Articles Posted in Fraud

“A gambling problem can negatively affect an individual’s home life, financial status, career, education, social relationships, and physical and emotional health.”

These words can be found on the helpline page of The Florida Council on Compulsive Gambling’s website.

Their mission statement demonstrates that they’re “committed to increasing public awareness about problem and compulsive gambling.”

In a scheme that bilked an elderly man out of over a quarter million dollars, a Broward jury found Matthew Stevens not guilty of the crime after deliberating for only a little more than five hours. This was Stevens’ second trial for the crime, the first one resulting in a hung jury.

But here’s the rub. Gina Stevens, the defendant’s common law wife under their shared Gypsy culture tradition who had three children with the defendant did not fare as well as her husband, once he was acquitted of the crime. They were both charged with grand theft but Mrs. Steven’s had no deal in place for testifying against her husband.

Broward Circuit Judge Barbara McCarthy sentenced Gina Stevens to 56 months in prison with 627 days credit for time served. She also ordered her to pay restitution of the $270,000 that was fleeced from the elderly victim.

The jury concluded that the victim, Charles Haas, a 91 year old World War II veteran from Hollywood was conned into giving the money to Mrs. Stevens under false pretenses. However, they apparently didn’t believe that her husband was the mastermind of the plot.

According to the prosecution as well as Mrs. Stevens’ testimony, her husband was the architect of the scam.

Gina befriended Haas in 2012, telling him she was a single mother of three who was recently widowed when her husband was killed in a car accident in Michigan. She claimed her name was Tiffany Williams. She told him she owned property in Chicago which was under government liens. Haas agreed to give her the money to pay off the holds on the property and testified in court that he expected to have the money returned to him after she sold the real estate.

Haas also testified that he previously helped secure an apartment for “Tiffany” in 2013 because she led him to believe that her landlord was increasing her rent by one hundred percent. He also bought her clothing and jewelry. It was around that time that he was introduced to Matthew Stevens who she deceptively told him was her cousin, also convincing him that he was gay.

As it turned out, the property in Chicago never existed; as was emphasized by the prosecution in their closing arguments, also declaring that Mrs. Stevens separated Haas from his entire life savings in the amount of approximately $280,000. The entire time period that all these events transpired was under four months.

But Mr. Steven’s defense lawyer told the jury that the facts showed that the prosecution had failed to prove a crime was even committed. He pointed out that Haas was of sound mind and body when he “lent” the money to his client’s wife, pointing out that he had no history of diminished mental capacity or dementia, and furnished the money eagerly, believing his generosity was advancing a romance with a younger woman. It was summed up by the defense as “a loan that didn’t work out”. He also went on to say that even if the jury concluded a crime was committed there was no proof that Mr. Stevens was aware of his wife’s actions and that the proceeds were given to Mrs. Steven’s mother and sister and not Mr. Stevens, according to his defense attorney.

The prosecutor responded to the defense attorney’s assertion by proclaiming to the jury “If you believe that, I’ve got a bridge to sell you in Brooklyn… or a property in Chicago.”

In the end, the jury did believe a crime was perpetrated but could not connect the dots to convict Mr. Stevens of any wrongdoing for the second time. During the first trial he testified that he didn’t even know how much money his wife received from the victim.

But Mrs. Steven’s testimony/confession sealed her fate.

The money hasn’t been recovered and Haas doesn’t expect he’ll ever see the restitution ordered by the judge. When he took the stand he told the court that Gina Stevens ruined him financially and is bitter that Mr. Steven’s was not convicted the first time. His final beseeching words after the hearing were “I’m broke. I’m living in poverty… So how do I get welfare?” Haas’ daughter Mona was quoted as saying “People have to be vigilant… They can’t be so trusting.”

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Indictment, Arrests and Sentencing
A three-year investigation looking into widespread commercial bribery and fraud in the electrical contracting industry led by the Inspector General for the Port Authority of New York and New Jersey jointly with the Manhattan District Attorney’s Office exposed the involvement of fifteen New York area companies and seventeen individuals as part of a 24-count indictment charging those involved with paying and receiving bribes, as well as falsifying business records.

