Former Head of Long Island Non-Profit Accused of Embezzling Nearly $1 Million - Supported Lavish Lifestyle

From the New York Post on 7/18/16:

The head of a Long Island not-for-profit organization swiped nearly $1 million in “consulting fees” to pay for her lavish lifestyle, which included cosmetic surgery, family vacations, spa treatments and her $1.3 million home, federal authorities in Brooklyn charged Monday.

Wafa Abboud allegedly ripped off $900,000 from Human First Inc., a social-services provider for those with autism and other developmental disabilities, between January 2011 and May 2016, according to a criminal complaint.

She served as executive director of the nonprofit from 2010 through May 2016, when she was fired.
The organization paid at least $16,000 a month — and sometimes more — to consulting firm MPB Management, a company run by one of Abboud’s cohorts, Marcelle Bailey, court papers say.

A federal investigation found that after the money was transferred to MPB Management, Abboud, 48, used the firm’s bank account to pay off at least $114,000 in personal credit-card debt she had racked up on vacations, jewelry and dining out, officials charged.

She also allegedly wired about $67,000 from MPB Management accounts to herself — and drew checks from it, including $8,000 for a “cosmetic-surgery bill,” according to the court complaint.

About $340,000 in ill-gotten gains were used as a down payment on Abboud’s home in Merrick, LI.
She is also accused of swiping more than $3,5000 to pay for property taxes.

Abboud and a co-defendant, Rami Misbah Taha, crafted a similar money-laundering scheme when it came to funding renovations for the home, according to the complaint.

Human First paid out more than $400,000 to a company controlled by Taha for purported “repairs” to its facilities — but the money was then funneled to a construction business that was doing upgrades on Abboud’s abode, the court documents say.

Prosecutors say Abboud also wired more than $23,000 to people in Morocco and Egypt between 2012 and 2014.

Abboud, Taha and Bailey were indicted last week on charges of embezzlement, conspiracy, money laundering, bank fraud and conspiracy to commit bank fraud for allegedly making false statements in order to secure a $1 million mortgage for the Merrick house.

They were arrested on the charges last month and released on bail, according to court records.

Iowa Woman Sentenced For Embezzling $169K From Low Income Housing Management Firm

From the Omaha World-Herald on 3/24/2015:

An Iowa woman who embezzled $100,000 from the Department of Housing and Urban Development is heading to federal prison.

Melissa Edwards, 41, of Sioux City was sentenced Monday to one year in federal prison for making false statements to HUD. A federal judge also ordered Edwards to pay $179,118 in restitution.

Edwards managed a South Sioux City apartment building that offered Section 8 housing subsidized by HUD. Over a two-year period Edwards embezzled $169,924 from the management company, including more than $100,000 of HUD funds.

Tennessee Woman Pleads Guilty To Embezzling $135K

From The Tennessean on 12/18/2014:

A Lebanon woman has pleaded guilty to two counts of wire fraud and one count of making a false statement to an agent with the U.S. Secret Service in an embezzlement scheme.

Bianca Thompson, 42, is facing up to 25 years in prison after admitting to a scheme to embezzle more than $135,000 from her employer and a client, and lying to the U.S. Secret Service about her actions, according to a Department of Justice news release.

Thompson said while working at Performance Food Group Customized Distribution in Lebanon, she falsely told a client that PFG had made a mistaken payment of more than $135,000 and instructed the client to wire that amount to Thompson’s personal bank account. Thompson converted the funds for personal use, including reducing her personal debts, according to the release.

Thompson also admitted that she concealed from PFG that she had instructed a second client to wire funds to her personal account and that she then used those funds personally.

When confronted about her conduct by the U.S. Secret Service, she lied to agents and said she transferred the funds received from one PFG client to another and said she had not spent any of the funds, according to the release.

She is scheduled for sentencing on March 15.
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Here is a more complete story: http://www.lebanondemocrat.com/article/crime/542881  Bianca Annamarie Thompson allegedly also stole $35,000 from a local youth soccer league.

Pennsylvania Man Sentenced To 25 Months In Prison For Embezzling $780K

From TribLIVE.com on 1/7/14:

A Richland man will spend two years and one month in prison for embezzling more than $718,000 from his company's pension plan over several years, a federal judge ruled Friday.  

Merrill J. Druggs, 67, pleaded guilty in October to making false statements and concealing information on pension plan documents. He was a tax manager for Oerlikon USA Holding Inc. of Export, a subsidiary of Swiss conglomerate Oerlikon Group, and a trustee for a pension plan covering about 1,400 people, prosecutors say.

...

 Read the story here.

Hat tip: FraudTalk reader Joe.

