Wednesday, March 31, 2010

Minnesota Businessman Charged In Alleged $190 Million Ponzi Scheme Fraud

Trevor Gibson Cook, 37, of Apple Valley, Minnesota, was charged yesterday with operating a Ponzi-type investment fraud scheme that allegedly bilked as many as 1,000 investors out of at least $190 million. He faces one count of mail fraud and one count of tax evasion. Cook's scheme, which operated from January 2007 through July 2009, offered returns of as much as 12 percent on investments in a foreign-currency trading program with little or no risk, according to prosecutors. Instead of investing the funds as promised, Cook reportedly spent investment funds to pay returns to earlier investors in classic Ponzi style and used the rest to enrich himself with personal investments, real estate and to pay off large gambling debts. Cook was originally charged last November, along with Patrick "Pat" J. Kiley, 71, of Burnsville, Minnesota and a local conservative radio talk show host, of selling unregistered securities through a series of shell companies. The companies named in the SEC's original complaint include UBS Diversified Growth LLC, Universal Brokerage FX Management LLC, Oxford Global Advisors LLC, Oxford Global Partners LLC and four shell companies.

Read the story here and here.
Update (4/13/10): Cook plead guilty today to operating a $190 million Ponzi scheme.

Vermont Bookkeeper Sentenced For Embezzling $180K From 2 Employers

Melanie McDonald, 43, of Thetford, Vermont, was sentenced on Monday to 18 months in prison for embezzling some $180,000 from two businesses, Dowd's Country Inn of Lyme, New Hampshire, and Wilder Business Services, in Wilder, Vermont, where she had been employed as a part-time bookkeeper. In 2007, McDonald pleaded guilty to interstate transportation of stolen property. Prosecutors alleged that McDonald's schemes lasted from 2001 until 2006.

Read the story here, here and here.

Co-Founder Of Washington State Company Charged With Misappropriating As Much As $524K

Mark E. Phillips, 35, of Seattle, Washington, has been charged with two counts of wire fraud in connection with the alleged misappropriation of as much as $524,000 from MOD Systems, Inc., a Seattle-based company he co-founded and served as CEO until last year. According to prosecutors, Phillips submitted fraudulent expense reimbursements for personal expenses and personal luxury items and otherwise misappropriated company funds for personal use. The complaint resulted from an internal investigation initiated by an angel investor, Robert Arnold, into the apparent misappropriations. Bitter civil litigation has ensued between all of the parties.

Read the story here and here.

Read the criminal complaint here.

Hat Tip: Reader Joe

Former Louisiana Banker Pleads Guilty To Embezzling $231K From Client Accounts

Christopher P. Smith, 30, of Lafayette, Louisiana, pleaded guilty yesterday to charges he embezzled some $231,000 from customer accounts at Chase Bank where he was employed as a personal banker. Specifically, Smith pleaded guilty to one count of misapplication of bank funds resulting from unauthorized withdrawals from September 2007 through August 2009. The bank customers have all been reimbursed, according to reports. Smith faces up to 30 years in prison, plus a fine of up to $1 million and restitution.

Read the story here.

Update (8/10/10): Smith was sentenced to 41 months in prison for his embezzlement scheme. Smith was also ordered to pay $228,350.60 in restitution and will serve five years of supervised release after his prison sentence. He had plead guilty to misapplication of bank funds.

Massachusetts Woman Sentenced For Embezzling $240K From Rhode Island Company

Sherrie Gagne, 41, of Seekonk, Massachusetts, was sentenced to 3 1/2 years in prison for embezzling nearly $240,000 from Cranston, Rhode Island-based 4 Seasons Carpet Workshop Inc., where she had been employed as office manager. Prosecutors alleged that from September 2005 until January 2007, Gagne issued 91 checks to herself totaling $237,363 for her own personal benefit. She had pleaded no contest to one count of embezzlement over $100, one count of uttering and publishing a false instrument -- forging and counterfeiting checks -- and one count of obstruction of justice. As part of the sentence, Gagne must also make full restitution and will have 6 1/2 years of probation following her prison term.

Read the story here and here.

Tuesday, March 30, 2010

Small Business Fraud Prevention ToolKit Available

Marquet International, Ltd. has joined with Business Fraud Prevention, LLC, to distribute the Small Business Fraud Prevention ToolKit," an educational program for small businesses to help identify, prevent and respond to internal fraud situations. The toolkit, which was authored by certified fraud examiner, Julie A. Mucha-Audlott, includes a two-hour instructional DVD and accompanying 72-page workbook. It is available for purchase online for $169. “We are very pleased to be able to offer the Small Business Fraud Prevention Toolkit,” said Christopher T. Marquet, CEO of Marquet International, Ltd. “Small businesses are particularly at risk for internal fraud and employee misconduct simply as a result of generally having a less robust control structure compared to larger organizations. Non-profits also face a high risk of fraud, waste and abuse,” said Marquet.

To order the Small Business Fraud Prevention ToolKit, visit our website here.

Former Virginia Bookkeeper Pleads Guilty To Embezzling $157K From Dollar Tree

Jenene Burgess Rodgers, 39, of Chesapeake, Virginia, pleaded guilty yesterday to six counts of embezzlement, admitting she stole about $157,000 from Dollar Tree Inc., where she had been employed as a clerk in the finance department handling company vendors. According to prosecutors, Rodgers created fake accounts to misappropriate company funds to pay her personal expenses, including a student loan, make online purchases and to take cash, over a nearly three year period between February 2007 and December 2009. All in, Rodgers, who must make restitution as part of the plea agreement, stole $157,588.19, according to authorities. She was arrested last December.

Read the story here and here.

Former Union Bookkeeper In California Sentenced For Embezzling $100+K

Rosa Della Porta, 45, of Highland Park, California, was sentenced yesterday to 21 months in prison for embezzling some $108,000 from the International Longshore and Warehouse Union, Local 26 (ILWU), where she had been employed as a bookkeeper. According to prosecutors, Porta handled incoming monies for union dues, but kept a portion of the cash that was meant to be deposited for the union. Porta's scheme lasted from January 2003 until June 2006. She was fired in November 2006 and ultimately arrested in August 2008. Porta plead guilty last year to one count of embezzlement.

Read the story here and here.

Monday, March 29, 2010

Texas Man Arrested In $170K Embezzlement Case

Jason Clarence Thomas, 34, of Waco, Texas, was arrested today on charges he embezzled nearly $170,000 from Starcrest Development, a local real estate development concern where he was one of six partners. According to authorities, Thomas wrote a series of checks dating back to March 2002 for his own benefit. The total amount embezzled was $169,642.57, according to investigators. In April 2009, his partners became suspicious and ordered an internal audit. Thomas is also is the owner of Bullseye Glass and the former owner of the now-defunct Mid-Tex Homes. He was arrested on the campus of McLennan Community College where he is now reportedly a nursing student.

Read the story here and here.

Saturday, March 27, 2010

Michigan Man Sentenced In $13.2 Million Ponzi Scheme

Richard Taft Johnson, 67, of Bloomfield Hills, Michigan, was sentenced to 8 years in prison for bilking investors out of some $13.2 million in a Ponzi-type investment fraud scheme. Prosecutors alleged that Johnson, through his company, Investor Planning Services, promised investors returns of as much as 40 percent per year through a low-risk program called the American Charitable Program. The scheme began in 1998 and lasted until 2009. There are about 130 known victims of Johnson's fraud. He plead guilty to "devising a Ponzi scheme and committing mail fraud in carrying it out."

Read the story here and here.

Read the DOJ announcements here and here.

Friday, March 26, 2010

Former Missouri Controller Indicted For Allegedly Embezzling $400K

Joseph B. Van Gronigen, 41, of Hillsboro, Missouri, was indicted yesterday on charges he embezzled more than $400,000 from Cepia, LLC, a Clayton, Missouri-based company that makes Zhu Zhu pets, for whom he had been employed as company controller. According to the indictment, Van Gronigen's scheme lasted from September 2007 to January 2010. He faces up to 20 years in prison, plus fines up to $250,000 for each of the two counts of mail fraud he has been indicted on, plus restitution.

