Three Former Financial Services Executives Indicted for Roles in Fraud Schemes July 28, 2010
Posted by jefhenninger in News.Tags: wire fraud
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Three former financial services executives were indicted today for their participation in fraud schemes and conspiracies related to bidding for contracts for the investment of municipal bond proceeds and other municipal finance contracts. The 12-count indictment was filed today in U.S. District Court in New York City and it charges Dominick P. Carollo, Steven E. Goldberg, and Peter S. Grimm, all former executives at financial service companies or financial institutions, with participating in wire fraud schemes and separate fraud conspiracies at various time periods from as early as 1999 until 2006.
The charged conspiracies and schemes all relate to the provision of a type of contract, known as an investment agreement, to public entities, such as state, county, and local governments and agencies throughout the United States. Major financial institutions, including banks, investment banks, insurance companies, and financial services companies are among the providers of investment agreements and other related municipal finance contracts. Public entities seek to invest money from a variety of sources, primarily the proceeds of municipal bonds that they issued to raise money for, among other things, public projects. Public entities typically hire a broker to conduct a competitive bidding process among various providers for the award of an investment agreement to invest such money. Competitive bidding for these agreements is the subject of regulations issued by the U.S. Department of the Treasury and is related to the tax-exempt status of the bonds. The companies that employed Carollo, Goldberg, and Grimm all marketed financial products and services, including services as a provider of investment agreements.
The indictment charges that Carollo, Goldberg, and Grimm conspired with various brokers to attempt to increase the number and profitability of investment agreements and other municipal finance contracts awarded to the provider companies where they were employed. According to court documents, Beverly Hills, California-based Rubin/Chambers, Dunhill Insurance Services Inc., also known as CDR Financial Products, was one of the co-conspirator brokers. Carollo, Goldberg, and Grimm obtained from CDR and other co-conspirator brokers information about the prices, price levels or conditions in competing providers’ bids, a practice known as a “last look,” which is explicitly prohibited by U.S. Treasury regulations. As a result of the information, various providers won investment agreements and other municipal finance contracts at artificially determined price levels. In exchange for this information, Carollo, Goldberg, and Grimm submitted intentionally losing bids for certain investment agreements and other contracts when requested, and, on occasion, agreed to pay or arranged for kickbacks to be paid to CDR and other co-conspirator brokers.
The indictment also alleges that Carollo, Goldberg, Grimm, and co-conspirators misrepresented to municipal issuers or bond counsel that the bidding process was in compliance with U.S. Treasury regulations. This caused the municipal issuers to award investment agreements and other municipal finance contracts to providers that otherwise would not have been awarded the contracts if the issuers had true and accurate information regarding the bidding process. Such conduct placed the tax-exempt status of the underlying bonds in jeopardy.
According to court documents, the efforts by Carollo, Goldberg, Grimm, and their co-conspirators to control and manipulate the bidding for investment contracts, and the execution of a variety of certifications that covered up their scheme, also obstructed the Internal Revenue Service’s (IRS) ability to monitor compliance with U.S. Treasury regulations and impeded the IRS’s ability to determine whether municipal issuers had correctly accounted for any money that was owed to the U.S. Treasury.
FBI, Slovenian and Spanish Police Arrests Mariposa Botnet Creator, Operators July 28, 2010
Posted by jefhenninger in News.Tags: computer crime
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The FBI, in partnership with the Slovenian Criminal Police and the Spanish Guardia Civil, announced today significant developments in a two-year investigation of the creator and operators of the Mariposa Botnet. A botnet is a network of remote-controlled compromised computers. The Mariposa Botnet was built with a computer virus known as “Butterfly Bot” and was used to steal passwords for websites and financial institutions. It stole computer users’ credit card and bank account information, launched denial of service attacks, and spread viruses. Industry experts estimated the Mariposa Botnet may have infected as many as 8 million to 12 million computers.
