fraud

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Wire-Tapping Becomes Popular Tool For Feds in White-Collar Crime (Fobres) - Where once reserved for violent and narco-related crime, the use of wiretaps has evolved to become a potent tool in the fledgling battle against white-collar crime.  This article examines the history of wiretaps, their foray into white-collar crime prosecutions, and a potentially cloudy future.  You may wonder if the Feds are listening .... from the people I know who were prosecuted for insider trading insist that the FBI had listened to far more than hot stock tips.

Bust of Ben Franklin Found In House Keepers Home (The Times Herald) - A former housekeeper who stole a rare 18th Century bust sculpture of Benjamin Franklin from a Main Line client was sentenced to 6 years in federal prison for taking the stolen property out of state.

Pair of 60+ year old Brothers Sentenced In Ponzi Scheme (NBC Southern Cal) - Between 2001 and 2005, a trio of senior citizens defrauded 790 investors out of cash, telling them they would use the funds to purchase and place Ad Toppers, advertisement-displaying video screens mounted on top of ATMs, vending machines and the like, according to federal prosecutors.

Death Sentenced for Chinese Woman in China Ponzi Scheme (PonziTracker) - A Chinese woman who masterminded a $70 million Ponzi scheme has been sentenced to death by a Chinese court - possibly by firing squad.  Haiyan Lin, 39, from the Wenzhou province, received the sentence as part of a broader push by Chinese authorities to crack down on the underground lending industry that has found itself awash with cash as part of Chinese stimulus efforts.  Haiyan is the latest of several women who have received a death sentence for their role in investment frauds.

Rajat Gupta Has Insider Conviction Case Heard by 2nd Circuit (DealBook) - On Tuesday, a lawyer for Mr. Gupta argued that a federal appeals court should overturn his client’s conviction and grant a new trial because the verdict was tainted by the erroneous admission of that statement and other wiretapped conversations.

Herbalife Hires New Accounting Firm (DealBook) - As a result of KPMG's exit as Herbalife's auditor, the company hired PricewaterhouseCoopers to fill the vacancy.  KPMG was forced out as a result of having their lead audit partner being caught in an insider trading scandal.  That partner, Scott London, is expected to plead guilty in the upcoming weeks.

Fmr SAC Trader, Mathew Martoma, Says Government Withholding Evidence (WSJ) - In court papers filed late Monday, Richard Strassberg, a lawyer for Mathew Martoma, said prosecutors have only provided specifics about a limited time period of alleged insider trading by his client and others—before the drug trial results were announced in July 2008—but was alleging he was part of a conspiracy stretching back to late 2006.

Pilot CEO Pleads With Customers "Please Don't Sue Sue Us" (WSJ)  - Embattled Pilot Flying J Chief Executive Jimmy Haslam III made a personal plea to his trucker customers, urging them on Thursday to work with the truck-stop operator instead of taking it to court.

Law Firms Making Millions From FCPA Fees (Reuters) - The bribery law bogeyman is scaring up a fresh batch of clients. To hear some law firms tell it, the U.S. Foreign Corrupt Practices Act presents a Freddy Krueger-like nightmare for multinational companies. Despite costly probes of Wal-Mart Stores, Avon and others, however, cases are relatively rare and often dubious. In a tight legal market, warnings to the contrary sound more like benign campfire ghost tales.

Will Prosecutors Use Laws Aimed At Organized Crime to Go After Cohen's SAC Capital (WSJ) - Federal prosecutors are considering charging hedge fund SAC Capital Advisors LP as a criminal enterprise through a powerful legal tool used against the Mafia and drug gangs, people familiar with the probe said.

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Employee Theft On The Rise New Study Finds (Marquet Intl) - Marquet International Ltd. announced today that it has released The 2012 Marquet Report on Embezzlement – its 5^th annual study of major embezzlement cases in the United States. The study examined 528 major embezzlement cases active in the US in 2012 – those with more than $100,000 in reported losses.

Doctor Claiming Cancer Cure Heads to Prison (Lawfuel) - The basic facts of the case are that Daniel, a medical doctor and prominent Pentecostal minister, fraudulently marketed and collected more than $1 million for a medical treatment that she and her employees claimed could cure many diseases and conditions, including cancer, multiple sclerosis, stroke, Alzheimer’s Disease, Parkinson’s Disease, diabetes and hepatitis.

Imprisoned Amish Bishop Opposes Taking Classes (The Plain Dealer) - Those beard-cutting Amish are at it again.  In federal prison, inmates must take classes to prepare them for the GED if they do not have a high school education.  Amish inmate Samuel Mullet says that he will not participate in the classes (he never received a formal education beyond 8th grade) because it violates his religious freedom.

