U.S. Commodity Futures Trading Commission inquiry eventually leads to ponzi scheme indictment August 12, 2009
Posted by whitecollarcrimenews in News.Tags: Fraud, mail fraud, Ponzi scheme, wire fraud
add a comment
This is a very interesting case because an investigation into Paul Robert Karr’s activity started in 2004 but he was just indicted now. I’d really like to know what took so long here. How does it take 5 years to put this together? Hopefully Karr used his time wisely and has prepared for his defense over the years.
The only good thing about all of these ponzi schemes at this point is that a defense attorney can keep track of all of the sentences that are starting to go down so that they can advise their client accordingly. Of course, the bad thing though is taking these cases to trial is very difficult for many reasons, the least of which is the public’s attitude on these cases.
Jeffrey H. Sloman, Acting United States Attorney for the Southern District of Florida, and Michael J. Folmar, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced today that Paul Robert Karr, f/k/a Paolo Roberto Correa (“Karr”), a North Miami Beach resident, was arrested earlier today on mail and wire fraud charges arising from an investment fraud scheme in which more than 100 investors lost approximately $4,000,000. Karr is currently being held without bond. A pre-trial detention hearing is scheduled for Friday, August 14, 2009 at 10:00 AM, before the duty Magistrate Judge.
As alleged in the Indictment, from January 2002 through November 2004, Karr defrauded investors by soliciting investments for the purported purpose of trading foreign currencies in the international foreign exchange market. Karr caused investors to believe that, based on his alleged extensive experience trading foreign currencies, he would trade foreign currencies on the investors’ behalf in return for a share of the profits generated by his trading activities. Investors were led to believe that Karr was generating positive monthly returns trading foreign currencies each and every month during the course of the scheme. In fact, during most of the scheme’s existence, Karr did not even attempt to trade foreign currencies, and, when he did attempt to do so, he lost significant amounts of investors’ money.
As the Indictment alleges, Karr used most of the investors’ money for his own personal benefit and to make payments in Ponzi scheme fashion to investors who occasionally sought to redeem some of the money that they had invested with Karr and his various corporate entities. In October/November 2004, the scheme collapsed after Karr received inquiries from the U.S. Commodity Futures Trading Commission (“CFTC”) concerning his activities in the international foreign exchange market.
Mr. Sloman commended the investigative efforts of the FBI and the assistance of the staff of the CFTC’s Chicago Office. The criminal case is being prosecuted by Assistant U.S. Attorney Harold E. Schimkat.
Georgia attorney faces 77 count indictment August 10, 2009
Posted by whitecollarcrimenews in News.Tags: embezzlement, Fraud, mail fraud, wire fraud
2 comments
This is pretty sad. As an attorney, Eichholz should have known that he should have another attorney talk for him. Instead, he allegedly tried to cover everything up which, as always, only makes everything worse. Lesson for today, if the Department of Labor comes knocking, call an attorney right away; even if you are an attorney yourself!
SAVANNAH, GA—Edmund A. Booth, Jr., United States Attorney for the Southern District of Georgia, announced today the return of a seventy-seven count indictment by the federal grand jury against Savannah attorney Benjamin Sheftall Eichholz, age 58, charging an alleged scheme to embezzle more than $950,000 from employee pension benefit plans established to provide retirement benefits to present and former employees of the Eichholz Law Firm. The charges against Eichholz include Embezzlement from Employee Pension Benefit Plans in violation of Title 18, United States Code, Section 664; Money Laundering in violation of Title 18, United States Code, Section 1957; Mail Fraud in violation of Title 18, United States Code, Section 1341; False Statements in Documents Required to be Filed by ERISA in violation of Title 18, United States Code, Section 1027; Obstruction of Justice in violation of Title 18, United States Code, Section 1505; and False Statements in violation of Title 18, United States Code, Section 1001.
The indictment alleges that beginning in or before 2001 and continuing to in or about October 2008, through a variety of different means, Eichholz embezzled more than $950,000 from two employee pension benefit plans at the Eichholz Law Firm, and then repeatedly executed, mailed and filed false documents with the United States Department of Labor in order to both execute and conceal his embezzlement. The indictment further alleges that during an investigation by the United States Department of Labor of Eichholz and the two employee pension benefit plans at the Eichholz Law Firm, Eichholz made numerous false statements to an investigator with the Department of Labor, and committed other acts to obstruct justice, in a further effort to cover up his embezzlement from the employee pension benefit plans.
