts with numerous property owners in the Washington, D.C. area to manage their rental properties. Under many of the contracts, the defendant were required to collect rental payments from tenants and use those funds to pay bills relating to the properties, such as utility bills. After paying any bills and deducting an administrative fee, the defendants were required to remit the remainder of the rental payments to the property owners.

As part of their fraudulent scheme, the defendants frequently collected rental payments from tenants but did not pay the bills for the properties, despite falsely representing to the property owners that the bills had been paid. Instead, the defendants used these funds for their own benefit. In addition, the defendants also sent forged bank statements to some of their clients, misstating the balances in their clients’ accounts.

Through this fraudulent scheme, the defendants defrauded at least 54 clients out of a total of $1,269,278.

Mortgage Fraud

On June 30, 2004, Ransom purchased the property on North Portal Drive NW for $975,000, financing the purchase, in part, with two loans in the total amount of $731,250 from WMC Mortgage Corp., a mortgage lender. Ransom executed two deeds of trust on the property, granting WMC a security interest in the property.

On December 29, 2005, Ransom filed with the District of Columbia Recorder of Deeds two forged Certificates of Satisfaction, purporting to release the WMC liens on the Portal property.

Then, on January 13, 2006, Ransom sold the Portal property to Talbott for $1,110,000. The defendants provided copies of the forged lien releases to the settlement company. Talbott obtained a loan in the amount of $750,000 from Fremont Investment and Loan. Talbott executed a deed of trust on the property, granting Fremont a security interest in the property. Ransom received a check in the amount of $515,034 from the settlement.

Less than a month later, on February 2, 2006, Ransom again “sold” the Portal property to Talbott, this time for $1,250,000, despite the fact that Talbott was already the legal owner. The defendants provided copies of the forged lien releases to the settlement company. Talbott obtained a loan of $890,000 from First National Bank of Arizona. Talbott executed a deed of trust on the property, granting First National Bank of Arizona a security interest in the property. Ransom received a check in the amount of $801,280 from the settlement.

Tax Fraud

For tax year 2006, the defendants filed false federal and District of Columbia tax returns. For both of their federal and D.C. taxes, the defendants submitted Forms W-2 that indicated federal and D.C. income tax withholdings in the following amounts:

In fact, the defendants did not have any actual federal or D.C. income tax withholdings for tax year 2006. Talbott’s false tax returns generated a federal tax refund in the amount of $66,655 and a D.C. tax refund in the amount of $30,897. Ransom’s 2006 federal and D.C. tax refunds were blocked prior to disbursement.

***

In announcing the guilty pleas, U.S. Attorney Machen, Inspector in Charge Cortez, Assistant Director McJunkin, and Acting Special Agent in Charge Hylton commended the outstanding investigative work of Postal Inspector Steven Sultan of the U.S. Postal Inspection Service; agents of the FBI’s Washington Field Office; agents of the Internal Revenue Service-Criminal Investigation, and Kevin Craddock of the District of Columbia Office of the Chief Financial Officer, Criminal Investigation Division. They also praised the efforts of members of the U.S. Attorney’s Office, including forensic accountants in the Fraud and Public Corruption Section; Paralegals Diane Hayes and Sarah Reis; former Paralegal Carolyn Cody; Legal Assistants Jamasee Lucas and Krishawn Graham; Information Technology Specialist Joshua Ellen; former Intern Sierra Tate, and Assistant U.S. Attorney Anthony Saler, who is working on forfeiture issues, and Assistant U.S. Attorney David Johnson, who is prosecuting the case.

Owners of Property Management Company Plead Guilty to Defrauding Clients, Mortgage Lenders, and Government | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

BALTIMORE—A second superseding indictment, which was returned by the grand jury on December 21, 2011 and was unsealed today, charges four defendants in a conspiracy to fraudulently obtain almost $1.4 million from a Baltimore Housing Authority bank account. Charged in the second superseding indictment are:

• Daren Kareem Gadsden, aka “D,” age 35, of Upper Marlboro, Maryland;
• Tyeast Brown, aka “Peaches,” age 41, of Suitland, Maryland;
• William Alvin Darden, age 44, of Washington, D.C; and
• Keith Eugene Daughtry, age 50, of Washington, D.C.

All of the defendants have been arrested. Gadsden and Darden are detained pending trial. Brown and Daughtry were released under the supervision of U.S. Pretrial Services.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation.

