Tuesday, March 31, 2009

Larceny Defined

Leeanna Rossi, a professor of criminal justice at the Western New Mexico University in Deming, NM, has now published a definition of larceny in the local paper, The Deming Headlight. We have taken the liberty of quoting her in full:

"Last week, I defined embezzlement as a crime of theft. Another crime of theft is larceny, which is closely related. Larceny can be defined as: the trespassory taking and carrying away of personal property of another with the intent to steal.

Larceny is a crime against possession. For there to be a trespassory taking, it requires the wrongful taking of property from another's possession, so that if the defendant is already in rightful possession of the property at the time she takes it for her own use, she can not be guilty of larceny. She would instead be guilty of embezzlement. The difference is she can not be in lawful possession of the property at the time of the taking.

For example, Delia contracts to sell her house to Mike. The deal also includes items such as the furniture. Delia was allowed to remain in the house until closing. Mike closes and as he is moving into the house, he sees that some of the furniture is gone. Delia admits to taking the missing furniture and later selling them. Can Delia be convicted of larceny? No, because Delia removed and sold the furniture while she was in lawful possession of those items, prior to the transfer of title. Delia may be charged with fraudulent conversion but not larceny.

The defendant, to commit larceny, must not only commit a trespassory taking but must also carry the property away. The technical term for this is "asportation." Even moving the property a slight distance is sufficient. In many courts today, merely bringing the property under your dominion and control, without physical movement, may also be sufficient.

For example, David enters Tom's car, turns on the lights and starts the engine. At that point he is arrested. If actual movement is required for asportation, then David would not be charged with larceny. However, if the requirement for asportation is only having the car under his dominion and control, David could be charged with larceny.

As with embezzlement, personal property of another may include property which is both tangible (such as an auto) and intangible items (such as stocks and bonds). One of the glaring differences between larceny and embezzlement is that a person can not commit larceny of real property.

Next, property taken must belong to another. There can be no larceny if the property is co-owned by the defendant and another person. However, co-owners may be charged with embezzlement or false pretenses if other aspects of these crimes are met.

Finally, the intent to steal requires that the owner be permanently deprived of the property. Intent to take property temporarily is not sufficient.

For example, Sue, a 17 year old girl, enters the house of Bill and takes his bicycle. She later testifies she took the bike to get even with Bill for something he had done and she intended to bring it back but got caught before she could do so. She was not charged with larceny because she didn't have the intent to deprive the owner of his property permanently, only temporarily. However, for temporary taking, the defendant must also have the ability to return the property to its owner. This applies when property is taken and later abandoned. Even though there is no intent to permanently keep the property which is abandoned, the defendant's ability to return it to the owner is unlikely.

Almost all states divide larceny into at least two degrees: petit and grand. Grand larceny usually qualifies where the market value is more than a specific amount. When a defendant steals several items, which together qualifies for grand larceny, but no item meets it separately, it may be decided on the circumstances behind the crime. Also, property taken at the same time from several victims will usually be charged with grand larceny because all property taken is considered as part of a single scheme."

Professor Rossi previously defined Embezzlement which we highlighted in our post here.

Read Rossi's article in The Deming Headlight here.

Update On Massive Ohio Corporate Fraud Case: National Century's Paulsen Sentenced To 30 Years

Lance K. Poulsen, 65, the former founder and CEO of Dublin, Ohio-based National Century Financial Enterprises, was sentenced Friday to 30 years in prison for defrauding investors to the tune of $1.9 billion. He was also ordered to pay $2.38 billion in restitution. According to prosecutors, Poulsen fabricated data, transferred funds between accounts to hide shortfalls and misled the investors concerning the financial health of the company. One of Poulsen's accomplices, Rebecca S. Parrett, 60, was sentenced to 25 years in prison for her part in the scheme. She remains a fugitive. A third defendant, Karl A. Demmler, 57, one of the founders of National Century, was sentenced to 7 years in prison for his involvement in the fraud. Poulsen was originally found guilty last October on multiple counts of securities fraud, wire fraud and money laundering. National Century collapsed in 2002.

Read FraudTalk's earlier posts on this story here and here.

Read the story here and here.

Massachusetts Man Sentenced For Embezzling $130K From Non-Profit

Andrew R. Ma, 33, of Weymouth, Massachusetts, was sentenced to 2 years in prison for embezzling some $130,000 from the Dimock Community Health Center Boston where he had been employed as a "senior accountant". Ma pleaded guilty last October to the embezzlement charges. According to prosecutors, Ma used a debit card from the non-profit health care institution to withdraw cash and to make purchases of jewelry and electronics for his own benefit. He also stole cash from the company's cashier's office. Some of the cash withdrawals were made at area casinos. Ma also altered the non-profit's books and records in an attempt to cover up his thefts. According to reports, Ma has an "extensive" criminal record.

Read the story here and here.

Read the DOJ announcement here.

Monday, March 30, 2009

Pennsylvania Man Sentenced In $3.5 Million Embezzlement Case

Brian J. Rowland, 44, of Gilbertsville, Pennsylvania, was sentenced Thursday to 63 months in prison for embezzling more than $3.5 million from the Gillespie Group, an advertising company where he had been employed as a bookkeeper. He had previously pleaded guilty to wire fraud and tax evasion. The thefts occurred over at least a 12 year period from 1994 to 2006, according to prosecutors. Rowland issued company checks to a fictitious business he created called "Business Management Concepts." He would then deposit the checks into a bank account he created under the name of “Brian Rowland T/A Business Management Concepts”. Rowland set up the entity Business Management Concepts as a fictitious business name in 1992. He was also ordered to pay restitution in the amount of $3,524,781.85. Rowland was also charged with tax evasion.

Read the story here and here.

Oregon Woman Arrested In $200K Embezzlement Scheme

Michele Louise Luck, 51, of Bend, Oregon, was arrested and charged with embezzling $214,000 from Central Oregon Pediatric Associates in Bend, Oregon office where she had been employed as office manager in charge of payroll for 17 years. Details are sketchy at this time.

Developing...

Read the story here.

Internet Fraud On the Rise, FBI Report Says

The Federal Bureau of Investigation has released its annual report on Internet fraud revealing that some $265 million was lost in 2008 in the US. More than 275,000 complaints were logged averaging almost $1,000 in losses each. The losses represent an increase of nearly 11 percent over 2007. Complaints increased dramatically by 33 percent over the prior year.

Read the FBI announcement here.
Read the entire report here.

Vermont Man Pleads Guilty To Embezzling Nearly $100K

Karl Austin, 34, of Pownal, Vermont, has pleaded guilty to two counts of embezzlement, admitting to stealing some $95,000 from NSK Steering Systems of Bennington, Vermont where he had been employed. Austin, who apparently had responsibilities at NSK that included finance, initially took from the petty cash and them moved onto writing himself checks to supplement his regular paycheck.

Read the story here.

Former Wisconsin Municipal Treasurer Convicted Of Embezzlement

Kim B. Simmelink, 52, of Sheboygan Falls, Wisconsin and the former treasurer for the Village of Oostburg, Wisconsin, was convicted of embezzling at least $56,000 from the municipality. According to prosecutors and audit showed Simmelink had embezzled more than $140,000. had been charged with nine felonies for allegedly forging signatures and falsifying records to cover the thefts. He pleaded no contest to two counts each of felony forgery and felony theft but will serve no time as part of the plea agreement. Simmelink had been employed as the Oostburg's bookkeeper since 1987, according to reports. The thefts in question ocurred over a six month period between late 2005 and early 2006 wherein Simmelink simply wrote himself checks.