Booth noted that, if convicted of the charges, Eichholz faces the following maximum statutory penalties:
Counts One Through Thirty – Embezzlement from Employee Pension Benefit Plans
Imprisonment for not more than five (5) years;
Fine of up to $250,000 (18 U.S.C. § 3571), or both;
Not more than three (3) years supervised release (18 U.S.C. § 3583);
Counts Thirty-One Through Thirty-Four – Money Laundering
Imprisonment for not more than ten (10) years;
Fine of up to $250,000 (18 U.S.C. § 3571), or both;
Not more than 3 years supervised release (18 U.S.C. § 3583);
Counts Thirty-Five Through Forty-Four -Mail Fraud
Imprisonment for not more than twenty (20) years;
Fine of up to $250,000 (18 U.S.C. §3571);
Not more than three (3) years Supervised Release (18 U.S.C. 3583);
Counts Forty-Five Through Fifty-Four False Statements in Documents Required to be Filed by ERISA
Imprisonment for not more than five (5) years;
Fine of up to $250,000 (18 U.S.C. §3571);
Not more than three (3) years Supervised Release (18 U.S.C. 3583);
Count Fifty-Five – Obstruction of Proceedings Before Departments, Agencies, and Committees
Imprisonment for not more than five (5) years;
Fine of up to $250,000 (18 U.S.C. §3571);
Not more than three (3) years Supervised Release (18 U.S.C. 3583);
Counts Fifty-Six Through Seventy-Seven – False Statements
Imprisonment for not more than five (5) years;
Fine of up to $250,000 (18 U.S.C. §3571);
Not more than three (3) years Supervised Release (18 U.S.C. 3583);
National Prearranged Services executive indicted for fraud August 10, 2009
Posted by whitecollarcrimenews in News.Tags: Fraud, mail fraud, wire fraud
6 comments
I’d really like to know if Randall Sutton had an attorney in 2007 when regulators came calling. A good attorney should have been able to sniff out these lies and counsel him accordingly. One of the primary reasons to get an attorney at the first sign of danger is to have a mouthpiece that is detached from your personal situation. Looks like Sutton tried to do the talking for himself which really made things go from bad to worse.
ST. LOUIS, MO—Randall Sutton was indicted on mail fraud, wire fraud and money laundering charges involving a ten-year multi- million dollar fraud scheme involving the sale of pre-paid funeral services, Acting United States Attorney Michael W. Reap announced today.
Randall Sutton was the Chief Financial Officer, Director, and President of National Prearranged Services, Inc., headquartered in Clayton, MO, an entity that sold prearranged funeral services in 19 states. Customers either purchased prearranged funeral services directly from National Prearranged Services, or from funeral homes who in turn purchased these services from National Prearranged Services. National Prearranged Services purchased life insurance policies from Memorial Service Life Insurance Company and Lincoln Memorial Life Insurance Company of Austin, Texas in order to fund the funerals when customers died. Sutton was Director of both of those companies.
According to the indictment, beginning in 1998 and continuing until 2008, Sutton and others, defrauded National Prearranged Services’ customers, states’ guaranty funds, and funeral homes doing business with National Prearranged Services.
The purchase of prearranged funeral services involves a pre-payment of a substantial sum by the customer, in exchange for the promise that funeral services will be provided at no further expense upon the customer’s death. In the ordinary course of business, the seller of prearranged funeral services uses the customer’s pre-paid funds to purchase a life insurance policy, holds the funds in trust, or otherwise makes reasonable use of the funds, to ensure that funds are available to provide the funeral services upon the customer’s death. The customer reasonably expects that the business will operate in such a way so that the pre-purchased services will be available upon death.
