New York Man Charged In $8 Million Embezzlement Case

Dennis Dowd, 52, of Yorktown Heights, New York, was charged last week of embezzling $8 million from his employer, Hitachi America of Tarrytown. Dowd had been employed by Hitachi since 1979, most recently as Senior Manager of Corporate Benefits. According to court filings, between 2000 and early 2008, Dowd opened a bank account in the company's name to pay health benefits for employees and then diverted $8 million from the account to a personal bank account. He allegedly used $1 million of the money to pay off credit-card bills, purchase a Lexus and used $625,000 to buy a house in Florida. If convicted on all counts, including embezzlement, health-care fraud and money laundering, Dowd faces 30 years in prison, plus fines. He is out on $1 million bond.

Read the story here and here.

Michigan Credit Union Manager Pleads Guilty To $1.3 Million Theft

Ronald Alan Tran, 45, of Plainwell, Michigan, pleaded guilty last week to embezzlement, money laundering and financial institution fraud charges and admitted to stealing $1.3 million from the Plainwell Community Federal Credit Union where he served as General Manager. The embezzlement occurred between 2002 and 2004, according to prosecutors. Tran faces up to 30 years in prison and $1 million in fines upon sentencing, which is scheduled for February 23, 2009.

Read the story here and here.

See the DOJ announcement here.

Virginia Physicist Pleads Guilty To Illegal Export Of Space Launch Data To China

Shu Quan-Sheng, 68, a native of China, and a naturalized U.S. citizen, pleaded guilty today to charges that he illegally exported space launch technical data and defense services to the People’s Republic of China (PRC) and offered bribes to Chinese government officials. Shu, a physicist by training, is the President, Secretary and Treasurer of AMAC International Inc., based in Newport News, Virginia. He plead guilty to three counts of a criminal information. The first alleges that from January 2003 through October 2007, Shu violated the Arms Export Control Act by exporting defense services without licensing or State Department approval. The second count alleges that on Dec. 20, 2003, Shu violated the Arms Export Control Act by willfully exporting a defense article to the PRC without approval or license. The third count involves a violation of the Foreign Corrupt Practices Act wherein Shu "offered, paid, promised and authorized" the payment of bribes to Chinese government officials to influence their decisions in his and AMAC's favor. He paid some $4 million in bribes, according to the criminal information. Shu faces up to 25 years in prison and a fine as high as $2,250,000 upon sentencing, scheduled for April 6, 2009.

Read the story here and here.

See the DOJ announcement here.

Virginia Attorney Pleads Guilty To $2 Million Embezzlement

Lawrence H. Bidwell, 49, pleaded guilty to stealing $2 million from the Virginia Farm Bureau, where he previously worked as claims counsel. According to prosecutors, Bidwell's embezzlement scheme dates back to at least 1996. Specifically, Bidwell plead guilty to five counts of embezzlement and one count of forgery. The scheme was not discovered until last August, when employees at the Farm Bureau noticed a $30,000 claims check was deposited into an account of Bidwell. While he is charged with $2 million theft, prosecutors suggested that the loss is probably closer to $3 million. During a hearing Bidwell admitted to having a gambling problem. He faces up to 110 years in prison and is due to be sentenced on February 3rd, 2009.

Read the story here, here and here.

Indictment In New Hampshire Embezzlement Case

Rebecca McGuire, 51, of Amherst, New Hampshire, was arrested last week after she was indicted on felony embezzlement charges. McGuire is accused of stealing more than $300,000 from the Jasper Swim and Tennis Club. The indictment includes three felony counts of "theft by unauthorized taking." She had served as the club treasurer for 9 years until she was terminated in 2007.

See our previous post here.

Read the updated story here and here.

New Jersey Union Agent Sentenced For Embezzling $800+K

John DaBronzo, 57 of Trenton, New Jersey, was sentenced to 30 months in prison for embezzling $829,000 from the Local 89 of the International Association of Heat and Frost Insulators and Asbestos Workers union for whom he worked as the business agent. According to prosecutors, between January 2005 and April 2007, DaBronzo stole the money from a union apprentice fund and by cashing checks from employers for union dues. He allegedly spent the money on a gambling habit. DaBronzo worked for the union for 18 years, according to reports.

Read the story here and here.

Read the indictment here.

Corruption at a union? Nah...