Read the story here.

Nevada Exec Charged With Fraud & Embezzlement

Nikki Pomeroy, an officer of Henderson, Nevada-based Southwest Exchange, purported to be a tax-free real estate exchange business, has been charged with fraud and embezzlement. Pomeroy, the daughter of the now defunct company's chairman Donald McGhan, pictured here, is charged with 11 counts of embezzlement and 11 counts of "unlawful intermediary in a tax-free exchange," and alleged to have bilked investors out of $95 million. Donald and Shirley McGhan have also been embroiled in the case which is described as a ponzi scheme.

Read the story here, here and here.

Update: Former Washington State Municipal Worker Is Sentenced To 3 Years For $1.3 Million Embezzlement

Terry L. Davis, 57, of Seattle, Washington and a former Assistant Finance Director for the City of Arlington, Washington, was sentenced Friday to 37 months in prison for embezzling some $1.3 million from the city. Davis, who worked for the city for 32 years and had been charged with mail fraud and filing a false tax return, wrote herself over 100 checks, according to prosecutors. She claimed to have a gambling problem.

Read FraudTalk's earlier posts on this story here and here.

What's Behind Rise In Worker Theft?

The Bend Oregon, Bulletin, published an article today entitled "What's Behind Rise In Worker Theft?" The article suggests that prosecutors have noticed a rise in embezzlement cases, but say that the reasons vary. According to the article, in the past 18 months some 15 people in Deschutes County, Oregon have been charged with various forms of embezzlement amounting to more than $500,000 in thefts from their respective employers. At least one perpetrator allegedy had a gambling problem. Another stole to pay off debts. Some stole to maintin or better their lifestyles. Others still feel entitled to the money and are disgruntled with their employers for some reason. Others still supposedly have mental health issues.

Read the whole article here.

We note that one of the examples included in the article is the case of Tiffany Lee Savastano. We noted her story back in November where she was sentenced to 6 years in prison for embezzling more than $200,000 from the Cooper Mountain Winery. However, the article cites Savastano as having embezzled $113,831 from 97 Truck and Trailer. We have not been able to independently verify that this, but perhaps it is a case of another serial embezzler.

Washington State Mortgage Fraud Cabal Indicted

A Seattle, Washington grand jury returned a 40-count indictment last week against 7 individuals in the Seattle area charging them with participating in a $46 million mortgage fraud scheme. Those indicted include Vladislav Baydovskiy, 31 and Viktor Kobzar, 32, principlas of Kobay Financial Corp, Camie Byron, 32, an employee of Kobay, Alla Sobol, 28, principal of Nationwide Home Lending, David Sobol, 40, and Donata Baydovskiy, 28, principals of Emerald City Escrow ; and Sandra Thorpe, 55, a bookkeeper who allegedly prepared false letters verifying employment for buyers. They all reside in the Seattle, Washington area. The indictment, which includes charges of conspiracy, bank fraud, mail fraud and wire fraud, alleges the defendants used "straw buyers" or other unqualified buyers with "vastly overstated incomes" to artificially inflate home values and acquire more than $46 million in mortgages from ING Bank, Washington Mutual and other banks. The indictment also alleges they kept $9 million for themselves. They were all arrested last Thursday. ING had previously brought a federal racketeering suit against Nationwide and Emerald City. Prosecutors are calling this the largest mortgage fraud case in state history. Some of the money was used to perpetuate lavish lifestyles of some of the defendants.

Read the story here, here and here.

Friday, March 27, 2009

2 Union Officials in Maryland Indicted For Embezzlement

Paul S. Peters, II, 31, of Dundalk, Maryland and Brian Armentrout, 32, of Baltimore, Maryland, president and secretary, respectively of the Waterfront Guard Association Local 1852, I.W.A., were indicted for embezzling more than $300,000 from the union. According to the complaint, between January 2002 and September 2005, "Peters and Armentrout embezzled funds from the union’s pension and welfare plans, as well as from the union operating account, and used the union money for personal expenses and purchases." Peters reportedly transferred fund from the pension and welfare plans to the operating account and Armentrout allegedly make cash withdrawals which were then deposited into their own personal accounts. Peters is facing seven counts of embezzlement from a labor union, six counts of embezzlement from an employee benefit plan, and conspiracy. Armentrout is facing four counts of embezzlement from a labor union and conspiracy.

Read the story here and here.

Read the DOJ announcement here.

Thursday, March 26, 2009

New York City Art Dealer Charged In $88 Million Fraud

Lawrence B. Salander, 59, of Millbrook, New York, and the proprietor of New York City-based Salander-O'Reilly Galleries, LLC, was arrested and charged with fraud for allegedly selling artwork and without permission or selling the same artwork more than once, and keeping the cash. Salander's high-end art dealership filed for bankruptcy in 2007 after numerous customers, including high profile individuals including tennis star John McEnroe, publisher Arthur Carter, and actor Robert Di Niro, sought to recover either their art or their funds. Salander-O'Reilly Galleries was shuttered by authorities in October 2007. Meanwhile, Salander, his wife, Jill and their seven children lived in a lavish 9,000 square foot townhouse in Manhattan and an estate up in Duchess County, New York. Prosecutors allege Salander bilked 26 victims between July 1994 and November 2007 out of some $88 million with his scheme. He was charged today with grand larceny, forgery and securities fraud.

Read the story here, here and here.
We note that since 2005, quite a few lawsuits were filed against Salander and his gallery to recover artwork and monies owed for artwork allegedly sold. This guy lived a lavish lifestyle while screwing over all his clients. I say good riddance. What goes around comes around.

Former North Carolina Church Finance Administrator Pleads Guilty To Embezzling $946K

Susan Manning Barney, 56, and a former finance administrator for the New Bern, North Carolina-based Garber United Methodist Church, pleaded guilty to 9 felony counts admitting that she embezzled some $946,000 from the church over a 7 year period. The judge sentenced her to 6 years in prison with 5 years probation, plus restitution. According to prosecutors, Barney used a church credit card to make fraudulent purchases and also wrote checks to herself, forging the church treasurer's signature. At her hearing, Barney claimed to have stolen the money to pay for her son's heroin addiction rehabilitation. Investigators say she used the money, in part at least, to buy clothes, a BMW, a Harley Davidson motor cycle and on numerous trips to Costa Rica. Her husband, Her husband Rick Barney, is a former Craven County Sheriff's Office investigator who has resigned from his job since the case came to light. He has reportedly emptied his 401(k) account to help pay the restitution due. Three separate polygraph tests supposedly convinced investigators that Rick Barney was not aware of the thefts. Susan Barney had been employed by the church for 13 years before the misappropriation came to light. The thefts occurred between September 2001 and January 2008.

Read the story here, here and here.

I am sorry folks, if your spouse steals nearly $1 million over the course of seven years, bringing home roughly $135,000 a year on average, you are going to be aware of the change in lifestyle and extra cash. She looks a bit arrogant in this mug shot, doesn't she?

