Tennessee Stockbroker Charged In $9 Million Ponzi Fraud

Michael J. Park, of Brentwood, Tennessee, was charged today with three counts of mail fraud and one count of wire fraud in connection with a Ponzi-like investment scheme he allegedly ran. Park was the sole principal of Park Capital Management Group, in which he convinced investors to place funds for investment publicly traded securities. However, prosecutors allege Park used investor funds to pay earlier investors, purchase homes, expensive cars and other personal items. The scam ran from September 2001 toJune 2008, according to the complaint. He had promised investors returns as high as 28 percent. Park has admitted to the SEC that the investments have no value and he reportedly attempted suicide after the business was shut down this summer. He has also filed for bankruptcy and his wife has filed for divorce. Park faces up to 60 years in prison, plus fines and restitution.

According to U.S. Attorney Ed Yarbrough, the prosecutor in this case, a lot of investor fraud schemes are coming to light across the country because of the recession. "What happens when the economy takes a hit like it is now is these schemes can longer stay afloat and people want their money back and suddenly discover there's no money there," he said. "That's why during a period like this you see a rash of these kinds of cases. I don't think we've seen the end of it yet."

I agree wholeheartedly.

See the Nashville Post's series of articles on this cases here.

Read the story here, here and here.

2 So-Cal Medical Company Execs Charged With Healthcare Fraud

Kim Jeanette Shittu, 45, and Adekunle Rafiu Shittu, aka "Cooley," 54, were indicted yesterday on charges of defrauding the Medicare program out of some $2.5 million. The pair are alleged to be part of a ring that has defrauded Medicare by recruiting patients for wheelchairs who do not need them and getting reimbursed by the program fraudulently. 18 others have been arrested in the Los Angeles area in connection with this and similar cases. The Shittus operated two entities, Kimco Medical Supply Inc. and K&K Medical Supply Inc., both operating from San Bernardino, California, which billed Medicare over $3.5 million and were fraudulently reimbursed in the amount of $2,517,076. FraudTalk has reported on a similar case in Texas here. The indictments are part of an ongoing prosecutorial effort made by the multi-agency composed Medicare Fraud Strike Force.

Read the story here, here and here.

Read the DOJ press release here.

Miami Doctor Sentenced To 30 Years For Heathcare Fraud

Dr. Ana Alvarez-Jacinto, 54, of Miami, Florida, was sentenced today to 30 years in prison for her role in a massive healthcare fraud scheme involving fraudulent AIDS/HIV Medicare reimbursements. It is one of the stiffest sentences for a Medicare fraud to date. FraudTalk has chronicled the ongoing prosecution of this type of healthcare fraud in Florida here and here. According to prosecutors, Dr. Alvarez-Jacinto was the front person at the Saint Jude Rehab Center Inc., an AIDS clinic in Miami, who conspired with Carlos Benitez and Luis Benitez, Cuban immigrant brothers and others, who succeeded in bilking the Medicare program out of some $119 million in total. She was convicted in October on one count of conspiracy to defraud the United States, to submit false claims and to pay healthcare kickbacks, one count of conspiracy to commit health care fraud, and three counts of the submission of false claims to the Medicare program. Her part in the fraud amounted to some $11 million. Another conspirator in the scheme and co-defendant, Sandra Mateos, 44, who was a nurse at the clinic, was convicted on two conspiracy counts and sentenced to 7 years in prison. Saint Jude Rehab Center was managed by Aisa Perera and Mariela Rodriguez, who have also been prosecuted and convicted on similar charges in this case as conspirators in the overall fraud. The Benitez brothers remain fugitives from the US, but are being held in jail in Cuba on immigration violations, according to authorities.

Read the story here, here and here.

Read the DOJ announcement of her conviction here.

Kansas Doctor's Office Manager Sentenced For Embezzling $300+K

Frances E. Holt, 51, of Wichita, Kansas and the former office manager for Wichita-based physician, Charles W. Beck, was sentenced today to 27 months in prison, plus ordered to pay restitution in the amount of $323,356 for embezzling from the doctor. Holt pleaded guilty in September to one count of mail fraud and one count of wire fraud in connection with the theft. As office manager, Holt had responsibility for payroll records, entering patient charges, preparing financial reports, printing checks and paying bills for the practice. She admitted to obtaining a credit card in Dr. Beck's name without his knowledge or authorization and made purchases with the card for herself, her family and friends.

Read the story here, here and here.

Read the DOJ announcement of her indictment here.

Wow. It's a busy day for embezzlers. Read on below...