The indictment alleges that rather than making reasonable use of the assets of their business, Randall Sutton and others used a series of deceptions to extract funds from National Prearranged Services and related entities such as Lincoln Memorial Life. As a result of this fraudulent scheme, National Prearranged Services and Lincoln Memorial Life were unable to meet their mounting obligations and collapsed in 2008. Sutton and others at National Prearranged Services led funeral homes and customers to believe funds paid for prearranged funeral services would be held in trust or used to purchase life insurance policies in order to ensure that money would be available to pay for customers’ funeral services when needed. Funeral homes and customers who paid the entire cost of pre-need funerals up-front were given “Paid in Full” certificates. Customers were not informed that their purchase of prepaid funerals involved risk. They also failed to disclose to funeral homes and custom
For example, at the time they purchased prearranged funeral services, many customers completed applications for life insurance policies indicating they were making payment in full for insurance policies that would fund their funerals. Employees at National Prearranged Services, with the knowledge and under the direction of Sutton, simply whited-out the indications that payments had been made in full and altered the documents to make it appear as though the customers had made partial payments. The altered documents were forwarded to life insurance companies such as Lincoln Memorial Life, who adopted the policies and assumed the obligation to pay a lump sum at the time of the customer’s death. National Prearranged Services, meanwhile, diverted the difference between the true full payments and the falsified partial payments from the customer’s insurance policy, thus retaining the vast majority of the customer’s lump-sum payment while transferring the obligation of future pay.
As another example, National Prearranged Services’ employees used white-out or cross-outs to change the names of beneficiaries on insurance applications in order to extract money. Customers completed applications for life insurance policies naming themselves or their funeral homes as a beneficiary. With Sutton’s knowledge, employees at National Prearranged Services simply whited-out or crossed-out other beneficiaries named in the applications and made National Prearranged Services the sole beneficiary. Once National Prearranged Services was listed as the sole beneficiary on policies, it was able to extract money from customers’ policies in at least two separate ways:
First, customers’ insurance policies were pledged as collateral for loans to National Prearranged Services without the customers’ knowledge. Typically, the loans were made by insurance companies within the same family of corporate entities, such as Lincoln Memorial Life, allowing Sutton and others to extract funds from these insurance entities under false premises. In total, as alleged in the indictment, National Prearranged Services received in excess of $65 million from such policy loans. Often, the proceeds of these policy loans were immediately turned around and used to pay outstanding premiums due from other customers.
Second, once it had altered applications to name itself as sole beneficiary, National Prearranged Services then converted customers’ whole life insurance policies to monthly renewable term polices, extracting from the insurance company the difference between the cash surrender value of the whole life policy and the first monthly premium of the renewable term policy. By doing so, National Prearranged Services extracted more than $40 million from the customers’ policies at Lincoln Memorial Life without their knowledge.
As another example, National Prearranged Services failed to invest the funds it received from roll-over accounts as promised. Instead, they often purchased large blocks of prearranged funeral contracts from funeral homes that had sold prearranged funeral services in the past. These block purchases were referred to as “roll-overs” because the prearranged funeral contracts were rolled-over from the originating funeral homes to National Prearranged Services. National Prearranged Services promised to invest 80 percent of the underlying customers’ funds in safe investments for 30 days, and then to use the money to purchase life insurance. Instead, National Prearranged Services failed to invest the money for 30 days as promised, and after 30 days failed to invest the money in life insurance policies as promised. Instead, the roll-over funds were used for other purposes, only to be replaced with “debentures” or promises to repay the funds. Sutton and others then caused false mo
The indictment states that Randall Sutton and others at National Prearranged Services agreed to manage a $1.7 million custody account for the Muehlebach Funeral Home located in Kansas City, MO. The Muehlebach Funeral Home needed this account to pay for its customers’ funerals when they died. National Prearranged Services invested this money in speculative futures contracts, lost most of the money, and then sent monthly statements to the Muehlebach Funeral Home showing false balances in its “Custody Account.”
As another example, Randall Sutton and others at National Prearranged Services caused over $50 million to be taken from the Company in exchange for promissory notes from related individuals or companies. Unlike legitimate promissory notes, these notes were often backdated, sometimes interest was paid back to National Prearranged Services with money that originated from National Prearranged Services itself in “round trip” transactions, and promissory notes were often replaced with new promissory notes when they came due. Over $10 million of these funds were funneled through various entities and used to purchase a company known as Professional Liability Insurance Company of America which is owned by RBT Trust II.