North Carolina Bank Employee Charged With $111K Embezzlement

Donna Lewis Cayton, 47, of Beaufort, North Carolina, was recently charged with embezzling $111,075.99 from Branch Banking & Trust branch in Beaufort, where she had been employed. Cayton's alleged theft occurred between December 2003 and August 2008, according to reports. She is currently out on a $10,000 bond. According to investigators, Cayton targeted the accounts of elderly people and would withdraw relatively small increments of $500 or so. If and when customers identified the discrepancy, she was often the one to correct it by taking from another account. We note that her husband, Christan Bruce Cayton passed away on September 22, 2008.

Read the story here and here.

Update On Florida Union Treasurer Embezzlement Case: Suspect Pleads Guilty

Tarris Dynell Dallas, 43, of Fernandina Beach, Florida and the former treasurer of the Nassau County, Florida chapter of the United Steelworkers International Union, pleaded guilty yesterday to charges that he embezzled more than $100,000 from the union. According to prosecutors, Dallas wrote 125 fraudulent checks out of Local 9-415’s bank account, totaling $103,000, and took another $1,300 in unauthorized ATM withdrawals. Dallas had been employed by the local for some 10 years before he was fired last January after the apparent misappropriation came to light. He was indicted last November.

Read FraudTalk's original post on this story here.

Read the story here.

Serial Massachusetts Fraudster Now Charged With Embezzlement

Kimberlee Anne "Kim" Mastronardi, 50, of Marblehead, Massachusetts, was arrested yesterday and charged with embezzling from Bartlett & Steadman Plumbing, where she had been employed as office manager. Mastronardi, who handled payroll for the company, is alleged to have altered the payroll after approval but prior to submitting it to the payroll servicing company. According to investigators, Mastronardi's 2008 W-2 showed nearly $190,000 in income when she is paid $23 per hour. With approximately 2,000 working hours in a given year, Mastronardi would have earned about $46,000. Company owner Richard Steadman claims that Mastronardi has been embezzling from the company for five years. That could mean several hundred thousand dollars embezzled over that time period. We note that in 1998, Mastronardi was convicted on four counts of larceny, forgery and falsifying books and received a one year suspended sentence. In 2001, Mastronardi was charged with multiple counts of credit card fraud and identity fraud. Some of those charges were dismissed, but she plead guilty to others and received a 2 year suspended sentence in 2003.

Read the story here.

Tennessee Bookkeeper Charged In $200K Embezzlement

Chandra Langston has been charged by authorities for embezzling some $200,000 from a Nashville, Tennessee-based Orthopedic office where she had been employed as a bookkeeper. Langston's scheme reportedly lasted 3 years whereby she essentially wrote checks to herself. She faces 56 counts of forgery.

Developing story...

Read the story here.

Wednesday, March 25, 2009

Embezzlement Trial For Montana Man Commences

The criminal trial for accused embezzler, William A. Dancer, 52, formerly of Libby, Montana, commenced Monday. Dancer is accused of embezzling some $400,000 from Independence Home Center Inc., based in Sable, Idaho, where he was apparently employed. He is on trial for one count of money laundering and six counts of embezzlement. Dancer allegedly deposited six checks made out to the company into his own accounts between 2005 and 2006. The embezzled funds were used to purchase two vehicles, and investments in a clothing store and discount store in which Dancer had an interest, according to court filings. He is also accused of assaulting his supervisor, Michael Brown, the son of the owner, Darwin "Bill" Brown, after being confronted and fleeing the jurisdiction. He faces up to 20 years in prison, plus a fine of $50,000 and restitution, if convicted on all counts. We note that Dancer unsuccessfully ran for Mayor of Libby, Montana in 2005.

Read the story here and here.

Missouri Woman Arrested For $150K Embezzlement At Pepsi Bottling Company

Melissa Perez, 41, of Rolla, Missouri, was arrested Monday for allegedly embezzling more than $150,000 from the New London, Missouri-based Pepsi Cola Bottling Company where she had been employed. She has been charged with Class B felony stealing. The embezzlement scheme reportedly lasted 3 years.

Details are sketchy at this point and the story is developing...

Read the story here, here and here.

Tuesday, March 24, 2009

Another Serial Embezzler, This One A California Bookkeeper, Sentenced

Lina Hinds, 39, formerly of Concord, California, was sentenced to six years in prison after pleading no contest to felony embezzlement charges in San Mateo County Superior Court, California. Hinds, who was awaiting trial in three separate embezzlement cases, also plead guilty to excessive taking, committing a new crime while out on bail and having a prior prison commitment. According to prosecutors, between May 1 and July 11, 2006, Hinds embezzled $225,841 from a flooring company based in Foster City, California where she was employed as a controller. She used the proceeds in part to put a down payment on a home. After being confronted, Hinds reportedly offered to pay the money back, but failed to do so. The authorities were notified in October 2006 and she was charged with the thefts. Hinds is reported to have a 1999 grand theft conviction in Los Angeles County for which she served prison time. At the time of the Foster City case, Hinds was out on bail in a pending embezzlement case from Alameda County. According to reports, Hinds was able to get a job at Publisher’s Group West in Berkley, California, while on bail and proceeded to steal some $300,000 from that employer. According to prosecutors, Hinds failed to make a court appearance, breaking her bail, and was ultimately arrested in Washington State, after she had managed to get hired by Sun Precautions, in Everett, Washington and stealing nearly $40,000 from them to purchase a Chevrolet Trailblazer. She was using the alias "Jackie Chu" in Washington. Authorities in Washington seized fake Social Security cards, credit cards and rental agreements, and even a phony badge indicating that she was a criminal investigator for the U.S. Department of Treasury.

Read the story here, here and here.

This is an amazing story. Hinds is clearly certifiable, but by the same token a true menace to society. Six years seems light to me in light of her past and present actions. If any reader gets a mug shot of Hinds, please forward it as we'd love to post it.

Update On $2.6 Million Kansas Embezzlement Case: Couple Pleads Guilty

James W. Foremsky, 61, the former Chief Financial Officer of Emporia, Kansas-based Vektek Inc., and his wife, Susan A. Foremsky, 56, both of Topeka, Kansas, have both plead guilty to charges they embezzled $2.6 million from the company. The Foremsky's had been indicted in April 2008 with conspiracy to commit bank fraud, wire fraud and money laundering. James Foremsky pleaded guilty to one count of wire fraud and Susan Foremsky pleaded guilty to one count of accessory after the fact to wire fraud. The couple reportedly used the funds to maintain a lavish lifestyle and spent it on items, including, show horses, paying their mortgage, lavish vacations, luxury vehicles, restaurant and bar bills and the like. They each face up to 30 years in prison, plus a fine of $1 million and restitution. Sentencing is scheduled for June 29.

Read FraudTalk's earlier post on this story here.

Read the story here and here.

Former Wisconsin Lawyer Who Embezzled $550K Is Denied Reinstatement Of His Law License

David V. Jennings III, of Cedarburg, Wisconsin, was denied reinstatement of his law license by the Wisconsin Supreme Court, citing a lack of moral character. In 1993, Jennings had pleaded guilty to embezzling a total of $550,000 from a company in bankruptcy he represented and his own mother's living trust. The court recognized that Jennings had made steps to rehabilitating himself, but still had not paid full restitution to his former law firm and a businessman to whom he owed money. Jennings has been working as a furniture store manager.

Read the story here.