In early December, two officers of Long Island City based IG Federal Electrical Supply Corporation entered into a Deferred Prosecution Agreement. Chief Executive Officer and Vice President of Operations, Ira Friedman, 52, of Larchmont, pleaded guilty to falsifying business records as did Todd Ehren, 46, of Port Washington, who was vice president of purchasing. Both Friedman and Ehren falsely categorized as expenses; in excess of $1 million of their salaries. Consequently, by under reporting the company payroll records through this salary scheme, IGF underpaid the International Brotherhood of Electrical Workers (Local 3) employee benefit fund by approximately $150,000.

Furthermore, the company acknowledged violating New York State Law by committing commercial bribery, fraud and theft for disbursing bribes to purchasing agents of electrical contracting companies and receiving kickbacks from purchasing agents, in addition to fraudulently filing paperwork claiming to be a woman-owned business (WOSB Program). According to the U.S. Small business Association, filing a company as a “woman-owned business” offers certain advantages. The Federal government is required to award five percent of its subcontract and prime monies to these businesses. The Program sanctions contracting officers to limit competition setting aside various requirements for competition, specifically among small businesses owned by women.

Sentencing for Friedman is anticipated to be carried out in late January, 2014 He is expected to pay approximately $260,000 in back taxes and forfeit $650,000 in addition to serving six months in prison. Ehren’s sentencing is scheduled for early March, 2014 when he will begin a term of four months in jail, as well as paying back approximately $255,000 in taxes and the forfeiture of $650,000.

Two weeks after the Friedman and Ehren sentences were decided, Alan Brite, 65, of Huntington, the president of Benfield Electric Supply Company, Inc. in the Bronx, was charged with disbursing bribes to purchasers at a number of companies to gain business, including raising the price of bids to Unity Electric Company with the intention of paying a kickback to Donald Russo, 54, of Huntington, who was a purchasing agent for that company, according to Manhattan District Attorney Cyrus Vance Jr..

Benfield Data Company and Benfield Controls which are divisions of the Benfield Electrical Supply Company by itself and together with Brite are now charged with an assortment of felonies and misdemeanors. Mr. Brite is personally charged with two counts of the class C felony: Grand Larceny in the Second Degree, three counts of the class E felony: Falsifying Business Records in the First Degree as well as three counts and one count respectively of the class A misdemeanors: Commercial Bribery in the Second Degree, and Commercial Bribe Receiving in the Second Degree.

Donald Russo, 54, of Syosset, NY, thought he had it all figured out. As a purchasing agent for Unity he was the recipient of the bribes paid by Brite’s firm as well as those with the ability to do so from other companies in the construction industry. He didn’t know that an investigation was underway until he and his company were jointly indicted two weeks ago

Russo’s Bar Electrical, located in in Plainview, NY is a shell company which was exclusively set up to accept the bribes, according to the District Attorney’s office.

According to the Indictment, as his take for steering contracts to them, Russo received more than $600,000 from five separate electrical supply companies, including Brite’s company during the years of 2008 through 2012. Prosecutors explained that Russo would bloat the costs of contracts he was in charge of so that a percentage of the proceeds were directed his way in exchange for permitting Unity’s business to be the recipient of companies that would agree to the inflated terms.

Russo was charged with five counts of falsifying business records, two counts and four counts respectively of grand larceny and offering a false instrument for filing, three counts of receiving commercial bribes, as well as four counts of criminal tax fraud.

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Conflict and personal drama are the traditional themes in the programming of reality TV shows. These television shows have become exceedingly popular since the onset of the twenty-first century and can be found on the major television networks as well as those viewed on cable TV. They deal with a theme of unscripted situations and actual happenings and usually feature a cast that was previously unfamiliar to the viewer.

The Real Housewives of New Jersey which can be seen on the Bravo network is an offshoot of the original show; the Real Housewives of Orange County. The inspiration for these shows was the fictional Desperate Housewives which first appeared on ABC in 2004. Other spinoffs include The Real Housewives of Beverly Hills, The Real Housewives of Atlanta, and those from many other American cities. Most of these shows have aired for multiple seasons, and are in production for future episodes with many new major cities targeted to host them.

In a case of life imitating art, two of the members of the New Jersey rendition of the show have found their own illustrations of personal drama and conflict.