During 2007, regulators and funeral homes from various states began to increase scrutiny of National Prearranged Services’ practices. In response, Randall Sutton and others gave false information to state regulators and funeral homes. For example, regulators and concerned funeral homes were told falsely that “policy loans” were not taken by National Prearranged Services, or that policy loans had been repaid, or that senior management was not aware of the policy loans. As another example, regulators and concerned funeral homes were told falsely that senior management was not aware of the practice of whiting out and altering customers’ life insurance applications, or they were told falsely that National Prearranged Services was permitted to do so based on language in the applications.
Finally, the indictment alleges that Randall Sutton held himself out to be licensed by the Missouri Department of Insurance. Sutton did in fact hold a Producer License issued by the Missouri Department of Insurance and this license was renewable every two years upon the successful completion of a qualifying exam. In truth, Sutton had his secretary study for and take the qualifying exam on-line rather than taking it himself.
“Money laundering is not a victimless crime as innocent people are often “duped” by various schemes” said C. Steve Howard, Acting Special Agent in Charge of IRS Criminal Investigation. “We will continue to work with our law enforcement partners to financially disrupt criminal organizations that commit crimes against our society and our economy.”
“Fraud schemes have a pronounced economic impact that eventually increase costs for all of us,” said John V. Gillies, Special Agent in Charge of the FBI in St. Louis. “Investigators work hard to unravel this complex type of corporate fraud. The FBI and our partners are committed to protecting the public by eliminating dishonest and unscrupulous greed.”
Sutton, 63, Chesterfield, MO, was indicted by a federal grand jury on six felony counts of mail fraud, one felony count of money laundering, and two felony counts of wire fraud. He is expected to appear in federal court this morning, in St. Louis.
If convicted, each count of mail and wire fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000; money laundering carries a maximum penalty of 10 years in prison and/or fines up to $250,000. Restitution is mandatory.
New arrests in 2007 election fraud case shows need to lawyer up early August 4, 2009
Posted by whitecollarcrimenews in News.Tags: Corruption, Fraud
2 comments
As I have said in posts about other news stories, large and complex investigations have a way of morphing as time goes by and other defendants flip on existing and unindicted co-defendants. Those lucky enough to escape the initial arrests should not think that they are out of the woods although I am sure that most will convince themselves that they are.
I have had great success when clients call me at the first sign of danger. Of course, you cannot stop others from flipping on your client and thus, there may be little you can do to prevent an indictment in some cases. However, I am a big proponent of starting trial prep right away as you can never have enough time to prepare for trial, gather information and minimize damage. Hopefully, these three people already had attorneys and are not surprised by this week’s events.
Press release:
TRENTON – Attorney General Anne Milgram announced that three more people were indicted today for election fraud in connection with absentee ballots they collected and submitted as workers for the 2007 campaign of Teresa Ruiz for the New Jersey Senate in the 29th District. Another campaign worker for Ruiz, Antonio Santana, was previously indicted on March 23 on charges he fraudulently changed votes on absentee ballots during the election.
According to Criminal Justice Director Deborah L. Gramiccioni, a state grand jury returned two indictments today charging three individuals in the ongoing investigation by the Division of Criminal Justice Corruption Bureau and the Essex County Prosecutor’s Office.
One indictment charges Gianine Narvaez, 36, of Belleville, a data processing technician for the Essex County Commissioner of Registration and Superintendent of Elections, with official misconduct (2nd degree), election fraud (2nd degree), absentee ballot fraud (3rd degree), tampering with public records or information (3rd degree), and forgery (4th degree).
The second indictment charges Angel Colon, 46, of Newark, an employee of the City of Newark Office of Affirmative Action, and Colon’s fiancée, Sorinette Rosario, 31, of Belleville, an employee of the Newark Welfare Department, with election fraud (2nd degree), conspiracy to commit election fraud (2nd degree), absentee ballot fraud (3rd degree), conspiracy to commit absentee ballot fraud (3rd degree), tampering with public records or information (3rd degree), and forgery (4th degree).