Former New York Exec Charged With $2.5 Million Embezzlement

Ian Leigh Gittlitz, 58, of Stony Brook, New York, and Pompano Beach, Florida, and the former president and chief financial officer of ICD Publications of Lincolnshire, Illinois, was arrested Sunday and charged with embezzling some $2.5 million from the company. Gittlitz allegedly used three different schemes to embezzle from ICD, according to investigators. First, he double submitted his expense reports. Second, he forged the expense reports of others as his own. A third, he wrote unauthorized checks from the company to himself. The schemes reportedly went on from 2000 until 2007, when he was fired by the company after improprieties came to the attention of board, according to reports.

In an interesting bit of irony, Gittlitz was quoted in a 2004 article about consumer response to Martha Stewart's criminal troubles as saying, "Our research shows that in many cases consumers are able to separate their personal feelings for Martha from their interest in her product designs. Consumers have consistently shown that they are most interested in products that offer the appropriate price value relationship, whatever the brand."

Read the story here and here.

Embezzlement Defined

Leeanna Rossi, a criminal justice instructor at Western New Mexico University in Deming, NM, published an article today on embezzlement. She defines the crime and provides some context. We quote her article in its entirety here:

"The crime of embezzlement is known as a crime of theft.

Its elements are primarily comprised of a fraudulent conversion of the property of another, by one who is already in lawful possession of it. Embezzlement is closely linked with larceny but the primary difference is for larceny to occur, the defendant must be wrongfully in possession of the property. Whereas with embezzlement, the defendant must be legally in possession of the property, but uses it for their own benefit.

For example, elected officials and public funds. Duly elected officials are empowered to use public funds for the good of the people. They are legally in possession of those funds. However, when an elected official uses those funds illegally, such as depositing sums in their personal account or buying a boat for their personal use, then that official has committed the crime of embezzlement.
Embezzlement requires property be converted by the defendant. To convert property, the defendant must deprive the lawful owner of a significant part of its usefulness. If the defendant merely uses it for a short time, or moves it slightly, she is not guilty of embezzlement.

For example, if A is lent a company car for company business and she decides to take the car and sells it, A could be convicted of embezzlement. The car was owned by another (the company) and taken by A to be sold. A has converted the car, deriving the company of its use.

Embezzlement also requires that property must fall within certain classes and must belong to someone other than the embezzler. Property which may be embezzled includes tangible (real estate, etc.) and intangible property (stocks, bonds, checks, promissory notes, etc.) Modern interpretations now also include intangible items such as minerals in the ground and the "taking of services" such as not paying for food or hotel rooms.

Property must also belong to another, rather than to oneself. One who is co-owner of property together with another cannot embezzle the joint property because it is her own. This applies to joint tenants in real estate or partners in a business.

Embezzlement may be limited to certain classes of persons. Such persons include employees, attorneys, guardians, officials, board of directors, etc. One loophole is if a person does not fall within one of the listed class, she cannot be an embezzler, even though she may have misappropriated property lawfully in her possession. To fill this loophole many states have increased the list to include anyone to whom property is "entrusted." For example, an employee (shop clerk) is thought to have only "custody" of store goods. The actual ownership of the goods remains with the owner of the store. Under earlier statutes, if the employee then sells the goods and pockets the proceeds, she would not be charged with embezzlement because she did not "own" the goods taken. Newer statutes now could charge the employee who sells such goods with embezzlement so long as the employee took property "under her care and control."

Finally the embezzler must not only intend to take the property, but her taking must be with the intent to defraud. The focus is on the defendant's state of mind. Her taking must be with the intent to permanently deprive the rightful owner. However, there are two possible defenses: a right to something which is not hers or the intent to return the item taken.

First, should the defendant honestly believe she has a right to take the property, she can use the defense of "mistake" and possibly not be held liable. Or a second defense is if she can show her intent to return the property taken. However, the property to be returned must be the very property taken. This defense does not usually work when money is taken because the actual dollars are not returned but an equivalent sum. Such intent to return the equivalent is no defense."

We could not have defined it better.

Four Florida Medical Workers Plead Guilty In $10 Million Medicare Fraud

Dr. Roberto Rodriguez, 54; Dr. Carlos Garrido, 69; Gonzalo Nodarse, 38; and Alexis Carrazana, 41, all residents of the Miami, Florida area and executives or employees of the Miami-based Midway Medical Center, pleaded guilty yesterday to one count each of conspiracy to commit health care fraud. Rodriguez and Garrido are owners of Midway Medical and, along with the other defendants, admitted they defrauded the Medicare program by receiving $10 million in reimbursements for unnecessary or non-performed medical procedures, specifically HIV infusion services. The scheme lasted from at least October 2003 to February 2005. Rodriguez is the founder of five clinics in and around Miami that have been the subject of criminal probes for Medicare fraud. Nodarse and Carrazana, who were employed at Midway as medical assistants, admitted to making false entries in medical records. We note that these physicians and medical assistants are simply the latest in a long list of Medicare fraudsters in South Florida who engaged in the HIV infusion fraud.

Read the story here, here and here.

Read the DOJ announcement here.

Second Executive Pleads Guilty In California "Skid Row" Healthcare Fraud Case

Dante Nicholson, 51, of Palmdale, California and the former Senior Vice President of the City of Angels Medical Center, pleaded guilty last Wednesday to a scheme whereby he and others paid an agent to recruit homeless people to come to the hospital for unnecessary medical procedures fraudulently charged to Medicare and Medi-Cal. Dr. Rudra Sabaratnam, 64, of the former CEO of the hospital, previously pleaded guilty in this case and was ordered to pay a $4.1 million fine. The fraud occurred between August 2004 and October 2007, according to prosecutors. The recruiter, Estill Mitts, 64, was arrested with Dr. Sabaratnam last August. He is alleged to have received more than $500,000 from the hospital as part of the scheme. Nicholson faces up to 10 years in prison and was also ordered to pay a $4.1 million fine.

Read FraudTalk's original post on this story here.

Read the story here and here.

Read the DOJ's announcement here.


California Bookkeeper Arrested In $120K Embezzlement Case

Christele L. Gosh, 36, of Manteca, California, was arrested Thursday and charged with embezzling approximately $120,000 from the Stockton 7UP Bottling Co., where she was employed as a bookkeeper. Gosh, an 11-year employee of the company, was charged with two felony counts of grand theft of personal property and falsifying corporate books. The complaint alleges Gosh stole cash and checks collected from delivery truck drivers and then voiding sales slips to cover her theft. The embezzlement scheme, which occurred from 2004 to 2008, was discovered when she took a day off, according to prosecutors.

Read the story here.

Monday, March 23, 2009

Missouri Business Owner Pleads Guilty To Embezzling From Company 401(K) Plan

Raymond A. Potts II, 52, of Sedalia, Missouri and the owner of Potts Contracting Group, Inc., pleaded guilty Friday to looting the company 401(k) plan and making false statements to a government agency, the US Department of Labor. According to prosecutors, commencing in January 2001, Potts embezzled $382,334 from his company's 401(k) plan by failing to forward appropriate pension contributions. Potts has a prior history of failing to comply with employee benefit regulations. In 1997 he was subject to a consent agreement with the Department of Labor on similar charges and agreed to pay $68,419 that was owed to the plan at that time. In the current case, Potts faces up to 5 years in prison plus restitution and a fine of as much as $250,000.

Read the story here, here and here.

Read the DOJ's announcement of Potts' guilty plea here.