Former Longtime City Employee In Washington State To Plead Guilty Of Embezzling $1.3 Million

Terry L. Davis, of Seattle, Washington and former deputy finance director and human resources manager for the City of Arlington, Washington, is scheduled to plead guilty tomorrow to charges she embezzled some $1.3 million from the municipality. Davis, who worked for the city for 32 years, is charged with mail fraud and filing a false tax return. According to prosecutors, Davis was able to write herself 103 checks starting in 2002, forging signatures and creating false documents. The IRS has moved to seize two properties she owns. According to reports, one of the checks she wrote to herself after her May retirement came back to the office and was questioned by another official, sparking the investigation.

Read the story here, here and here.

This case sounds eerily like the one FraudTalk profiled a couple of weeks ago about the longtime Illinois village clerk here.

Texas Woman Sentenced To 9 Years For $170 Million Pyramid Scheme

Cynthia Setser, 51, of Canton, Texas, was sentenced to 9 years in prison for her role in a multi-million dollar pyramid scheme that bilked investors out of more than $170 million. Setser and her husband, Gregory Earl Setser, pictured together to the right, were alleged to be the masterminds behind International Product Investment Corporation and IPIC Investments, sham companies that targeted Christian investors. Gregory Setser was previously convicted on 22 counts in the case, including one count of conspiracy to commit mail fraud and wire fraud, ten counts of wire fraud, three counts of mail fraud, one count of securities fraud, one count of conspiracy to commit money laundering, and six counts of money laundering. and sentenced to more than 40 years in prison. His sister, Deborah Setser was also convicted on six felony counts in the case. Cynthia Setser, who skipped out on her initial hearing, was arrested in December 2007 in Florida. The Setser's lived a lavish lifestyle, spending cash on aircraft, homes, luxury travel and the like.

Read the story here, here and here.

Read the DOJ press releases here and here.

Read the SEC's original litigation release here.

Former Miami Attorney Sentenced To 5+ Years For Stealing Clients' Funds

Joseph J. Weisenfeld, of Miami, Florida, was sentenced today to more than 5 years in prison for stealing some $3 million in client funds. Weisenfeld, the former principal in Weisenfeld & Associates, P.A., based in Miami, was charged in June with wire fraud in connection with the looting of client escrow funds meant for real estate closings. He was disbarred by the Florida Bar Association in November. A restitution hearing is scheduled for January 24, 2009.

Read the criminal complaint here.

Read the story here and here.

Former NYC Currency Firm Manager Pleads Guilty To $2 Million Embezzlement

Shemika Jackson, 33, the former manager of Travelex Inc.'s New York City branch, pleaded guilty today to embezzling some $2 million from the company. Specifically, Jackson pleaded guilty to first-degree grand larceny and faces up to 12 years in prison upon sentencing, which is scheduled for January 7, 2009. According to prosecutors, Jackson stole the funds between December 2006 and March 2008 by entering false data into the company's computer system. Details are sketchy on this case at this point.

Read the story here and here.

Kansas Man Pleads Guilty To $1.6 Million Theft

Eric J. Journey, 29, of Kansas City, Kansas, pleaded guilty Monday to one count of wire fraud in the theft of some $1.6 million from Overland Park, Kansas-based Multi-Service Aviation. The company, which is owned by US Bank, provides credit cards for individual and corporate consumers to purchase aviation fuel, parts and other services. Journey, who worked as a "client services manager" admitted to setting up a bogus bank account in the name of Journey Aviation Services to which he began wiring funds from Multi-Service Aviation vendor receipts. He faces up to 30 years in prison, plus a fine of up to $250,000 and restitution upon sentencing which is scheduled for March 9, 2009.

Read the story here and here.

Read the DOJ announcement here.

DC Office Of Tax And Revenue Fraud Report Released

The Council of the District of Columbia released its special report on the frauds committed at the Office of Tax and Revenue by Harriette Walters and others. FraudTalk has covered this story here and here. The special report was prepared by Wilmer Cutler Pickering Hale & Dorr LLC, counsel and PricewatershouseCoopers LLC, forensic accountants. Read the full report here.

Seattle Area Convicted Embezzler Hired Back At Old Job

According to published reports, Kevin Dean, 49, who was convicted in 2006 of embezzling some $1.2 million from his employer, Frontier Ford, an auto dealership in Anacortes, Washington, was hired back to his own position. Frontier Ford owner Ron Rennebohm is quoted as saying that Dean was "good at his job" as general manager and it was "just a business decision" to hire him back. Dean, who has been out on bail pending appeal, was charged in 2002 along with the company controller Lisa Mullen, with stealing the money over a six year period. Mullen was also convicted in the case and sentenced. Rennenbohm claims that the company has made a number of changes in its business controls that would prevent such thefts in the future.