According to Director Gramiccioni, Narvaez, Colon and Rosario are charged with tampering with documentation for messenger ballots, which are absentee ballots intended for use by homebound voters. They are charged with fraudulently submitting such ballots as votes in the Nov. 6, 2007 general election.
“We charge that these campaign workers fraudulently submitted absentee ballots on behalf of residents who never received the ballots or had an opportunity to cast their votes,” said Attorney General Milgram. “Election fraud is a serious crime, particularly when voters are disenfranchised.”
Messenger ballots are for use only by those who are homebound due to illness, infirmity or disability. Such persons can complete an application designating a messenger who is a family member or a registered voter in the county. The messenger is thereby authorized to obtain an absentee ballot from the county board of elections, take it to the voter, and return a completed ballot to the county board.
Narvaez, Colon and Rosario allegedly solicited applications for messenger ballots from individuals not qualified to receive them and fraudulently designated themselves as the authorized messengers. They allegedly obtained messenger ballots from the county board of elections, and submitted them to the board of elections as votes on behalf of voters who, in fact, never received or voted the ballots.
“This alleged voter exploitation was brought to our office’s attention by the Essex County Superintendent of Elections,” said Essex County Prosecutor Paula Dow. “Voting is a fundamental privilege that all American citizens have a right to exercise without any form of meddling. The Essex County Prosecutor’s Office will not tolerate any attempt to manipulate elections of any kind.”
“We are continuing our investigation into allegations of fraud in the November 2007 general election in the 29th District,” said Director Gramiccioni. “The Division of Criminal Justice and Essex County Prosecutor’s Office are pursuing all leads concerning tampering with absentee ballots.”
Second-degree crimes carry a maximum sentence of 10 years in prison and a $150,000 fine, while third-degree crimes carry a maximum sentence of five years in prison and a $15,000 fine. Fourth-degree crimes carry a maximum sentence of 18 months in prison and a $10,000 fine.
The official misconduct charge against Narvaez carries a mandatory minimum sentence of five years in prison without parole. The mandatory minimum was established under a law signed by Governor Jon S. Corzine in March 2007 that significantly enhances the punishment of government officials who are convicted of abusing their office and violating the public trust.
The charges remain pending against, Antonio Santana, 58, of Newark. That indictment alleges that Santana changed the votes on three absentee ballots that he collected from members of one family in October 2007. The family members filled in the circles on the ballots in pencil to vote for the three independent candidates. They gave the sealed ballots to Santana, who allegedly changed the votes on each of the ballots to the three Democratic candidates.
Contractor arrested for theft by deception August 1, 2009
Posted by whitecollarcrimenews in News.Tags: Attorney, Crime, Fraud, Law, Lawyer, New Jersey, News, theft by deception
4 comments
Robert D. Hamway of Toms River, who is not a licensed contractor, was arrested and charged with theft by deception after allegedly taking money to fix a roof but never performing the work.
These cases are common but in my opinion, most of them are not criminal cases. Instead, they are civil cases where the customer does not want to go to civil court for a number of reasons. While I have little to no facts here, my experience tells me that the customer got fed up at some point and asked for his money back. However, Hamway may have dodged phone calls or told the customer that the money was on the way, when it never really was. It is that conduct that occurs after the transaction that tends to push this into criminal court.
Story is here.
Utah law firm indicted for H-2B visa program fraud August 1, 2009
Posted by whitecollarcrimenews in News.Tags: Attorney, Crime, Fraud, Law, News
add a comment
James Hector Alcala, his law firm the Alcala law firm, seven current or former employees and a property management company have all been indicted for an alleged immigration fraud scheme. Authorities allege that the firm lied on applications to help 10 companies in Salt Lake, Utah and Davis counties get work visas for ineligible foreign workers.
The H-2B visa program allows employers to petition for permits that allow foreign nationals to work temporarily in the United States. More than 700 petitions filed by the Salt Lake City firm led to the issuance of more than 5,000 work visas. The majority of those were fraudulent.
This is the type of case where the number of people arrested can increase exponentially if authorities find evidence that the companies working with the firm knew that the applications were fraudulent. I’m sure at least some of the companies know, but proving it is another matter. These other companies need attorneys right away to field inquiries from authorities.