Indiana Woman Charged With Fraud & Misappropriation Of Invesment Funds

Dorothy M. Geisler-Tragardh, of McCordsville, Indiana, was charged Thursday with one count of securities fraud and 10 counts of theft for allegedly bilking investors out of more than $2.5 million in a coal-gasification project. The scheme lasted 2 years, according to prosecutors, wherein Geisler-Tragardh fraudulently sold shares of Praxis Resources Partners, LLC, depositing the funds directly into her own accounts for her own benefit. Prosecutors have frozen her assets and seized such assets as Picasso artwork, a luxury waterfront home, a Rolex watch, a diamond, a Mercedes-Benz, two other cars and a boat. She has plead not guilty.

Read the story here, here and here.

Rhode Island Woman Already Charged With Bilking Non-Profit, Now Charged With Separate $400K Embezzlement

Louise A. DiStefano, 54, of Westerly, Rhode Island, has been charged with embezzling more than $400,000 from Koolco Inc., an HVAC company where she was employed as a bookkeeper. DiStefano was already facing charges she embezzled $209,000 from Turning Pointe Therapeutic Riding, a non-profit based in Ashaway, Rhode Island. At the time of her arrest in late January, cash was seized at her home as well as marijuana, and authorities also charged her with possession. In the Koolco case, DiStefano is alleged to have deposited checks meant for the company into her own accounts. DiStefano has a prior criminal record having plead guilty in 2005 to embezzling some $14,000 from the North Stonington Elementary School in Connecticut where she had been employed. She received a 4 year suspended sentence in that case.

Read the story here, here and here.

Former Finance Director Of DC Non-Profit Sentenced For $400K Embezzlement

Earl Staubs, 63, of Arlington, Virginia, was sentenced Friday to 2 1/2 years in prison for embezzling some $438,000 from the Center for Applied Linguistics, a DC-based non-profit organization. According to prosecutors, Staubs set up a bank account in the non-profit's name in 2005, with his home address, deposited checks into that account, and then used the funds for his own benefit. He plead guilty to wire fraud charges in September. Staubs, who is currently serving a 7 year state prison sentence for another embezzlement, faces up to 37 months in prison for the Applied Linguistics case.

Read the story here and here.

Read the DOJ's announcement of Staubs' guilty plea here.

2 Aides To Former NY Comptroller Hevesi Indicted On Kickback Charges

Hank Morris, formerly a political advisor and fundraiser to New York Comptroller Alan Hevesi (D-NY), and David Loglisci, formerly the chief investment officer in the comptroller's office, have been charged with 123 fraud counts, including "enterprise corruption," securities fraud, grand larceny, bribery and money laundering. The Securities & Exchange Commission has also moved to seize more than $35 million in assets controlled by Morris and Loglisci. The two are accused to accepting "placement fees," aka kickbacks, on more than 20 deals between 2003 to 2006, for steering state pension fund investments to certain companies. According to the SEC complaint and other reports, a number of firms, including HFV Management, Liberty Oak Capital Fund, Odyssey Investment Partners, Access/NY European Fund, the Aldus New York Emerging Fund, GKM/NY Venture Capital Fund, Olympia John Street Fund, Paladin Homeland Security Fund (NY), Pequot Diversified Offshore Fund/Pequot Private Equity Partners Fund IV, and Strategic Co-Investment Partners and the Carlyle Group, paid the placement fees to Morris and Loglisci. Morris and Loglisci have pleaded not guilty to the charges. Hevesi, pictured here, resigned in early 2007 after being convicted of using state workers as drivers for his wife.

Read the story here, here and here.

Saturday, March 21, 2009

Update On Iowa Bookkeeper Hospital Embezzlent Trial: Guilty Verdict

Tammy Brandt, 49, of Cedar Rapids, was found guilty by a Linn County jury on first degree felony theft charges that she embezzled some $210,000 from the Mercy Medical Center Foundation where she worked as a bookkeeper. The thefts reportedly occurred over a 13 year period where she would keep donations to the hospital from checks and credit cards that were converted to cash and that she was supposed to deposit. Brandt was a 28 year veteran employee of the hospital.

Read FraudTalk's original post on this story here.

Read the story here and here.

Update On JetBlue Embezzlement Case: Virginia Woman Pleads Guilty

Carol Davidson, 43, of Midlothian, Virginia, pleaded guilty to embezzlement charges yesterday in Henrico County Circuit Court, admitting that she stole some $338,000 from JetBlue Airlines, where she had been employed as a manager. Specifically, Davidson pleaded guilty to 13 felony counts including, embezzlement, forgery or uttering bogus checks, essentially admitting that she forged employee names on JetBlue checks and used a company credit card for her own expenses. Davidson reportedly has a compulsive buying disorder. Her sentencing is scheduled for July 14th when she faces more than 100 years in prison.

Read FraudTalk's original post on this story here.

Read the story here and here.

Friday, March 20, 2009

Update: Illinois Village Clerk Sentenced To 18 Months For $144K Misappropriation

Dorothy Richardson Triplett, 38, the former payroll clerk for Washington Park Village, Illinois, was sentenced to 18 months in prison for misappropriating some $144,000 from town coffers. She pleaded guilty last December to two counts of "misappropriation of assets" in a scheme that involved numerous transfers of small amounts of money, between $200 and $6,000 during 2006 and 2007. Triplett also allegedly conspired with Washington Park's mayor's assisstant Linda Connor to embezzle an additional $369,587 from the municipality. Connor was indicted on criminal charges earlier this week including misapplication of property and filing a false tax return. The reduced sentence for Triplett was ordered by the judge as a result of her "substantial" assistance and cooperation in the case. Normal sentencing guidelines recommend 30 - 37 months in prison.

Read FraudTalk's original post on this story here.

Read the story here and here.

Update On $126 Million Virginia Fraud Scheme: Okun Convicted

Edward Hugh Okun, 58, of Miami Beach, Florida, was convicted by a Virginia jury yesterday on 23 felony criminal charges including conspiracy to commit mail and wire fraud, wire fraud, conspiracy to commit money laundering, money laundering, bulk cash smuggling and perjury. Okun, the sole owner and senior officer of The 1031 Tax Group LLP, together with company officer Laura Coleman, conspired to misappropriate as much as $126 million in client funds that were supposedly held in trust in a purported capital gains deferment program. The indictment had alleged that Okun used the misappropriated funds to "support his lavish lifestyle, pay operating expenses for his various companies, invest in commercial real estate, and purchase additional qualified intermediary companies to obtain access to additional client funds." Okun reportedly purchased an aircraft, yacht and other luxury items with the ill-gotten funds. Okun is pictured here in a screenshot taken from a 2005 video of his lavish wedding with bride Simone Bolani. Laura Coleman previously pleaded guilty in January on similar charges.

Read FraudTalk's earlier post on this story here.

Read the story here and here.

Read the DOJ's announcement here.

Update On Atlanta Area Ponzi Scheme Case: Ossie Officially Indicted

James G. Ossie, 49, of Alpharetta, Georgia, was indicted Wednesday on 10 counts of wire fraud for allegedly bilking investors out of as much as $25 million in a Ponzi-type investment fraud scheme. In January, the SEC took action against Ossie and his company, CRE Capital Corporation, freezing his assets and charging him with securities fraud. The CFTC also charged Ossie with commodities fraud. Ossie allegedly promised investors as much as a 20 percent return every 30 days on a proprietary currency trading program.