Read the story here and here.

Update (6/18/11): Van Gronigen has been sentenced to 20 months in prison for embezzling what is now believed to be $500,000 from Cepia, LLC, the maker of Zhu Zhu pets.  He had plead guilty last January to one felony count of mail fraud.

International Embezzlement Beat

Some of the prominent embezzlement cases in the news from around the globe recently include:

People's Republic of China

Li Shubiao, 46, and the former director of the Chenzhou Housing Provident Fund Centre, was executed yesterday by Chinese authorities. He was reportedly found guilty of having embezzled some 120 million yuan (US$18 million) in public funds over a five year period during his tenure. He is reported to have invested most of the money in personal investments or "squandered" it gambling.


France

Jacques Chirac, 77, and the former president of France, has been ordered to stand trial for embezzlement. Chirac was forced to step down in 2007 resulting from accusations he created fictitious jobs to pay his political cronies during his time as Paris mayor between 1992 and 1995. This case is noteworthy in that it marks the first time a modern French leader has appeared in the dock in a public court. The investigation took 3 years to complete and Chirac has avoided prosecution due to his immunity in public office until he stepped down.


Rwanda

An investigation lead by the Office of the Prosecutor General has resulted the arrest of a number of leaders and members of various cooperatives in the country for alleged embezzlement of at least Rwf 889m. Those arrested include, Jeanne Mukandamage, Claude Nzaramba, Odeth Mukamana (Codevram), Anastase Murego, Andre Nzabamwita, and Boniface Uwimana.


Republic of Korea

Official crime reports indicate that embezzlement cases are on the rise in South Korea. According to the National Police Agency, the number of embezzlement cases reported was 23,830 last year, up 17 percent over the past five years. An article in the Korea Herald reported that many of the perpetrators involve "financial experts" and "other professionals. The article cited three recent cases, including the following:
  • Last October, the 49-year-old manager of a company under court receivership was arrested on charges of embezzling 190 billion won (US$160 million) from his company. The man, named Park, allegedly squandered all the money that he stole for six years on stock investments, plus gambling and "other extravagancies."

  • On March 19, an official at Gangnam District Office in southern Seoul committed suicide after being found to have appropriated 770 million won (US$650,000) in state funds.

  • Officials at Yonsei University in Seoul reported Wednesday that they were investigating a campus employee suspected of embezzling research fees worth of "tens of millions of won."
Kazakhstan

Mukhtar Dzhakishev, a former president of state-run nuclear energy company Kazatomprom, was recently convicted of embezzling some 99.8 million tenge (US$679,000) by misappropriating state shares in uranium deposits to offshore accounts. He was sentenced to 14 years in prison and barred for 7 years from holding government posts.

Guatemala

Alfonso Portillo, 58, the former president of Guatemala, will faces money laundering and embezzlement charges in the United States after a panel of judges approved his extradition to the U.S. on charges that he laundered tens of millions of dollars that he had embezzled while he was President, between 2000 and 2004, including $2.5 million in donations from the Taiwanese government that was meant for children's schoolbooks. He was apprehended in January after a US indictment was handed down. Portillo claims he is innocent and suggested that the accusations are a political witch hunt by the U.S. and U.N. He faces up to 20 years in prison if convicted.


Taiwan

Sentencing for Hsieh Shih-hung, a bank intern formerly employed by the Bank of Taiwan, who embezzled NT$320 million is recommended by prosecutors to be 15 years in prison. Hsieh reportedly used his manager's identity and the banks newly installed electronic data interchange service to make two transfers of NT$160 each to his own personal bank account. Hsieh, who also conspired with his wife and an aunt to transfer some of the funds to overseas accounts, was originally charged with violating the Banking Act and laundering


Spain

Jaume Matas, the former president of the Balearic Islands, has been accused of embezzlement, false documentation, breach of trust, fraud management and money laundering in connection with the misappropriation of some 41 million euros while he was in government. He faces a maximum of 18 years in prison if convicted on all counts.

California Woman Charged With Embezzling $100K

Debra Davis, 47, of Apple Valley, California, has been arrested and charged with embezzling about $100,000 from an unnamed Hesperia-based auto repair business where she had been employed. Authorities believe Davis stole cash from the business over a period of years and that she had been employed there since 2003. Details of the case are sketchy at this time.

Read the story here.

Developing...

California Couple Indicted In $1/2 Million Embezzlement Case

Benjamin Joseph Chaney, believed to be in his early 30s, and Kara Leigh Brown, believed to be in her early 40s, of Discovery Bay, California, were indicted Wednesday on 7 counts of theft and embezzlement with “Aggravated White Collar Crime” enhancements alleging they stole more than $500,000 from an unnamed business based in Davis. The indictment alleges that Chaney had served as CFO of the company and, over a four year period between 2003 and 2007, used his position to write checks and use the company credit card for "a multitude of personal expenses related to the couple’s home, vehicles and entertainment." The indictment is the culmination of 2 years of investigation and litigation in Yolo County, California. The couple were arrested last weekend.

Read the story here .

Read the DA's announcement here.

Note: We have identified a Benjamin Chaney who has been employed by a manufactured/mobile home real estate concern called East Bay Repos (www.eastbayrepos.com). However, we are not certain that this is one and the same Benjamin Chaney who was indicted in this case.

Update (1/16/13): Brown, now 43, pleaded guilty to Accessory to a Felony.  Chaney, 32, pleaded guilty to embezzling as much as $500,000 from Harper Model Home Maintenance, for which he had been employed as chief financial officer.

Thursday, March 25, 2010

New Mexico Real Estate Exec Accused Of Running $80 Million Ponzi Scheme

Douglas F. Vaughan, 62, of Albuquerque, New Mexico, and a prominent local real estate executive, has been accused by the SEC of operating a Ponzi-type investment fraud scheme that bilked investors out of some $80 million. According to the Securities and Exchange Commission, Vaughan, through his companies, The Vaughan Company Realtors and Vaughan Capital LLC, enticed investors with promissory notes with fixed rates of return between 10 and 25 percent for real estate investments involving distressed properties. Some 600 investors were defrauded, according to the SEC, dating back to 1993. Vaughan and his companies have reportedly filed for bankruptcy.

Read the story here and here.

Read the SEC complaint here

Arizona Woman Set To Be Sentenced For Embezzling From Bank

Marlene Aguilera Pena, 46, of Globe, Arizona, is due to be sentenced April 12th for misappropriating more than $860,000 from the Marian Miami Federal Credit Union, where she had been employed. Prosecutors alleged that Pena opened 141 fictitious loans with a total originated loan balance of approximately $2.1 million. Pena plead guilty to three counts of embezzlement, admitting that $860,377 was taken for her and her family's own benefit. The credit union is now defunct. The scheme lasted nearly six years, from January 2001 until November 2006, according to the indictment, which originally had 25 counts of embezzlement. She faces up to 30 years in prison for each of the three counts, plus restitution and a fine of up to $1 million.

Read the story here, here and here.

Read the DOJ announcement of her guilty plea here.

Update (5/14/10): Pena was sentenced to more than 4 years in prison, plus 5 years supervised release and must pay $1.2 million in restitution.

Former New Hampshire Bank Exec Sentenced For Embezzling $120K

Gary K. Ellis, 57, of Newmarket, New Hampshire, was sentenced to six months in prison for embezzling at least $120,000 from River Valley Credit Union in Brattleboro, Vermont, where he had served as chief executive officer. According to prosecutors, Ellis took extra salary and bonus from the bank over a four year period. He was fired in 2005 after the misappropriation came to light and ultimately indicted in December 2008. With the sentence, Ellis must also pay restitution of between $120,000 and $200,000 to be determined in a separate hearing.

Read the story here and here.