 

New York State Politician Embroiled In Scandal Is Alleged To Have Embezzled $440K From Escrow Accounts

From ABC News on 5/6/13:

A prominent New York state senator pleaded not guilty on Monday to embezzlement and other charges alleging he brazenly tried to sabotage a federal fraud investigation of his law practice by seeking inside information from an employee of the Brooklyn U.S. attorney's office.

Sen. John Sampson told the employee — who has since been fired — that he wanted to identify cooperators in his case so he could arrange to "take them out," prosecutors said in announcing an indictment against the former Democratic leader in the Senate.

The indictment alleges that Sampson embezzled $440,000 from escrow accounts under his supervision as a court-appointed referee for foreclosures. It says some of the funds were funneled into his losing campaign to become Brooklyn district attorney in 2005.
...

Update (2/4/14): NY State Senator John Sampson has now been indicted on two counts of embezzlement, five counts of obstruction of justice and two counts of making false statements to the FBI.

According to the Brooklyn Daily Eagle:

Beginning in the late 1990s, Sampson served as a court-appointed referee for foreclosure proceedings conducted by the Kings County Supreme Court.

As referee, Sampson controlled escrow accounts holding proceeds of foreclosure sales of Brooklyn properties.  It is alleged that between 1998 and 2008, Sampson embezzled approximately $440,000 in surplus funds from the foreclosure sales of four Brooklyn properties. The prior owners of the Brooklyn properties, and other parties with a lawful interest, had a right to receive the funds allegedly embezzled by Sampson. 

It is reported that Sampson indicated that he had illegally diverted the stolen funds to pay expenses arising from his unsuccessful run for Kings County District Attorney in 2005. ...

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.

CFO Of Pennsylvania Development Company Charged In $6.3 Million Embezzlement Scheme

Michael G. Spada, 50, of East Norriton, Pennsylvania, was charged with embezzling $6.3 million from Scannapieco Development Corp., a local real estate development company for whom he had served as chief financial officer. Prosecutors allege that over the course of nine years, from September 2000 until he was fired in May 2009, Spada diverted monies from company accounts and the personal accounts of Scannapieco's founder, Tom Scannapieco, for his own benefit. Spada has been charged with wire fraud, bank fraud, filing a false tax return and making a false statement to the federal government. Spada had been employed by Scannapieco Development for 23 years, according to reports. Spada took at least $400,000 in unauthorized salary as well as diverted more than 100 company checks to his own accounts.

Read the story here and here.

Update (9/28/10): Spada was sentenced yesterday to six years in prison.

Bernard Kerik, Former NYC Police Commissioner, Sentenced To 48 Months For Frauds

Bernard B. Kerik, 54, of New York City, was sentenced last week to 4 years in prison following his guilty plea on 8 felony counts last November, including one count of obstructing and impeding the due administration of the internal revenue laws, one count of aiding in the preparation of a false tax return, one count of making a false statement on a loan application, and five counts of making false statements to the federal government. Kerik must also pay restitution in the amount of $187,931. Kerik was originally indicted in 2007 following revelations from his 2003 White House vetting for the position of Secretary of Homeland Security.

Read the story here, here, here and here.

Read the DOJ announcement here.

Update: California Man Convicted In $62 Million Ponzi Scheme Case

Milton Retana, 46, of Huntington Park, California, was convicted by a jury last week on six counts of mail fraud and one count of making false statements to government in connection with a fraudulent Ponzi-type investment fraud scheme that bilked investors out of some $62 million. According to prosecutors, through his company, Best Diamond Funding, Retana, a native of El Salvador, lured mostly Spanish speaking investors with promises of up to 84 percent returns from real estate investments. Instead, Retana allegedly used the investment funds to enrich himself and pay off earlier investors. According to reports, Retana solicited investors in Spanish-language magazines, on the Internet and during weekly investment seminars across Los Angeles. His scheme began in or about 2006 until he was arrested in December 2008.

Read FraudTalk's original post on this story here.

Read the story here.

Update (4/30/10): Milton Retana was sentenced to 25 years in federal prison for six counts of mail fraud and one count of making false statements to government agents. Prosecutors alleged that during the course of Retana’s Ponzi scheme, he collected about $62 million from approximately 2,300 victims, who suffered actual loses of about $33 million.