Read FraudTalk's original post on this story here.

Read the story here and here.

Read the DOJ announcement here.

Former Texas Housing Official Charged In $130K Embezzlement Case

Laura D. Morales, 44, and the former head of the Housing Authority of Bexar County (HABC), Texas, was charged yesterday with embezzling more than $131,000 from the agency. Morales was accused of stealing money from two HABC accounts intended for low-income housing under federal Section 8, funded by HUD, by writing checks to herself and fraudulently stamping the board chairman's signature on them. Morales also reportedly paid herself for leave time she did not earn. She was fired last summer after the allegations came to light. Morales' schemes reportedly date back to 2003 when she took over the position from her predecessor, Christine Torres, who resigned after misappropriate allegations came to light. She faces up to 10 years in prison, plus a fine of up to $250,000 and restitution if convicted.

Read the story here, here and here.

Thursday, March 19, 2009

Update On Arkansas School $800K Embezzlement Case: Administrator Sentenced To 80 Years

Lynda King, 40, of Pine Bluff, Arkansas, was sentenced to 80 years in prison Tuesday for embezzling some $884,000 from the Pine Bluff School District where she had been employed as a secretary for ten years. She was also ordered to pay restitution i the amount of $747,000. King pleaded guilty to more than 1,400 theft and forgery charges February 17th. According to prosecutors, King set up a phony vendor and billed the school district for non-existent work/services. The scheme is reported to have gone on from approximately 2001 until 2008.

Read FraudTalk's original post on this story here.

California Hedge Fund Manager Arrested In Hong Kong On Misappropriation Charges

Albert K. Hu, 47, formerly of Sunnyvale, California was arrested in Hong Kong Tuesday on six counts of wire fraud for an alleged investment fraud scheme involving hedge funds he administered from 2001 to 2008. Prosecutors allege that Hu had promised investors returns as high as 20-to-30 percent a year but instead moved investor funds to overseas accounts, misappropriated as much as $5 million. Hu's scheme involved two hedge funds he ran, Asenqua Beta Fund and Fireside LS Fund. Hue reportedly left the US, closing out accounts and relocating in Hong Kong. He is now in the process of extradition back to the U.S. The SEC action freezes the assets of Hu's companies. The SEC complaint also alleges that Hu provided false and fraudulent documentation to investors. Interestingly, Hu's company website is still operating here. Hu's bio claims he has a Ph.D. from M.I.T.

Read the story here, here and here.
Read the SEC complaint here.

2 Californians Charged With Operating Ponzi Scheme Investment Fraud

Kenneth Kenitzer, 66, of Pleasanton, California and Anthony Vassallo, 29, of Folsom, California, principals of Equity Investment Management and Trading, Inc., were accused by the SEC of running a $40 million Ponzi scheme. The SEC complaint alleges that Kenitzer (pictured here) and Vassallo solicited the funds from some 150 investors between 2004 to 2008, ostensibly to invest in the securities market. In fact, the complaint states that by September 2007, Kenitzer and Vassallo had "ceased trading on behalf of EIMT, withdrawn virtually all investor funds from EIMT's brokerage accounts and misappropriated the funds for their own use." Many of the victim investors were from the same Mormon community as Vassallo and Kenitzer, according to the complaint. Kenitzer and Vassallo had promised returns of as much as 3.5 percent per month (42 percent annually) with the use of their proprietary trading software program. The SEC action freezes the company's assets.

Read the story here, here and here.

Read the SEC complaint here.

Wednesday, March 18, 2009

DC Security Official & Accomplice Charged In Bribery Scheme

Yusuf Acar, 40, of Washington, DC and the Acting Chief Security Officer of the District of Columbia’s Office of the Chief Technology Officer, was arrested last week and charged with being involved in a bribery scheme with an accomplice, Sushil Bansal, 41, of Dunn Loring, Virginia, a former District employee and the current CEO of Advanced Integrated Technologies Corporation. Acar was charged in a four-count complaint with Conspiracy to Commit Bribery, Honest Services Wire Fraud, Conflict of Interest, and Conspiracy to Launder Monetary Instruments. Bansal, who was also arrested last week, was charged in a two-count complaint with Conspiracy to Commit Bribery and Conspiracy to Launder Monetary Instruments. One scheme involved Bansal's company overcharging for goods sold and the conspirators split to excess proceeds, according to prosecutors. A second scheme involved Bansal's company billing the District for "ghost employees" who either did not exist or did not perform any work. Acar's wife, Galen Acar, received at least $70,000 in checks from Bansal's company, although she has not been charged. Acar, who had been employed by the District since 2004, is being held without bail. As of this afternoon, some 23 people have been fired from the Office of the Chief Technology Officer.

Read the story here, here, here and here.

Read the DOJ announcement here.
Read the criminal complaint courtesy of the New York Times here.

University Administrator Sentenced In $175K Embezzlement Case

Michelle Harris, 41, aka Michelle Dunbar, and a former program coordinator at Georgia Institute of Technology's Office of Management, was sentenced to ten years in prison for embezzling some $175,000 from the institution. Harris pleaded guilty to misusing a university procurement card to pay for personal expenses, including buying jewelry, auto insurance, groceries and even catering a wedding. Her thefts occurred over a four year period, according to reports. Harris is one of at least 17 Georgia Tech who have abused their procurement cards who have been fired, forced to resign or retire. Harris' tough sentence is due in part by the fact that she reneged on a plea agreement and has not made any restitution.

Read the story here, here and here.

Read the State of Georgia's announcement here.

Madoff Accountant Charged With Fraud

David G. Friehling, 49, of Pomona, New York, and Bernard Madoff's longtime accountant, was arrested on fraud charges today. Friehling, the sole practitioner at Friehling & Horowitz, CPAs, PC, a small accounting concern located in a non-descript building north of New York City, had been Madoff's accountant since 1991. Friehling is specifically charged with securities fraud, aiding and abetting investment adviser fraud and four counts of filing false audit reports with the SEC. He earned as much as $186,000 per year in that capacity, according to reports. The firm had been co-owned by Friehling and his father-in-law, Jerome Horowitz, who turned over the business to Friehling some years ago and passed away last week at the age of 80. He faces up to 105 years in prison if convicted on all charges. Meanwhile, Friehling and his wife may have lost as much as $14 million in investment accounts held at Bernard L. Madoff Investment Securities LLC.

Read the story here, here and here.

Read the SEC's announcement here.

Tuesday, March 17, 2009

Mortgage Fraud Up 26% Industry Study Says

The Mortgage Asset Research Institute released its annual report on mortgage fraud, which indicates an increase in mortgage fraud reports of 26 perent over the prior year and reaching the highest level to date. The sates with the highest percentage of fraud reports include the following listed in order:
  • Rhode Island
  • Florida
  • Illinois
  • Georgia
  • Maryland
  • New York
  • Michigan
  • California
  • Missouri
  • Colorado
Read the story here, here and here.

Former Pennsylvania State Senator Convicted Of Public Corruption Charges

Vincent J. Fumo, 65, and a former State Representative, was convicted yesterday on all 137 counts, including conspiracy, fraud, obstruction of justice, and tax violations, by a jury at his public corruption trial in Philadelphia. Fumo (Democrat-South Philadelphia), was convicted of defrauding the state and two non-profit organizations out of $3.5 million as well as using state employees and consultants to do political work and run personal errands. Fumo was accused of helping to defraud a community group he helped found, the Citizens Alliance for Better Neighborhoods, by using $1.4 million of its money to buy tools and other goods, to conduct political polls and to file a lawsuit against a Republican enemy. Fumo is allegedly a member of Mensa, the genius organization.