In February, the Spanish Guardia Civil arrested three suspected Mariposa Botnet operators: “Netkairo,” “Jonyloleante,” and “Ostiator,” aka Florencio Carro Ruiz, Jonathan Pazos Rivera, and Juan Jose Bellido Rios. These individuals are being prosecuted in Spain for computer crimes. Last week, the Slovenian Criminal Police identified and arrested the Mariposa Botnet’s suspected creator, a 23-year-old Slovenian citizen known as “Iserdo.” The work of the Slovenian and Spanish authorities was integral to this investigation.
In a statement, Slovenian Minister of the Interior Katarina Kresal and Director General Janko Gorsek, Slovenian Criminal Police, said: “We are glad to cooperate with the United States; the FBI’s assistance is invaluable and represents professional affirmation of our force. This case shows that cyber crime issues call for international police cooperation that shouldn’t be hindered by geographical borders. The FBI has demonstrated a high level of collaboration in which our countries were equal partners, which was crucial for the success of the investigation and reducing the threat on a global level. This partnership serves as a solid basis for future cooperation.”
Maj. Juan Salom, commander of the Guardia Civil’s Cyber Crime Division, noted: “The Mariposa case showed how the coordinated and joint actions of different international police forces, along with the efforts of the Internet security industry, have been able to face the global threat of cyber crime,” he said. “The cyber kingpins know that they are not invincible anymore because the global efforts of the FBI, Slovenian Criminal Police, and Spanish Guardia Civil have shown that it doesn’t matter where or how they try to hide, they will be located and prosecuted.”
From 2008 to 2010, the Slovenian citizen created “Butterfly Bot” and sold it to other criminals worldwide. In turn, these criminals developed networks of infected computers—botnets—and the Mariposa variety from Spain was the most notorious and largest. In addition to selling the Butterfly Bot program, the Slovenian citizen developed customized versions for certain customers and created and sold plug-ins (add-ons) to augment the botnet’s features and functionality.
This case is significant because it targeted not only the operators of the botnet but also the creator of the malicious software that was used to build and operate it. The success of this investigation was made possible because of the skill, professionalism, and commitment of the Slovenian Criminal Police’s Cyber Crime Division and the Spanish Guardia Civil’s Computer Crimes Group.
Four arrested in extortion plot July 28, 2010
Posted by jefhenninger in News.Tags: Extortion
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Grigoriy Shinder , of the Morganville section of Marlboro, and his son Albert Shinder of Manalapan, were arrested Monday by Bloomfield police. Police have only said that: “It is an ongoing investigation into an extortion plot to extort money out of a company. We cannot comment further at this time”. Also arrested was Thomas Bara of South River, and Warren Flagg of Tappan, N.Y. All four men are charged with kidnapping, criminal coercion, and false imprisonment.
Story is here.
Music teacher arrested for allegedly selling the school’s instruments July 21, 2010
Posted by jefhenninger in News.Tags: theft
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Albert J. Crosta, of Toms River, was arrested for allegedly selling clarinets, a violin, French horn and cymbals with a total approximate value of $1,300 between July 7 and July 16 at a local second hand shop. Crosta, who teaches a class at the high school has been a music teacher at the school for 17 years and is co-director of the Mighty Marching Mariners marching band, the Blue/Gold Wind Symphony and the Stage/Jazz Band at the high school. Crosta has been asked to appear at the Aug. 17 executive session meeting of the Toms River Regional Board of Education. I don’t see what he can really say with the charges pending.
Story is here.
