Essex Fells superintendent charged with Official Misconduct January 14, 2009
Posted by whitecollarcrimenews in News.Tags: Crime, Law, New Jersey, News, official misconduct
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Raymond Hyman superintendent of the Essex Fells New Jersey school district has bee charged with second degree official misconduct and other charges. His attorney, Thomas Murphy of Belleville, is already out there working the press like a good attorney should by stating that his client is a “lifelong educator” and “all around good guy” and “family man with four children”.
Anyone want to bet that at some point he’ll be taking a plea for 3 years? I say that because too many of these cases end in a plea. If you have such a great client like that, why not roll the dice and take the case to trial. If you lose, you are probably looking at 5 years at the worst. If you do a good job at sentencing, you could probably get that down to 3 anyway. Under current parole guidelines, the difference between a 3 and a 5 is about a month or two anyway.
However, this type of client has an amazing shot at getting ISP. Since either the plea or a conviction would still be a second degree, he would have to do 6 months. Thus, the difference between 3 and 5 years for a case like this could be nothing! So, unless the State has an great case, take it to trial.
One of the biggest problems at trial will be picking a jury. Just check out the comments at the end of the story to see who you’ll have to weed out of the jury.
Atlantic City man accused of posing as female veterinarian January 14, 2009
Posted by whitecollarcrimenews in News.Tags: Crime, Fraud, Law, New Jersey, News
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What editor approved this story? How do you report that a guy poses as a female vet and not think to provide the reader with just a little information as to exactly how he did this? At least promise us that you’ll follow up.
Anyway, Vineland, New Jersey police charged Daniel C. Tyce with practicing medicine without a license. They allege that he ran a business called South Jersey Small Animal Rescue and pretended to be Dr. Danielle Smith, a graduate of the University of Pennsylvania veterinary school. Police also allege that he inoculated pets and offered small animals for adoption for a fee through the rescue agency. I don’t see any of this as that big of a deal, at least in the criminal sense (assuming no animals were injured)
However, the police also say that he also solicited donations, claiming the agency was a nonprofit which is was not. That is a much bigger problem.
If all we are talking about is a guy (or, uh, woman?) pretending to be a veterinarian, then the biggest issue is whether any animals were injured. If not, what is the big deal? Trust me, as an animal lover, I’d be afraid of someone treating my pets that doesn’t know what they are doing. However, my defense of this guy would be that he is a huge animal lover and just wanted to help animals. In other words, his intentions were great, his actions improper. However, there is no reason to punish him as his actions hurt no one and helped many.
Of course, that defense gets complicated when you add the issues of pretending to be a nonprofit. Somehow I doubt that he made a ton of money. I would want to look over his books and track all of the money. If he is using the money to drive a new BMW, then we have problems. If he is using the money to help the animals, grow his practice, etc, then this just supports the defense.
This guy can’t find $1000 to bail himself out of jail, so I assume he has no money (and thus no BMW). Unless he has some nice friends or family, he won’t be hiring a good attorney anytime soon.
Stunt pilot Marcus Schrenker almost pulls off total disappearing act January 13, 2009
Posted by whitecollarcrimenews in News.Tags: Crime, Fraud, News
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The Media is just loving this story and some are even comparing him to DB Cooper, even though there is almost no connection. I’m sure you’ve heard the story by now, Marcus Schrenker, facing a divorce, financial problems and possible securities violations, allegedly tries to fake his death by crashing his plane. Problem is, military jets notice that the plane looked empty before it crashed, his body was not found at the crash site and he was seen at a store and motel after the accident.
Right now, he’s not facing any charges. I would suggest he just man up and deal with all of this before it gets any worse. He has no criminal charges and a good attorney can blame his actions on the stress of the recent events in his life. A civil settlement can try to be worked out to avoid criminal charges. Such a trial would be difficult to put together due to all of the different witnesses it would take to get a trial going here. In addition, while the plane could have killed someone, no one was hurt.
His bigger issue at the moment, is any possible criminal charges he is facing relating to his business dealings. If charged, the prosecutor will want to use the plane ditching against him. Of course, this would divert the attention from the real issues; so if they have a good case, they might just want to forget it. After all, he is not charged with anything yet. The Media loves this case so I’m sure we’ll easily find out how this one ends.
A good AP article on this story is here.
