Two men charged in alleged used-car sales fraud February 3, 2010
Posted by jefhenninger in News.Tags: theft by deception
1 comment so far
Authorities allege that Brett Golkin and Peter Schladebeck, 46, both from Colts Neck, sold 32 vehicles at their dealership, Freedom Auto Center in East Brunswick, but used the proceeds to pay personal expenses. They were charged with theft by deception and theft by failure to make the required disposition of cash received for the vehicles.
Manuel Sameiro, assistant Middlesex County prosecutor, said Golkin and Schladebeck sold the cars at the dealership’s two locations on Route 18 on consignment for wholesalers and some individuals from January 2008 until September 2009 when the dealership closed. The alleged scheme was discovered after customers who paid for vehicles but did not receive titles complained to police. The wholesalers and other original owners kept the titles while waiting for Freedom to pay them.
Golkin and Schladebeck also were charged with issuing $59,289 in bad checks between May 8, 2009, and Aug. 5, 2009, to three vehicle owners who demanded payment. An audit of the dealership’s records showed that on Oct. 15, 2008, the defendants accepted $229,000 from an investor to assist in their purchase of real estate. However, they allegedly kept the investor’s money without telling him they already owned the property.
I had a case along these lines where I represented a car dealer that took cars on consignment, received money and then gambled it away. Of course, my client was not charged as I worked out the case before the police were involved.
Story is here.
Annapolis Mortgage Broker Charged in Fraud Scheme February 2, 2010
Posted by jefhenninger in News.Tags: Ponzi scheme, wire fraud
add a comment
Mortgage broker David Wehrs, Sr. of Annapolis, Maryland, has been charged with wire fraud in connection with a scheme to defraud investors and financial institutions of approximately $2.3 million. According to the information and court documents, Wehrs owned Maryland Title and Escrow Company, Inc., located in Annapolis, and operated a small home remodeling company called Show-Me. From 2007 to October 2009, Wehrs allegedly induced individuals to invest money through Maryland Title into a purported FDIC-insured money market fund that Wehrs “guaranteed” would pay monthly interest payments of 10.85 percent. Instead of depositing the money into an “American Funds Fixed Rate Money Market” as promised, Wehrs allegedly deposited investor funds into one of two bank accounts he controlled in the name of his title company. Wehrs then wire transferred a large portion of these investor funds to a brokerage account in the name of his title company at Terra Nova Financial LLC located in Chicago, Illinois.
The Government also alleges that Wehrs then used the money he obtained to “day trade.” During the scheme, Wehrs is alleged to have conducted millions of dollars of stock trades per month. In addition to day trading, Wehrs allegedly used some of the investor funds to: pay “monthly interest” and “redemptions” to other investors; pay expenses of his other businesses, including Show-Me; make escrow payments for his title company; buy real estate and personal property; and pay other personal expenses.
The Government further alleges that when Wehrs had no money left in his personal bank accounts or day trading accounts to pay interest due to investors, he used $630,611 earmarked to pay lending institutions for mortgage payoffs from his escrow account at Maryland Title to pay investors, causing a loss of such amount to a title insurance company. He also allegedly used $100,000 from the Maryland Title escrow account that was earmarked as earnest money for the purchase of an individual’s home to pay interest to investors, causing a loss of $100,000 to the home buyer.
As a result of the scheme, Wehrs is alleged to have caused a total loss of $2,371,06 to investors and the title insurance company. The worst part for Wehrs is that it seems like he doesn’t have a ton of money to pay back to make this go away.
4 men charged with bilking school district of more than $2 million February 2, 2010
Posted by jefhenninger in News.Tags: money laundering
add a comment
The Somerset County Prosecutor’s Office has charged four men after a more than year-long investigation, alleging they bilked the Bernards School District out of more than $2 million. Even though the money has since been repaid, the bad news for these four is “Somerset County”. Good luck.