U.S. Attorney Paul J. Fishman announced that two cast members of the show, Giuseppe (Joe) Giudice, 43, and his wife Teresa Giudice, 41 have been indicted on bankruptcy fraud and bank fraud which are federal offenses. A federal grand jury returned a 39-count indictment in which they were named. The indictment also carried charges of conspiracy to commit mail and wire fraud, and making false statements on loan applications. Additionally, the indictment charges that Giuseppe Giudice meaningfully did not file tax returns for the four year period of 2004 through 2008. It is alleged that Mr. Giudice earned close to $1 million during that time-frame.

The charges the couple faces were allegedly enacted between September 2001 and late 2008. Throughout that time period, the couple from Towaco, New Jersey, submitted fraudulent mortgage and loan applications, according to the indictment. One example demonstrated that in 2001, in an attempt to defraud the lender, Mrs. Giudice applied for a mortgage loan in an amount exceeding $120,000. She allegedly submitted fabricated pay stubs and falsified W-2 forms. She listed her occupational title as an executive assistant which was also a bogus claim. Also included in the indictment are charges of precise occasions where the couple was guilty of loan application fraud and bank fraud during the time they obtained loans from a number of banks.

The two are also accused of not divulging assets when they petitioned for bankruptcy in 2009. In October of that year they filed for Chapter Seven bankruptcy protection. Included in those effects was the non-disclosure of truthful facts and figures regarding rental properties, businesses they owned, and Mrs. Giudice’s actual compensation from the television show’s broadcasts.

Being convicted of any of the charges against them convey steep punishments A conviction for loan application fraud and bank fraud hold a penalty of a $1 million fine as well as each count carrying a maximum potential penalty of 30 years of incarceration. The fine for conspiracy to commit wire and/or mail fraud is $250,000 and each count carries a maximum prospective penalty of 20 years behind bars. The bankruptcy fraud carries a maximum penalty of five years in prison for each count and a $250,000 fine. In regard to failing to file tax returns, the penalties carry maximums of one year in prison for each count as well as a fine of $100,000.

Unrelated to the fraud charges, Mr. Giudice is also awaiting trial for charges of impersonation and wrongfully using identification information of another individual. According to he was arrested in 2011 and faces up to 10 years of incarceration if convicted of those unrelated charges. The case against him alleges that he used his brother’s identity to attain a driver’s license. In this separate action, Giudice has rebutted any misconduct.

To make matters worse at the time, the couple was hit with two additional charges of loan application fraud and bank fraud, adding two more counts to the indictment that was raised against them in July.

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In the real world, it seems the more effort put into constructing locks and security systems to safeguard our possessions; lawbreakers develop abilities to build enhanced keys, and a superior illicit method to gain access to what is being guarded. Protecting the contents of our homes, cash and valuables is an ever-present, unending challenge. But in the Cyber world the level of sophistication reached by criminals responsible for computer incursions and hacking activities is constantly tested by our ability to thwart their entry.

The phenomena of modern technology has grown exponentially over the past have century. And most individuals use the Internet for a variety of purposes. For the most part when we visit our online banking or brokerage accounts the belief is that the transactions that are processed are secure, encrypted, and veiled from prying eyes.

But clever cyber-crooks are always out there, lurking in the shadows constantly attempting to find ways to cash in on activities in this virtual world.

Petr Murmylyuk, a.k.a. Dmitry Tokar, a Russian National who made his home in Brooklyn, NY is one of those shadow lurkers.

Murmylyuk’s cultivated knowledge in the workings of computers was substantiated by his arrest in November, 2011 when he was caught red-handed with a laptop in his possession containing more than enough evidence to implicate him in a substantial scam, along with his accomplices.

The Complaint against Murmylyuk asserts that he, along with an accomplice recruited Russian, as well as other foreign nationals in an online stock rigging scheme. The foreigners were either already living in the United States, or were visiting. Some were students. Three residents of Houston, Texas: Mikhail Shatov, Anton Mezentsev and Galina Korelina were among them as well as other unnamed participants. The group was instructed to open new bank accounts where illegal profits resultant from the proposed operation would be deposited.

Murmylyuk’s hacking abilities allowed him to gain illegal entry to online accounts of brokerage firm customer accounts at Fidelity, Scottrade, E-Trade, and Schwab among other brokerage firms not specifically listed. Telephone numbers and email addresses of the owners were then altered giving the group complete control of the hacked accounts. He and his connections then used identities that were originally illegally obtained or stolen to open new accounts at other brokerage houses. These accounts were termed “Profit Accounts” in the Information. After this method was introduced, they then made irrational and unprofitable trades using the victimized accounts leading to losses in the victims’ accounts and gains in the “Profit Accounts”.