Investor allegedly uses priests and Knights of Columbus to fuel Ponzi scheme January 12, 2009
Posted by whitecollarcrimenews in News.Tags: Crime, Fraud, News, Ponzi scheme
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At first, the Media acted like Madoff invented the Ponzi scheme. Now, they can’t wait to tell you about every Ponzi scheme out there. There are also countless stories about what is a Ponzi scheme, how to spot a Ponzi scheme, etc. Richard Piccoli’s case is not that unusual. Like others accused or convicted of Ponzi schemes, he targeted a specific community, in this case, Catholic priests and members of the Knights of Columbus. Now that he has been arrested, investors are unsure as to how much is left over. Thus, while this story may seem just like every other Ponzi scheme story, his story is actually rather interesting from a number of different angles.
Quick point: the story doesn’t really flesh this out, but one of the people that Piccoli allegedly used to show that he was legit was Danny Wegman, the CEO of the Wegman supermarket chain. The article states that Piccoli showed on investor a $50,000 check with Wegman’s name on it to show that if Wegman trusts him, anyone should. The odd thing is, Wegman denies that the check was his and that he invested with Piccoli. If this is the case, why would he pick Wegman?
Another quick point: how will the priests in this case handle being victims/witnesses in a criminal case? Will they want to see Piccoli go to jail? Should be interesting to watch how they react.
As a defense attorney, this case would be really tough to pick a jury. How can this guy get a fair trial? While this seems like a big local story and the Madoff news is not helping, there is even a bigger issue. A majority of the jury pool will likely be Catholic. Can fellow Catholics put aside their religion to give this guy a fair trial? Can the defense even be permitted to ask to find out the religion of all potential jurors? I can’t see how you have a fair trial otherwise.
The most important issue is one that mostly everyone associated with cases involving elderly defendants seem to want to ignore is age. Any prison time he get will likely be a life sentence since the guy is 82 and he’s not going to prison tomorrow. So, by the time he gets to that point (assuming her does) he will be even older. Is there really a point in working out a plea deal for less time? Several studies have been done about prison time and aging. However, our system does not account for this. Thus, if you are 20 or 80, you generally get the same sentence.
Of course, lawyers don’t make that argument so a court can’t deal with an issue before them. When representing an elderly defendant, you really need to ascertain what the client wants. Does he want to stay out of prison or does he just want to clear this name to the best extent possible. Its a morbid concept for most people to handle, but dealing with death and the real desire of the client needs to be explored. If the goal is to stay out of prison, the lawyer needs to stall the case but in a way that is ethical. In other words, fight the case, but don’t go over board by filing motions that are a complete waste of time.
The prosecutor faces a tough dilemma as well. They can pour a ton of money into fighting this battle to get this guy a long prison sentence, when any sentence will likely be a life sentence anyway. Of course, they can’t send the message that anyone over 80 can break the law without fear of prison.
The story is here.
1 of 3 wanted suspects in foreclosure scam arrested January 10, 2009
Posted by whitecollarcrimenews in News.Tags: Crime, Foreclosure Fraud, Fraud, Mortgage Fraud, News
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Jessica Refuerzo has been arrested while Julita Whittingham and Edgardo Orcino are still being sought for allegedly defrauding homeowners out of more than $100,000. Authorities allege that the three along with two others that have already been arrested, told at least 17 people that “land patents” would protect them from impending foreclosure.
According to San Diego’s DA, the group claimed that the patents would make the owners a sovereign nation and protect them because the banks would not own the land or be able to come into their property. The story is here. In other words, the bank would own the house but not the land under them. Thus, without the land, the house is worthless.
I need more information about the players here before I can fully analyze the case and possible defenses. While you can look at this can think that this is an obvious scam, it wasn’t obvious to the people that fell for it. Likewise, many people are involved in questionable businesses without really understanding what they are selling and if it is true and/or legal. One would assume that the head of the operation would know what was going on and that presents a more complex problem. However, my defense for the lesser people involved would be that they thought that what they were doing was legit.
First, they didn’t seem to hide in the shadows; this was an up front business. I would beat that drum all day in front of the jury. After all, if the client is engaging in criminal activity, why would you be so up front about it? How could you ever hope to get away with it? Instead, they are acting like every other legal business does. Second, this wasn’t a novel idea. There are plenty of other websites that proclaim that this is possible and the people behind them are not arrested.
