Massachusetts Woman Pleads Guilty To Embezzling "Hundreds of Thousands" of Dollars From Local Dental Practices

Phuong “Lisa” Nguyen, 32, of Quincy, Massachusetts, pleaded guilty to charges she embezzled "hundreds of thousands" of dollars from four unidentified dental practices where she had been employed as a an office manager or front desk manager. According to authorities, since 2006, Nguyen obtained a series of administrative positions at the four dental offices where she forged insurance reimbursement checks or in some cases, forged the doctor's signature on practice checks for her own benefit. Nguyen was reportedly fired from one of the jobs when the embezzlement was discovered. Nguyen, who plead guilty to three counts of uttering a forged security, one count of mail fraud, and one count of wire fraud is due to be sentenced on September 13, 2011 and faces up to 51 months in prison, plus restitution and fines.

Read the story here.

Read the DOJ announcement of her guilty plea here.

Update (10/21/11): Nguyen, now 33, has been sentenced to 46 months in prison for embezzling what has now been determined to be $378,624.  She must also pay restitution. 

12 Steps To Avoid Ponzi Schemes

12 Steps To Avoid Ponzi Schemes
(excerpted from the upcoming Marquet Report on Ponzi Schemes)

By Christopher T. Marquet

It has been two and a half years since the largest Ponzi scheme in history came to light with the collapse of Bernard L. Madoff Investment Securities, LLC in late November 2008 – now estimated to be about $20 billion. Since that time, numerous other major Ponzi schemes and investment frauds have been revealed, including infamous Madoff runners up: R. Allen Stanford and his Stanford Group entities ($7.2 billion); Thomas J. “Tom” Petters and his Petters Worldwide Group ($3.65 billion); Paul Greenwood and his Westridge Capital Management ($1.3 billion); Joel Steinger and his Mutual Benefits Corp. ($1.25 billion); Scott W. Rothstein and his Rothstein Rosenfeldt Adler ($1.2 billion); and Nevin K. Shapiro and his Capitol Investments, USA ($880 million). These are all massive frauds that have shaken investor confidence around the globe. Calls for stricter oversight and regulation abound and special criticism of the Securities & Exchange Commission has mounted for its apparent failure stop these frauds.

Nevertheless, greater investor awareness, due diligence efforts and increased enforcement actions – already underway – should help prevent future schemes from getting so destructive. Sadly, this will not stop the seemingly bottomless cesspool of con-artists who perpetuate investment fraud schemes. While it appears that Ponzi schemes have proliferated in recent years – and the numbers from our upcoming Marquet Report on Ponzi Schemes seem to support this theory, get-rich-quick investment fraud schemes have always been around. Indeed, these invasive weeds will continue to germinate with the allure of fast money and riches, lavish, celebrity lifestyles and the accoutrements that come with it all. The question is, can these weeds be squelched before they do too much damage?

Inevitably, all Ponzi schemes and other investment frauds such as pyramid schemes, collapse under their own weight. It is simply impossible to deliver high rates of return – universally implied or explicitly promised in Ponzi schemes – by using investors’ funds while continuing to attract additional investors. The collapse or revelation is only a matter of time. Unfortunately for those investors burned by the schemes, they will typically only see pennies on the dollar recovered. Claw-backs may also take back earlier returns derived from fraudulent schemes.

Some practical strategies for investors to help them avoid investment frauds and Ponzi schemes include, but are not limited to, the following:

1. Do your due diligence – thoroughly check out prospective investment advisors, money managers, hedge fund operators, private equity funds and any other individual or entity to be entrusted with your hard earned investment funds. As The Marquet Report on Ponzi Schemes has demonstrated, a significant percentage of Ponzi scheme operators (at least 1 in 8, according to our research) have prior criminal, fraud accusation or regulatory censure in their histories. Others are not even registered with the appropriate regulatory bodies. Nearly 5% of the investment frauds we reviewed in this report involved the sale of completely phony securities.
Make sure outside auditors are reputable. In some cases they have been completely phony.

Regulatory & licensing checks - The SEC requires investment adviser representatives and investment advisor firms to register by filing an “Independent Adviser Public Disclosure” called a “ADV Form”. These can be searched directly on the SEC’s web site here. The SEC site can also be searched for regulatory actions, litigation notices, enforcement actions and other sanctions. The Financial Industry Regulatory Authority (“FINRA”) maintains a searchable disclosure called “BrokerCheck” which includes files on registered brokers, including affiliations, qualifications and regulatory actions (see here). Each state has a securities regulating body that can be contacted. A useful listing can be obtained at the North American Securities Administrators Association, here. Other professional associations can be checked as well, including The Financial Planning Association, The National Association of Personal Finance Advisors, and the Certified Financial Planner Board of Standards.