Oklahoma Bank Executive Accused In $500K Embezzlement Scheme

Criss Lee McGinty, 51, of Glencoe, Oklahoma, was indicted last week on charges he embezzled $536,995 from a customer's account at the Glencoe State Bank, for whom he had been employed as Executive Vice President. Specifically, he was indicted for embezzlement, misapplication of bank funds, making false statements to FDIC bank examiners and obstructing an FDIC examination. According to prosecutors, McGinty used a variety of means, including executing hand written checks to himself, to transfer funds from the account of Dove Construction, LLC, held at the bank to a personal account in the name of “McGinty House,” which he used to pay for construction of his home and other personal expenses. McGinty has been employed by Glencoe State Bank since 1978.

Read the story here, here and here.

Rod Blagojevich Indicted

Former Illinois Gov. Rod R. Blagojevich, (D-IL), 52, of Chicago, Illinois along with five close associates including his brother, was indicted by a grand jury yesterday in a superseding indictment on 16 felony counts, including racketeering conspiracy, wire fraud, extortion conspiracy, attempted extortion and making false statements to federal agents. The charges arise from allegations Blagojevich used his position as governor to offer for sale the senate seat vacated by President Obama. Associates of Blagojevich also indicted include:

• John Harris, 47, of Chicago, Illinois. Blagojevich’s former chief of staff was charged with one count of wire fraud;
• Alonzo Monk, 50, of Park Ridge, Illinois. A Blagojevich consultant, former chief of staff, campaign manager and former general counsel, now a lobbyist doing business as AM3 Consulting, Ltd.
• Robert Blagojevich, 53, of Nashville, Tennessee. Blagojevich's brother and former chairman of his campaign fund.
• Christopher Kelly, 50, of Burr Ridge, Illinois. A key Blagojevich fundraiser.
• William F. Cellini, Sr., 74, of Springfield, Illinois. Another key Blagojevich fundraiser and businessman

New allegations in the indictment include:

• Beginning in 2002 and continuing after Blagojevich was first elected governor, Blagojevich and Monk, along with Kelly and previously convicted co-schemer Antoin “Tony” Rezko, agreed that they would use the offices of governor and chief of staff for financial gain, which would be divided among them with the understanding that the money would be distributed after Blagojevich left public office;
• In 2003, Blagojevich, Monk, Kelly, Rezko and other co-schemers implemented this agreement by directing lucrative state business relating to the refinancing of billions of dollars in State of Illinois Pension Obligation Bonds to a company whose lobbyist agreed to provide hundreds of thousands of dollars to Rezko out of the fee the lobbyist would collect, and Rezko in turn agreed to split the money with Blagojevich, Monk and Kelly;
• After it became public that Kelly and Rezko were under investigation and ceased playing a significant role in raising campaign funds, Blagojevich personally continued to trade his actions as governor for personal benefits, including, for example, delaying a state grant to a publicly-supported school while trying to leverage a U.S. Congressman, who supported the school, or the Congressman’s brother, to hold a campaign fundraiser for Blagojevich; and
• In an interview on March 16, 2005, Blagojevich lied to FBI agents when he said that he maintains a separation, or firewall, between politics and state business; and he does not track, or want to know, who contributes to him or how much they are contributing to him.

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

Read the superseding indictment here.

Read the DOJ announcement here.

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.

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.

Madoff Charged In 11 Count Information; Indends To Plead Guilty

Bernard L. Madoff, 70, of New York City, in his capacity as sole principal of Bernard L. Madoff Investment Securities LLC, has been charged in an 11 felony fraud count information today with 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 related to his alleged defrauding of investors out of as much as $50 billion. There is no plea agreement at this time, according to federal prosecutors. If convicted on all counts, Madoff could be sentenced to as much as 150 years in prison, plus restitution and fines. The information alleged that his fraud commenced since at least the 1980s. According to the complaint, the November statements sent out by the firm to clients indicated a total of $64.8 billion in assets, whereas in fact, it only had a small fraction of that amount. His attorney indicated today that he will plead guilty to all 11 counts.

Read FraudTalk's most recent posts on the Madoff fraud here, here and here.

Read the DOJ's announcement here.

Read the story here, here and here.

Former KB Home Exec Indicted In Stock Options Backdating Fraud

Bruce E. Karatz, 63, of Bel Air Estates, California and the former chairman and chief executive officer of KB Home, was indicted yesterday on 20 counts of fraud including mail fraud, wire fraud, securities fraud, and making false statements to the SEC and internal accountants. Karatz is alleged to have engaged in a stock option backdating scheme that reportedly bilked shareholders out of millions of dollars. Karatz agreed to pay $7.2 million to settle civil charges in the case, faces up to 415 years in prison if convicted on all charges in the criminal matter. Last month, former KB executive, Gary A. Ray, pleaded guilty to conspiring with Karatz to obstruct justice.

Read the story here, here and here.