“The indictment alleges that the defendants stole from the Baltimore Housing Authority by transferring money directly out of the Authority’s bank account,” said U.S. Attorney Rod J. Rosenstein. “The $1,399,700 stolen from the Baltimore Housing Authority was supposed to be used to provide housing, not to line the pockets of criminals.”

According to the four-count second superseding indictment, in 2009, Gadsden owned a property in Baltimore that was rented to a low-income individual, whose rental payments were paid by the Baltimore Housing Authority, from its account directly to Gadsden’s bank account. In late 2009 and 2010, Gadsden made a series of inquiries to another bank where he had an account about how to use his computer to make electronic transfers to and from his account at that bank. In early 2010, the Housing Authority lost a few thousand dollars when a series of unauthorized electronic transfers debited funds out of the Housing Authority’s account and into Gadsden’s bank account. After being confronted by Housing Authority officials, Gadsden denied any wrongdoing, but paid the Housing Authority $1,400 to cover some of its losses.

From early 2010 until at least September 17, 2010, the indictment alleges that the defendants conspired to execute a larger scheme to defraud the Housing Authority. Specifically, Gadsden contacted Brown to plan the fraud. Brown, in turn, contacted Darden and Daughtry, securing from Daughtry his Social Security card and birth certificate, which she provided to Darden. On May 19, 2010, Darden obtained a Maryland driver’s license with his photograph, but in Daughtry’s name, using Daughtry’s Social Security card and birth certificate as proof of identity. Darden then used the fraudulent license to open a bank account in the name of Keith Daughtry Contracting LLC. Gadsden had registered the entity with the state of Maryland, only a few days before, under a different, misspelled name. Darden also provided a mailing address for the company that was actually a mailbox rented by the conspirators at a commercial mailing store.

Beginning in July, 2010, the indictment alleges that the defendants electronically transferred funds from the Housing Authority’s bank account and into the Keith Daughtry Contracting LLC account. According to the indictment, the conspirators drained the stolen Housing Authority funds from the Keith Daughtry Contracting account by electronic transfers into accounts at other banks, in-person cash withdrawals and from automated teller machines. In addition, the conspirators electronically transferred funds from the Keith Daughtry Contracting account onto debit cards in the names of other individuals. For example, the indictment alleges that during the summer of 2010, Brown recruited individuals to open debit cards in their names at a retail store. The conspirators allegedly transferred thousands of dollars in stolen Housing Authority funds from the Keith Daughtry Contracting account onto these debit cards. Brown then directed the recruits to withdraw most of these funds off the debit cards through cash withdrawals at the retail store and provide the funds to her, although she did permit them to keep certain amounts for themselves. Further, the indictment alleges that Gadsden opened a debit account in the name of another individual, using that person’s identity information without their knowledge or permission.

The indictment also alleges that Gadsden attempted to and did tamper with evidence after he was contacted by an FBI special agent by deleting the contents of at least two e-mail accounts, which were provided as the points of contact for certain debit cards Gadsden opened using stolen identity information.

Finally, the indictment seeks forfeiture of $1,399,700, believed to be the proceeds of the scheme.

The defendants face a maximum sentence of 30 years in prison and a $1 million fine for the bank fraud conspiracy. Gadsden also faces a mandatory two years in prison, consecutive to any other sentence for aggravated identity theft, and 20 years in prison for one count each of attempting to tamper with evidence and for evidence tampering. U.S. District Judge William D. Quarles, Jr. has scheduled trial for April 30, 2012.

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

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 thanked the FBI for its work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorney Sujit Raman, who is prosecuting the case.

Four Indicted in Scheme to Allegedly Fraudulently Obtain Nearly $1.4 Million from Baltimore Housing Authority Account | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

NEWARK, NJ—The leader of a fraud ring that engaged in identity theft and financial crimes which have led to charges against 54 individuals admitted today to directing the large scale, sophisticated criminal enterprise, U.S. Attorney Paul J. Fishman announced.

Sang-Hyun Park, a/k/a “Jimmy,” 45, of Palisades Park, N.J., pleaded guilty to a five-count information charging him with conspiracy to unlawfully produce identification documents and false identification documents (count one); conspiracy to commit wire fraud affecting financial institutions and bank fraud (count two); aggravated identity theft (count three); money laundering (count four); and conspiracy to defraud the Internal Revenue Service (count five).

Ho K. Yu, a/k/a “Edmund,” 59, of Tenafly, N.J.—a co-conspirator who fraudulently established credit scores for the enterprise’s customers and fraudulently obtained hundreds of thousands of dollars in commercial loans for others—also pleaded guilty today to a three-count Information charging him with conspiracy to commit wire fraud affecting financial institutions.