California Man Sentenced For Misappropriating $1.2 Million In Company Equipment, Selling It On Ebay

Timothy Charles Webb Jr., 38, of Santa Rosa, California, was sentenced to two years in prison for misappropriating more than $1.2 million in property from Agilent Technologies Inc. where he had been employed. Webb was reportedly was caught by a co-worker taking items from the company in February 2007, sparking an investigation. Police searched his home and found it full of electronic items taken from Agilent that Webb was attempting to sell on eBay. The theft scheme reportedly lasted four years. In May 2008, Webb plead no contest to burglary and grand theft and returned a truck load of Agilent property. Webb has also been ordered to pay $1.22 million in restitution. Webb's wife, Kristen Webb, was also a former Agilent employee, but she was not charged in the case. Agilent filed a civil suit against Webb that claimed, among other things, that he had been selling stolen Agilent equipment since 1999.

Read the story here, here and here.

Read the DA's announcements here and here.

Wednesday, March 24, 2010

New Jersey Investment Advisor Pleads Guilty To Embezzling $1 Million From Elderly Clients

Brian Anderson, 45, of Oradell, New Jersey, pleaded guilty today to a one-count Information charging him with embezzlement in connection with the theft of over $1 million from eight elderly client accounts. Anderson admitted that he embezzled the money from clients of his over a four year period between 2002 and 2006 while at PrimeVest Financial Services of Jersey City. His scheme reportedly involved the simple withdrawal of funds from client accounts and then depositing those funds into his own accounts. Anderson faces up to 30 years in prison, a $1,000,000 fine, plus restitution upon sentencing which is set for June 29th.

Read the story here and here.

Update (9/8/10): Anderson, now 46, was sentenced to 68 months in prison. He must also pay $1,110,633 in restitution.

Tennessee Based Pharma Company Agrees To Pay $42.5 Million To Settle Kickback Scheme Allegations

Alpharma Inc., now a wholly owned subsidiary of King Pharmaceuticals based in Bristol, Tennessee, agreed last week to pay $42.5 million to settle allegations that it violated the False Claims Act and paid kickbacks to health care providers to prescribe its pain killer drug, Kadian. The government had alleged that between January 1, 2000 and December 29, 2008, Alpharma engaged in the illegal promotion of Kadian, and that they had made misrepresentations about the safety and efficacy of the drug. The case was the result of a whistleblower claim from, Debra Parks, made in 2006 under the qui tam provision of the False Claims Act. Under the civil settlement announced today, Parks will receive $5.33 million.

Read the story here and here.

Read the DOJ announcement here.

Michigan Man Sentenced For Operating $5 Million Ponzi Scheme

Raymond Frank Joseph, 55, of Bloomfield Hills, Michigan, was sentenced to 66 months in prison for operating a Ponzi-type investment fraud scheme that bilked investors out of at least $5 million. Joseph was found guilty by a federal jury after a two week trial on 36 felony counts, including three counts of wire fraud, nine counts of interstate transportation of stolen money or property, and twenty-four counts of conducting monetary transactions in criminally derived property. Between December 2002 and early 2007, Joseph was alleged to have solicited loans to invest in several business ventures. Instead, Joseph used the investment funds to pay returns to earlier investors and to for his own personal benefit. Joseph was also ordered to pay $2.2 million in restitution.

Read the story here and here.

Read the DOJ announcements here and here.

Former New York Foreign Exchange Trader Sentenced In $110 Million Ponzi Scheme

Michael Richard MacCaull, 38, of Northport, New York, a former foreign exchange trader, was sentenced to 188 months (15 1/2+ years) in prison for operating a Ponzi-type investment fraud scheme that bilked 272 investors out of some $110 million over an 7 year period. MacCaull and a co-defendant, Bradley David Eisner, 37, of Long Island, plead guilty in 2008 and have forfeited $28 million in assets. The court ordered MacCaull to pay additional restitution of $66 million. MacCaull and Eisner are alleged to have enticed investors through their company, Razor FX, Inc., claiming they were experts at foreign exchange trading. However, almost no trading occurred and investment funds went to pay returns to earlier investors and to maintain their opulent lifestyle. MacCaull was convicted in connection with an earlier investment fraud scheme involving Sterling Foster & Co., a now defunct New York boiler-room operation that manipulated stock prices. In 2002, MacCaull was sentenced to 15 months in prison.

Read the story here, here and here.

Read the original DOJ announcement here.

Tuesday, March 23, 2010

Trial For Former South Carolina Mayor & Wife Commences In $243K Embezzlement Case

Alan "Lenneau" Berry, 58, and his wife, Sheila Berry, of Latta, South Carolina, are on trial in federal court on 62 counts of embezzlement of Social Security funds. Lenneau Berry, the former mayor of Latta, previously plead guilty to state charges of one count of common law misconduct in office, four counts of obstruction of justice and one count of making a false statement. The two are accused of embezzling $243,000 from Social Security between 2000 and 2008. Harold J. Kornblut, 56, a local CPA, originally indicted in the case, testified that Lenneau Berry had him issue his paychecks to Sheila Berry since he was receiving disability payments.

Read the story here, here, here and here.

Monday, March 22, 2010

Former Maine Banker Sued By Victims Of $800+K Embezzlement

Christina "Tina" Torres-York, 39, of Warren, Maine, has been sued in two separate civil suits alleging she embezzled nearly $750,000 from Camden National Bank in Waldoboro, where she had been employed as a loan officer and more than $80,000 from a separate non-profit organization where she had served as volunteer treasurer. The suits, filed by Camden National Corp., parent of the bank and Maine Contractors and Builders Alliance Inc., allege that Torres-York embezzled the funds over a 2 year period between 2007 and 2009. The suit alleges Torres-York made $749,402 in unauthorized withdrawals from five of the bank customers’ lines of credit. The second suit, filed by the Alliance, alleges Torres-York embezzled $82,940 from the non-profit during the course of 2009. Torres-York reportedly left a confession letter. The FBI is investigating, but no charges have yet been filed.

Read the story here, here and here.

Update (1/10/11): According to media reports, Torres-York is expected to plead guilty to charges of embezzlement and misapplication of funds in connection with her alleged theft of at least $750,000 from Camden National Bank.

Update (1/12/11): Torres-York pleaded guilty as expected. She is due to be sentenced in April 2011.

Connecticut Man To Be Sentenced In $2.5 Million Embezzlement Case

Steven DeCecco, 52, of Stratford, Connecticut, is scheduled to be sentenced tomorrow for embezzling more than $2.5 million from an unnamed local employer where he had served as controller. Our research suggests that the company in question is Expand International of America, Inc., an event and outdoor display manufacturing company. DeCecco was arrested last April and charged with conspiracy to commit wire fraud. According to prosecutors, DeCecco and an unnamed former female employee "directed numerous wire transfers to their own accounts and accounts for their benefit." DeCecco allegedly approved hundreds of transfers and his co-conspirator hid the thefts by reconciling the company's books and records. Authorities believe he used a large portion of the stolen funds to purchase 20 or more high-end classic cars. DeCecco was originally arrested and charged last April and he pleaded guilty last November to one count of conspiracy to commit wire fraud, three counts of wire fraud, and two counts of interstate transportation of stolen property. DeCecco faces up to 20 years in prison, plus a fine of up to $5 million and restitution.

Read the story here and here.

Read the DOJ announcement of DeCecco's arrest here.

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

Update (3/23/10): DeCecco was sentenced today to 96 months in prison, followed by three years of supervised release, plus full restitution. DeCecco and his former colleague and co-conspirator, identified as Jaime Hoff, caused hundreds of unauthorized wire transfers from Expand International's accounts to their own accounts and third parties.

Update (4/30/10): Jaime Hoff, 30, of Watertown, Connecticut, was sentenced to 33 months in prison for her role in this embezzlement scheme. She has also been ordered to pay $2,098,050 in restitution to Expand International of America.

Former Georgia Bookkeeper Arrested & Charged In Possible $850K Embezzlement Case

Kimberly Denise Brown of Locust Grove, Georgia, was arrested last week and charged with eight counts of forgery and fraud in connection with the alleged embezzlement of as much as $850,000, from Norcross-based Atrium Foliage where she had been employed as a bookkeeper, according to an article published in the Atlanta Journal-Constitution today (read the story here). According to police investigators, Brown used "a combination of forged checks and letters, secret payroll payments and unauthorized use of credit cards, blank checks and other measures to steal at least $95,577," according to the article. Brown's scheme allegedly spanned an 18 month period, according to Robert Albright and Kathy Lang Albright, owners of Atrium Foliage. They reportedly had to lay off about 20 employees as a result of Brown's actions.