An example of the swindle involved initiating trades that sold options contracts directly to the “Profit Accounts”. After the trade was offered the same contracts were specifically purchased back minutes later for “at times” almost ten times the original price. They also used “short selling” to achieve the same results. (Selling an issue short is a sale of stock that a shareholder doesn’t actually own, but instead borrows from an investor willing to do so with the hope of eventually returning it after the stock price drops resulting in a profit to the original shareholder who “sold it short”.)

This was done by using the “Profit Accounts” offering a short sale of a stock at a worth grossly inflated above the market price for that particular day for the given stock. Moments after the offering was proposed on the open market from the Hackers Accounts, the Hackers used their ability over the Victim Accounts to purchase the shares of the stock at the inflated price, which resulted in a profit for the owner of the “Profit Account” at the Victim Account’s expense. Murmylyuk and/or his associates then covered the falsified short sale by re-purchasing the security which was borrowed at the lower market price.

All proceeds were then transferred from the “Profit Accounts” into the new accounts and then transmitted to the bank accounts that were opened by Mezentsev, Korelina and Shatov as well as others involved in the scheme.

The profits received by Murmylyuk and his associates, generated by the scam, resulted in combined losses of roughly $1 million to the three named major brokerage houses as well as others.

Mikhail Shatov, Anton Mezentsev and Galina Korelina were previously charged in New Jersey and convicted for charges of conspiracy to commit wire fraud. U. S. District Judge Esther Salas sentenced Mezentsev to 27 months in federal prison. Korelina and Shatov were sentenced to14 months each, earlier in 2012.

Murmylyuk was formally charged in April, 2012, charged with unauthorized access to computers, one count of conspiracy to commit wire fraud, and securities fraud. The SEC is also filing a comparable civil action. He is currently in state custody looking at charges from a separate investigation directed by the Manhattan District Attorney’s Office where he is charged with identity theft of more than three-hundred individuals that were unemployed. He then allegedly collected bogus tax returns using their names and information.

Murmylyuk has pleaded guilty to the conspiracy to commit securities fraud charge. He pleaded guilty to identity theft and tax fraud charges earlier. He’ll face a $250,000 fine and a maximum penalty of five years in prison for the New Jersey case and fifteen years in prison for the case against him brought forward by the Manhattan district attorney. Sentencing is scheduled for November 12 for the securities fraud case.

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Two reasons that criminals are eager to steal valuable paintings are because their values can be outrageous and the physical weights of the items are negligible. Transport is also not difficult once a painting is cut from its frame and rolled into a carrier tube.

Matthew Taylor, 45 was a freelance art dealer. Or at least that’s what he claimed to be. He was very persuasive in assuming the part. His knowledge of fine art seemed to be infinite. In addition to being a supposed dealer he also played the role of a customer very well.

Originally from Vero Beach, Florida, Taylor moved to Agoura, California in 2005. It was there that he quickly became a patron of the Los Angeles Fine Art Gallery. Between the years of his arrival in California, up until his arrest, he made frequent trips between the two states.

In September, 2011 a Los Angeles federal grand jury indicted Taylor on seven felony charges linked to art thefts. The indictment also charged that he defrauded an art collector out of millions of dollars by selling him forged paintings.

One of the paintings taken from the Fine Art Gallery in Los Angeles was a Granville Redmond named “Seascape at Twilight” which he sold to another gallery in that city for $85,000. He also stole a painting by Lucien Frank titled “Park Scene, Paris” according to the indictment. He later claimed that the Redmond piece was originally owned by his mother for many years before it came into his possession.

Taylor was seen in Vero Beach, FL with the painting by Frank several years after it went missing, following his sale of the Redmond. It was there that he attempted to sell the painting to an individual, claiming it was painted by a different artist after erasing Frank’s signature from the piece and then substituting it with the other.

According to the indictment he also sold forged artworks to a collector, maintaining that they were authentic, and that they were painted by revered artists. He sold the naïve collector more than 100 paintings, including some that he deceptively claimed were painted by Jackson Pollock, Vincent van Gogh, Claude Monet, and Mark Rothko. He received more than two million dollars from the collector throughout the swindle in 2005 and 2006.

