Articles Posted in Wire Fraud

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A federal jury found a 40-year-old Windermere man guilty of 11 counts of wire fraud and 4 counts of filing a false tax-related document.

He faces a maximum penalty of 20 years in federal prison for each wire fraud count and up to 3 years’ imprisonment for each false document charge.

The man’s sentencing hearing is scheduled for November 19, 2015. He was indicted on April 9, 2015.

According to the evidence presented at trial, from 2006 through 2012, the accused was employed as the personal assistant to an NBA basketball player, who has since retired from professional basketball. During calendar years 2008 through 2011, the man apparently stole approximately $2,188,170 from the ball player by making unauthorized online banking money transfers from one of his bank accounts into three different bank accounts that the man controlled. The man spent these funds on his own personal expenses, including mortgage payments for his home in Windermere, and the purchase of a Ferrari and a Range Rover.

The man also filed false joint income tax returns with the Internal Revenue Service for each of these years. In these tax returns, he and his wife never reported more than $60,000 in gross income, when in fact their joint income was significantly greater due to the money the man stole from the former basketball player.

This case was investigated by the Internal Revenue Service – Criminal Investigation, with assistance from the United States Secret Service. It is being prosecuted by Assistant United States Attorney Andrew C. Searle.

Wire fraud can range in criminal acts, including fraudulent schemes for phishing emails, sending electronic checks or money to banks, or communications over the Internet or telephone.

The essential elements of wire fraud include the following:

  • The defendant intentionally devised or participated in a scheme to defraud another out of money
  • The defendant did so with the intent to defraud
  • It was foreseeable that interstate wire communication would be used
  • That interstate wire communication was used

The term “interstate wire communications” is broad, and refers to any type of transmission by wire, radio, or television communication, including, but not limited to, writings, signs, pictures, faxes, or sounds used in interstate or foreign commerce.

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A 63-year-old man was sentenced to six years in federal prison last week for bank fraud, mail fraud, and wire fraud.

The man pleaded guilty to the above charges on March 14, 2013.

Court records indicate that the man was president and director of a realty company in southwest Florida. In June 1990, he apparently created a Trust Agreement for approximately 101 acres of unimproved land, in Cape Coral for which he was the trustee and also one of its beneficiaries, along with 52 named combined interest holders or beneficiaries. He mortgaged the trust property without the consent of the other beneficiaries by submitting fraudulently altered trust agreements to multiple banks that named him as the sole beneficiary.

The man also executed various loan documents, where he falsely claimed to be the sole beneficiary, giving him the authorization to mortgage the property. He received $2 million from Florida Community Bank in 2002 for the first mortgage loan. He then paid that loan off in 2006 with a mortgage loan exceeding $17 million from First National Bank of Pennsylvania. Court documents show that the man used most of the money from the second loan for personal use to fund other projects. He defaulted on the First National Bank of Pennsylvania mortgage loan, causing the bank to foreclose on the property in October 2009, leaving an unpaid principal balance of $17.03 million.

mortgage betch.jpgThe beneficiaries of the 101 acres have yet to receive compensation for their initial payments as interest holders, yearly payments or for the increase in the value of the Trust property.

Bank fraud violations, along with other white collar crimes are harshly punished in the state of Florida and throughout the United States. Under federal statutes, a conviction for bank or mortgage fraud may carry up to $1 million in penalties and 30 years in federal prison. Attempting to commit bank fraud carries the same penalties as the actual crime itself.

Once a conviction is achieved in bank fraud cases, sentencing generally depends on the amount of money lost in the scheme. A Lee County Federal Criminal Defense Lawyer at Whittel & Melton can help those accused of bank fraud fight the severe ramifications of a bank fraud conviction.

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A Jacksonville insurance salesman pleaded guilty to a 15-year scam in federal court Friday. Reports suggest that more than 50 people were bilked out of nearly $5 million.

Prosecutors claim that the investments the man promised large returns on were actually a Ponzi scheme that he used to buy commercial property, luxury cars and other items.