Background checks – for deep digging conduct a thorough background check on the individual(s) to be entrusted with investment funds. This would include a thorough vetting of credentials, employment history, educational background, as well as independent civil and criminal checks, searches for liens, judgments and bankruptcies and the aforementioned regulatory bodies. Media coverage, business affiliations and online Internet profiles should all be checked. Identify “non references” – individuals who have had dealings with the subject in the past, but may not be listed as a client reference. Such individuals may be former business partners, former employees, current or former clients, industry analysts and others. Finally, a “lifestyle check” can also be conducted. As we have seen, most Ponzi schemers live a fairly opulent or lavish lifestyle. While not a conclusive indicator of fraud, it is certainly a common theme. Independent investigatory firms like Marquet International and other reputable outfits provide this kind of service.

Talk to people – it is not good enough to just “ask around” or talk to references provided. No one gives out bad references. Some fraudsters actually manufacture fraudulent references. Speak to actual longtime clients. Speak to “non” references. This latter category can be identified by asking the actual references for others to speak to or through the background investigation outlined above.

2. If it sounds too good to be true, it probably is – as we have seen Ponzi schemers induce prospective investors with the promise of higher than market returns – often sky high or extraordinary returns. The upcoming Marquet Report on Ponzi Schemes analysis shows that the higher the promised returns the shorter the life of the Ponzi scheme. Still, that is cold comfort for those who get burned. Any investment program that purports to deliver significantly higher than market rates of return should be an immediate yellow, orange or even red flag, depending upon how incredible they are. That, in fact, is the proper word for it – incredible – meaning “so extraordinary as to seem impossible,” “not credible,” “hard to believe,” “unbelievable,” “farfetched,” “astonishing,” and “preposterous,” according to dictionary definitions.

3. Be skeptical of exotic financial products – if you cannot understand what the investment is and how it works, you probably should not invest in it. Ponzi schemers do not like to have to explain their programs with too much specificity and therefore often make them appear highly complex or simply describe their trading program as “proprietary” or an “exclusive” program.

4. Be skeptical of “once in a lifetime claims” – as in the case of typical pyramid schemes, prospective investors are given a “once in a lifetime” opportunity to “get in on the ground floor”.

5. Be highly skeptical of “guaranteed” returns or “risk free” investments – as previously noted, no legitimate investment advisor can or will guarantee returns and no investments are risk free. Since all investment involves risk, higher returns necessarily means higher risk. Also avoid investments described as “sure things” or “special” or “exclusive” access.

6. Be skeptical of investment programs targeted at specific “affinity” groups – as our upcoming Marquet Report on Ponzi Schemes determined, elderly or retired individuals are the most common affinity group targeted by Ponzi schemers. Other common affinity groups include Religious sects and Ethic groups. Ponzi schemers sometimes attempt to create an exclusivity mystique about their investment “opportunity.” Be concerned if your investment advisor claims you are now a member of an “exclusive” club.

7. Be skeptical of flimsy disclosures and statements – Many Ponzi schemers provide little disclosure information (naturally) upfront and provide fraudulent or completely fabricated statements to investors. Examine the statements, be sure they are detailed and regular, ie. monthly. Statements should come from the custodian of funds, not the investment advisor.

8. Be wary of too regular returns, especially in a volatile market – it is impossible for real securities investments to make consistent returns, month after month, year after year. This was Madoff’s hook (and tell), by providing stability of returns. Likewise, if promised returns or dividend payments are not forthcoming, investigate. Be sure your liquidation options are open.

9. Be skeptical of new or unknown investment firms/advisors – It is much less risky to work with a well-established reputable outfit than someone new or unknown.

10. Be skeptical if your investment advisor is also not the custodian of your investment – the adjunct is also valid: be wary if the custodian is an affiliate of the investment advisor. The custodian has direct access to your investment funds.

11. Avoid high pressure sales tactics and cold call or Internet solicitations – you can be sure than many of these are fraudulent.

12. Diversify your investments – Many investors lost their life’s savings in the recent spate of Ponzi schemes. That is because they put all of their eggs in one basket. If the basket rots through, a diversified investor will at least have many other baskets to place their eggs.

Massachusetts Man Accused Of Embezzling $100+K From Local VFW

James T. Wagner, 69, of South Dartmouth, Massachusetts, has been charged with embezzling more than $100,000 from the Andrews-Dahill Post of the Veterans of Foreign Wars where he had served as longtime quartermaster. Details are scant at this point, but Wagner apparently wrote checks out to himself as well as to fictitious businessess and individuals as well as real people, including the infamous Lorena Bobbitt.

