Disbarred Virginia Lawyer Sentenced For Embezzling $500+K

Michael D. Hancock, 51, of Henrico, Virginia, a disbarred attorney, has been sentenced to 2 years in prison for embezzling from client trust accounts. Hancock was accused of stealing from three accounts, totalling $514,000 which he admitted in his disbarment proceeding.

Read the story here and here.

See the Virginia State Bar's disbarment decision here.

Delaware Woman Pleads Guilty To Various Frauds, Including Embezzlement

Jody Chubbs, 32, of Middletown, Delaware, pleaded guilty yesterday to 15 counts of bank and credit card fraud amounting to nearly $370,000 over a 7 year period. In one scheme, Chubbs was employed by CVM Corp. as a bookkeeper, office manager and controller when, between 2000 and 2002, she wrote checks to herself and forged signatures. CVM's loss was some $132,000. In a more recent scheme, from 2006 and 2007, Chubbs deposited worthless checks into business accounts she controlled and then withdrew cash, netting some $200,000, according to prosecutors. She also made $30,000 in unauthorized charges, Chubbs Towing's credit card, a company she controlled, in 2007. Finally, she reportedly defrauded the Bank of America and Sovereign Bank by opening up accounts in other individuals' names. Chubbs faces as much as 45 years in prison, plus fines and restitution.

Read the story here and here.

Indiana Man Charged In $6 Million Bank Fraud Scheme

Kem E. Linn, 55, of Carmel, Indiana, was arrested yesterday and charged with one count of corrupt business influence, one count of fraud on a financial institution and 48 counts of forgery in connection with a scheme to defraud Evansville, Illinois-based Old National Bank. Linn is an officer of Cubberley's, a Marion, Illinois-based wholesaler of tobacco products, candy and confections. According to a civil complaint filed by the bank against Cubberley's, Linn was at the center of a check-kiting scheme for at least the past five years. Linn reportedly attempted to commit suicide last week and was recovering at the Cornerstone Behavioral Health Center. If convicted on all 50 felony charges, Linn could face as much as 400 years in prison and fines of up to $500,000. Separately, Linn resigned as Grant County Democratic Party chairman after he was charged with making false emergency calls. Details of that case are unavailable.

Read the story here, here and here.

3 More Sentenced In Florida HIV-Infusion Medicare Fraud

Dilcia Marinez, Juan Carlos Castaneda and Luis Frias, all of Miami, Florida, were sentenced to prison yesterday for their role in defrauding the Medicare program in reimbursements of some $14 million for fraudulent HIV infusions and illegally laundering the funds. Marinez, who pleaded guilty on Sept. 15, 2008, to conspiracy to commit healthcare fraud and conspiracy to commit money laundering, was sentenced to 57 months in prison, three years of probation and payment of a $24,000 fine. Marinez was also ordered to pay $43,000 in forfeiture. Castaneda, who pleaded guilty to one count of money laundering conspiracy on Aug. 27, 2008, was sentenced to 87 months in prison, three years of probation and payment of a $100 special assessment. Frias, who on Sept. 23, 2008, also pleaded guilty to one count of conspiracy to launder money, was sentenced to 27 months in prison, three years of probation and payment of a $100 special assessment. The fraud occurred between 2003 and 2004 and involved G&S Medical Center Inc., a Miami-based health care center for which Marinez acted as the president and director. According to the complaint, G&S, at Marinez direction, falsely sent reimbursement claims to Medicare for HIV infusion that never occurred. Castandea and Lrias admitted in to aiding Marinez in laundering the ill-gotten gains.

Read our earlier posts on related cases here and here.

Read the FBI release here.

Eric Holder Tapped To Be Next AG

According to media accounts, sources close to the Obama transition team reported that Eric Holder has been picked to be the next Attorney General. He still has to go through the vetting process. Read the Newsweek article here which broke the story yesterday. Holder, 57, was Deputy Attorney General in the Clinton administration and is set to be the first African American Attorney General, if confirmed. Holder's role in a number of controversial pardons, including members of the Weather Underground and FALN terrorists, and the fugitive Marc Rich (see our blurb on Rich in the White Collar Rogues Gallery here), has created some questions, however.

2 Indicted For Defrauding Investors In Ponzi Scheme

As we reported recently, Steven Byers, 46, of Oakbrook, Illinois, and Joseph Shereshevsky, 51, of Norfolk, Virginia (right and left in 2006 photo here), were indicted last week on one count each of securities fraud and conspiracy for defrauding investors in a $9.2 million fraud scheme. Byers and Shereshevshky, principals of WexTrust Capital LLC, based in Chicago, Illinois, had been charged by the SEC in late August of running a massive $255 million Ponzi scheme which targeted members of the Orthodox Jewish community. According to the SEC complaint, the scheme convinced some 1200 investors to invest in WexTrust and various affiliates since at least 2005 through a series of securities offerings and private placements. The SEC complaint alleged that "at least $100 million had been diverted for unauthorized purposes." It turns out that Shereshevsky, who has used a variety of aliases, has a prior criminal history in that he plead guilty to one felony count of bank fraud in June 2003. He also has a bank fraud conviction in 1994, according to published reports.

Read our earlier post here.

Read more of the ongoing saga, here, here, here and here.

Read the SEC litigation announcement here.

Update (4/13/10): Steven Byers, now 47, pleaded guilty today to one count of securities fraud and one count of conspiracy in connection with his part in running a $255 million Ponzi-type investment fraud scheme that targeted the Jewish investment community. Byers faces a sentence of 151 to 188 months in prison under his plea agreement, and he could be ordered to forfeit $9.2 million in illegally obtained investment funds.