Interview by ABCNews.com regarding Unemployment Fraud July 13, 2010
Posted by jefhenninger in My Cases.Tags: unemployment fraud
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As a follow up to my last interview, I was also interviewed by ABCNews.com
You can read that interview here
http://abcnews.go.com/Business/underemployed-overpaid-states-shell-unemployment/story?id=11118137
Interview re Unemployment Fraud by Star Ledger/AP Reporter July 8, 2010
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I recently had the pleasure of being interviewed by Newark-Star Ledger (New Jersey) reporter Leslie Kwoh. Because Leslie/the Star Ledger is also affiliated with the Associated Press, the article was picked up by a number of news outlets included MSN, 7online.com, the Boston Herald, the Philly.com, Bloomberg Businesweek, CNBC.com, Forbes.com, the Daily Record and a number of other news papers and news websites. You can read the interview at this link http://www.nj.com/news/index.ssf/2010/07/nj_unemployment_insurance_fund.html
and you can read all of Leslie’s articles at http://connect.nj.com/user/lkwoh/index.html
Burlington County Insurance Producer Charged With Fraud June 30, 2010
Posted by jefhenninger in News.Tags: Insurance Fraud
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Lee Schaffer of Marlton, was charged with insurance fraud, theft by failure to make required disposition of property received, and theft by deception, all third-degree charges. The indictment alleges that between March 16 and July 8, 2005, Schaffer, an insurance producer who operated Focus Insurance Services, prepared a fictitious insurance proposal and certificate of liability under the name of a fictitious insurance company, Custome Solutions. Schaffer is then alleged to have used them in a transaction with Suburban Swim Association of South Jersey. Schaffer allegedly received $14,413 in premium payments from that company as well as Rancocas Valley Baseball League and Larchmont Barracudas Inc. for liability insurance, accident insurance, and directors’ and officers’ insurance. However, authorities allege that Schaffer failed to pay the premiums to Bollinger Insurance Company and instead, kept the money for his own use.
New Jersey IRS Audit Attorney & CPA Help June 23, 2010
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Are you facing an IRS tax audit in New Jersey? Criminal and civil penalties arising from the audit can devastate you life. A criminal tax attorney can help you stay out of prison and avoid high civil penalties. A CPA can manage the audit and reduce liability for a low cost. When an attorney and CPA team up to defend you against the IRS, you increase the chances of success so you can move on with your life.
I have teamed up with a great CPA that specializes in IRS tax audits. Together, we can help you avoid criminal charges of tax evasion, failure to file tax returns, willfully failing to pay estimated tax or keep records and tax fraud. We can also lower any civil penalties and money owed to the government.
Responding to an Income Tax Examination
A letter from the IRS indicating that you are subject to an income tax examination, otherwise known as an audit notice, may be one of the worst letters you ever receive. Seeking professional help right away can make the difference between success and disaster. An audit does not have to be scary and expensive when you have the right help. Call my team today to fight back against the IRS.
Selecting the right team to represent you for an IRS audit
The “person” that always handles your tax returns may not be the right person to go to. After all, can this person represent you if you are arrested on criminal tax charges? Not quite. What about that lawyer on TV that promises to settle your tax debt for pennies on the dollar? Why don’t you google IR-2004-130 to see what the IRS has to say about that? It may be a scam. Regardless, do you want to deal with someone who you can never meet?
I think a team approach of local people you can trust can provide you with total protection which can drastically increase your chances of success. As a criminal defense attorney that handles tax evasion and fraud charges, I know what it takes to fight for my clients and keep them out of trouble. The CPA works with specializes in audits and has a great track record of reducing liabilities. Together, we will fight for you to provide a cost effective solution and total piece of mind for you and your family. If this IRS criminal tax lawyer-CPA team approach sounds like the right team for you, call us today to discuss your case.
Political Consultant Indicted For Allegedly Impersonating Opposing Candidate’s Chief Of Staff June 17, 2010
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TRENTON – Attorney General Paula T. Dow and Criminal Justice Director Stephen J. Taylor announced that a paid political consultant was indicted today in connection with deceptive “robocalls” made to more than 12,000 voters that attacked the two Republican incumbents in the June 2009 primary race for state Assembly in the 40th Legislative District.
According to Director Taylor, the Division of Criminal Justice Corruption Bureau obtained a state grand jury indictment today charging Kevin Collins, 39, of Brooklyn, N.Y., formerly of Wood-Ridge, N.J., with impersonation, a fourth-degree crime. The charge stems from an investigation by the Division of Criminal Justice and the New Jersey State Police.