Read the story here, here and here.

Update On DC Office Of Tax & Revenue: Another Figure Sentenced

Jayrece Elaine Turnbull, 35, of Bowie, Maryland, who pleaded guilty to helping her aunt, Harriette M. Walters, former manager within the District of Columbia Office of Tax and Revenue, embezzle nearly $50 million from District coffers, was sentenced to 9 years in prison for her role in the thefts. The embezzlement scheme involve fraudulent tax refund checks Walters had sent to a variety of accomplices who shared the proceeds. All told, 11 people have pleaded guilty in the case. Turnbull, a native of Puerto Rico, is described by prosecutors as Walters' principal accomplice in the scheme. Turnbull purchased real estate in the Dominican Republic, among other personal expenditures and international travel with of her share of the ill-gotten gains.

Read FraudTalk's earlier posts on this story here, here, here and here.

Update On Ohio Embezzlement Case: Perp's House Sold At Auction

The home of Craig K. Rohr, 37, formerly of Canton, Ohio, who was convicted and sentenced to 9 years in prison for embezzling $1.8 million from Hartville Homes, a non-profit home builder, was auctioned off for $270,000 to help pay his restitution. Huntington Bank, which held the mortgage on the home and was preparing to foreclose, was the bid winner. Rohr had served as the chief financial officer of Hartville Homes. He also reportedly stole $100,000 from the St. Barbara Catholic Church where he had served as finance director. The thefts took place over a 7 year period.

Read FraudTalk's original post on this story here.

Read the story here and here.

Here is a guy who stole big-time from the non-profit builder of group homes for disadvantaged people, as well as from his Church. Now his own home has been auctioned off. What goes around comes around...

Monday, March 16, 2009

Former Alaska State Representative Pleads Guilty To Public Corruption

Beverly L. Masek, a former elected member of the Alaska House of Representatives, pleaded guilty last week to conspiracy to commit bribery in connection with federally funded programs. Masek (R-Alaska), conspired with Bill J. Allen, the former chief executive officer of VECO Corporation, a now-defunct multinational oil field services company, and Richard L. Smith, a former VECO vice president, to soliciting and accepting bribes. Both Allen and Smith pleaded guilty to federal corruption charges and are awaiting sentencing. Masek is one of a number of Alaska political figures caught up in recent public corruption investigations, including Thomas T. Anderson, Peter Kott, Victor H. Kohring, James Clark, William Bobrick, William Weimar, John Cowdery and US Senator Theodore F. Stevens . She faces up to 5 years in prison and a fine of up to $250,000 upon sentencing, which is scheduled for May 28.

Read the story here.

Ann Arbor, Michigan: Center Embezzlement Cases

The Ann Arbor News details several significant embezzlement cases from recent years in an article published yesterday (complete with mug shots). They include the cases of Christopher Steeb (pictured here), a local fireman accused of stealing as much as $200,000 from Ann Arbor Moose Lodge 1253 where he served as an administrator; Kimberley Knight, accused of stealing $934,000 from the Arbor Amateur Hockey Association where she served as treasurer (see FraudTalk article here); Donald G. Dely, convicted of stealing more than $100,000 from the Ann Arbor District Library where he served as finance director; Robin Scully, convicted of stealing $300,000 from the Oak Grove Cemetery Association where she served as treasurer; and Ann Hampton Hawkins, who was convicted of stealing nearly $100,000 from the Ann Arbor Community Center where she served as a bookkeeper.

Read the whole story here.

Update (3/30/10): Christopher Steeb, 34, of Dexter, Michigan, pleaded no contest to embezzlement of more than $50,000, but less than $100,000 from the Ann Arbor Moose Lodge. He is alleged to have embezzled as much as $200,000.

Texas Man Sentenced To 10 Years For Ponzi Scheme Investment Fraud

George D. Hudgins, 57, of Nacogdoches, Texas, was sentenced to 10 years in prison for defrauding investors out of more than $70 million. According to the original complaint filed by the Commodities Futures Trading Commission, beginning in or about January 2005, Hudgins fraudulently solicited funds from more than 300 investors to pool and trade futures contracts by over inflating the investment track record and misappropriating investor funds. Hudgins in fact, lost money and used investor funds to pay "profits" to investors. In his investment promotional packet, Hudgins had claimed returns of as much as 99 percent annually. He plead guilty to three felony counts including wire fraud, money laundering and embezzlement

Read the story here, here and here.

Read the CFTC complaint here.

Washington State Embezzler Sentenced

David Lenihan, 55, of Yakima, Washington, was sentenced to 21 months in prison and ordered to pay $412,000 in restitution for embezzling $2.1 million from two companies between 1996 and 2005 where he had been employed as company controller: Underwood Fruit and Warehouse Co. of Yakima and from Washington Fruit and Produce. Lenihan, who had plead guilty to three counts of bank fraud in federal court, had previously been sentenced to 5 years in prison in state court for first degree theft. The sentences are to run concurrently.

Read the story here, here, here and here.

California Bookkeeper & Serial Embezzler Sentenced Again

Lenore Gotelli, 46, of San Mateo, California was sentenced to 2 1/2 years in prison for embezzling some $100,000 from her former employer, RSS Architecture Inc., where she had been employed as a bookkeeper. Gotelli used corporate credit cards to steal the money in 2006 while she was still on probation for two other embezzlement cases. During 2003 and 2004, Gotelli had embezzled nearly $11,000 from the Ralston Middle School Athletic Boosters Club in Belmont, California, by writing checks to herself. Gotelli had suggested that the boosters club be formed to help support school athletics and took over the financial reins. In that case, she plead no contest to two embezzlement charges and was sentenced to six months in jail, plus three years' probation, but did not do any time because she had 205 days credit. While out and on probation, Gotelli got a job at Action Systems Inc., in Redwood City, California, where she stole $4,000 by writing 7 checks to herself between 2004 and 2005. A police search of Gotelli's home after the RSS case revealed a number of items, including a flat screen television, an oven and rugs, that were supposedly purchased with the stolen money. The terms of Gotelli's probation prohibited her from working in any financial capacity.

Read the story here, here and here.

Sunday, March 15, 2009

Oklahoma Woman Turns Self In To Face Embezzlement Charges After Disappearing

Jolene Chesnut, 61, of Mead, Oklahoma, turned herself in Friday after having been charged with embezzling some $110,000 from a law firm trust account and a client's estate accounts she oversaw. Chesnut was employed as a legal assistant for Mark Morrison, an attorney based in Durant, Oklahoma. According to investigators, Chesnut wrote checks out of the estate account for her own benefit as well as checks written out of the law firm's trust account. She was charged with two felony embezzlement counts last Wednesday, but had been missing since March 2nd. According to reports, Chesnut is known to frequent casinos - perhaps a motive for her alleged thefts.

Read the story here, here and here.