Read the story here and here.

Former Detroit Public Schools Bookkeeper Pleads Guilty To $150K Embezzlement

Allen Swayze, 34, of Detroit, Michigan, pleaded guilty to embezzling nearly $149,000 from the Detroit Public Schools' Breithaupt Career and Technical Center, where he had been employed as a bookkeeper. According to authorities, Swayze wrote numerous checks to himself over a period of nearly 3 years, from August 2006 until May 2009, totaling $148,772.86. Swayze faces up to 18 years in prison upon sentencing on August 23, 2011. Swayze must also pay full restitution.

Read the story here and here.

Read the DOJ announcement of Swayze's indictment here.

Update (8/23/11): Swayze was sentenced to 14 months in prison and ordered to pay restitution of nearly $149,000.

Yet Another Virginia Beach Area Major Embezzlement Case: Bookkeeper Charged With Embezzling $567K From Law Firm

Diana Lynn Farmer-Forston, 54, of Virginia Beach, Virginia, has been charged with embezzling $567,000 from the law firm Bennett and Zydron where she had been employed as a bookkeeper. According to authorities, Farmer-Forston's scheme spanned a 4 year period ending late this past February. Farmer-Forston is accused of forging at least 210 checks from the law firm and depositing them into her own accounts. Media reports suggest she used the ill-gotten gains to support a lavish lifestyle, purchasing numerous luxury goods, a BMW and to fund an investment account at Merrill Lynch.

Read the story here and here.

There seems to be something in the water casuing an epidemic of embezzlement cases in the Norfolk-Virginia Beach area in recent years. By our count, there have been at least 12 major embezzlements in the area in the past couple of years.

Former Treasurer of North Carolina Playhouse Sentenced in $300K Embezzlement

John Willis Hurst, 51, of Charlotte, North Carolina, has been sentenced to 12 to 16 months in prison for embezzling more than $300,000 from the Matthews Playhouse of the Performing Arts where he had served as treasurer. According to authorities, over a period of 7 years, from 2002 until August 2009, Hurst siphoned funds from playhouse coffers. He was arrested in June 2010 and plead guilty last week. However, details are unclear as to how Hurst embezzled the monies. Hurst was also ordered to make restitution to the playhouse and to pay court costst.

Unfortunately, we note Hurst is still listed as an executive board member and treasurer on the playhouse website here. Research suggests that Hurst was a broker with the Principal Financial Group until late 2009. He has been debarred by the Financial Regulatory Authority (FINRA) as a result of this criminal matter.

Read the story here and here.

New Jersey Man Sentenced For Role In $784K Postal Service Union Embezzlement Scheme

John McGovern, 55, currently of Hawthorne, New Jersey and formerly of Ridgewood, New Jersey, has been sentenced to 20 months in prison for embezzling $783,931 from the North Jersey Area Local 190 of the American Postal Workers International Union where he had served as secretary-treasurer. According to authorities, McGovern conspired with the union's former president, Gary G. Weightman, 58, of Keansburg, New Jersey, to siphon payroll funds by issuing additional additional pay to themselves as well as reimbursing themselves for non-existent or personal expenses. The scheme spanned a two and a half year period, from April 2000 to October 2002. McGovern pleaded guilty last November to one count of conspiracy to embezzle from a union. He is reported to have spent much of the ill-gotten gains at casinos in Atlantic City. Weightman has pleaded guilty to tax evasion and is due to be sentenced for his part on June 10, 2011. The two were originally arrested in February 2006.

Read the story here, here and here.

New Mexico Man Charged With Embezzling $100K From Clients

Paul Scott Thomas, 43, of Aztec, New Mexico, has been charged with embezzling at least $100,000 from clients of Chipman's Accounting where he was employed as an accountant. According to authorities, Thomas wrote checks to himself from accounts belonging to clients, Reed's Welding and Lower Animas Community Ditch Company. Thomas has been charged with 2 felony counts of embezzlement and 10 counts of forgery. Authorities believe Thomas' scheme spanned a three year period from late 2007 until November 2010 and could amount to as much as $300,000 in losses.

Read the story here.

Wisconsin Woman Sentenced For Embezzling $617K

Mary Radiske, 47, of Thiensville, Wisconsin, has been sentenced to 5 years in prison after pleading guilty to charges she embezzling at least $617,432 from the Wisconsin Kitchen Mart where she had been employed as its longtime bookkeeper. According to authorities, over a five year period from 2005 until early 2010, Radiske wrote at least 79 checks from company coffers, made out to her husband, forging the signatures of the owners and depositing them into her own accounts. At her sentencing hearing, Radiske reportedly claimed she stole the money to "keep her husband happy." Randall Radiske, 47, has not been charged in the case and investigators do not believe he had a part in the theft. Randall Radiske has since filed for divorce. Mary Radiske must also pay restitution of $554,000.