Taylor established methods to evade paying more than $400,000 in federal income taxes that was owed to the IRS from the illicit sales. He also laundered and transported the profits of his fraud across state lines, including more than $100,000 that was acquired through transactions of four forged paintings, during the above-mentioned timeframe.

His manner of disguising the actual origin of the alleged masterpieces was to mark over or otherwise conceal the signatures of the actual artists replacing them with facsimiles of the famed originals. He also placed bogus labels on the paintings which deceitfully characterized that the paintings were at one time parts of prominent collections that were housed at well-known museums such as the Guggenheim Museum and Museum of Modern Art in New York City.

Last August, a jury found Taylor guilty of five separate felonies as follows: possession of stolen property that had crossed state lines, two counts of tax evasion, structuring cash transactions to avoid federal reporting requirements while on pretrial release and, wire fraud.

On July 11, before federal district judge John A. Kronstadt for the Central District of California, Taylor was sentenced to 7 ½ years in federal prison for the crimes relating to the art theft, forgery scheme and tax evasion matters. He was also ordered to pay over 1.2 million in restitution in addition to over $100,000 to two art galleries. He also has to pay the IRS more than $1.1 million for back taxes including interest and penalties. Judge Kronstadt also ordered that after his prison term ended he would have to face a period of supervised release during which time he would be prohibited from working in or owning “any business involving antiques and or art” without the specific consent of a probation officer that would be assigned to him.

The investigation into Taylor was conducted by the IRS-Criminal Investigation Division, the LAPD’s Art Theft Detail which is responsible for the investigation of burglaries and thefts when fine art is the primary object of interest as well as investigating fakes, frauds, and forgeries, as well as the FBI’s Art Crime Team

The latest FBI press release regarding this case can be found by clicking here.

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Federal health care fraud charges that have been making headlines for almost six years have reached a resolution against four defendants indicted with various charges. Early last week, a federal jury delivered “mixed verdicts” regarding four former executives of WellCare Health Plans.

WellCare Health Plans, Inc. is a publicly owned health care company that offers Medicaid and Medicare managed health care plans for more than its 2 million participants. The company began operations in 1985 as a Medicaid provider for Florida with its main headquarters located in Tampa. They have affiliations with more than 90,000 doctors and works with over 3,500 associates. The company is also a holding company for numerous affiliates, including Staywell, HealthEase, Harmony, and ‘ Ohana Health Plans. WellCare maintains local offices in Miami, Florida; Chicago, Illinois New York City; Baton Rouge, Louisiana: North Haven, Connecticut; Marietta, Georgia; and Houston, Texas.

In October 2007, more than 200 Special Agents accompanied by the FBI, the Department of Health and Human Services as well as the Florida Attorney General’s Medicaid Fraud Control Unit raided WellCare’s Tampa based headquarters and executed a search warrant of the company’s offices.

It was alleged that the company overstated expenses by handing in bogus documents to the state. Under selected mental health care agreements, WellCare was paid a flat fee for each patient and was expected to disburse at least eighty percent of the received funds on the care of each individual patient. Surplus amounts of more than 20 percent were to be refunded to the state. However, the company’s invented bogus outlays permitted them to keep the remaining monies.

Prosecutors went forward with the charges and with the testimony of a former employee had the allegations corroborated opening up a can of worms that came to at least a semi-conclusion last week.

In a plea agreement that has since been unsealed WellCare agreed in to repay $35 million of the ill-gotten gains, which was the company’s best approximation of the total amount that was deceptively retained by the company between the years of 2002-2006. The company was forced to restate its quarterly and annual profits after the raid occurred.

This action drove net income down by $32 million, and triggered resignation of the company’s top three officials. There were no criminal charges filed at the time but investigations were announced by both the States of Florida and Connecticut. The SEC also began an informal investigation. Several shareholder lawsuits and sealed whistleblower complaints were also filed. WellCare’s publicly traded stock (NTSE: WCG) was halted on the news. Once it reopened for trading it quickly fell to a low of eighty percent below that year’s (2007) annual high price per share.

In May of 2009 charges were filed and a Deferred Prosecution Agreement (DPA) was initiated in part of which the company agreed to pay $40 Million in restitution to the Florida Medicaid and Healthy Kids programs in repayment of proceeds from those platforms that WellCare was not entitled to, and additionally consented to another civil forfeiture of $40 Million. The company also had to accept all responsibility for the behavior that led to the investigation by the government as well as accepting its knowledge of the unlawful events that took place.