Saturday, March 14, 2009

California Administrator Arrested For $850K Alleged Embezzlement

Angela Phillips, 37, of Montecito, California and an administrative assistant at Windsor Capital Group based in Carpinteria, California, was arrested Wednesday for allegedly embezzling some $850,000 from the company. According to prosecutors, Phillips used company credit cards and online accounts to live a more lavish life, including making purchases for travel, personal items, and buying gifts for friends and family. She also forged checks that were made payable to the company and deposited them into her own accounts. It is unclear how long the scheme was enacted.


Read the story here, here and here.

Friday, March 13, 2009

Elderly Escrow Officer In Texas Sentenced To 3-1/2 Years For $1.2 Million Embezzlement

Helen K. Sullivan, 71, of Commerce, Texas, was sentenced to 42 months in prison plus restitution for embezzling some $1.2 million from the Lawyers Title Insurance Corp. in Dallas where she had been employed. Sullivan plead guilty last August to mail fraud charges, admitted the embezzlement. According to prosecutors, Sullivan misappropriated the funds from client escrow accounts over a nearly six year period from 2000 until September 2006. She reportedly wrote more than 160 checks to pay her personal credit card bills and to fund another business of hers called S Industries LLC.

Read the story here, here and here.

Vermont Executive Sentenced To 6 Years For $5 Million Embezzlement

Kenneth MacKay, 37, of Williston, Vermont, was sentenced to 70 months in prison for embezzling more than $5 million from Willis Management, a captive insurance administrator, and its clients, for whom he was employed as a senior vice president. He was also ordered to pay restitution in the amount of $5.3 million. MacKay was arrested and charged last May with bank fraud, wire fraud and money laundering. According to prosecutors, over an 8 year period, MacKay diverted funds deposited into Willis accounts into a shell corporation he created. He reportedly used the funds to purchase a condominium in Florida and to build a $1.9 million home in Vermont. He also used the funds to deposit nearly a quarter million dollars into his five childrens' college savings accounts. Prosecutors claimed MacKay had already forfeited $4.24 million, including his home, Florida condo and the funds deposited into this children's college accounts.

Read the story here, here and here.

Read the DOJ's announcement here and here.

Update On Oklahoma Embezzlement Case: Cynthia Harris Sentenced To 63 Months

Cynthia Jan Harris, 52, of Chelsea, Oklahoma, was sentenced to 63 months in prison for embezzling $1,645,482 from the Mayes County Federal Credit Union where she had been employed as an assistant manager and chief financial officer. She was also ordered to pay restitution in that amount. Harris, who was originally charged with the thefts on August 25, 2008, pleaded guilty on November 6th, 2009. The thefts ocurred over a 7 year period from 2000 to 2007, according to prosecutors. She had no prior criminal history and only one speeding ticket to her name, according to her defense counsel.

Read FraudTalk's original post on this story here.

Read the story here.

Thursday, March 12, 2009

Connecticut Accountant Sentenced To 37 Months For Embezzling $1.5 Million From 2 Companies

Noel Desingco Lara, 41, of Westport, Connecticut, was sentenced to 37 months in prison for embezzling some $1.5 million over a 2 year period from two different companies he worked for as an accountant handling payroll and client escrow accounts. Lara was also ordered to pay full restitution to both companies. The two companies have been revealed to be MUUS Asset Management of Westport and Octagon of Norwalk. Lara was originally arrested in May 2008 and pleaded guilty to one count of interstate transportation of money obtained by fraud on July 31, 2008. Reports indicate that Lara used the stolen money to purchase personal items such as designer watches and clothing, as well as to finance payments to motor vehicle companies and made investments in stocks.

Read the story here, here and here.

California Non-Profit Bookkeeper Pleads No Contest In $350K Embezzlement Case

Marilyn F. Machalowski, 69, of San Jose, California and the former accounting manager and payroll administrator of the Lucile Packard Foundation for Children's Health, pleaded no contest to charges she embezzled more than $350,000 from the non-profit health foundation. Machalowski reportedly wrote foundation checks to her daughter and deposited them into an account she jointly controlled. She spent the money on establishing a lavish lifestyle that included luxury vehicles and exotic vacations. The scheme is believed to have gone on for nearly 10 years and accelerated in later years. She was originally charged in July 2008 after an investigative audit revealed the thefts. Machalowski partly blamed her actions on wanting to enjoy life with her terminally ill husband who has since passed away.

Read the story here, here and here.

We have seen the tendency for embezzlers to accelerate their taking over time, starting small and getting much bigger. This usually leads to their downfall...

Madoff Pleads Guilty To All 11 Charges

Bernard L. Madoff, 70, of New York City, pleaded guilty today to a 11 count fraud Information, admitting that, as head and sole principal of of Bernard L. Madoff Investment Securities LLC, he defrauded thousands of clients out of at possibly as much as $65 billion. The Information included charges of securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the SEC, and theft from an employee benefit plan. He faces up to 150 years in prison, plus fines. At his guilty plea hearing today, he is quoted as saying, "I am actually grateful for this opportunity to publicly comment about my crimes, for which I am deeply sorry and ashamed." I cannot adequately express how sorry I am for my crimes." He also said that he is “painfully aware” that he has “deeply hurt many many people.”

Read FraudTalk's latest post on this story here.

Read the story here, here and here.

Update On California Controller Accused In $10 Million Embezzlement: Reportedly Lost $42 Million At Casinos

Annette C. Yeomans, 51, of Escondido, California, accused of embezzling $9.9 million from her former employer, Quality Woodworks, Inc., of San Marcos, California, where she had been employed as controller. Yeomans lost as much as $42 million gambling at casinos, according to reports from investigators. She allegedly stole the money over a 7 year period and used it to establish a lavish lifestyle that included a designer wardrobe that included 400 pairs of shoes valued at $240,000, clothing valued at $300,000 and $320,00 in handbags. With control over the company finances, Yeomans was able to spend as much as $25,000 in a weekend on her credit card and then pay it off with company funds. Her actions directly resulted in layoffs and has nearly bankrupted the company, according to reports. Yeomans faces 20 felony counts of embezzlement and grand theft.

Read FraudTalk's original post on this story here.

Read the story here and here.

Wednesday, March 11, 2009

Arizona Attorney Pleads Guilty To "Pump & Dump" Stock Manipulation Schemes

David B. Stocker, 49, of Phoenix, Arizona and an attorney by training, pleaded guilty to securities fraud charges admitting that he defrauded investors in a number of "pump & dump" stock manipulation schemes involving 19 publicly traded companies. Those companies include: eDollars Inc; Emerging Holdings Inc.; MassClick Inc.; China Score Inc.; American Television and Film Company Inc.; Auction Mills Inc.; Custom-Designed Compressor Systems Inc.; Ecogate Inc.; Media International Concepts Inc.; Vanquish Productions Inc.; AVL Global Inc.; Motion DNA Corp.; PokerBook Gaming Corp.; TKO Holding Ltd; Body Scan Inc.; Integrity Messenger Corp.; Beverly Hills Film Studios; IFINIX Inc.; and V3 Global Inc. Stocker had been the subject of three SEC actions - 2 in 2007 and 1 in 2008 - for his involvement in penny stock fraud schemes involving some of these companies. In at least one case, Stocker had a co-conspirator, Phillip W. Offill Jr., a Texas lawyer, who allegedly set up a sham corporation at Stocker's direction. Stocker is set to be sentenced on November 6, 2009 and faces up to 5 years in prison, plus a fine of $250,000 for his involvement in these stock manipulation frauds.

Read the story here.

Read the DOJ's announcement here.