Note: Your humble correspondent is quoted throughout the article regarding the nature of embezzlement today.

Upstate New York Woman Found Guilty Of Embezzling $150+K

Rebecca Farnsworth, 37, of Saranac Lake, New York, was found guilty by a jury last week on charges she embezzled about $154,000 from Adirondack Audiology Associates for whom she had been employed. Farnsworth made some $80,000 in unauthorized credit card charges for personal travel and expenses and misappropriated another $74,000 in unauthorized salary compensation. Specifically, the jury found her guilty of second degree larceny. Her thefts reportedly spanned a four year period between 2004 and 2008. Farnsworth is expected to be sentenced next month.

Read the story here, here and here.

Sunday, March 21, 2010

Former New Jersey Payroll Company Exec May Have Embezzled $1 Million

Jose M. Figueroa, 35, the former vice president of operations for First Priority Pay, a Hoboken, New Jersey-based payroll processing company, and Carlos Chorro, 34, a former sales director for the company, who were charged in January with embezzling nearly $600,000, are believed to have stolen at least $400,000 more, according to authorities investigation the case. Figueroa is believed to have siphoned off the funds between July and November last year by making transfers from escrow accounts that held money deposited by clients to pay taxes to accounts held by Figueroa, his wife Olefia B. Figueroa, and to Chorro. The three were named in a civil suit filed by First Priority Pay last December to recover the losses. The investigation is ongoing and the figure could go beyond the $1 million mark. Figueroa is believed to have taken the money to facilitate the opening of his own payroll business.

Read the story here and here.

Saturday, March 20, 2010

Alaska State Worker Charged In $724K Embezzlement Scheme

Chona Aguinaldo Agtarap, 35, of Anchorage and Kodiak, Alaska, was arrested Thursday and charged with embezzling some $724,000 from the state Department of Health and Social Services, where she had been a longtime employee. According to authorities, Agatrap issued assistance checks from the state treasury to herself, using a slightly different name, and had them mailed to her Kodiak post office box, then deposited them into two accounts she controlled. Agtarap's scheme spanned five years, starting in April 2005 until earlier this month and involved more than 150 unauthorized payments to herself. Authorities seized a 2010 Nissan Armada, a 2008 Nissan Pathfinder, three four-wheelers, a Glastron boat, firearms, home electronics and furniture from Agtarap's home in Kodiak, believed to have been purchased with stolen state funds.

Read the story here and here.

Update (9/18/10): Agtarap was sentenced to 2 years in prison.

Friday, March 19, 2010

Delaware Company Pleads Guilty To FCPA Violations

Authorities announced yesterday that Innospec Inc., a Delaware corporation, pleaded guilty to defrauding the United Nations (UN), to violating the Foreign Corrupt Practices Act (FCPA) and to violating the U.S. embargo against Cuba. Specifically, Innospec, a specialty chemical manufacturer, plead guilty to a 12-count information charging wire fraud in connection with kickbacks to the former Iraqi government under the UN Oil for Food Program (OFFP), as well as FCPA violations in connection with bribe payments it made to officials in the Iraqi Ministry of Oil. Innospec also admitted to selling chemicals to Cuban power plants, in violation of the U.S. embargo against Cuba. For example, Innospec admitted paying and promising to pay more than $1.5 million in bribes to Iraqi Oil Ministry officials from 2004 to 2008. As part of its plea agreement, Innospec agreed to pay a $14.1 million criminal fine and to retain an independent compliance monitor for a minimum of three years to oversee the implementation of a robust anti-corruption and export control compliance program. The company also faces up to a $40 million fine to settle SEC allegations.

Read the story here and here.

Read the DOJ announcement here.

Pennsylvania Export Company Pleads Guilty To Violating Foreign Corrupt Practices Act

Nexus Technologies Inc., a Philadelphia, Pennsylvania-based export company, pleaded guilty Tuesday to charges of conspiracy to bribe officials of the Vietnamese government in exchange for lucrative contracts to supply equipment and technology to Vietnamese government agencies, in violation of the Foreign Corrupt Practices Act (FCPA). The company, together with Nam Quoc Nguyen, 54, of Houston and Vietnam; Kim Ahn Nguyen, 41, of Philadelphia; and An Quoc Nguyen, 34, of Philadelphia, were charged in a superseding indictment on October 30, 2009, with conspiracy, violations of the FCPA, violations of the Travel Act in connection with commercial bribes, and money laundering. Each has pleaded guilty to various charges. Another former executive, Joseph T. Lukas, also pleaded guilty to conspiracy and violating the FCPA. In connection with the guilty pleas, Nexus and the Nguyens admitted that from 1999 to 2008 they agreed to pay bribes in excess of $250,000 to Vietnamese government officials. Sentencing is scheduled for July 13, 2010, and Nexus faces a fine of up to $27 million.

Read the story here and here.

Read the DOJ announcement here.

Texas Woman Indicted For Embezzling $154K From Church

Patricia Ladawn Poehls, 37, of Bruceville, Texas, was indicted Wednesday on charges she embezzled more than $154,000 from St. Jerome Catholic Church where she had served as youth coordinator and bookkeeper responsible for payroll. Prosecutors allege that over the course of about one and a half years, between January 2007 and June 2008, Poehls stole a total of $154,329.27 from church coffers to pay for “school, hotels, airplane tickets" and other personal items. Poehls reportedly has claimed that she needed the money to pay after she and her husband had separated to pay for household and school expenses. Poehls' scheme allegedly involved the misappropriation of church funds via unauthorized credit card charges and fraudulent checks made to herself or personal vendors.

Read the story here and here.
Update (11/23/10): Poehls, who is now known as Rylie Joe Trish Wilson, pleaded guilty to charges she embezzled more than $125,000.

Former "Officer Of The Year" From Nebraska Sentenced In $4 Million Ponzi Scheme Fraud

Matthew H. Anselmo, 38, of Bellevue, Nebraska, was sentenced to 4 years in prison for operating a Ponzi-like investment fraud scheme that billed investors out of nearly $4 million. Prosecutors alleged that Anselmo lured investors, mostly family members, friends and business acquaintances, with promises of spectacular returns of as much as 100% in three months or less. Instead, Anselmo reportedly spent the money on maintaining a lavish lifestyle, including gambling junkets as well as paying earlier investors phony returns. Anselmo is a former officer with the Papillion Police Department - and one-time "Officer of the Year" of the department. Prosecutors alleged that Anselmo's scheme spanned 3 years and that nearly all of the investment funds are lost. Anselmo was also ordered to pay $3.7 million in restitution. He was originally charged in a 27 count indictment in May 2009 with wire fraud, money laundering and possession of counterfeit checks. He was the owner/operator of two businesses: M&M Marketing, a golf outing company and Premier Fighter, a mixed martial arts apparel business. Anselmo plead guilty to one count of mail fraud last September.

Read the story here, here and here.

Thursday, March 18, 2010

California Accountant Pleads Guilty To Running $13 Million Ponzi Scheme

William R. Murray, 55, of Sacramento, California, pleaded guilty to charges last week he ran a Ponzi-type investment fraud scheme that bilked 52 clients out of as much as $13 million over an 8 year period. According to prosecutors, Murray promised clients that he would pay taxes and make investments on their behalf but instead used the money to support an extravagant lifestyle, including the purchase of real property, a classic car, a fleet of limousines, expensive jewelry and rugs, and fine wines. Murry charged the addresses for his clients so they would not receive delinquent tax notices. The scheme became a Ponzi scheme when he began using recent client funds to pay off earlier requirements. He is scheduled to be sentenced on the mail fraud and interference with tax administration charges on May 28.

Read the story here and here.

Update (5/28/11): Murray was sentenced to 19 1/2 years in prison.