Former Alabama Insurance Executive Convicted Of Embezzling $4 Million

John W. Goff, 60, of Montgomery, Alabama, was found guilty by a jury on 23 counts of mail fraud, one count of embezzlement and one count of filing a false report in connection with the embezzlement of some $4 million in insurance premiums intended for Greenwich Insurance Co. and XL Specialty Insurance. Goff's company, Goff Group, offered worker's compensation insurance. Goff reportedly used the money to himself a $1 million salary, buy a private plane, a beach house and other real estate investments. He faces up to 30 years in prison, plus fines up to twice the amount embezzled.

Read the story here.

Mississippi Woman Convicted Of Healthcare Fraud

Pamela Hull, of Moss Point, Mississippi, and co-owner of Rehabilicare Inc., and a principal of Mississippi Care Partners, Inc., was convicted Thursday on multiple counts of healthcare fraud for falsely billing Medicare $23 million. Specifically, Hull was convicted by a jury on one count of conspiracy to commit health care fraud, three counts of health care fraud and 12 counts of making false statements relating to health care, according to prosecutors. She faces up to 95 years in prison and $4 million in fines. Hull was arrested in October 2007 along with Jim Davis Hull, Janis Kayer Dunn of Gulfport; Evelyn Marshell of Cleveland; Jacquline Crawley of North Carolina and Cheniqua G. Ellis of Franklin, Tennessee, according to reports.

Read the story here, here and here.

Former Ohio Couple Indicted In Kickback Scheme At Railroad

Ronald L. Zullig, 54, and his wife, Jean A. Zullig, 52, currently of Bolivar, Missouri, were indicted recently on conspiracy and fraud charges related to a kickback scheme in which the two are alleged to have engaged involving the Ohio Central Railroad where Ronald Zullig was employed. According to prosecutors, the conspiracy transpired between October 2000 and July 2006. Zullig was employed as a repair manager for the railroad and allegedly collected kickbacks from various vendors including directed a railroad contractor to bill the railroad for work performed at the Zullig's home. Ronald Zullig tried to conceal the scheme by having the contractors write checks to Jean Zullig. They have also been charged with interstate transportation and sale of stolen goods for allegedly selling stolen railroad property, as well as mail fraud, generating false billing invoices and lying to investigators. According to prosecutors, the Zullig's fraudulently received some $140,000 in kickback proceeds. They each face up to 25 years in prison, plus $750,000 in fines.

Read the story here, here and here.

Read the DOJ's announcement of the indictments here.

Update (4/23/10): Ronald L. Zullig, now 55, was sentenced to 2 years in prison for his role in a kickback scheme involving Ohio Central Railroad. He was also ordered to pay $185,000 in restitution. He and his wife, Jean A. Zullig both plead guilty last July 1st to one count of conspiracy to commit mail fraud, two counts of mail fraud, and one count of interstate transportation and sale of stolen property which occurred between June 2000 and July 2006. Jean Zullig was sentenced on December 17, 2009 to three years' probation and ordered to pay $53,000 in restitution.

Virginia Woman, Former Exec Of Investment Company, Pleads Guilty In $132 Million Fraud

Lara Coleman, 40, of Richmond,VA, the former Chief Operating Officer of Investment Properties of America, pleaded guilty yesterday to a superseding indictment for her role in a scheme to defraud investors out of some $132 million. Specifically, Coleman plead guilty to conspiracy to commit mail and wire fraud and making a material false statement to federal investigators. Coleman and Edward H. Okun, 57, the owner of Investment Properties of America and The 1031 Tax Group LLP, were originally charged with bilking clients out of funds ostensibly held in trust by the 1031 Tax Group entity. The scheme went on between August 2005 and April 2007 whereby clients were led to believe their investment funds were to be held in the trust only but instead were diverted for Coleman and Okun's own purposes. Okun was originally arrested and charged in March 2008 with mail fraud, "bulk cash smuggling" and making false statements.

Read the story here and here.

Read the superseding indictment here.

Yet Another Ponzi Scheme Busted - Salvadoran In California Defrauds Investors $62 Million

Milton Retana, 43, of Norwalk, California and an El Salvadoran national, was arrested Christmas morning on charges he orchestrated a Ponzi-type investment fraud scheme bilking more than 2,000 investors out of some $62 million, according to prosecutors. Retana's scheme involved luring investors to his Best Diamond Funding company which purportedly used profits from diamond sales to purchase and resell real estate and promised up to 84 percent returns. He targeted largely Hispanic investors, according to prosecutors. When authorities raided his wife's religious bookstore, they found in excess of $3 million in cash. Retana faces up to 65 years in prison on the fraud and false statements charges, plus restitution and fines.

Read the story here, here and here.