Among other terms of the DPA, the company was required to continue its cooperation in the ongoing federal and state criminal investigation of its former executives.

In March 2011 U.S. Attorney Robert E. O’Neill announced the return by a grand jury of an indictment charging five former officials of WellCare with conspiracy to commit Medicaid fraud, false statements, and further associated charges. Explicitly, the indictment charges that Todd S. Farha, 42, the former chief executive officer; Thaddeus M.S. Bereday, 45 former general counsel; Paul L. Behrens, 49 former chief financial officer; William L. Kale, 61, a former vice president of Harmony Behavioral Health, Inc., a exclusively-owned subsidiary of WellCare; and Peter E. Clay, 54, former vice president of Medical Economics were the focus of the indictment.

In 2012, WellCare paid $137.5 million to the nine states and the federal government to decide four lawsuits that had alleged abuses of the False Claims Act.

On June 10, 2013 after weeks of deliberation a jury of 10-women and two men provided an assortment of verdicts finding four of the executives guilty of at least some of the criminal charges against them but acquitting them of other allegations.

Farha, Behrens, and Kale were each found guilty of two counts of health care fraud but Farha was acquitted of six other charges including giving false statements. Behrens was found guilty of two counts of making false statements, but was acquitted of two other false statement charges. Clay was the lone defendant not convicted of health care fraud but was found guilty of two counts of making false statements.

Federal charges are still pending against former WellCare general counsel Thaddeus M.S. Bereday
The four men swindled the government out of more than $30 million. The money they appropriated to their company should have been used for people who were in need of their health care services, not to increase the earnings of a company that was already profitable, prosecutors said.

Each health care fraud count is punishable by up to 10 years’ imprisonment. The maximum penalty of incarceration for each of the other convictions has a maximum of five years.

To read the latest FBI press release relating to this article click here

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A New York City woman pleaded guilty last week to fraud in a fundraising scheme, claiming to be the aunt of one of the children killed in the Newtown, Conn. Massacre last December. At the time of her arrest she was also charged with lying to FBI agents and potentially faces federal charges that include interstate transportation of stolen property, access device fraud and wire fraud.

Nouel Alba, 37, of the Bronx was arrested by FBI agents after she tried to solicit people into making donations by writing in a Facebook post that she was the aunt of Noah Pozner, one of the Newtown students that were killed in the now well-publicized attack. She used Facebook as her means to beseech anyone to donate money only a few hours after the horrific incident occurred. She reportedly was asking for donations to assist in paying for the child’s funeral. Twenty young children and six adults were gunned down on Dec. 14 at Sandy Hook Elementary School in Newtown, Conn.

According to U.S. Attorney Jonathan Francis’s office Alba instructed unaware victims to send money to a Pay Pal account that she controlled. The messages were posted under the screen name of Victorian Glam Fairys, a Facebook page that has since been taken down by the Social Media Network.

The day after the shootings, she began imploring for donations. She posted that these donations were “to be used for my brother and other families.”

Another post stated “Reality set in when they asked for photos and if our loved ones had any marks on their body. A part of me regrets having to be the one to identify my nephew’s body; I couldn’t help but to hold my nephew in my arms and then give my brother and sister-in-law the bad news.”

She went as far as emailing the Sandy Hook PTA on Dec. 16, and received replies from two of the officers from that organization which she deceptively used to falsify a link to the school with potential contributors.

Alba also used text messaging to communicate with other prospective donors. She said that President Obama “hugged us and even cried with us.” in one of them. In yet another, she typed: “I’m a mess. Not looking forward to seeking that casket; 11 gun shot in his little body; I can’t bare the pain, the fear he went through. We always promised to protect him and the one time we needed to be there we weren’t there to protect him.”

She was interviewed by CNN after the charges were filed and claimed that she was set up. After the televised interview when she was contacted by FBI Special Agents Jillian Guerrera and Milan Kosanovic she maintained that she never made any posts whatsoever on the Facebook page and had no idea that any funds were being transferred into her Pay Pal account.
According to Court records, all the donations which totaled in excess of $5000.00 have been returned.