Read the story here and here.

Not a good idea, in my opinion. People rarely change their spots. This guy is not to be trusted in any way.

Former Court Clerk In Mississippi Charged With $200K Embezzlement

Natalie Brooke Ward, 30, the former deputy clerk at the Jones County Court in Laurel, Mississippi, was indicted yesterday on two felony charges alleging she embezzled more than $200,000 from the county. County officials noticed that funds were missing from the County land redemption account, sparking an investigation. Ward served as deputy chancery clerk from Aug. 1, 2002, until Feb. 13, 2008, when she resigned after being implicated in the case. The alleged thefts occurred between November 2004 and January 2008, during which time Ward is alleged to have stolen $218,024.59, according to prosecutors. Ward was specifically charged with "embezzlement by a public employee" and "alteration of record." Authorities are seeking restitution of more than $300,000 including interest and investigative costs. She faces up to 30 years in prison if convicted on both counts.

Read the story here, here and here.

Authorities In Connecticut Seek Alleged Embezzler

Law enforcement authorities in New Haven, Connecticut are asking for the public's help to find Philip Friend, 49, of Ridgefield, Connecticut, who is alleged to have embezzled some $237,000 from Standard Beef, a meet packing company in New Haven. Friend is being sought on charges of larceny and forgery in connection with the alleged embezzlement. According to reports, Friend was employed for about six months as a consultant to the company. No details are yet available on the specific nature of the case. Friend was last seen driving a red Chevy Avalanche, plate number 419-UPH. He also has access to a grey BMW 525xi with plate number 968-UPS and a blue Volkswagen Eos convertible, plate number 613-XND. Anyone with information is asked to contact the New Haven, Connecticut police.

Friend is also at the center of the controversy over the collapse of Ridgefield Farms LLC, a separate business he owned in which investors from Minnesota and South Dakota lost some $3 million.

Read the story here and here.

Update: Friend has turned himself in.

Former GenRe CEO Sentenced In Fraud Case

Ronald E. Ferguson, 66, of Fairfield, Connecticut, the former CEO of GenRe Corporation, a unit of AIG, was sentenced to 2 years in prison plus ordered to pay a $200,000 fine yesterday for his role in perpetuating a fraudulent conspiracy to fraudulently inflate the value of AIG stock. See FraudTalk's earlier post on this story here. Ferguson had been convicted by a jury on February 28, 2008 on charges of conspiracy, securities fraud, false statements to the SEC and mail fraud. His co-conspirators, Christopher P. Garand, Elizabeth A. Monrad, Robert D. Graham and Christian M. Milton were also found guilty in the case.

Read the story here, here and here.

Read the DOJ announcement here.

Former California Insurance Executive Sentenced For Embezzlement; Ordered To Pay Restitution Of $8.3 million.

Mary Ann Locke, 60, of San Jose, Calfornia, the former part owner and executive of the Wersching Agency, an insurance agency, was sentenced to 39 months in prison plus restitution in the amount of $8,308,410.87 for embezzling insurance premiums rightfully owed to the Farmers Insurance Group. Locke was originally indicted on August 24, 2005 for embezzlement of insurance funds, participation in the insurance business following a felony conviction involving dishonesty, wire fraud and money laundering. According to the indictment, Locke embezzled more than $8 million in premiums due Farmers between 1997 and 2000. She pleaded guilty on January 25, 2006 to embezzlement of insurance funds, participation in the insurance business following a felony conviction involving dishonesty and money laundering. Locke's business partner, Ray Wersching, the former San Francisco 49ers kicker, pleaded guilty to a misdemeanor charge of not filing a tax return.

Read the story here, here and here.

See the DOJ announcement here.

CEO Of National Lampoon & Others Indicted On Securities Fraud Charges

Daniel S. Laikin, 46, CEO of National Lampoon, Inc., along with several others, were charged yesterday with conspiracy and securities fraud in a case brought by the US Attorney's office in Philadelphia. After a lengthy investigation conducted by the Securities & Exchange Commission, the complaint charges that Laikin conspired with Dennis Barsky, a National Lampoon consultant, to pay others, including Eduardo Rodriguez, of Livingston, New Jersey, to artificially inflate the price of National Lampoon stock. The complaint also says that Rodriguez, the principal of Cheetah Consulting Group, enlisted Tim Dougherty, a Rochester, New York stock promoter, to assist in the scheme. Rodriguez is the central figure in two other stock manipulation cases brought by the US.

Read the story here, here and here.

Read the SEC announcement here.