Here’s a good example: http://landpatentpapers.com/ While the website itself contains a lot of discussion about the history of land use without an explicit mention that you can avoid foreclosure, the title of the page (look at the top of your browser) says: “Learn to be free of bank foreclosures”. At the bottom of the page, it states that: “For the procedure to acquire your name into a Land Patent you must take your name out of Color of Title (fictional characteristic usage of language) and bring it into the proper perspective of the Land Patent ( the truth of the language) such a procedure can be acquired with complete forms and instructions for a gift of $19.95 may be sent to R. J. Elsarelli at P.O. Box 194 Durand Michigan 48429 with notification to LandPatentService@TheNorthernNews.net allow seven to ten days by mail or use the credit card system.”
The site seems to be registered to a Richard J Elsarelli of Durand, MI. This information was found here. Is Richard’s site slick enough to stay within the bounds of the law or is the 19.95 price low enough for the police not to care? More importantly, what does this “procedure” indicate that you can actually accomplish?
Two fraud cases show need for attorneys to assume the worst at the first sign of trouble January 8, 2009
Posted by whitecollarcrimenews in News.Tags: Crime, Fraud, Law, mail fraud, News, wire fraud
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As an attorney, I like to be proactive instead of reactive. In other words, I prepare for the worst and I assume that every case will go to trial, so I prepare accordingly. It seems like other attorneys either don’t know how to evaluate a client’s actions and/or a client’s business. Maybe they are too lazy or maybe they don’t care. I really don’t know why but it is something that all of us could do more often.
This is easier to do is the client has shut down a business or ceased their activity. I do not have to report crimes that have already happened but the ethics rules kick in when I find crime that is on going. Of course, what is a crime and what is a civil case can be tough to distinguish in these cases. Thus, I can’t blame an attorney for not wanting to look for something they would rather not find.
Assuming there are no ethical issues because any possible criminal activity is over, an attorney must perform an evaluation on a client’s business at the first sign of trouble. Two new fraud cases today demonstrate my point:
Case one involves Alexander James Trabulse, the former manager of the Fahey hedge fund. In 2007 he was sued be the Securities and Exchange Commission. The year before the suite, the fund had about 165 investors who invested a total of $17.6 million in the fund. The SEC allege that he misled those investors into believing that their investments were worth $50 million when in fact they were worth $12 million. Investigators concluded that more than 20 percent of all invested assets included things like rugs, real estate, art and jewelry.
While the article is rather brief, I would doubt that the SEC just surprised him by filing a suit against him. I am sure there were other signs that would have led his attorneys to believe that a suit along with criminal charges were not far off. A final judgment in the civil case was entered against him in April. However, criminal charges were just filed against him a few days ago. He is charged with mail fraud.
If his attorneys would have audited his business from the beginning, they would have seen all his problems long before the criminal charges were filed. This would allow them to prepare a defense for the criminal case, use the civil case to assess the strengths of the Government’s case and be able to have plea negotiations early on or even attempt to avoid criminal charges. More information on this case is here.
Since that article doesn’t include a lot of information about the case, I have to make a lot of assumptions about what Trabulse’s attorneys did, known, actions they could have taken, etc. However, I know more about this next case due to the details in the article.
In 2007, the One World Capital Group was more or less shut down by Commodity Futures Trading Commission after they obtained a court order to freeze their assets and bar them from any further trading activity. At that point, it is time to go into a total defensive mode, “lawyer up” and prepare for everything. As a result, nothing is ever a surprise.
On the eve of working out an agreement in the civil case, the Government arrested John Walsh, the founder of the company along with Charles Martin, another employee of the company. They are both charged with wire fraud. Martin is alleged to have charged over $1 million at clubs and restaurants”, as well as spending $50,000 at toy stores and $280,000 in jewelry-store purchases. Both men are alleged to have used hundreds of thousands of dollars to finance a movie that was never released.
Walsh’s civil attorney was at least surprised with the timing of the arrests. I have to imagine that he knew that there was a good chance that these charges were on the way at some point. The story is here.
As both of these cases show, civil cases can turn into criminal charges sooner or later. Attorneys for clients in any civil case, internal investigation or administrative investigation involving allegations of theft or fraud need to assume that criminal charges are right around the corner. While you don’t want to call the FBI and ask them if they will be pressing charges, you need to keep your ear to the grounds. Its my experience that you will know well in advance that the FBI is coming after your client. After all, there is no emergency that requires them to use stealth and speed to gain an advantage in their case.
An attorney also needs to try to work out a package deal that includes both the criminal and civil cases. Or if that is not possible, an attorney can at least advise the client that resources should not be wasted in defending the civil case, but that the civil case can be used to gather evidence and set up the criminal case. After all, the criminal case is much more important than the civil case.