Pennsylvania Man Pleads Guilty To Charges He Ran A $12 Million Ponzi Scheme

Stephen Michael Alexander, 59, of Villanova, Pennsylvania, pleaded guilty Tuesday to charges he operated a Ponzi-type investment fraud scheme that bilked investors out of as much as $12 million. Alexander reportedly posed as a hedge fund manager to potential investors, but used investment funds to enrich himself and pay personal expenses while providing false monthly financial statements to his clients. According to the criminal complaint, Alexander promised investors returns of as much as 38 percent. He faces up to 60 years in prison plus a $1 million fine for the two counts of wire fraud and one count of money laundering he plead to upon sentencing which is scheduled for June 16th.

Read the story here, here and here.

Former Ohio Bank Manager Pleads Guilty In $245K Embezzlement Scheme

Ann Bryson, 63, of Cincinnati, Ohio, pleaded guilty last week to charges she embezzled more than $245,000 from Good Samaritan Employees Credit Union, where she had been employed as a manager. Prosecutors alleged that over the course of 7 years, between 1998 and 2005, Bryson wrote credit union checks and money orders totalling $245,432.66 for her personal expenses. She also allegedly manipulated bank records in an effort to conceal the misappropriation scheme. Bryson, who plead guilty to bank embezzlement, is due to be sentenced on July 1st and faces up to 30 years in prison, a $1 million fine, plus restitution. Good Samaritan Employees Credit Union was dissolved after it became insolvent in November 2005.

Read the DOJ announcement here.

Update (7/2/10): Bryson was sentenced to 33 months in prison followed by three years supervised release. She was also ordered to pay restitution in the amount of $245,432.66.

Former Ohio Bank Manager Charged With Embezzling $1.5 Million

Joanne S. Kuchna, 65, of Seven Hills, Ohio, was charged yesterday with bank fraud in connection with an embezzlement scheme that defrauded Charter One Bank out of nearly $1.5 million over a 14 year period. Prosecutors allege that Kuchna stole money from customer certificate of deposit accounts at the Broadview Heights branch of Charter One and concealed the thefts by shifting money from one account to another. The scheme reportedly began 1995 and continued until November 2009, involving at least 17 customer accounts and netting Kuchna $1,489,850.88 in ill-gotten gains. She also forged withdrawal slips and used unsuspecting co-workers to conduct some of her fraudulent transactions, in an effort to conceal the thefts, according to authorities. Kuchna had been a 29-year employee of the bank, most recently as an assistant manager.

Read the story here and here.

Read the DOJ announcement here.

Hat Tip: Reader Joe

Update (5/26/10): Kuchna pleaded guilty to one count of bank fraud.

Colorado Investment Fraud Artist Scams Investors Again To Pay For Lawyer

Hamilton Alan Bird of Colorado Springs, Colorado, was indicted yesterday on charges he defrauded investors out of nearly $700,000 which was used to pay for his defense attorney in a prior investment fraud scheme that bilked 350 investors out of some $7.5 million. Bird, who was indicted in the earlier case in May 2006, pleaded guilty to fraud charges in March 2008 and was sentenced in September 2008 to 24 years in prison. A $12.6 million judgement was also entered against Bird in May 2007 in the same case. The more recent investment swindle involves a Nevada-based company, EquityFX, Inc., through which Bird lured investors for purported high return foreign exchange currency investments. According to authorities, the scheme lasted from January 2006 through September 2008 wherein he only invested a portion in foreign exchange accounts and used the rest to pay earlier investors, his defense attorney and to enrich himself.

Read the story here, here and here.
Read the indictment here.
Hat Tip: Reader Joe

Update: Pennsylvania Woman Sentenced In $1.6 Million Embezzlement Case

Vivian K. Williams, 50, of Allentown, Pennsylvania, was sentenced to 57 months in prison for embezzling some $1.6 million from International Women's Apparel, Inc., over a nine year period. Prosecutors alleged that Williams issued phony invoices from a fictitious company for services not rendered the company to misappropriate the funds. Williams was employed as an administrative assistant to the president and later director of human resources for the company during the period of the thefts. Williams created a company called "The Copy Connection" which billed the company for non-existent services to the tune of $1,663,129, pocketing the proceeds. Williams reportedly used the stolen money for personal travel, her son's tuition, a $20,000 home theater system and home remodeling. She was also ordered Williams to pay back $1,542,638.25 to the company and $710,291.33 to the IRS in back taxes, penalties and fees. According to reports, this is Williams' third conviction for embezzlement.

Read FraudTalk's original post on this story here.

Read the story here.

Wednesday, March 17, 2010

Former Pennsylvania Bank Teller Sentenced For Embezzling $286K

Tonya Marie Lord, 39, of Hamburg, Pennsylvania, was sentenced yesterday to 27 months in prison for embezzling $286,000 from a local branch of Wachovia Bank where she had been employed as a teller. According to prosecutors, Lord used her position to steal cash from bank ATMs over a six year period on more than 100 occasions. Lord was originally indicted on the charge of embezzlement of funds by a bank employee last September and plead guilty to it on November 19th. According to prosecutors, Lord spent the stolen money on drugs, automobiles, motorcycles and other luxury items to substantially increase her standard of living. Lord must also pay full restitution and spend five years of supervised release after her prison sentence, during which time she is prohibited from employment that would allow her access to money via a computer.

Read the story here and here.

Read the DOJ announcement here.

Tuesday, March 16, 2010

Former School Finance Director From Virginia Arrested On Embezzlement Charges

Barbara J. Worrell, 62, of Colonial Beach, Virginia, was arrested yesterday and charged on 13 felony counts of embezzlement. Authorities allege Worrell embezzled an uspecified amount of money from the Colonial Beach Public Schools, where she had served as finance director. She is believed to have been involved in misappropriating funds between 2007 and 2009. Details have not been released at this time.

Read the story here, here and here.

Developing...

Update (6/29/10): Worrell's employment contract was terminated by the Colonial Beach School Board. She had been employed by the School District for 28 years.

Former Connecticut Municipal Board Of Ed Bookkeeper Sentenced For Embezzling $110K

Lori A. Tompkins, 35, of Salisbury, Connecticut, was sentenced today to 3 years in prison for embezzling some $110,000 from the Salisbury Board of Education, where she had been employed as clerk and treasurer. Tompkins plead guilty to the embezzlement last November admitting she misappropriated the funds over a three and a half year period between March 2005 and November 2008. Tompkins was also ordered to pay $108,000 in restitution. She was charged last month with first-degree larceny, second-degree forgery and illegal use of a credit card. According to authorities, Tompkins embezzled a total of $110,395.11 from the board and the activity accounts of the Salisbury Central School.

Read the story here, here and here.

California Attorney Accused Of Embezzling More Than $500K From Clients

Oscar Cruz Parra, 67, of San Dimas, California, a probate attorney, was arrested today on charges he embezzled more than $500,000 from at least four of his clients. Prosecutors have charged him with five counts of embezzlement, four counts of perjury and one count of preparing false evidence. According to the complaint, since December 2000, Parra misappropriated funds from probate estates he handled and then filed false papers with the court to cover up the defalcations. The State Bar of California suspended his law license last month. Parra, who faces up to 14 years in prison if convicted on all the charges, is currently held on $641,103 bail.

Read the story here.

Read the DA's announcement here.

Update (5/26/10): Parra pleaded guilty today to charges he embezzled more than $500,000 from 5 of his clients. In a plea deal reached with prosecutors, Parra agreed to serve five years in state prison and pay $441,000 in restitution.

Update: Husband Of Non-Profit Exec Sentenced In Oklahoma Embezzlement Case

Eugene M. Naukam III, 65, of Edmond, Oklahoma, was sentenced to 5 years in prison for embezzling nearly $150,000 from the Oklahoma Court Appointed Special Advocates Association (CASA) for which his wife, Anna Marie Naukam, 51, had served as Executive Director and was also convicted in the case. Eugene Naukam was also ordered to pay a total of about $148,000 in restitution to the taxpayer and publicly supported agency meant to help abused and neglected children. For her part, Anna Marie Naukam was sentenced to 15 years in prison, 20 years on probation and ordered to pay $549,024 in restitution. Eugene Naukam had previously plead guilty to 41 embezzlement counts and one conspiracy count. State auditors had found that the Naukams had misappropriated more than $650,000 to finance a lavish lifestyle, among other personal expenses.