Last Thursday she admitted in federal court that she was indeed guilty of the charges brought against her. She pleaded guilty to wire fraud as well as making false statements to FBI agents. A conviction of wire fraud can carry a maximum sentence of twenty years while the false statement sentence could yield a term of up to five years. Nonetheless, an initial calculation of her suggested sentencing guidelines asks for her to obtain a term of incarceration not to exceed six months, according to A.U.S.A. Jonathan Francis.

U.S. Magistrate Judge William I. Garfinkel asked her in federal court: “Is it true that in December 2012 you used Facebook, email and other kinds of electronic communication to falsely claim to be related to a victim; and you elicited donations from people?”

“Yeah,” she replied with apparent indifference.

She’ll be sentenced by U.S. District Judge Michael Shea on August 29 in Hartford Conn.

To read the latest official FBI press release dealing with this case, click here.
You can also read a previous article from my Florida blog posted last December by clicking here.

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The wet foot, dry foot program was the name given to a portion of the revision of the Cuban Adjustment Act of 1966 that was amended in the late 1990’s
The Act states, that any person(s) who fled Cuba and made it to “dry land” in the United States would be allowed to stay and apply for residency after remaining in the Country for over one year. They would then qualify for an expedited “legal permanent resident” status and, eventually, U.S. citizenship. At the time of its amendment, the U.S. government with Bill Clinton as President came to an agreement with the Cuban government that they would allow this scenario, but prevent Cuban refugees found at sea access to enter the country. A Cuban caught on the waters between the two countries would immediately be sent back to Cuba or to a third country.

Last week, U.S. Immigration and Customs Enforcement (ICE) officials arrested 20 people posing as Cubans who fled their country in an effort to obtain residence or citizenship using the Act to their benefit, taking advantage of the amended law.

According to federal officials who are handling the case, almost all of the detainees said that they were from Cuba with the idea of obtaining immigration papers. ICE did not stipulate what documents the detainee’s submitted to immigration authorities in their effort to obtain residence or citizenship.

In Miami federal court on Wednesday, at the detainees’ first appearance, a few of the accused revealed their actual nationalities. As it turned out, one of them said he had dual citizenship from Israel and Colombia. Another detailed that he was in possession of a Venezuelan passport. And a third stated that she had a U.S. passport as well as one originating from Cuba.

The current case includes suspects who were already living in South Florida cities comprising Miami, Miami Beach, North Miami and Doral in Dade county, and Hollywood, Davie, Sunrise and Miramar in Broward.

“These individuals came here seeking the freedom and benefits this country provides to Cuban nationals,” said Alysa Erichs, the special agent in charge of Homeland Security Investigations for the greater Miami-Dade area. “The operation identified and addressed vulnerabilities in the application process… These arrests by HSI should send a clear message that we will target anyone who tries to obtain immigration benefits fraudulently.”

She went on to say that many undocumented immigrants who obtain Cuban birth certificates come from South and Central America and in this particular case most of them were from Venezuela.

All the arrests were the product of an investigation, labeled “Havana Gateway”, by ICE’s Homeland Security Investigations (HSI) unit combined with the Customs and Border Protection, Citizenship and Immigration Services as well as the United States State Department’s Diplomatic Security Service.

Operation Havana Gateway, which began in August 2012, is the federally sponsored sting responsible for the current arrests. It is an ongoing effort and will continue moving forward, according to Erichs. She also mentioned that agents were expected to make further arrests.

Although a large amount of the detentions took place in Dade and Broward counties, other arrests were delivered on the West Coast specifically in Naples, and some as far north as Jacksonville where Ferdinando Enrique Bello, 52, was arrested when he was charged with filing an application for citizenship in which he deceitfully claimed that he was born in Cuba.

Miriam Licea, 57, of Miami, was charged with assisting two of the suspects provide fraudulent applications claiming Cuban citizenship. Licea’s arrest was related to an earlier case in which a defendant confessed to paying her $15,000 for a fake Cuban birth certificate.

At her bail hearing, Licea said that she didn’t want bail because her family had no money to pay for it. However the lawyer standing right next to her as she made that statement seemed to surprise her when he told her that it was her family had hired him, and they were willing to pay the $50,000 that the bond was set at.

Luis Enrique Legon Mena, 44, of Miramar, was charged with conspiring to persuade some of the suspects to stay illegally in the United States, apparently a notation to his suspected role as an expediter in providing falsified documents to immigrants without legal documentation, according to the ICE statement.