Park was arrested on Sept. 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 Park with participating in one large-scale criminal enterprise. Yu was arrested and charged the next day.

“Today, ‘Jimmy’ Park admitted he ran an organization which obtained social security numbers through fraud, manufactured fake IDs, ripped off banks and retailers, and laundered a portion of millions in profits overseas,” said U.S. Attorney Fishman. “This criminal enterprise combined traditional identity theft with sophisticated credit card fraud, and dismantling it is a signal success in combating the emerging problem of international organized crime.”

“Sang-Hyun ‘Jimmy’ Park was the head of a New Jersey crime conglomerate which advertised, facilitated, and supported a multitude of frauds resulting in staggering economic losses,” said Michael B. Ward, Special Agent In Charge of the FBI’s Newark Division. “Park and his cohorts supervised as willing participants obtained social security numbers with false identities, applied for out of state driver’s licenses utilizing these identities, quickly built fraudulent credit histories, and then opened bank and credit accounts. Afterwards, Park and associates would commit various frauds with the assistance of collusive merchants and others steeped in white-collar crime. The criminal activity was sophisticated, and was designed to evade detection from law enforcement.”

Both defendants pleaded guilty before U.S. Magistrate Judge Patty Shwartz in Newark federal court. According to documents filed in these cases and statements made in court:

Sang-Hyun Park

Sang-Hyun Park, a/k/a “Jimmy,” was the leader of a criminal organization (the ‘Park Criminal Enterprise”) headquartered in Bergen County, N.J., that obtained, brokered, and sold identity documents to customers for the purpose of committing credit card fraud, bank fraud and tax fraud. As part of the scheme, 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 the 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 these identities as authorized users 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. In particular, 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 elated to these fraudulent transactions, the collusive merchants gave the money to Park and his co-conspirators, minus their “kkang fee.”

Among other things, Park admitted that he operated the criminal enterprise out of several offices in Bergen County, N.J., ran advertisements in local newspapers to attract customers interested in his illegal services, met with customers and other co-conspirators and otherwise directed the activities of the criminal enterprise. He also admitted that he obtained and sold 586 social security cards to his customers and members of his criminal enterprise escorted more than 100 customers to various states so they could fraudulently obtain identification cards and driver’s licenses using the 586 Social Security cards and other fraudulent documents—such as counterfeit Chinese passports.

Park also admitted he conspired with and paid cash to various “build up teams,” which included Yu, to build the credit scores and establish credit histories for the fraudulent identities that he had sold to his customers. Park also told Judge Shwartz he laundered portions of the money he obtained through the fraud by wiring the money to various accounts in South Korea.

In total, Park defrauded various credit card companies, banks, and lenders out of approximately $4 million. He and his co-conspirators also claimed more than $182,000 in tax refunds from the Internal Revenue Service through the filing of false and fictitious tax returns and accompanying documents.

At sentencing, Park faces a maximum potential penalty of 15 years in prison and a $250,000 fine on count one; 30 years in prison and a $1 million fine on count two; a two-year mandatory minimum term in prison on count three; 20 years in prison and a $500,000 fine on count four; and five years in prison and a $250,000 fine on count five. Sentencing for Park is currently scheduled for April 23, 2012. He is currently detained.

Ho K. Yu

Yu admitted his role in three separate conspiracies, including that from 2001 through 2002, he conspired with others to fraudulently obtain hundreds of thousands of dollars in small business loans for unqualified borrowers. To obtain these commercial loans, Yu and his co- conspirators submitted false loan applications and supporting documents to a lender. The vast majority of these loans defaulted, resulting in significant losses to the lender.

Yu also admitted that between 2006 and January 2009, he conspired with others to obtain hundreds of thousands of dollars in personal business loans for unqualified borrowers. In furtherance of this conspiracy, Yu and a co-conspirator manufactured false tax returns and W-2 forms and submitted them with bogus loans applications to lenders. The vast majority of these loans defaulted, resulting in significant losses to the lenders.

Finally, Yu admitted that he conspired with Park and others by fraudulently building credit scores for Park’s customers who were using 586 identities. Yu acknowledged that he received approximately $500 in cash for each identity he added to his accounts. In total, Yu and his co-conspirators caused in excess of $2.5 million in losses to banks, credit card companies, and other lenders.