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

Read the story here.

Florida Man Indicted For Bilking Investors, Mostly Hawaii Residents In $10 Million Ponzi Scheme

Patrick H. Rakotonanahary, 34, of Tampa, Florida, was arrested yesterday on indictment charges he bilked more than 100 investors, mostly residents of Hawaii, out of $10.2 million in a Ponzi-type investment fraud scheme. Prosecutors allege that Rakotonanahary, through his company, Cyber Market Group LLC, promised returns of 6 percent to 10 percent per week to investors. According to reports, he paid earlier investors $8.4 million in phony returns out of investment funds of later investors, in classic Ponzi-like style. The foreign exchange trading scheme began in December 2007 and ran until May 2009, according to authorities.

Read the story here and here.

Colorado Man Pleads Guilty To Operating Ponzi Scheme That Bilked $30+ Million From Investors

Mark Jay Jackson, 55, of Denver, Colorado, pleaded guilty to charges he operated a Ponzi-type investment fraud scheme that may have bilked more than $30 million from investors over a nearly 15 year period. Prosecutors allege that starting in April 1995 until June 2009, Jackson promised investors returns of 12 to 36 percent from his activities as a day trader. Instead, he is alleged to have used investment funds to enrich himself and to pay phony returns to other investors. Jackson is due to be sentenced on May 25 on the single racketeering charge he plead guilty to Monday. Jackson's scheme unravelled last summer and he was indicted in December on 59-counts of racketeering, securities fraud, theft and forgery.

Read the story here, here and here.

Read the criminal indictment here.

Monday, March 15, 2010

Former New York Bank Exec Arrested In First TARP/Bank Bailout Fraud

Charles J. Antonucci Sr., 59, of Fishkill, New York, and the former CEO of The Park Avenue Bank, was arrested today on charges of making false statements, self-dealing, bank bribery, embezzlement of bank funds and fraud, among other charges, in connection with the alleged misappropriation of more than $11.2 million in Troubled Asset Relief Program (TARP) funds. According to prosecutors Antonucci used another company he owned, Easy Wealth Group to mask some of the fraudulent transactions he was allegedly engaged in over the course of the scheme, from October 2008 until February 2009. Bank regulators seized the bank over the weekend.

Read the story here, here, here and here.

Update: Connecticut Woman Pleads Guilty To Embezzling $250K From Auto Dealer

Anna Roberts, 61, of Prospect, Connecticut, pleaded guilty Friday to charges she embezzled $251,516.34 from Key Auto Group where she had been employed as office manager for 25 years. She was sentenced to 18 months in prison, plus 5 years of supervised release. Prosecutors alleged that over the course of nearly 2 years, from April 2007 until her arrest in February 2009, Roberts misappropriated funds by stealing cash and checks to help pay for her gambling addiction, among other things. The dealership's owner, Larry Merriam, claims that Robert's thefts were responsible for the closure of his business, costing 50 jobs. Roberts who was originally charged in February 2009, plead guilty to one count of first-degree larceny.

Read FraudTalk's original post on this story here.

Read here.

Sunday, March 14, 2010

Former Tennessee CFO Charged With Embezzling $166K From Public Company

Ruey Ann Gordon, 58, of Brentwood, Tennessee, was charged Friday with embezzling $166,000 from publicly traded Goldleaf Financial Solutions, Inc., where she had been employed as chief financial officer of the company's technology division. According to prosecutors, Gordon issued a series of fraudulent Automated Clearing House transactions over a period of nearly 2 years, from January 2006 to November 2007, which were deposited into her own personal banking account. She then created false entries in the company’s accounting system to cover up the fraud, according to the complaint. Goldleaf describes itself as a "leading payments technology provider for the successful automation and integration of transaction processing solutions." Gordon, who has been charged with one count of money laundering, faces up to 10 years in prison if convicted.

Read the story here, here and here.

Saturday, March 13, 2010

California Man Convicted Of Embezzling $106K From Building Supply Company

Todd Martin Schoepflin, 36, of Simi Valley, California, who was convicted last month of embezzling nearly $106,000 from Stock Building Supply, where he had been employed for 11 years as a sales clerk, was sentenced yesterday to to a year in jail and five years of probation. According to prosecutors, Schoepflin stole cash receipts from retail purchases then hid the thefts by canceling the sales transactions in the company’s computer system. Authorities alleged that his thefts spanned a three year period between 2006 and 2009. Schoepflin was also ordered to pay full restitution in the amount of $105,868.

Read the story here.

Read the DA's announcement here.

Relative Of New York City Politicians Pleads Guilty To Embezzling $115K From Charity He Ran

Richard Izquierdo-Arroyo, the grandson of Democrat New York Assemblywoman Carmen E. Arroyo, and the nephew of Democrat City Council member Maria del Carmen Arroyo, pleaded guilty to charges he embezzled $115,000 from SBCC Management Corp., a taxpayer-funded non-profit housing agency he headed. He is also accused of sharing some of the misappropriated funds with the assemblywoman and councilwoman, although they have not been charged at this time. According to prosecutors, Izquierdo-Arroyo used some of the stolen money to put new flooring in his grandmother's district office, donated thousands of dollars to her campaign, spent $20,000 of the embezzled funds to pay for a trip to Puerto Rico for the assemblywoman and councilwoman, paid the salaries of interns in their legislative offices and their political club, among other things. Izquierdo-Arroyo was originally indicted last June and faces up to 10 years in prison upon sentencing. He was charged together with a co-conspirator, Margarita Villegas, 54, a director at SBCC Management in the embezzlement scheme that lasted four years from 2005 to 2009. Together the two are alleged to have misappropriated some $200,000. Villegas pleaded guilty earlier this month.

Read the story here, here, here and here.
Update (3/16/10): Richard Izquierdo-Arroyo pleaded guilty to the embezzlement charges today.

Friday, March 12, 2010

Missouri Man Sentenced For $3.5 Million Embezzlement Scheme

Scott James Beeson, 53, of North Kansas City, Missouri, was sentenced yesterday to 51 months in prison for embezzling $3.5 million from Ferrellgas, Inc., a local propane dealer, where he had been employed as a fleet manager. According to authorities, Beeson, reportedly a college-educated Eagle Scout, created fake invoices for work that two vendors never performed. Beeson also reportedly gave at least $1 million of the misappropriated funds to finance Prominent Youth Inc., a youth mentoring project. The rest of the funds went to finance a lavish personal lifestyle, according to reports. Beeson, who had served as fleet manager for 13 years with Ferrellgas, pleaded guilty to wire fraud and money laundering charges last April. Beeson's scheme lasted more than 6 years, from January 2002 and March 2008.

Read the story here, here and here.

Read the DOJ announcement here.

Louisiana Woman & Co-Conspirator Sentenced In $12.7 Million Embezzlement Case

Donna White, 46. of Avondale, Louisiana, was sentenced to 40 months in prison for her role in an embezzlement scheme that bilked Gretna-based John W. Stone Oil Distributor LLC out of some $12.7 million. According to authorities, White, who was employed by the dock fueling business in its accounting department, conspired with her sister's boyfriend, Daniel Kinney, 44, of Whitesville, Kentucky, to misappropriate the funds over a 12 year period starting in 1995. The scheme involved stealing customer checks and funds meant for deposit, but instead were deposited into their personal accounts. Kinney was sentenced to 78 months in prison. The stolen money was reportedly used to finance Kinney's NASCAR racing company, Premier Motorsports, as well as to pay for personal expenses and gambling. The two were originally charged last November on a one count bill of information with mail fraud to which they plead guilty in December 2009.

Read the story here and here.

Read the DOJ announcement here.