The 49-year-old man faces up to 80 years in prison, a fine of over $1 million as well as paying restitution to the victims involved in all 34 counts of the federal grand indictment.

Court records indicate that many of the victims were Duval County School Board employees who invested money from their Deferred Retirement Option Program, also known as DROP. There were also out of state investors in Georgia and North Carolina.

The man pleaded guilty to two counts of mail fraud, one count of wire fraud and one count of money laundering. All other charges were dropped.

The man remains free pending a sentencing hearing, which has yet to be scheduled.

ponzi scheme betch.jpgCourt records claim the scheme started in 1996 when the man set up a shell corporation, Abaco Securities International, in the Turks and Caicos Islands, British West Indies, as a fake offshore investment company. The man was listed as the director of the company, but the only location was a post office. The man solicited his victims to invest their retirement savings in an investment product he described as ASI and promised interest rates sometimes exceeding 12 percent.

While some of the money was sent to a financial services company where the man had told his investors the retirement money would be invested, prosecutors claim the majority of the funds were deposited into SunTrust accounts set up by the man and then stolen by him. This apparently lasted until 2011.

A Ponzi scheme, also known as a business or investment pyramid, is defined as an investment plan where early investors are paid with the investments of later investors. While the plan may have started out legitimately, with everyone intention of delivering appropriate funds to investors, somewhere down the line the manager of the funds found that the investment strategy could not meet its goals, and in order to meet the demands of initial investors, used the money from later investors to pay early backers.

Due to the large sums of money involved in Ponzi schemes, these criminal cases are usually tried in federal court. They often include charges of mail fraud, wire fraud and money laundering. When Ponzi schemes are uncovered and a person faces criminal charges in federal court, it is not surprising to find out that law enforcement has been investigating them for months, possibly for a year or more.

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The Securities and Exchange Commission has charged Vero Beach, Florida couple, Richard and Susan Olive, for allegedly raising millions of dollars selling investments for a purported charitable organization while defrauding senior citizens and exaggerating the amount of contributions actually made to charity.

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The SEC complaint, filed in the Southern District of Florida, charges the Olives with aiding and abetting violations of the antifraud provisions of the federal securities laws as well as violations of the securities and broker-dealer registration provisions of the federal securities laws.

The SEC complaint against the Olives lays out a scheme where the Olives were hired at We The People Inc., a Tallahassee-based non-profit organization that obtained $75 million from more than 400 investors in Florida, Colorado, and Texas by selling an investment product they described as a charitable gift annuity (CGA). Allegations are that the CGAs issued by We The People differed from legitimately-issued CGAs– namely that they were issued primarily to benefit the Olives and other third-party promoters and consultants. Only a small amount of the money raised was actually directed to charitable services. Meanwhile the Olives received more than $1.1 million in salary and commissions, and they also siphoned away investor funds for their personal use.

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Two ex-NFL football players and a former high school football star were arrested in an undercover operation set up by FBI agents Monday for allegedly cashing dozens of fraudulently obtained tax-refund checks and seeking a loan, totaling hundreds of thousands of dollars.

FBI agents apparently set up a check-cashing store “front” in Miami as a response to the escalating number of reported identity-theft crimes in South Florida and nationwide. The FBI claims the bust was designed to prevent an alleged identify-theft and tax-refund scheme.

The men arrested include: William Joseph who was drafted in the first round by the New York Giants in 2003 and last played with the Oakland Raiders in 2010, Michael Bennet who also was drafted in the first round by the Minnesota Vikings in 2001 and finished his career with the Raiders in 2011 and Louis Gachelin, a Miami Jackson High and Syracuse University defensive lineman who signed as a free agent with the New England Patriots in 2004, but failed to make the final roster.

The former football players, Joseph, 32, of Miramar, Gachelin, 31, of Miramar, and Bennett, 33, of Tampa were granted bonds Tuesday. Arraignments are apparently scheduled for May 15.

The sting operation yielded five other arrests Monday as well.

Joseph, Gachelin and those five defendants were charged with cashing a total of about $500,000
in fraudulently obtained tax-refund checks, forging signatures on the checks and unlawfully using identification documents such as a driver’s license.