At sentencing, Yu faces a maximum potential 30 years in prison and a $1 million fine on each of the three counts to which he pleaded guilty. Sentencing for Yu is currently scheduled for April 23, 2012.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Ward in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Victor W. Lessoff; the Department of Homeland Security’s Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent in Charge Andrew M. McLees; the Federal Deposit Insurance Corporation-Office of Inspector General, under the direction of Inspector General Jon T. Rymer; 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 guilty pleas.

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.

Numerous members of the Park Criminal Enterprise have pleaded guilty to various offenses in support of the enterprise’s fraudulent schemes. As for the defendants with pending charges, the charges and allegations contained in the charging documents against them are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Defense counsel:
Sang-Hyun Park: Christian P. Fleming Esq., East Brunswick, N.J.
Ho K. Yu: Robert G. Stahl Esq., Westfield, N.J.

Leader of Large-Scale Identity Theft Ring and Co-Conspirator Plead Guilty, Admit Roles in Fraud Enterprise | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

LOS ANGELES—A Carson man is in custody today after being sentenced to 12 years in federal prison for running a $1 million scheme that bilked dozens of victims—including a U.S. Army staff sergeant who was serving on active duty in Afghanistan—who thought they were investing in a legitimate wind energy technology business.

James A. Rivera, 42, was sentenced late yesterday by United States District Judge Stephen V. Wilson, who remanded the defendant into custody at the conclusion of the hearing. In addition to the 144-month prison term, Judge Wilson ordered Rivera to pay restitution of just more than $1 million, a figure that represents the total amount lost by victims in the case.

At the conclusion of a jury trial in June 2010, Rivera was convicted of mail fraud and 10 counts of wire fraud Rivera related to the scheme he ran out of the Carson offices of companies Rivera called Apostles, Inc. and Almighty Wind, Inc. Through word-of-mouth, telephone conference calls, and seminars conducted over the Internet, Rivera solicited investments in his companies, which he claimed would manufacture and market a revolutionary new form of windmill or “wind turbine” that would be used for electricity production. Beginning in 2007 and continuing into 2009, Rivera marketed his scheme by making numerous false statements, including that the Nigerian government had committed to buying more than $1 billion worth of the windmills, that the International Monetary Fund was providing hundreds of millions of dollars in financing for the business, and that a prominent Hollywood director was planning to purchase the windmills to power the movie set of his next production. Rivera also falsely told investors that he held multiple patents on the windmill design and that he would be mass-producing the windmills within several months. In reality, there were no such customer orders, financing arrangements or patents, and the windmill had never progressed beyond the early design stage.

While Rivera touted his financial integrity and used religious rhetoric and imagery to appeal to investors, Rivera failed to disclose to investors that he had eight prior criminal convictions, five of which were for fraud and fraud-related offenses. Nor did Rivera reveal to investors that he was on probation for one of his prior fraud convictions and was on bail awaiting trial on additional fraud charges filed in California state court.

The investigation of Rivera was conducted by the Federal Bureau of Investigation.

CONTACT:
Assistant United States Attorney Joshua M. Robbins
(714) 338-3538

Carson Man Sentenced to 12 Years in Federal Prison for Running Investment Fraud Scheme Involving Wind Energy Technology | 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, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Gaston E. Cantens, 73, of Miami, was charged in a criminal information with one count of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 371.

According to the Information filed in court, Royal West Properties, Inc. (“Royal West”) was a Miami-Dade corporation that promised to pay investors a fixed rate of return on investments made with the company. Gaston E. Cantens was the president of Royal West Properties, Inc. In this capacity, Cantens allegedly recruited individuals to invest in Royal West by promising investors that their investments would be guaranteed by properties or mortgages that acted as collateral.

According to the information, Cantens misappropriated money from investors by making materially false representations and concealing and omitting to state material facts concerning, among other things, the financial condition of Royal West, the manner in which mortgages and properties were assigned as collateral to investors, the assignment of non-performing mortgages, the assignment of mortgages that were paid in full, the proper recording of mortgages, and the recording of investors’ interests in properties and mortgages.

Specifically, the Information alleges that Cantens told investors that their moneys were collateralized by individual properties but failed to inform them that the collateralized properties had previously been assigned to other investors. Cantens received moneys from investors based on these misrepresentations, and used the moneys for his personal benefit and to further the fraud scheme.