Stock Scammer Gets 7 years Prison After Fleeing Country (Tulsa World ) - A man who prosecutors say was “critically involved” in a stock conspiracy that defrauded as many as 17,000 people of a total of about $44 million was sentenced Thursday in Tulsa to seven years in prison.  Joshua Wayne Lankford, 39, fled to Costa Rica after the investigation came to light and then lied about his identity and background to avoid facing the charges against him, according to a document the prosecution filed May 1.

Woman in Orlando Area Gets Prison Time for Embezzling From Company (Orlando Sentinel) -  A Central Florida woman was sentenced to two years in federal prison for embezzling nearly $600,000 from her employer and failing to pay taxes on that income.  Jody McCarty Emmons pleaded guilty earlier this year in Orlando federal court to taking the money from The Recovery Room of Central Florida from 2006 to 2010.

Man Convicted in Yankee Stadium Dirt Scam (CT Post) - Mark Hayward kept a stiff upper lip Thursday afternoon as a jury convicted him of ripping off an aging rock musician through a plan to sell dirt from the former Yankee Stadium.

Nicaragua Extraidtes White-Collar Fugitive To US (AP) - You can run but you can't hide for long.  Interior Minister Ana Morales said Lawrence Hartman was sent to Florida, where he was expected to appear in court Thursday.  The 47-year-old lawyer was detained April 25 when he tried to get a Nicaraguan passport using a fraudulent birth certificate, Morales said.  U.S. prosecutors say Hartman is one of seven people charged in Tampa, Florida, with operating an investment fraud scheme that bilked investors out of at least $137 million.

Wal-Mart Blows Through Its FCPA Budget (FCPA Blog) - Wal-Mart said Thursday it spent $73 million on FCPA-related expenses during the first quarter of 2013. It had budgeted $40 million to $45 million.

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Three Men Arrested in NJ on Facebook Share Fraud (Forbes) - Federal law enforcement officers with the FBI and IRS-Criminal Investigation arrested three men at their homes this morning on charges they stole approximately $6.7 million from an investor, in part by claiming special access to shares iof Facebook Inc., prior to the company’s initial public offering, New Jersey U.S. Attorney Paul J. Fishman announced.

Fmr BP Engineer Kurt Mix Says U.S. Withheld Evidence (Bloomberg) -  A former BP Plc (BP/) engineer charged in the first criminal case arising from the 2010 Gulf of Mexico oil spill will ask a judge today to sanction U.S. prosecutors for withholding evidence that he says might clear him.  The U.S. charged Kurt Mix, the ex-BP employee, with two counts of obstruction of justice last year, alleging he deleted from his mobile phone text-message strings related to the company’s effort to estimate the size of the spill. Mix, who has pleaded not guilty, is facing a June 10 trial in federal court in New Orleans.

Ponzi Schemer Thomas Petters Says He Wants A Do-Over (PonziTracker) - The man responsible for the third-largest Ponzi scheme in history has filed papers seeking to have his fifty-year sentence overturned, claiming that his former attorney failed to disclose that prosecutors had previously offered a 30-year sentence in plea negotiations.  Thomas Petters, 56, chose to stand trial in 2009 on allegations that he masterminded a $3.7 billion Ponzi scheme, even taking the witness stand to profess his innocence.

Tracker Boat Haulers Get Prison Time for Fraud (KY3) - The husband and wife owners of a trucking company were sentenced last week for their roles in a conspiracy to defraud Tracker Marine, a Springfield-based manufacturer of boats and trailers sold throughout North America.

Feds Arrest 89 in Big Medicare Fraud Case (Reuters) -  Federal officials charged 89 people including doctors, nurses and other medical professionals in eight U.S. cities on Tuesday with Medicare fraud schemes that the government said totaled $223 million in false billings.  In the latest big Medicare fraud crackdown, more than 400 law enforcement officers including FBI agents fanned out in Miami, Detroit, Los Angeles, New York and other cities to make arrests.

Ex-BlackRock Manager Arrested in U.K. (Bloomberg) -  Former BlackRock Inc. (BLK) fund manager Mark Lyttleton was arrested April 30 as part of an insider trading probe by the U.K. Financial Conduct Authority, two people familiar with the matter said.  Lyttleton was detained along with his wife, Delphine, in west London, said one of the people, both of whom declined to be identified because the matter isn’t public. An FCA spokesman declined to comment on the investigation.

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After 43 Years On Run, Arkansas Asks For Fugitive To Be Returned (WSJ) -  For most of his life, Lester Stiggers has lived in Michigan as a fugitive from justice.  A native of Little Rock, Arkansas, Mr. Stiggers was 15 years old when he murdered his father with a 12-gauge shotgun. He claimed he “took as much as he could” from his father, whom he described as a closeted gay man who beat and threatened to kill him if he told anyone about his secret.  A jury convicted him of first-degree murder and sentenced him to life in prison.  In 1970, during a five-day authorized absence from prison, Mr. Stiggers fled to Michigan and never came back....now Arkansas wants him back in state prison.