Read the story here, here and here.

Texas Woman Sentenced To 25 Years For Embezzling More Than $1 Million From Church & 2 Charities; Has 2 Priors

Louanne Aponte, 52, of Austin, Texas, was sentenced to 25 years in prison for embezzling more than $1 million from Family Connections, a child care services non-profit, for which she had served as executive director. She also took funds from the Texas Association of Child Care Resource and Referral Agencies and the Hyde Park Christian Church, where she had served as treasurer, according to prosecutors. When a state audit found that Aponte had falsified records, she reportedly fled to Venezuela in February 2010, but returned six months later when she was arrested. Aponte's now estranged husband, Marco Aponte, 48, was charged with money laundering. According to reports, some $2 million was tracked going into accounts held by the Aponte's over a period of 7 years. Louanne Aponte, formerly known as Louanne Shetter, was twice convicted on embezzlement charges in the 1980s, according to media reports.

Read the story here, here, here, here and here.

Former Secretary For Michigan Union Pleads Guilty To Embezzling $412K

April Dawn Franklin, 35, of Lansing, Michigan, pleaded guilty to charges she embezzled some $412,000 from the Plumbers and Pipefitters Local 333 union where she had been employed as a secretary for a decade. Details have not been disclosed. Franklin is scheculed to be sentenced on July 25th.

Read the story here and here.

Update (7/26/11): Franklin was sentenced to 42 months in prison and ordered to pay restitution of $412,000.  According to authorities, her thefts from the union spanned a ten year period, from 1999 and 2009.  She had pleaded guilty to theft from an employee benefit plan.

Indiana Woman Charged With Embezzling $364K From Church

Beth Ann Boger, 44, of Garrett, Indiana, has been charged with embezzling $364,436 from the St. Joseph Catholic Church of Garrett where she had served as bookkeeper. According to authorities, over a nearly five year period, from June 3, 2004 until April 17, 2009, Boger wrote checks to herself and made electronic funds transfers to her own accounts from bank coffers. Originally indicted in March, Boger has been charged in a superseding indictment with six counts of wire fraud and four counts of tax evasion.

Read the story here and here.

Virginia Woman Sentenced For Embezzling Nearly $100K

Mary Beth Lloyd, 41, of Richmond, Virginia, was sentenced to 16 months in prison for embezzling $98,156 from the Grace Covenant Child Development Center where she had been employed as director. Lloyd was also ordered to pay restitution in the amount of $136,396.34. According to prosecutors, Lloyd's scheme spanned a five month period between December 1, 2009 and May 1, 2010. Lloyd reportedly told parents to make tuition checks out in her name, falsely claiming as a director, she had a development center account as such. Lloyd deposited those checks directly into her own personal accounts.

Read the story here and here.

Former Treasurer Of Ohio Food Pantry Sentenced In $213K Embezzlement Case

Gayle J. Tatman, 59, of Grove City, Ohio, was sentenced to 2 years in prison for embezzling nearly $213,000 from the Grove City Food Pantry for which she had served as treasurer. According to authorities, Tatman siphoned the funds, amounting to half of the pantry's cash, over a period of 7 years, from May 2002 until April 2009. Tatman's scheme involved forgery of checks and at least four of the organization's bank accounts, including one that was supposed to have been closed out years ago. She plead guilty in a plea agreement in January to one count of bank fraud.

Read the story here, here and here.

Read the DOJ announcement here.

Michigan Woman Indicted On Charges She Embezzled $236K From Credit Union

Marcie Graham, 30, of Lansing, Michigan, has been indicted on charges she embezzled some $236,000 from the Case Credit Union where she had been employed as a an assistant manager. According to prosecutors, Graham's scheme spanned nearly two years from December 2008 until October 2010. She faces up to 30 years in prison, plus fines and restitution.

Developing...

Read the story here and here.

Read the DOJ announcement here.

Former CFO For Alabama School Board Sentenced For $100K Embezzlement

Monica Baker Foote, 53, of Ozark City, Alabama, has been sentenced to 2 years in jail for embezzling more than $100,000 from the Ozark City Board of Education where she had been employed as chief financial officer. Foote must also pay restitution in the amount of $102,170. Foote, who was indicted on 4 felony counts, allegedly used Board funds to pay for personal items over an unspecified period of time. Foote reportedly resigned her position of 14 years in 2009 after irregularities were discovered in the accounting.

Read the story here , here, and here.