The information alleges specific instances of fraud. For example, according to the Information, in February 2008, Cantens allegedly assigned a property to Our Lady of Belen Jesuit as collateral for an investment. In May 2008, Cantens assigned the same property again as collateral to investor “R.R.” for an investment. In addition, according to the factual proffer in the plea agreement filed today, Royal West sold the property to “V.R.” and assigned the mortgage on the property to yet another investor, “S.M.” Cantens never informed the investors, including Our Lady of Belen Jesuit, of the existence of other investors or their interests in the property.

Mr. Ferrer commended the investigative efforts of the FBI. Mr. Ferrer also commended the efforts of SEC Regional Director Eric Bustillo and his staff for their contributions to this investigation and its successful prosecution. The case is being prosecuted by Assistant U.S. Attorney H. Ron Davidson.

An information is merely an accusation and a defendant is presumed innocent until proven guilty.

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. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Royal West Owner Charged in Securities Fraud Scheme | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

FRESNO, CA—Joseph Randall Medcalf, 55, formerly of Clovis, was deported over the weekend by Panama to the United States after being arrested late last week in Panama, announced U.S. Attorney Benjamin B. Wagner. On March 24, 2011, a federal grand jury in Fresno indicted Medcalf, charging him with defrauding investors of $3.2 million.

According to the indictment, from May 2002 to October 2007, Medcalf, a financial advisor, defrauded his clients by encouraging them to invest in bogus investment opportunities, primarily two that he had formed himself: All Valley Holdings LLC and CenCal Value Investments LLC. The indictment alleges that Medcalf did not invest the clients’ money as promised but used it for his own personal expenses and enjoyment.

In October 2007, Medcalf filed for personal bankruptcy in order to discharge his debts related to this scheme. According to the indictment, he fled the United States in 2008.

U.S. Attorney Wagner said: “You can run, but you can’t hide. International cooperation in the pursuit of fugitives is essential as we combat complex financial crimes. Mr. Medcalf is the latest in a long list of fugitives who have been brought back to the United States to face justice. My office is grateful to the authorities in Panama for their assistance in this matter.”

Medcalf is scheduled to appear in federal court today in Atlanta, where he re-entered the United States in custody on Saturday. It is anticipated that he will eventually be ordered transported to federal court in Fresno to face the present charges.

This case is the product of an extensive investigation by the FBI. Assistant U.S. Attorney Stanley A. Boone is prosecuting the case. The Office of International Affairs in the Justice Department’s Criminal Division assisted in the coordination of Medcalf’s deportation to the United States.

If convicted, Medcalf faces the maximum statutory penalties for the mail and wire fraud counts of 20 years in prison and a $250,000 fine. Any sentence will be determined at the discretion of the court after consideration of any applicable statutory factors and the federal sentencing guidelines, which take into account a number of variables.

The charges are only allegations, and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This law enforcement action is part of the work being done by 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. One component of the FFETF is the national Securities Fraud Working Group, which is tasked with combating investment fraud schemes. For more information on the task force, visit www.stopfraud.gov.

Clovis, California Businessman Deported from Panama to Face Federal Charges of Defrauding Investors of $3.2 Million | Chicago Press Release Services - Chicago's leading press release newswire service; professional press release services, press release distribution and newswire services.

WASHINGTON—Lisa Wright, 46, and Cathy Saffer, 52, of Pompano Beach, Fla., were charged today with a conspiracy to defraud homeowners and banks in a foreclosure rescue scheme, announced the Department of Justice. Also charged was Barrington Coombs, 57, a certified public accountant of Weston, Fla., who participated in the scheme. A federal grand jury in the Southern District of Florida returned an indictment charging Wright and Saffer with one count of conspiracy, three counts of mail fraud and three counts of wire fraud. The grand jury charged Coombs with one count of conspiracy and one count of wire fraud.

The indictment states that Wright and Saffer operated an alleged business called Foreclosure Solution Specialists (FSS) from 2006 to 2009. Through FSS, Wright and Saffer allegedly targeted homeowners facing foreclosure, advertising that FSS could assist those homeowners in remaining in their homes. According to the indictment, when contacted by distressed homeowners seeking assistance, Wright and Saffer misrepresented to those homeowners that their homes would be sold to investors. Wright and Saffer also allegedly claimed that customers could remain in their homes after the sales and promised them an opportunity to repurchase the homes at a later date. According to the indictment, rather than selling the homes to legitimate investors, Wright and Saffer designed sham sales to straw purchasers whom they paid to participate in the scheme.