Charged were Robert E. Titus Jr., 52, of Citadel Drive in Jackson; John Paris, 61, of Sherman Avenue in the Belford section of Middletown; Edward G. Beach, 52, of Woodfern Court in Toms River and Gabriel Caponetto, 50, of Milton Street in Howell. They face charges ranging from first-degree money laundering to second-degree conspiracy to theft by deception and forgery.
Aramark Corp. and school district officials jointly reported an alleged long-term theft by an employee of Aramark from the district. Aramark provides food, janitorial and facility management services to the school district. Titus, who began working for Aramark in 1992, became an on-site manager at the district’s Ridge High School in 1999, and was responsible for maintaining facilities and overseeing projects performed mostly by outside subcontractors. He was able to contractors without the school district having to obtain bids. In addition, one of those contractors, John Paris Construction, in turn hired other subcontractors to perform work without following a bidding process.
In July 2008 the district’s newly appointed business administrator began noticing inconsistencies between invoices Titus submitted for payment through Aramark and work performed in the district. When confronted by the schools superintendent, Titus admitted he had ‘doctored” an invoice, apologized, cleaned out his office and left the district. This will present another problem for everyone involved as he may be the first to flip.
This is the type of case where an attorney really needs to move on this case right away to quickly figure out which way the case may go, what a trial would look like, which charges will stand up, who will flip, etc.
New Jersey charged with theft, fraud after Craigslist car sale February 1, 2010
Posted by jefhenninger in News.Tags: theft by deception
add a comment
James Maltese, of Harmony Road, Middletown, New Jersey turned himself in at police headquarters on Friday after police began to look into a transaction he made with a Delaware couple who reported having trouble with a 1999 Dodge Durango moments after buying it for $2,995 on Craigslist.
Police say that the car was initially sold to someone else for $150. That person was told by a mechanic in Keyport that the head gasket was blown. Maltese somehow obtained possession of the car and then brokered the sale online. What really hurts Maltese is that he issued a fraudulent temporary license plate. He also never informed the buyers of the car’s mechanical problems but there is no indication that he knew about the problems.
He was charged with theft by deception, falsifying records and engaging in the business of a vehicle dealer without a license. The fake plate is the worst part of the case for him as otherwise, this is just a bad sale. The good news is that the dollar amount of the loss is low. A good attorney should be able to wrap this up pretty quickly for him unless he has a big record.
Story is here.
Peter Madoff, Bernie’s brother is under fire January 31, 2010
Posted by jefhenninger in News.Tags: Madoff
add a comment
Anyone associated with Madoff should have retained an attorney by now. Family members, employees and associates have been either arrested or are the subject of various investigations. This week its Peter Madoff who is subject to both a criminal investigation and a civil suit brought by the charitable foundation of U.S. Senator Frank Lautenberg.
Numerous blogs picked up on this story including:
http://www.senseoncents.com/2010/01/peter-madoff-subject-of-criminal-probe/trackback/
And be sure to check out Madoff A to Z at
Entrepreneur Sentenced to 76 Months in Prison for Identity Theft January 31, 2010
Posted by jefhenninger in News.Tags: identity theft
add a comment
TERRENCE CHALK was sentenced this week to 76 months in prison for his participation in a conspiracy to make false statements and representations to financial institutions in connection with applications for loans, lines of credit, and credit cards, and for the crime of aggravated identity theft for using another person’s Social Security number to seek a line of credit from a bank. CHALK must pay restitution of $750,000.
CHALK, the principal of a White Plains-based computer systems company, and others submitted applications for loans, lines of credit and credit cards, in the names of various business entities controlled by CHALK (the “CHALK Entities”) that contained false information and representations. Some of the applications falsely represented that certain Chalk employees and clients were guarantors for the loans and/or were owners and officers of the various CHALK Entities when in fact they were not.