Thursday, March 11, 2010

Less Than 3 Months In, 2010 A Banner Year For Major Embezzlement Cases In Michigan

Michigan is infamously having a banner year for major embezzlement cases. With less than two and a half months into the year, we have already chronicled 15 cases involving employee thefts of more than $100,000. For 2009, the total for the entire year was 21 cases. We believe that the more severe economic woes in Michigan may have driven some of this white collar crime. However, most of these cases have gone of for years - the average scheme duration nearing 5 years. Interestingly, five of the 2010 cases involve healthcare related businesses. The average perpetrator age is 44 and 12 of the 15 are females - consistent with our overall research on this topic. There are still more than 9 months left in the year, but Michigan appears to be running far ahead of all other states (California, Texas and New York each have 6 or fewer such cases thus far this year). Our research suggests that the three largest embezzlement cases in Michigan this year so far include:
  • Amanda Renee Burns, of Lansing, Michigan, charged two weeks ago with embezzling about $950,000 from the Rockford branch of Fifth Third Bank
  • Debra Ann Boynton, 44, of Troy, Michigan, sentenced in January for embezzling $640,000 from Standard Federal Bank (now Lasalle Bank Midwest)
  • Susan M. Burgher, 48, of Breckenridge, Michigan, pleaded guilty in January to one count of "embezzlement of more than $100,000" for stealing nearly $600,000 from Innovative Communications Inc.
Any Michiganders want to comment on this apparent trend?

Nevada Woman Sought By Authorities For Allegedly Embezzling $500+K

Ronda K. Zamora, 42, of Henderson, Nevada, is being sought on charges she embezzled more than $500,000 from Silver State Refrigeration where she had been employed. Authorities believe Zamora, who is wanted on 32 different counts of theft, conspiracy and possession of stolen property, has fled the country to Mexico in order to avoid prosecution and are seeking leads to apprehend her. Zamora is believed to have transferred company funds via false paychecks into her own personal bank account over a period of 2 or 3 years, according to reports. Police are asking anyone with information to call Crime Stoppers at 702-385-5555 or the Henderson Police Department at 702-267-4750.

Read the story here, here and here.

South Carolina Woman Charged With Embezzling $520K From Bank

Kimberly O. McAbee, 44, of Woodruff, South Carolina, was indicted yesterday on charges she embezzled some $520,000 from Arthur State Bank in Union, South Carolina, where she had been employed. Prosecutors allege that McAbee embezzled the funds over a four year period between 2005 and 2009. She allegedly manipulated lines of credit and bank loans of family members and friends and altered bank records to hide the thefts. She faces up to 30 years in prison, plus fines and restitution. McAbee had been employed by the bank for over 20 years, from 1988 until 2009.

Read the story here and here.

Update (4/27/10): McAbee pleaded guilty today to the charges she embezzled $520,000 from Arthur State Bank.

Update (8/17/10): McAbee, now 45, was sentenced to 2 years in prison for her embezzlement in this case.

Former Bookkeeper In Washington State Pleads Guilty To Embezzling $350K From Rotary Club

Susan E. Kinney, 48, of Redmond, Washington, pleaded guilty yesterday to charges she embezzled more than $356,000 from the the Seattle Rotary Service Foundation, where she had been employed as business manager and bookkeeper. Kinney was originally charged on 123 theft counts, but pleaded guilty to 10 counts of first-degree theft. According to prosecutors, Kinney wrote herself and others more than 100 unauthorized checks totalling $356,173 from the charity's coffers over a five and a half year period between June 2003 and December 2008. Kinney has reportedly been affiliated with the organization for 22 years. She is scheduled to be sentenced on April 2 and is expected to receive about 5 years in prison. The thefts were revealed in late 2008 after a second bookkeeper was brought in to assist Kinney, who had near complete control over the organization's finances, according to reports. Kinney was terminated last March. We note that Kinney has a pair of Chapter 7 bankruptcies in her past, one in 1999 and the second in 2009.

Read the story here, here, here and here.

Hat tip: Reader Julie

Update (5/14/10): Kinney was sentenced to 53 months in prison.

Wednesday, March 10, 2010

IRS Worker In US Virgin Islands Charged With Defrauding Government Out Of More Than $100K By Filing False Tax Returns

Colette Browne of the US Virgin Islands and an IRS employee, together with her husband, Leroy Browne, have been charged with embezzlement, forgery, and identity theft in connection with the alleged defrauding the federal government of more than $100,000 by filing nearly three dozen false tax returns. According to authorities, Colette Browne filed 32 false tax returns under the names of friends and family, including her husband, Leroy. The scheme reportedly lasted for three years, from 2003 to 2006.

Read the story here.

Tuesday, March 9, 2010

Tennessee Man Pleads Guilty To Running $3.5 Million Ponzi Scheme

James Terry Brinley, 53, Millington, Tennessee, pleaded guilty today to charges he ran a Ponzi-type investment fraud scheme that bilked investors out of as much as $3.5 million. According to prosecutors, Brinley, who operated a company called Strategic Capital Management, lured investors with promises of above-market returns on certificates of deposit and trading accounts. Prosecutors alleged that Brinley's scheme, which involved used the investment funds to finance his own lifestyle and to pay earlier investors in classic Ponzi style, spanned 10 years, from June 1999 until May 2009. Brinley, who is due to be sentenced June 11, faces up to five years in prison.

Read the story here and here.

Read the DOJ announcement here.

Former Texas CFO Accused In $3.5 Million Embezzlement Scheme

Christopher McCullough, 47, formerly of Houston, Texas and now of Frederic, Colorado, was indicted yesterday on charges he embezzled more than $3.5 million from LJA Engineering where he had been employed as chief financial officer. Prosecutors allege McCullough accessed company accounts and engaged in more than 200 unauthorized transactions in which he converted LJA funds by withdrawing cash and writing checks to pay for a wide range of personal expenses. The 7 count indictment accuses McCullough of spending the embezzled funds on such items as past due taxes, real estate in Colorado, home improvements, interior decorating, stock purchases and other personal expenses. He is also charged with interstate transportation of stolen goods - checks and financial records believed to have been taken from the company's offices after he left the company.

Read the story here and here.

Read the DOJ announcement here.

Update (5/1/10): McCullough pleaded guilty to interstate transportation of stolen property in connection with his embezzlement of some $3.5 million from LJA Engineering, where he had served as CFO and a member of the board of directors.

Update (9/8/10): McCullough was sentenced to 51 months in prison.

Florida Woman Alleged To Have Stolen At Least $1.2 Million From Sheriff's Department

Catherine "Cathy" Diane Lister, 58, of Pensacola, Florida, is suspected of misappropriating at least $1.2 million from the Escambia County Sheriff's Office, where she has been a long-time finance unit employee, responsible, in part, for handling seized cash. Lister was arrested last month on larceny charges and when only $140,000 was believed to have been stolen. As the investigation has continued, that estimate has increased dramatically and authorities believe Lister's scheme, which apparently involved taking cash meant for the department's evidence trust fund account, spanned at least 10 years. She reportedly admitted to the thefts during interviews with investigators. Lister reportedly "retired" in January after 32 years with the department.

Read the story here and here.
Update (7/20/10): Lister was found guilty of one count of aggravated white collar crime and 11 counts of money laundering in connection with her embezzlement of what is now believed to be $1.4 million. She blamed her actions in part on gambling.
Update 2: Lister was sentenced to 15 years in prison.

Monday, March 8, 2010

West Virginia Municipal Employees Charged With Embezzling $100K

David W. Mayle, 28, of Salem, West Virginia and the city manager of the City of Salem, along with Sherry Olenick, 42, also of Salem and the former city clerk, have been charged with embezzling some $100,000 from municipal coffers. According to authorities, the two misappropriated $50,000 in the town's payroll and another $50,000 in general funds. Mayle is on paid administrative leave and Olenick has been fired, according to reports. Authorities say the investigation is ongoing and additional charges could be forthcoming. For now, they have been arrested on felony charges of embezzlement and falsifying accounts. Their scheme, which dates back to at least 2007, involved writing themselves checks and taking extra paychecks.

Read the story here, here and here.