While it looks bad for Acala, I’m questioning the case against the other employees. Authorities in these cases tend to believe that everyone is in on it. However, most employees are ”worker bees” that do what they are told without being told what is really going on. With the benefit of the whole picture in front of them, authorities find it impossible to believe that everyone else wasn’t in on it. I’ve seen this many times.
Thus, attorneys for these other employees need to really look at the case from a number of angles to see if there is any real criminal exposure for their clients. Law enforcement tends to exert a lot of pressure on attorneys in an effort to weaken their opinion of the case which in turn, will change the advice they give to their clients. In these situations, attorneys need to counter this pressure and work to convince law enforcement that they have no case. I’ve done this several times with great results.
Story is here.
11 week bribery trial ends in 5 hours July 30, 2009
Posted by whitecollarcrimenews in News.Tags: Attorney, Bribery, Crime, Fraud, Law, New Jersey, News, official misconduct
add a comment
My heart goes out to Robin Lord. She’s a great attorney. After 11 long weeks of trial, her client, John Fiore was convicted after just 5 hours of deliberations. In my opinion, that tells me that it wasn’t even close which just has to kill you as an attorney. There is no way that a jury can give serious consideration to 11 weeks of testimony in just 5 hours. While I did not follow the trial, those two numbers alone tell me that most of the jury probably convicted him a few weeks ago. Thus, this may have been a situation where, for whatever reason, there is little an attorney can do and no one could have done better.
Press release:
TRENTON – Attorney General Anne Milgram and Criminal Justice Director Deborah L. Gramiccioni announced that John Fiore, former executive vice president of the East Windsor Police Athletic League, was convicted at trial today of official misconduct and bribery for steering a PAL construction contract to a contractor who built a deck at his home free of charge.
According to Director Gramiccioni, Fiore, 63, of Allentown, was convicted by a Mercer County jury of conspiracy, bribery and official misconduct, all second-degree offenses. The verdict followed an 11-week trial before Superior Court Judge Mitchell Ostrer. The jury deliberated for five hours over a two-day period. Second-degree crimes carry a maximum sentence of 10 years in state prison and a $150,000 fine. Judge Ostrer scheduled Fiore’s sentencing for Oct. 13.
Assistant Attorney General Lewis Korngut conducted the trial for the Division of Criminal Justice Corruption Bureau. The charges stem from an investigation by the Office of Insurance Fraud Prosecutor within the Division of Criminal Justice.
“This defendant selfishly and corruptly used his public position within the PAL for his personal gain,” Attorney General Milgram said. “Today’s verdict sends a loud message that this type of conduct will not be tolerated.”
The jury found that Fiore, a retired East Windsor police officer, used his position as an officer on the Board of Directors of the East Windsor PAL to steer a contract to Jeffrey Nemes to build the PAL a combined concession stand and administration building on Airport Road in East Windsor. The jury found that, in return for Fiore influencing the Board of Directors to hire Nemes’ company, Nemes built a $12,000 deck, free of charge, at Fiore’s former home in Washington Township, Mercer County.
The state’s investigation revealed a conspiracy among Fiore, Nemes and a third man, Marc Rossi, to arrange for Nemes Construction Company to get the contract and overcharge the East Windsor PAL for the project. The PAL paid Nemes a total of $274,046, which was at least $90,000 more than what the building should have cost. Rossi received $5,000 for his role in arranging the deal between Fiore, the East Windsor PAL, and Nemes Construction Company.
The investigation was conducted and coordinated by Lt. Robert Stemmer, Civil Investigator Joseph Salvatore, Analyst Paula Carter, Deputy Attorney General Asha Vaghela and Assistant Attorney General Lewis Korngut. Stemmer and Salvatore were formerly assigned to the Office of Insurance Fraud Prosecutor but now are assigned to the Division of Criminal Justice Corruption Bureau.
“This verdict is a tribute to the superb hard work and dedication of the Division of Criminal Justice’s investigative and trial teams,” Director Gramiccioni said. “Today’s conviction marks the conclusion of a 10-year investigation in which 12 people were convicted, resulting in seven people being sent to New Jersey State Prison.”