Included in the applications was personal identification information, such as names, addresses and Social Security numbers of the CHALK Entities’ employees, agents, or clients, without their knowledge or permission. While seeking to obtain the loans, lines of credit, and/or credit cards, CHALK and others met with representatives of financial institutions and falsely represented the ownership of the Chalk entities and the identity of the guarantors and/or supplied false financial information. Among other things, CHALK sought a loan using the name and personal information of a dead relative. CHALK continued his criminal conduct even after his initial arrest in this case, when from prison, he directed others on the outside to submit false information to BMW of Ridgefield, Connecticut, in order to secure BMW vehicles for, among others, CHALK’s girlfriend and someone who signed a bond to help secure CHALK’s release on bail. CHALK’s release on bail ended in July 2008 with his arrest in connection with the car leasing scheme.
Bank Employee Charged with Stealing Money January 31, 2010
Posted by jefhenninger in News.Tags: embezzlement
1 comment so far
Mary M. Knecht has been charged with theft, embezzlement, and misapplication by a bank employee. The Government alleges that Knecht embezzled approximately $750,000 from First Keystone National Bank of Berwick, Pennsylvania, where she worked as an accounting administrator.
Knecht allegedly began stealing from First Keystone in or around January 1992 through December 2009. The indictment alleges that Knecht fraudulently diverted and transferred funds from the bank’s internal general ledger accounts to personal First Keystone accounts that she controlled, using fraudulent bank cashier’s checks, deposit slips, debit and credit memoranda, and other documents to carry out and cover-up the thefts.
Texas Attorney Convicted for Role in Pump-and-Dump Stock Schemes January 31, 2010
Posted by jefhenninger in News.Tags: securities fraud
add a comment
A securities attorney was convicted this week by a federal jury in Alexandria, Va., for participating in multi-million dollar pump-and-dump stock manipulation schemes. Phillip Windom Offill Jr., of Dallas, was indicted on March 12, 2009, and was found guilty of one count of conspiracy to commit registration violations, securities fraud and nine counts of wire fraud.
Offill, an attorney in Dallas and a former attorney with the SEC, was retained by David Stocker, a Phoenix attorney who pleaded guilty in March 2009 in the Eastern District of Virginia to conspiracy to commit securities fraud. Ffrom approximately March 2004 through October 2004, Offill and Stocker evaded federal securities registration requirements and provided co-conspirators with millions of unregistered and “free-trading” shares of nine companies’ common stock that the co-conspirators could not have otherwise legally obtained. Many of the shares were subsequently sold by co-conspirators to investors in the general public. By evading the registration requirements, the co-conspirators were able to hide from the investing public the actual financial condition and business operations of the companies. The companies included Emerging Holdings Inc.; MassClick Inc.; China Score Inc.; Auction Mills Inc.; Custom-Designed Compressor Systems Inc.; Ecogate Inc.; Media International Concepts Inc.; Vanquish Productions Inc.; and AVL Global Inc.
In connection with Emerging Holdings, MassClick and China Score, evidence at trial showed that Offill knowingly participated in a conspiracy known as a “pump-and-dump” scheme to manipulate the price of these companies’ securities. Co-conspirators falsely manipulated the price and volume of some of the companies’ stock by making materially false and misleading statements in press releases and in spam e-mails to tens of millions of e-mail addresses throughout the United States in an effort to create artificial demand for the three companies’ stock. After fraudulently “pumping” the market price and demand for the companies’ stock, co-conspirators “dumped” shares by selling them for large profits to the general investing public in the over-the-counter market through listings on Pink Sheets, an inter-dealer electronic quotation and trading system. These shares were purchased by unsuspecting investors, including investors in the Eastern District of Virginia, and were often rendered virtually worthless.
Ten other defendants have pleaded guilty and eight of them have been sentenced in federal court in Alexandria, Va., for their roles in related stock manipulation schemes. David B. Stocker will be sentenced on March 8, 2010. Kenneth Owen pleaded guilty to conspiracy to commit securities fraud and will be sentenced in federal court in Los Angeles on Aug. 25, 2010. Michael R. Saquella was sentenced to 10 years in prison; Justin Medlin was sentenced to six years in prison; Steven P. Luscko and Gregory A. Neu were each sentenced to five years in prison; Lawrence Kaplan was sentenced to three years in prison; Brian G. Brunette was sentenced to a one year in prison; Anthony Tarantola was sentenced to six months in prison; and Henry “Hank” Zemla was sentenced to three months in prison.