It is alleged that Collins, who was a paid political consultant for Republican challengers Joe Caruso and Anthony Rottino, was responsible for automated phone calls or “robocalls” attacking the Republican incumbents, Assemblymen Scott Rumana and David Russo. The calls, which were made using a robocall service operated by an independent company, allegedly impersonated Assemblyman Rumana’s chief of staff, Ann O’Rourke. The calls featured the voice of a woman who identified herself as “Ann.”
It is alleged that Collins obtained the cellular telephone number of Ann O’Rourke and provided it to the robocall service company so that it would appear that the automated phone message originated from her and her cell phone. The robocall went to more that 12,000 residents of the 40th Legislative District on the day of the primary, June 2, 2009. The call made several inaccurate remarks about the incumbent assemblymen and encouraged recipients to vote against them. The call did not identify what campaign or political organization was responsible for it.
Woman Charged in Multi-Million Dollar Scheme to Obtain Mortgage Loans June 17, 2010
Posted by jefhenninger in News.Tags: Mortgage Fraud
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Attorney General Paula T. Dow and Criminal Justice Director Stephen J. Taylor today announced charges against a Kearny woman who allegedly orchestrated a scheme to steal millions of dollars by obtaining mortgage loans using false identities and counterfeit documents.
According to Director Taylor, Genilza R. Nunes, 36, of Kearny, was arrested on March 9 by detectives of the Division of Criminal Justice Major Crimes Bureau as a result of an ongoing investigation into the conspiracy. She was charged by complaint with first-degree conspiracy, first-degree money laundering, second-degree securities fraud and second-degree theft by deception. She has been held in state custody since that time with bail set at $2 million.
Because the investigation by the Division of Criminal Justice is ongoing, the charges were not announced until today. Nunes was charged today with other defendants in a federal investigation into related activities announced by the U.S. Attorney’s Office and FBI in Newark.
The state investigation by the Division of Criminal Justice Major Crimes Bureau determined that Nunes and a number of co-conspirators allegedly were involved in a sophisticated, multi-million dollar mortgage loan fraud scheme operating in northern New Jersey, including Morris, Hudson, Union and Essex Counties. The fraudulent enterprise allegedly included licensed and unlicensed professionals, including real estate agents, mortgage loan brokers, real estate appraisers, notaries, lawyers, straw buyers and counterfeit document makers.
Nunes allegedly was one of the people responsible for creating phony documents, including false identification cards, fraudulent financial documents, inflated real estate appraisals, altered real estate transfer documents, and fraudulent government documents, including U.S. passports and numerous state motor vehicle licenses. Nunes and others involved in the scheme used false names and the fraudulent documents to disguise their true identities.
Nunes and her co-conspirators allegedly defrauded numerous lending institutions of millions of dollars through what is known as a “short sale mortgage loan property flip scheme.” A “short sale” is a type of pre-foreclosure sale of real estate where the lender holding the mortgage agrees to permit the property to be sold for a price less then the amount due on the mortgage loan. Short sales have become more prevalent due to the recent economic downturn.
In this case, individuals involved in the scheme were purchasing the properties as straw buyers, using false identities supported by counterfeit driver’s licenses, false financial records, and fictitious credit histories. Through a series of fraudulent transactions, the short sale properties were then sold or “flipped” at inflated values derived from fraudulent appraiser reports. A second straw buyer applied for a mortgage loan on the inflated property and obtained the loan under a false identity. The short sale property was then purchased with the loan proceeds, and, by design, the straw buyer made no payments on the loan, causing a loan default.
Because the straw buyer used a false identity, the lending institution was unable to locate the borrower. The difference between the sales price for the short sale transaction and the inflated loan obtained represented the net proceeds of the fraudulent scheme. Typically Nunes and her co-conspirators obtained $100,000 to $300,000 per transaction.
The state alleges Nunes was responsible for cultivating and creating straw buyers, including real and fake persons, for the purpose of engaging in the scheme. The state has specifically alleged that Nunes engaged in fraudulent transactions involving five properties, with a total fraud of $2,152,800. However, it is believed that the scheme is much larger. The investigation is continuing and additional charges are anticipated.