Iowa Meatpacking Exec Arrested On Bank Fraud Charges

Sholom Rubashkin, 49, former CEO of Postville, Iowa-based kosher meatpacking company, Agriprocessors, was arrested on bank fraud charges Friday morning. Rubashkin had also been arrested late last month on federal charges of conspiring to hire undocumented workers at the meat processing plant, but was out on bond. The new charges allege that Rubashkin diverted at least $10.9 million in funds from Agriprocessors accounts to other accounts, including one for Kosher Community Grocery, in which he is a part owner. Agriprocessors filed for bankruptcy last month after an ICE raid apprehended nearly 400 illegal alien workers at the plant. Last year, Agriprocessors executives agreed to pay $1.4 million to settle a separate case alleging a scheme to hide another company’s assets in bankruptcy. Rubashkin faces up to 52 years in prison if convicted on all the charges. We also note that Sholom's brother, Moshe Rubashkin, was convicted of bank fraud in 2002 and sentenced to 15 months in prison.

Read the story here, here and here.

Dot Com Era Magnate Found Sentenced To 9 Years For Fraud

Charles E. "Junior" Johnson, 48, of Las Vegas was sentenced to 9 years in prison Thursday for defrauding investors in his now-defunct company, PurchasePro. Prosecutors alleged that Johnson orchestrated the false inflation of PurchasePro's revenues during the first three quarters of 2001 while the company was unravelling. Seven other individuals have been convicted in this case which also led to charges of improper accounting practices at America Online. In May 2008, Johnson, former chairman and CEO of PurchasePro, was found guilty of securities fraud, witness tampering and other crimes. He was indicted in January 2005, along with co-conspirators and company executives, Robert Geoffrey Layne and James Sholeff following an investigation conducted by the SEC. Johnson's obstruction of justice charge arose from his unsuccessful attempt to introduce fabricated e-mails into evidence at his trial. According to reports, his attorneys found out about it and resigned from the case which caused a mistrial.

Read the story, here, here and here.

Michigan Man Receives Prison Sentence For Largest Fraud In History Against SBA

Patrick J. Harrington, 45, of Beverly Hills, Michigan, was sentenced on Thursday to 10 years in prison and ordered to pay $34 million in restitution for what authorities described as the largest fraud perpetrated against the US Small Business Administration. Harrington served as the vice president and office manager for Business Loan Express (BLX), before he was charged and connected to at least 89 fraudulent loans totaling about $85 million, according to the U.S. Justice Department. The fraud commenced in or about 2000 with Harrington inflating property appraisals and other bogus documentation to cause the SBA to finance a variety of businesses in the Detroit and Flint, Michigan areas. There have been 34 other individuals charged in connection with this case - half of whom have been convicted and sentenced.

Read the story, here, here and here.

Washington State Man Convicted In Investment Ponzi Scheme Fraud

Charles Nolon Bush, 69, of Port Orchard, Washington, was convicted Friday of fraud and money laundering. Using fraudulent investment vehicles, Hulaman Management Services, Global Dominion Financial Services, and Cornerstone Institute, Bush was accused of bilking potential investors out of more than $35 million between 1998 and 2002 in phony investment schemes that promised high returns. Investigators said Bush used the money to support an extravagant lifestyle and to pay off earlier investors to continue the Ponzi scheme. He claimed the investments were for a Mexican resort called Cabo San Quintin. Bush fled authorities in 2002 and travelled to France and then Poland. Polish authorities apprehended him in August 2007 and was extradited to the US. Bush faces 20 years in prison plus fines in excess of $1 million. He is scheduled for sentencing on February 6, 2009.

Read the story here, here and here.

Non-profit Exec Charged In $500K Fraud Case

Andy A. Lewis, the former Executive Director of the Better Brooklyn Community Center, was arrested Thursday on charges that he defrauded the US Department of Agriculture’s National Child Food Program of more than $500,000. According to the complaint, Lewis ran the Better Brooklyn Community Center from 2002 until it was shut down earlier this year. During this time the agency received some $520,000 in reimbursed funds for meals allegedly served under the federal food program. Lewis had falsified records indicating that his non-profit served between 355 and 385 meals per day when in fact, it had served none. The complaint stated that Lewis had misappropriated these funds. He faces 20 years in prison.

See the FBI announcement here.