While I cannot judge the actions of the attorneys with the little information I have here, I know that there are many people that find themselves in civil cases and other investigations where their attorneys give no thought to possible criminal cases. Early and aggressive work before charges are filed can often help the client avoid being charged let alone convicted.
Busy day in NJ as State AG unveils new indictments in two separate cases that each include million dollar theft and fraud charges January 7, 2009
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2009 is starting off with a bang here in New Jersey. The State’s AG unveiled two indictments today that each charge numerous people with over one million dollars in theft and fraud.
The first case involves former OSI Collection Services director Sandra Bielanski. She is charged with numerous second degree offenses for her role in OSI’s alleged over billing of the State. The AG alleges that OSI over billed New Jersey in excess of one million dollars and that she helped cover it up. Previously charged in connection with this case include Enos “George” Blake and Carol Labbe. Bielanski also faces charges from a 2006 indictment charging her with six counts of offering an unlawful benefit to a public servant for official behavior.
More info is here.
Case two is actually two different indictments. The first involves allegations against Justin M. Sciarra, Paul Brown, Michael Magee, James Maconaghy, William Griffith, Q-Town, Inc., TJAX Investment Corp., Bay Enterprises, Inc., and 3D Assurance Brokerage, LLC. They are charged with some or all of these offenses: conspiracy, racketeering, insurance fraud, theft by failure to make required disposition of property received (all 2nd degree) and fourth-degree workers’ compensation insurance fraud.
The second indictment charges Sciarra, Brown as well as Paul Hopkins with conspiracy to commit racketeering, racketeering, conspiracy, theft by failure to make required disposition of property received, theft of services, misconduct by a corporate official and financial facilitation of criminal activity. Hopkins’s wife, Adrienne Hopkins was charged with conspiracy to commit racketeering, racketeering, conspiracy, misconduct by a corporate official, and financial facilitation of criminal activity. Eight corporations were also charged: Sciarra Insurance Agency; AJAX Enterprises, a.k.a. AJAX Leasing, Inc.; AJEX Enterprises, Inc., UJEX Enterprises; Inc., Q-Town, Inc.; and Homestead Assurance Brokerage, as well as America’s PEO, Inc., a.k.a. America’s PEO Holdings, Inc., a.k.a. Staff America and PTD Financial, Ltd.
The AG’s press release is here.
I doubt any of this is a surprise to those named in these stories. It seems like all of these cases have been going on for a while. Due to the complex nature of these on-going investigations that take years to complete, the biggest issue for those involved is whether or not they have the money to fuel the legal fight that is required to battle these charges.
Former principal of defunct school arrested on theft charges January 6, 2009
Posted by whitecollarcrimenews in News.Tags: Brevard County, Charter School, Crime, Florida, Fraud, News, theft
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Ruben Rosario, the former principal of the defunct Explorer Charter School in Brevard County, Florida was arrested today on grand theft charges. Jay Maer, the former finance director of the school is also charged. However, them men do not share the same problem. While Rosario has four charges, Maer has 46. Maer is also an ex-con. Guess who’s got the better chance of getting a good deal to testify against the other?
Besides that, Rosario seems to have a great defense. When the school was taken over and eventually shut down, law enforcement found that many financial records have gone missing. That alone will give Rosario a lot of room to maneuver since the allegations are that Rosario took payments he was not entitled to. Of course, without records, memos and other documents, it will be tough for the prosecutor to prove that Rosario knew one thing or the other.
One of the best defenses in any white collar crime case is the civil case defense. I’m sure someone has a better name for this. Basically, it should not be a criminal offense of this guy to be a bad principal. If he took money he should not have taken, but he took it all openly, then it is a civil case and not a criminal case.
For example, he allegedly took $14,000 for a vacation that he was not suppose to take. Did he tell everyone that he was going on vacation? Is there a clear paper-trail regarding the vacation and the payment from the school for his vacation? In other words, but for the issue of whether or not he was entitled to do this, did this appear legit? If so, they have no criminal intent. No criminal intent = civil case.
Maer, on the other hand, is alleged to have taken payments for extra work that he did not perform. This could easily happen once by mistake. But the article indicates that he did this on numerous occassions. That is tough to defend and a clear pattern of fraud quickly emerges. As I indicated earlier, Rosario’s best defense may be to flip on Maer in exchange for a great deal.
The article is here.