Ponzi Scheme in India Leads to Victim Suicides (PonziTracker) - As investors begin to come to terms with a Ponzi scheme that is estimated to have duped hundreds of thousands of Indian investors out of billions of dollars, details are beginning to emerge about the scheme and its mastermind, while suicides continue to mount in a grim reminder of the true human toll of Ponzi schemes.  In a script perhaps better suited for a Hollywood movie, there are tales of bribes paid to politicians, a factory where workers pretended to work to impress potential investors, and a mastermind so opposed to having his picture taken that his website simply features a picture of an empty chair in his stead.  Now, two weeks after the scheme unraveled, many are trying to piece together what is likely the largest scam in India's history.

Justice Safety Valve Act (WSJ) - There are few topics on which leading Democratic and Republican voices agree these days. But the recently introduced Justice Safety Valve Act of 2013—which would authorize federal judges to impose prison terms below statutory mandatory minimums in some cases—represents a new bipartisan effort at addressing America's overcrowded prisons and bloated budget. Passage of the act, though, will depend on President Obama and his Justice Department getting behind it.

Philip Falcone Settles With SEC (WSJ) -   Philip Falcone, a onetime hedge-fund star who hit a string of major defeats, is facing his most daunting challenge yet: A two-year ban from the securities industry that made him a billionaire.  Mr. Falcone agreed to the ban as part of a pact he and his firm, Harbinger Capital Partners LLC, reached with the Securities and Exchange Commission to settle civil fraud charges. Harbinger will pay $18 million without admitting or denying the allegations, according to a regulatory filing Thursday by Harbinger Group Inc.

Four U.S. Immigration Officials Charged With Bribery (LA Times) -  Attorney Kwang Man "John" Lee, authorities say, was a man who could make things happen — for a price.  For a pound of marijuana and $44,000, the Koreatown attorney allegedly said, he could get an immigrant client a U.S. citizenship.  "Price is OK for the risk," Lee told an associate, according to federal authorities.

U.S. Prosecutors Want 11 Years In Prison for 3 Ex-UBS Execs in Muni-Bond Scandal (Bloomberg) -   Three former UBS AG (UBSN) executives convicted of bid-rigging should get prison terms ranging from more than 11 years to almost 20, U.S. prosecutors argued.  A New York jury in August found former UBS managing director Peter Ghavami and two co-workers, Gary Heinz and Michael Welty, guilty of rigging auctions for contracts to invest the proceeds of municipal bond sales. They are to be sentenced this month.

Seal of the U.S. Securities and Exchange Commission. (Photo credit: Wikipedia)

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Insider Trader Sentence of Chiasson Could End in 10 year Sentenced (Reuters) -  Federal prosecutors want the co-founder of hedge fund firm Level Global Investors LP to spend as much as 10 years in prison for insider trading in shares of two technology companies.  The government said in a Manhattan federal court filing that Anthony Chiasson, who was convicted in December of securities fraud and conspiracy, should spend 97 to 121 months behind bars.

The City of Harrisburg, PA Charged With Fraud by SEC (Reuters) -  It is the first time the U.S. Securities and Exchange Commission has charged a municipality for making misleading statements outside of the disclosure documents provided in bond sales.  Harrisburg agreed to settle the charges without admitting or denying the findings in the SEC's order to cease and desist. The city did not pay any monetary penalty as part of the settlement and the SEC did not name any particular individuals.  So nothing really happened.

CEO Pay At Banks Goes From Bad to Worse (LinkedIn) - My good friend Neil Weinberg (American Banker) blogged on AB's second annual bank Executive Compensation Special Report.  It shows that the booss of 160 banks received median raises of 11% last year and a combined 28% over the past 2 years.  It's good to be KING.

SEC's New Chief Says "I need more money" (DealBook) - Like most Securities and Exchange Commission chiefs before her, Ms. White testified before a Senate Appropriations subcommittee to outline her agency’s need for a bigger budget. In the testimony, she called for new resources to complete an overhaul of financial regulation and to keep a closer eye on Wall Street fraud.

Venezuelan Bank Official Charged in US in Bribe Scheme (Bloomberg) -  Maria Gonzalez, 54, vice president of finance at Banco de Desarrollo Economico y Social de Venezuela, Tomas Alberto Clarke Bethancourt, 43, and Jose Alejandro Hurtado, 38, were charged in a criminal complaint unsealed yesterday in federal court in New York.  Prosecutors said Clarke was a senior vice president and Hurtado an employee in the Miami office of the brokerage, which was identified in a lawsuit by the U.S. Securities and Exchange Commission as Direct Access Partners LLC, or DAP.