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A married couple charged with swindling seniors mainly in Florida, Colorado and Texas, as well as more than 30 other states across the country were among some of the recent enforcement actions taken by the Security & Exchange Commission (SEC). The victims were told they were investing in a charitable organization based in Tallahassee, Florida by purchasing charitable gift annuities (CGAs).

Richard K. Olive and Susan L. Olive who are both in their forties were apparently principals of the organization named We The People Inc. that implemented the transactions. The Olives originally stated that they were hired by the company. Looking into the matter, the SEC determined that the CGAs issued by We the People were different in numerous aspects from CGAs issued legitimately. The Olives purportedly collected over $75 million from more than 400 naïve and elderly investors. Research revealed that the company was organized as a nonprofit and run from the Olives’ home at 1308 Buckingham Circle in Franklin Tennessee.

A CGA, (Charitable Gift Annuity) is a gift vehicle that falls under the category of Planned Giving. It encompasses a contract concerning a donor and a charity, where the donor hands over cash and/or property to the charity in exchange for a limited tax deduction and a lifetime sum of annual revenue from the charity. In the occurrence of the donor’s death, the charity keeps the remaining equity and all accrued interest of the original gift.

According to the SEC’s complaint against the couple filed in U.S. District Court for the Southern District of Florida, it is charged that the CGAs were issued primarily to benefit the Olives as well as additional third-party organizers and consultants, not the senior investors. Only a slight amount of the money that was raised was essentially guided to any charitable organizations. In the meantime, the Olives received in excess of $1.1 million in commissions and salary. They also tapped investor funds for their own usage. The couple has now been charged by the SEC with defrauding the seniors and dramatically overstating the amounts of the contributions.

The sentencing of an insider trading informant who succeeded in avoiding incarceration for his cooperation assisted in the SEC investigation.

We The People claimed that from June 2008 to April 2012 its operations were as a nonprofit organization however it was found that their CGAs were far from legitimate.

One example of public reports showed that it donated $21.8 million for the assistance of AIDS orphans in the country Zambia when in fact the supplies marked for that venture were donated by others, and the organization only donated a trivial amount of money to the third party that was the shipper of the supplies.

Their promotional materials were filled with several falsifications, omissions and oversights. They claimed that their CGAs were worth the “full” amassed value of the assets conveyed by investors when they weren’t. It appears that the method that they use to calculate the CGAs’ value were of substantially lesser than full value, since the organization skimmed off a substantial percentage of the actual value and retained it as a “charitable gift.”

It was also claimed by the organization that they had a 110% reserve of its total liabilities in trust in its continuing effort to “reinsure” its products through “highly rated” commercial insurance firms. As it turned out, this too was a falsehood. The organization had no restricted-access trust accounts, therefore any reserves at all. They never reinsured anything whatsoever.

Their marketing materials also failed to divulge that the Olives had been affiliated with several previous indictments and governing sanctions for retailing the equivalent type of phony products in the past. They were operating within an obscure Florida law that allowed them to sell CGAs in the state. The organization also neglected to reference the significant commissions that were paid to the couple as well as others, in the amount of several million dollars.

The SEC filed a separate complaint against the company’s in-house counsel William G. Reeves. The organization and Reeves both agreed to resolve the charges against them without admitting or denying the allegations. The settlements are contingent upon court approval.

We The People acquiesced to an ultimate judgment that will permit the selection of a receiver to safeguard the more than $60 million of donators’ monies still in possession of the company. Additionally, the final judgment also affords for repayment of ill-gotten gains and delivers injunctive relief under the antifraud and registration requirements of the federal securities laws.

Reeves agreed to a cooperation agreement with the authorities. The terms of his settlement demonstrate his assistance in the investigation and foreseen assistance in the imminent prosecution against the Olives. He also agreed to a suspension from practicing or appearing before the SEC for a period of no less than five years, and assented to a final judgment supporting injunctive relief under the requirements of the federal securities laws that were violated. It will be determined by the court at a later date if a monetary penalty should also be enacted against Reeves.

In the Denver Regional Office, Michael Cates and Ian Karpel conducted the SEC’s investigation. The proceedings against the Olives will be headed by the SEC’s Nicholas Heinke and Dugan Bliss.

Related Reading:
Definition a Charitable Gift Annuity: Click Here

SEC complaint against the Olives: Click Here

SEC complaint against the organization: Click Here

SEC complaint against Reeves: Click Here

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