Nigerian scam leads to arrest of lonely Michigan man January 5, 2009
Posted by whitecollarcrimenews in News.Tags: Crime, Fraud, Law, News, Nigerian Scam, theft
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How could you not feel sorry for Calvin Walton of Michigan? He thought that he had met a pretty woman using an online dating website. A Florida man thought the same thing. Both men, somehow missing out on news articles, Dateline NBC specials, and just plain old common sense, thought it made sense that this woman that they had never met in person had millions of dollars coming to her. I’m sure you know what comes next. She need their help to get the money out of one country and into the US. All it’ll take is $88,000 which they will get back.
An interesting twist on this old Nigerian scam (in Nigeria, they just call it a scam) is to use a middleman so that it seems legit. That’s where Walton comes in. You see, this “woman” has the man from Florida wire $88,000 to Walton because he thinks that Walton is this woman’s US attorney. Walton thinks that he is just helping pass money from one account to another so he wires it offshore. No problems for Walton yet.
The police allege that Walton, in his quest for Internet romance, “became involved with fake money orders and checks”. Exactly what he did and how exactly he formed any criminal intent here is unknown.
Although Lapeer County is considered metro Detroit, the entire county doesn’t even have 100,000 people. Thus, I doubt that the local prosecutor sees much computer crime. Walton’s attorney can really take advantage of this as it can be very tough for a prosecutor to present a computer crime case to a jury. You can have a lot of fun if the prosecutor has never done it before as it is nothing like a normal criminal case.
Besides the issue of if they can present the case properly, I’d really like to know how they plan to try this case due to the proof issues that they will have to deal with. I’m in the dark here since the article doesn’t exactly have specifics with regard to the criminal allegations, so I have to assume that this “woman” instructed him to do one thing or the other. Of course, none of that will be able to be brought up as it would be hearsay.
I also doubt that this Florida guy is going to come up from Michigan. So the prosecutor tells the jury that this guy wrote out a fake check(s) but we can’t tell you why. Of course, Walton is free to say just about anything and blame his actions on this “woman” since she is not there in court. I call this the empty chair defense; meaning you place the blame on the person who is not there, but should be. I’d couple with the defense that this guy is a sad sack who is just as much of a victim as the guy from Florida. Fun stuff.
Here’s the article. Hope you caught the Pulp Fiction reference.
NJ lawyer pleads guilty to gambling away $4 million in clients’ money January 4, 2009
Posted by whitecollarcrimenews in News.Tags: Attorney, Crime, Law, New Jersey, News, theft
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This is a real sad story. Even though I didn’t know this fellow NJ attorney, I know how gambling addictions can ruin people as I have a good client right now that I am helping right now. Sometimes I feel like I’m bailing out a sinking cruise ship with a plastic cup, but so far, we’ve resolved several issues without any police involvement. Hopefully I can write a detailed story about the case one day. I’ve represented other people with gambling addictions in the past.
This attorney, Michael Rumore entered into a plea that calls for 15 years of prison. Compare that to the four years of probation that Kenneth Weiner, another NJ attorney got. See the story about Weiner here. If anyone knows that you can’t always compare cases, its me. However, I’m having a real problem with this 15 years.
According to the story, this gambling problem had been going on for years. However, Rumore, a real estate attorney, would use his own money when business was good. When the economy turned he used the money from lenders in his trust account that was supposed to pay balances on existing mortgages and other associated costs and fees.
As a first time offender, Rumore would have several mitigating factors in his favor right from the start. His attorney could have probably established several factors due to his addiction. Thus, if convicted at trial, there is a good chance he could get 15 years anyway which is the minimum. Since two of his charges do not merge, the best he could get would be an 8, but that would be a long shot. Something between an 8 and 15 could be possible.
As always, I don’t want to second guess his attorney, but I have trouble seeing how I would advise this guy to take this deal. If they are going to get 15 years, I would make them work for it. Why not take it to trial? This guy’s life is going to be ruined. He’ll be in prison for a few years, probably less than 5, but then what? He’ll have no job and he’ll owe this money forever. What’s the purpose of 15 years? To deter someone else? You can’t deter someone with this type of addiction. As his attorney said, he went days without sleep as he kept feeding his addiction. I’m not saying he should go free, but you can’t give him the same sentence that you would give to a criminal that was just plain greedy.
As always, I’m sure I’ll catch hell for my comments here, but 1, I’m a defense attorney, what do you want? and 2, just wait until this is you or your family and then tell me that you want yourself or them to get 15 years. But that’s right, no one you know has a mental illness.
Rumore’s story is here.