The case, which was referred by the Market Regulation Department of Financial Industry Regulatory Authority (FINRA), was investigated by the FBI and the U.S. Postal Inspection Service, with assistance from FINRA’s Criminal Prosecution Advisory Group.
Government brings Mortgage Fraud Charges Against Six People Involving Million-Dollar-Plus Houses January 31, 2010
Posted by jefhenninger in News.Tags: loan fraud
add a comment
A two-year investigation by the Greater Cincinnati Mortgage Fraud Task Force has resulted in a seven-count indictment charging two Cincinnati area home builders, a former Huntington National Bank vice president, and a self-employed tax preparer and interior designer with participating in a mortgage fraud scheme to sell four high-end luxury properties to “straw buyers.” A straw buyer is someone who is listed as the owner of a house, but is not really the one buying the house.
Charged were:
Eric D. Duke of Newport, Kentucky. Duke is a self-employed tax preparer and interior designer. He also owned a property management company called Rivendale Property Management Group, L.P., in Maineville, Ohio.
Terrence J. Monahan Jr., of Cincinnati, formerly with Huntington National Bank.
Bernard J. Kurlemann, of Mason, owner of Kurlemann Homes of Long Cove and Long Cove Management, LLC.
Bryan Sanneman, of Mason, owner of Sanneman Homes, Inc.
The charges stem from the sale of four residential properties in 2006 to 2007, three of which were sold for approximately $2 million each. The Government alleges that Monahan, Sanneman, and Kurlemann, each conspired with Duke to defraud lenders involved with the sales.
The scheme involved Duke locating two people willing to buy the properties in name only and let their names be used on loan applications. Duke worked with a mortgage broker who submitted fraudulent loan applications that contained false income and assets. Monahan gave Duke a customer bank account statement to be used as a “go-by” to create fictitious account statements to support fraudulent assets on the loan applications.
Sanneman and Kurlemann provided documentation to the lenders falsely stating that they had received down payments from the borrowers when they had not. The defendants conspired with Duke to have the fraudulent loans approved in order to sell their properties.
The defendants benefitted from the scheme because they were able to sell their expensive properties, get out from under substantial mortgages, and receive additional loan proceeds. All four defendants are charged with conspiracy. Duke and Monahan are charged with conspiracy to commit wire fraud and wire fraud. Duke and Kurlemann are charged with conspiracy to commit loan fraud and two counts of loan fraud.
Loan proceeds from the alleged fraud totaled approximately $6.7 million.
Charges have been filed separately against the straw buyers. Francisca Webster, of Cincinnati, has been charged in a separate information, with conspiracy to commit wire fraud. Christopher Gagnon, of Florence, Kentucky has been charged with loan fraud.
Clearly, the straw buyers have the best chance of working out a great deal in exchange for testimony.
Louisiana Man Charged with Conspiracy to Solicit and Give Bribes Involving a Public Official January 31, 2010
Posted by jefhenninger in News.Tags: Bribery
add a comment
RAY ANTHONY DAVEZAC, of Destrehan, Louisiana, was charged today in a one-count Bill of Information with Conspiracy to Solicit and Give Bribes Involving a Public Official. DAVEZAC owned and operated Davezac Consulting Engineers, LLC. The Government alleges that the President of St. John the Baptist Parish, William Hubbard, solicited a bribe from DAVEZAC. DAVEZAC paid a $5,000 bribe made payable to a local automobile dealership for the benefit of Hubbard. DAVEZAC received a contract from St. John Parish at a date after the bribe payment was solicited and paid.
There is no information about whether Hubbard has been charged yet or what the Government’s evidence is.