In March, Nemes, 43, of Hamilton, pleaded guilty to bribery, admitting he built the $8,000 deck for Fiore in return for the PAL contract. The judge ordered Nemes to pay $8,000 in restitution to the East Windsor PAL and imposed a five-year state prison sentence, concurrent to an eight-year sentence he was already serving on a 2007 bribery conviction obtained by the Division of Criminal Justice.
Rossi pleaded guilty to theft in 2003 in connection with the $5,000 payment involving the PAL. He was sentenced to three years in prison.
Nemes, a former Hamilton Township police officer, was convicted at trial in 2007 of offering two Hamilton Township fire chiefs up to $500 and other rewards if they would delay fire suppression and increase damage at fire scenes so as to increase potential profits for Nemes’ company and an insurance adjustment firm owned by Rossi. That conviction led to his prior eight-year state prison sentence. Assistant Attorney General Korngut also represented the state in that trial.
In addition, Nemes pleaded guilty in March to theft for stealing insurance money from four fire victims who hired him for repairs that he never completed. For that charge, Nemes received a concurrent jail sentence and was ordered to pay $74,472 in restitution.
Rossi pleaded guilty in 2003 to bribery and operating an “arson-for-profit” insurance fraud scheme. Rossi admitted to intentionally setting at least six fires in the Trenton area in 1999 so his public insurance adjustment business would be hired to adjust the insurance claims. Rossi was sentenced to eight years in prison and was ordered to pay $542,853 in restitution and a $50,000 insurance fraud fine.
Ponzi schemes continue to roll up July 30, 2009
Posted by whitecollarcrimenews in News.Tags: Attorney, Crime, Fraud, Law, Lawyer, Madoff, New Jersey, News, Ponzi scheme
1 comment so far
Some of the ponzi schemes that surfaced over the past year are starting to plea out. The latest includes Marcia Sladich, the former operator of a Clifton-based real estate investment program. She admitted that she fraudulently stole more than $15 million from hundreds of investors. She pleaded guilty on Thursday in federal court to a one-count information charging her with mail fraud. Under federal sentencing guidelines, she faces up to 78 months in prison but of course, the guidelines are no longer mandatory.
After the circus that was the Madoff case, I would want a few more of these cases to shake out first before tempting fate. Conventional wisdom has traditionally been that a good attorney can shave years off the sentencing guidelines in a white collar crime case. My firm has made that a reality. Of course, post-Madoff, some judges might want to send an example especially when the victims are in the hundreds. A six and a half year sentence in a $15 million case is pretty good deal so we’ll have to see what the judge hands down.
Story is here.
Private investigator probably lost opportunity to settle case before indictment July 30, 2009
Posted by whitecollarcrimenews in News.Tags: Crime, Fraud, Law, New Jersey, News, theft by deception
3 comments
Jerry Panico of Staten Island, is accused of stealing $79,000 from Allstate Investigations by diverting funds from clients to his own bank account. He was charged with second-degree theft by deception for allegedly conducting investigations for clients without his employer’s knowledge then had checks written made payable to himself and mailed to his home.
That alleged theft totaled $30,000 and I would have no problem taking that case to trial. However, he is also charged with stealing an additional $49,000 worth of checks made payable to Allstate by endorsing them and cashing them before being deposited into a fraudulent account he created in the company’s name.
He was fired in October of 2008, arrested in June and indicted this week. This case is illustrative of advice that I often give but is rarely followed: hire an attorney at the first sign of trouble. Here, Panico was fired almost a year ago and he knew what was going on. He should have hired a good attorney right away to resolve this before it even got to the police.
For whatever reason, many people think that nothing bad will ever happen to them so they do nothing. How do I know? I have people come to me before law enforcement is involved but some of them seem to want to find someone that will just agree with them. As soon as I tell them that they need to take proactive action now, they assure me that nothing bad will ever happen. Of course, that begs the question, why the hell are you in my office in the first place? I have seen these people try to convince me that they know better only to read (and blog) about them later when they are arrested/indicted and sentenced to prison.
You know you will never read about? All the clients that came to me early on where I could work out a case and prevent them from ever getting arrested/convicted. Those clients pay a smaller legal bill and have a lot less stress in their life.