The indictment further alleges that Wright and Saffer made numerous misrepresentations on loan applications regarding the purchasers’ net worths, incomes and employment histories in order to induce lenders to fund loans. The indictment alleges that, as part of the scheme, Wright and Saffer paid Coombs to sign a letter which falsely vouched for the fraudulent information on various loan applications.

According to the indictment, these sham sales drew equity out of the homes, which Wright and Saffer pocketed for their own purposes. After doing so, Wright and Saffer allowed the loans to go into foreclosure. Homeowners ultimately lost all of the equity in their homes, and most of the victims were forced to move out of their homes.

“Protecting Americans from financial fraud is one of our top priorities,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “Foreclosure rescue scams, like the one alleged here, are especially insidious because they seek to take advantage of those most at risk of losing everything. These charges demonstrate that we will aggressively prosecute individuals who we believe prey on homeowners struggling in these tough financial times.” This investigation is part of the Department of Justice’s continued nationwide focus on mortgage fraud.

Charges contained in the indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.

The case was investigated by the FBI. The case is being prosecuted by Christopher E. Parisi, a Trial Attorney at the Civil Division’s Consumer Protection Branch.

Three Charged with Fraud in Florida Foreclosure Rescue Scheme | 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 Richard D. Bennett sentenced John Stewart Morrison IV, age 55, of Columbia, Maryland late yesterday to 15 months in prison, followed by two years of supervised release, for mail fraud in connection with a mortgage fraud scheme involving a loss of $431,377. Judge Bennett also ordered that Morrison pay restitution of $240,740 and forfeit $240,740, which is to be applied to the restitution amount.

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 Special Agent in Charge Kenneth R. Taylor, Jr. of the Housing and Urban Development Office of Inspector General-Office of Investigations.

According to Morrison’s plea agreement, on November 17, 2005, Morrison contracted to buy a lot in Glen Rock Borough, Pennsylvania for $74,900. The property was a steeply graded parcel of land that the developer of the community had used as a “fill” lot to store excess soil. In order for any development to take place, extensive soil and engineering work had to be done. As part of the contract of sale, the developer, which owned the lot, required Morrison to sign a disclosure statement in which Morrison acknowledged having received notice of the serious problems with the land, including two formal engineering studies that detailed these problems.

Instead of closing on the property himself, Morrison eventually recruited another individual to buy the lot. The buyer wished to have a modular home installed on the property and intended to spend his retirement there. Morrison failed to disclose the property’s soil and grading problems to the buyer. When the developer insisted that the buyer sign the same disclosure statement that Morrison had signed, in order to ensure that the buyer too, was aware of the lot’s deficiencies, Morrison, in his capacity as the buyer’s broker, submitted to the developer a fraudulent document bearing the buyer’s signature that falsely indicated that the buyer had been made aware of these problems.

As the buyer’s broker, Morrison also took responsibility for arranging the completion of the buyer’s loan application documents and submitting these documents to the lender. Morrison did not, however, correctly represent the buyer’s monthly income. Based in part on this fraudulent information, a mortgage company funded a loan amounting to $431,377 to the buyer to finance the purchase of the lot and construction of the modular home. Similarly, Morrison failed to disclose the problems with the lot to the appraiser he commissioned to appraise the land. As a result, the lending institution relied upon a materially deficient appraisal.

To conceal his involvement in this fraudulent transaction, Morrison requested that the transaction’s settlement statement reflect that any payments made to him were in fact paid to an entity that did not exist, or existed in name only. In this way, Morrison ensured that his name did not appear on the settlement statement. In addition, Morrison falsely made it appear that the seller had made this request. At the closing, the buyer paid an inflated sum of $115,500 for the unsuitable property. The developer received $73,495, on par with what the developer believed the land, factoring in its deficiencies, was worth. Minus fees and other closing costs, the balance of the sales price—$36,800—went to Morrison under the guise of the shell entity. Morrison used these funds for his personal enjoyment.

In the weeks and months after the settlement, the buyer was unable to make the monthly payments on his loan, in part because the loan was too large for the buyer to afford, and in part because of the additional costs needed to make the property suitable for the delivery and installation of a modular home. Eventually, the buyer defaulted on the loan. He never received the modular home or plot of land upon which he had hoped to spend his retirement days.

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 commended the FBI and HUD-OIG for their investigative work. Mr. Rosenstein thanked the Maryland Department of Labor, Licensing and Regulation’s Division of Financial Regulation for their assistance in the investigation and commended Assistant U.S. Attorney Sujit Raman, who prosecuted the case.

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