BAE Systems Pays $400 Million Fine To Settle FCPA Problems

BAE Systems, plc, a UK-based defense contractor with operations in the US, pleaded guilty last week to conspiring to defraud the United States by impairing and impeding its lawful functions, to make false statements about its Foreign Corrupt Practices Act (FCPA) compliance program, and to violate the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR). According to court filings, from approximately 2000 to 2002, BAE Systems represented to various U.S. government agencies, including the Departments of Defense and Justice, that it would create and implement policies and procedures to ensure its compliance with the anti-bribery provisions of the FCPA, as well as similar, foreign laws implementing the Organization for Economic Cooperation and Development (OECD) Anti-bribery Convention. Further, BAE Systems "knowingly and willfully" failed to create mechanisms to ensure compliance with these legal prohibitions on foreign bribery. Prosecutors alleged that BAE Systems made a series of "substantial" payments to shell companies and third party intermediaries that were not subjected to the degree of scrutiny and review to which the company told the U.S. government the payments would be subjected. The company admitted it regularly retained what it referred to as “marketing advisors” to assist in securing sales of defense items without scrutinizing those relationships. In fact, prosecutors alleged that BAE Systems attempted to conceal its relationships with some of these advisors and its undisclosed payments to them.

Read the story here and here.

Read the DOJ announcement here.

Update: Former Mayor Of Birmingham, Alabama Sentenced To 15 Years For Bribery Scheme

Larry P. Langford, 63, the former mayor of Birmingham, Alabama, was sentenced today to 15 years in federal prison for taking some $235,000 in bribes in return for lucrative bond work. Langford, who was originally arrested in December 2008, was charged with bribery, conspiracy, money laundering and filing false tax returns. Two co-conspirators, William B. Blount, 56 and Albert W. LaPierre, 59, who admitted bribing Langford while he was president of the Jefferson County Commission were previously sentenced to a minimum four years in prison each.

Read FraudTalk's original post on this story here.
Read the story here.

Sunday, March 7, 2010

Update: California Woman Sentenced For Embezzling $1.43 Million

Desiree Herrera, 36, of San Jose, California, was sentenced to ten years in prison for embezzling $1.43 million from Payless Hardware and Rockery, where she had been employed as an accounts receivable clerk. According to authorities, Herrera skimmed cash receipts over a 7 year period, between 2002 and 2009, before they were to be deposited. Herrera's husband, Ruben Herrera, 37, was separately sentenced to one year in prison for laundering the stolen money through the their personal bank account. Desiree Herrera must also pay restitution in the amount of $1.43 million as well as $182,000 in back taxes, penalties and investigative costs. The Herrera's were originally charged last October with one count of grand theft, three counts of filing a false tax return, and nine counts of money laundering. They plead no contest to each of these counts last month. The couple reportedly spent much of the money remodeling their home and on gambling.

Read FraudTalk's original post on this story here.
Read the story here and here.

Mississippi Woman Arrested For Embezzling $100K From Church

Phyllis Daughdrill, of Jasper County, Mississippi, was arrested Thursday and charged with embezzling more than $100,000 from the Corinth Baptist Church of Heidelberg, where she had served as the secretary for nearly 10 years. She has been charged with one count of embezzlement. Details have not yet been released although authorities believe Daughdrill's thefts have taken place "over a long period of time."

Read the story here and here.

Developing...

Texas Ex-Con Charged With Running $6 Million Ponzi Scheme

Alan Todd May, 45, of Dallas, Texas, was accused by the SEC Thursday with running an Ponzi-type investment fraud scheme that bilked investors out of as much as $6 million. According to reports, May has 14 prior criminal convictions for fraud. According to the complaint, since his release from prison in 2007 on other charges, May operated Prosper Oil & Gas Co., and raised $6 million from at least 99 investors. Instead of investing the funds, which he promised that investors would earn between 25 and 38 percent annually from revenues based on oil and gas production, May used the money to support a lavish lifestyle and pay for luxury automobiles and an aircraft, according to the SEC. May also used investment funds to pay earlier investors, in classic Ponzi scheme style.

Read the story here.

Read the SEC complaint here.

Saturday, March 6, 2010

Virginia High School Bookkeeper, Charged With Embezzling $279K, Resigns

Susan Thanh Litwin, 37, of Woodbridge, Virginia, charged with embezzling some $279,000 from Thomas Jefferson High School for Science and Technology, for which she was employed as a "finance technician," resigned her position yesterday after her arrest. According to authorities, Litwin took money that was intended for booster clubs and other school organizations. Prosecutors allege that from March 2008 through January 2010, Litwin misappropriated more than $279,000 by writing checks to herself or making withdrawals ranging from $2,500 to $35,000. Litwin reportedly told authorities she stole the school funds in part to finance gambling trips to Las Vegas and Atlantic City, but also to pay for large credit card debts and her mortgage.

Read the story here, here and here.

Update (5/6/10): Litwin pleaded guilty today to the embezzlement charges.

Update (8/13/10): Litwin was sentenced today to 15 months in prison for embezzling more than $279,000 from the Thomas Jefferson High School for Science and Technology.

Friday, March 5, 2010

Michigan Woman Pleads Guilty To Embezzling $100K From Optometrist Office

Lorraine Z. Montalvo, 47, of Lansing Township, pleaded guilty yesterday to charges she embezzled more than $100,000 from Optometrists of Lansing where she had been employed as office manager for 26 years. According to authorities, Montalvo pocketed cash payments instead of depositing them for the business. She reportedly spent much of the stolen money at Soaring Eagle Casino in Mount Pleasant, Michigan. Authorities report that Montalvo stole the money over the course of "several years." She plead guilty in Ingham County Circuit Court to two counts of embezzlement of $20,000 or more.

Read the story here.

Update (4/21/10): Montalvo was sentenced to up to 12 months in prison for embezzling more than $100,000 from Optometrists of Lansing where she had been employed for some 26 years.

Tennessee Man, Son-In-Law Of Business Owner, Charged With Embezzling $150K

David W. Baldwin, 51, of Johnson City, Tennessee, was charged with embezzling nearly $150,000 from Dennis Powell Body Shop, a local business owned by his father-in-law, where he had been employed as manager. Specifically, Baldwin was charged with more than 100 counts including theft, forgery, and identity theft. Specifics on how the thefts were allegedly accomplished were not revealed, however, it is believed that Baldwin forged company checks over an unspecified period of time.

Read the story here and here.

Update: Former Mississippi Bank Exec Charged In 30 Year Embezzlement Scheme That Netted At Least $1 Million

Margaret S. Migues, 52, of Jackson, Mississippi, was charged yesterday with embezzling at least $1 million over nearly a 30 year period from client accounts at Hancock Bank in Ocean Springs where she had been employed as the longtime branch operations manager. Migues has reportdly agreed to plead guilty to a one count Information for the thefts which allegedly spanned from 1980 and 2009. According to authorities, Migues and a former teller at the bank, Doris "Willie" Burney, misappropriated more than $1 million over this period.

Read FraudTalk's original post on this story here.

Read the story here and here.
Update (3/18/10): Margaret S. Migues pleaded guilty yesterday to bank embezzlement charges. Investigation reveals that the thefts, spanning nearly 30 years, netted nearly $3 million, instead of the earlier estimate of $1 million, according to reports.
Update (5/26/10): Migues, now of Ocean Springs, Mississippi, is expected to plead guilty today. Migues and cohort Doris "Willie" Burney are believed to have embezzled millions from Hancock Bank over a nearly 30 year period, from 1980 through 2009.
Update (6/10/10): Doris "Willie" Burney, now 62, has been formally charged for her involvement in this embezzlement scheme. Migues is scheduled to be sentenced this August.
Update (10/13/10): Migues and Burney were both sentenced to 8 1/2 years in prison for their roles in the embezzlement scheme that targeted the accounts of elderly cusotmers of Hancock Bank, ranging in age from 71 to 102, where they both started out as bank tellers. They were also ordered to pay $3.4 million in restitution, the latest estimate of the loss. Victims of their misappropriations have been made whole by the bank.