Story is here.
20 reasons to call a white collar criminal defense attorney July 28, 2009
Posted by whitecollarcrimenews in My Cases.Tags: Crime, Fraud, Law, New Jersey, News
1 comment so far
I see way too many people come into my office when it is already too late. The difference between prison and freedom, a criminal record and no record, unemployment and a great career may not only be what attorney you call, but when you call that attorney. To make it clear, I came up with a list of twenty scenarios where you should call a white collar criminal defense attorney right away. You may not need to hire the attorney, but you at least need to get advice on how to proceed and whether or not you have any exposure. Even better, if you call early enough, you can often prevent any charges from being filed which will keep your legal fees low.
1. Arrest
If you are arrested, you should call an attorney ASAP. The sooner you get a good attorney involved in your case, the greater the chance for a successful result.
2. Arrest of someone closely associated with you (family member, friend, co-worker)
If someone close to you has been arrested and there is a chance that their criminal activity is associated with you in any way, see an attorney right away.
3. Conviction
Many people choose the wrong attorney the first time around. It can’t hurt to call a good attorney to check your options now that you are convicted.
4. Call from police asking to make statement
You have the right to remain silent and anything you say will be used against you. Don’t think that you can explain it away. Call an attorney or risk a conviction as a result.
5. Knock on door from law enforcement
If law enforcement knocks on your door and makes a request, you should call an attorney right away before doing anything. Unless they have a warrant, they can always come back later.
6. Subpoena from law enforcement requesting records and/or testimony
Many white collar crime cases start with a subpoena. You may not have to turn over anything or you could limit what you turn over. Call an attorney for guidance.
7. Allegation from DYFS of any type of child abuse or neglect
While DYFS investigations and criminal prosecutions do not always go hand-in-hand, they quite often do. Thus, anything you say to DYFS could be used to convict you.
8. Investigation from Administrative agency regarding possible criminal conduct
You do not have the same rights in an administrative action as you do in a criminal court. Thus, you could open yourself to criminal prosecution if you make the wrong step. This could be in the form of a demand for inspection, a subpoena or a set of interrogatories.
9. Investigation from employer for possible criminal activity
You have no Miranda rights with your employer and private companies will prosecute you.
10. Discipline from employer for criminal activity
Now that you have been disciplined or terminated for possible criminal wrong-doing, you need someone to field any possible calls from law enforcement.
11. Civil suit complaint alleging possible criminal activity
Setting up a team of attorneys for the civil case that can make strategic use of discovery proceedings to set up the eventual criminal case can make all the difference.
12. Subpoena for deposition in civil case
A fishing expedition in a civil case could lock you into a statement that can be used down the road in a criminal case where you could be seriously regretting your own words.
13. Subpoena for testimony at grand jury
You are only one piece of the puzzle and thus, you may not know the goal of the grand jury. Your testimony could lead to an indictment of a friend, family member or even yourself.
14. Letter from insurance company regarding investigation
Insurance company investigations discover a majority of the insurance fraud that is criminally prosecuted in New Jersey. Again, you have no Miranda rights here.
15. Request from insurance company requesting an Examination Under Oath (EUO)
Same as above, however, this is a sure sign that you are suspected of insurance fraud. Having an attorney guide you through the process can be priceless.
16. Allegations of criminal activity in divorce case
A soon to be ex-spouse can be out for blood. Consulting with an attorney about possible criminal activity such as invasion of privacy can give you piece of mind.
17. Tevis claim as part of divorce complaint
Not just a mere allegation but a civil claim seeking damages. Criminal complaints can be used for leverage. Having a good criminal defense attorney to shut this down is key.
18. Identity theft or unknown items on credit report
Innocent people are arrested everyday because someone else stole their identity. You need an attorney that can clear up both your good name and credit.
19. Property seized by law enforcement
If your property is seized, there is a good chance you are not getting it back regardless of what the police say. Call an attorney right away to look into your options and criminal exposure.
20. IRS notice that there was a problem with your taxes
The IRS can be easy to deal with if they approached early and in the right way. After a while, they lose their patience and you find yourself indicted for any number of tax crimes.