All I have to say is, what a dirt bag to steal money intended to feed poor children.

Three South Korean Nationals Indicted For Alleged Theft of Trade Secrets

Sang Ho Shin, Dong Sik Kim and Yeon Hee Lee, all residents of South Korea and executives of SK Chemicals, were indicted Thursday on two counts of theft of trade secrets and one count of trade secrets conspiracy. According to the indictment, between late 2001 through in or about January 2008 the three conspired with Kyung J. Kim to steal trade secrets from Ohio-based Lubrizol Corporation. Kyung J. Kim was an employee of Lubrizol during this time frame and met on numerous occasions with the defendants as part of the conspiracy. In April 2008, Kyung J. Kim pleaded guilty to one count of theft of trade secrets conspiracy and two counts of theft of trade secrets.

Read the story here and here.

See the FBI announcement here.

Montana Couple Fined $1+ Million For Investment Fraud Scheme

Gordon Walters and Ann Walters, of Roundup, Montana, were fined $1.1 million and ordered to pay $280,654 in restitution to investors they bilked in a fraudulent investment scam. The Walters' were the owners of Cascade Water Holdings and Cascade Exploration, Inc. for which they sold fake bonds claimed to be backed by the government. Two other defendants in the case had previously settled with the state. Danny Kegel settled in 2007 and agreed to a $5,000 fine and a permanent ban from the securities industry in Montana. Calvin Statelen also settled in 2007 and agreed to a $10,000 fine, 500 hours of community service and a permanent ban from selling securities in Montana. Both agreed to cooperate in the case against the Walters.

Read the state auditor's announcement here.

Read the story here.

State Auditor John Morrison is quoted in a statement as saying, "This type of scam is the reason that investors should always be wary and check the facts before investing." Good advice. The companies were not registered to issue securities legally.

Virginia Man Pleads Guilty To $33 Million Mortgage Fraud Scheme

Vijay K. Taneja, 47, of Fairfax, Virginia, plead guilty to one count of conspiracy to commit money laundering involving his company, Financial Mortgage, Inc., which originated and sold mortgages in the Washington, DC area. Taneja, through his company, arranged for temporary funding of the groups of mortgages before selling them. According to the complaint, beginning in 2001, FMI began defrauding a series of warehouse lenders and eventually two other financial institutions serving as long term investors, causing an accumulated loss of at least $33 million to four financial institutions by the time FMI filed for bankruptcy in June 2008. Taneja reportedly invested millions in Indian movies and concerts. He was also the head of Elite Entertainment, Inc., which promoted celebrities from the Indian film industry. He faces 20 years in prison, plus a $500,000 fine and restitution.

Read the story here and here.

Indiana Purchasing Manager Sentenced For Embezzling

Robert Rosenberg, 41, of Indiannapolis, Indiana, the former purchasing manager of Sealed Air Corp., was sentenced Monday to 16 months in federal prison for embezzling $613,000 from the company. Rosenberg was found guilty of wire fraud and ordered to pay restitution as well. According to court documents, Rosenberg used his position in the company, along witht the company credit card to make numerous purchases of car parts for his own start-up company, Chaos Drag Racing. The unauthorized charges began in 2003 where he would allegedly order items, have them delivered to the company loading dock and then intercept them there. Authorities found "thousands of dollars" worth in car parts and equipment in a barn at his home.

Read the story here, here and here.

Florida Clinic Owner Sentenced To 30 Months In Prison For $10.9 Million Medicare Fraud

Nayda Freire, 61, of Miami, Florida, was sentenced yesterday to 30 months in federal prison for defrauding the medicare program with a $10.9 million HIV-infusion fraud scheme. Freire was also order to pay restitution in the amount of $7,992,391, plus 2 years supervised release after her prison term. She plead guilty to one count of conspiracy to commit health care fraud in her role as owner of Miami-based Global Med-Care Corp. In her plea agreement, Freire admitted that during 2003, she and others filed false claims for HIV infusion procedures. Funds were then transferred to bogus entities controlled by Freire's co-conspirators, Carlos, Luis and Jose Benitez. Another co-conspirator is Thomas McKenzie, who was charged separately for his role in the fraud. McKenzie has already plead guilty for his role in a larger, $119 million HIV-infusion medicare fraud.

Read the story here and here.

Read the DOJ announcement here.

Read our earlier related post here.