As part of the undercover sting, the FBI apparently charged 35 percent to 45 percent in fees to cash their checks with the bureau’s own funds.

Bennet allegedly tried to obtain a $200,000 loan on April 18 from the check-cashing store front using a UBS financial statement falsely showing that he had $9 million in collateral for the loan. He was charged with wire fraud.

The FBI claims fraudulently obtained tax refunds are costing the government $5 billion or more.

According to the U.S. Government Accountability Office, people filing false tax returns have abused a hole in the IRS electronic filing system.

It appears that the IRS does not actually match tax returns to the W-2 income forms that employers file until several months after the filing season ends on April 15. Employers file returns at the end of February or early March, but the agency apparently does not match them up with employees’ incomes reported on 1040 forms until sometime in June.

According to the GAO, the number of identity theft-related fraud incidents on tax returns reached 248,000 in 2010, which is around five times more than in 2008.

Federal investigations into white collar or financial crimes can arise out of nowhere. In fact, these investigations can intensify quite rapidly, sometimes even before you are ever approached by investigators. It is critical to consult with a criminal defense lawyer if you have any reason to believe that you are under investigation for a financial crime. Often there are signs that can clue you into whether or not an investigation is in progress, including behavior changes in those around you, unusual questions or suspicious activities.

White collar crimes can include:

• Tax Crimes
Fraud

Identity Theft

• Embezzlement
Antitrust Crimes

• Hacking
• Forgery
Financial crimes require a strong defense, and in order to be effective you must retain a trial attorney prepared to practice in state and federal court. The Florida White Collar Crime Defense Lawyers at Whittel & Melton understand how a strong defense against financial crimes is built. We know how to identify loophole’s in the prosecutor’s case and leverage them to work in your favor.

It is important to realize that when you are charged with a crime, your future depends on early representation. Unfortunately, early mistakes cannot be undone and the prosecution will use any information they can against you.

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A former Florida resident was sentenced to the maximum sentence of 20 years in federal prison on Thursday for mail fraud in connection with a $30 million Ponzi scheme.

His original charges also included wire fraud and conspiracy, crimes that often get charged in conjunction with mail fraud cases.

The case was investigated by the U.S. Postal Inspection Service, the Florida Department of Law Enforcement, the Florida Office of Financial Regulation, the Florida Attorney General’s Office and prosecuted by the U.S. Attorney’s Office.

The 48-year-old man was ordered to surrender $29.9 million, numerous computers and computer equipment purchased using earnings from the scheme.

According to authorities, the man received $30 million from more than 500 investors in Florida and throughout the United States by assuring them that they could earn 10 percent interest per month by trading in foreign currency through his company located in Pasco County.

The man supposedly only invested a small portion of the assets obtained, paid investors about $15 million of other investors’ money and spent millions of dollars on personal items for himself, friends and family. He allegedly leased high-end real estate in New York City, private jets, and bought luxury cars, clothing and jewelry.

The Florida Attorney General’s Office shut down the man’s former company in April 2010 and froze its assets after investigating a grievance against the company. During that time the man had a Gainesville address and supposedly went to school in the area.

He was arrested in New York City on Nov. 4, 2010 and indicted Dec. 1.

Mail fraud and wire fraud are broad terms used in any case involving theft by mail, by Internet, by electronic transfer, by phone or any other comparable scenario. The State must prove intent beyond a reasonable doubt to obtain a conviction for this white collar offense. A mail fraud or mail theft case revolves around several points:

• Did the accused actually plan to commit fraud?

• Did the accused willfully and intentionally create a plot to cheat another person or persons
out of money or property?

• Did the accused use the postal system in their scheme to defraud?

Prosecutors and investigators for fraud cases are aggressive in pursuing charges, which means your case can drag on for a lengthy time period. If convicted of mail fraud, the penalties include stiff fines or imprisonment for up to 20 years, possibly both. If the violation concerns a financial institution such as a bank, the fine can be elevated as high as $1,000,000 and imprisonment up to 30 years.

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