New York Executive (With A History) Charged With Securities Fraud

Kevin P. Cassidy, 49, of Bedford Hills, New York, was arrested today on securities fraud charges in connection with his actions as CEO with Optionable, Inc., an oil derivatives trading company based in Valhalla, New York. The six-count indictment charges him with conspiracy, wire fraud, aiding and abetting the making of false statements, and securities fraud. The allegations involve a scheme to defraud the Bank of Montreal by overvaluing certain derivitive instruments, which reported a loss of CN$800 million as a result, according to published reports. Cassidy resigned as CEO of Optionable in May 2007 amid a controversy involving his prior criminal past. Cassidy was sentenced to 30 months for a felony conviction on credit card fraud in 1997 and six months for income tax evasion in 1993. The board of New York Mercantile Exchange (nymex), which purchased a 19 percent interest in Optionable, apparently forced Cassidy to resign when his past was revealed. Optionable's former president, Edward O'Connor and broker, Scott Connor, were also charged by the SEC in this case. David Lee, a former Managing Director of Bank of Montreal, plead guilty to separate charges and was ordered to pay forfeiture of $4.41 million for his role in the scheme.

Read the story here, here and here.

See the SEC complaint here.

This is a good example of failure to do one's due diligence. Nymex should have resolved the Cassidy criminal past before making their investment. See our article on Conducting Effective Due Diligence and the Top Ten Resume Lies.

Texas Woman Arraigned In Health Care Embezzlement Case

Laura Cullars Minor, 52, of Abilene, Texas, was arraigned yesterday on federal charges of embezzling more than $850,000 from the Hendrick Health System ("HHS") where she previously was employed. She entered a plea of not guilty. Minor is accused of the embezzlement scheme, along with Sheri Lynn Mitchell, 48, of Cleveland, Tennessee. Minor and Mitchell were charged in October with one count of conspiracy to commit mail fraud and health care fraud, eleven counts of mail fraud and aiding and abetting, and eleven counts of theft. The alleged embezzlement occurred between April 2002 and November 2007 wherein Mitchell would submit fraudulent invoices to HHS for physician recruiting services that were not provided, according to the complaint. Mitchell would then kickback to Minor approximately one-third to one-half of the payment, totalling some $280,000 in kickbacks. Minor faces up to 280 years in prison, plus fines of as much as $5.75 million. A trial is set for January 5, 2009.

Read the story here, here and here.

Read the DOJ announcement here.

Today is female embezzlement day. Read on below...

Former Pennsylvania Town Treasurer Sentenced For Embezzling

Deborah Perry, 52, of Ridley Park, Pennsylvania and former treasurer for Thornbury Township, pleaded guilty to embezzling from the Township over an 8 year period and sentenced to 3-6 years in prison, plus fines and restitution of $303,000. Perry was reportedly ratted out by her former boyfriend, Robert James Hance, who was accused of spending $40,000 of the ill gotten funds. She joins a list of other Delaware County public employees who have stolen from taxpayers. Mary Arnold was convicted last year of embezzling $287,000 in lunch money funds from the Southeast Delco School District and Carol Ackley, who pleaded guilty in March to stealing nearly $600,000 from the Ridley School District for which she was employed as payroll coordinator.

Read the story here and here.

Texas Woman, Longtime Civic Leader, Sentenced In Embezzlement Case

Margaret Mills, 67, of Waco, Texas and longtime executive director of Downtown Waco, Inc., a redevelopment agency, was recently sentenced to 9 years in prison for stealing from the agency. Mills was originally indicted in November 2007 on charges of felony theft, but plead guity to a lesser charge of third-degree felony theft. Prosecuors alleged that Mills deposited as many as 116 checks - donations meant for the agency - into her personal accounts, totalling $237,000. Investigators believe she stole as much as $511,000. Mills' arrest and conviction shocked the Waco community, where she is reported to have served as a tireless advocate and champion for the rehabilitation of Waco. Her husband, Coke Mills, is a prominent attorney in town.

Read the story here, here and here.

Once again, a non-proft gets looted by its executive director. Lax controls, typically due to lack of funding, are generally the cause. Speculation in this case as to motive seems to be that Mills sought to maintain a certain lifestyle as her husband's law practice suffered.

Former Head Of Texas Credit Union Faces Embezzlement Charge

Joanna Lynn McGee, 39, of Wichita Falls, Texas was indicted recently on charges that she embezzled as much as $1.9 million from her former employer, Texdot Wichita Falls Credit Union. Court filings claim McGee created 129 fictitious loans that generated $3.1 million from which she pilfered funds for her own use.

Read the story here.

Virginia Corporate Accountant Sentenced To Prison For $757K Embezzlement

John N. Sacco, 66, of Chesterfield, Virginia, was sentenced last week to 28 months in prison for embezzling some $757,000 from his former employer, Environmental Supply Co. Inc. Sacco served as the company's accountant and managed to siphon the funds from the corporate accounts for his own benefit. Sacco pleaded guilty earlier in the year to six embezzlement charges and five counts of check forgery. According to prosecutors, there was little oversight of Sacco's bookkeeping methods such that he was able to write checks to himself, one for nearly $30,000.

Read the story here.

Former Aspen Tech CEO Receives Probation For Financial Statement Fraud

David McQuillin, 50, of Sudbury, Massachusetts, and former CEO of Burlington, Massachusetts-based Aspen Technology, was sentenced last week to 3 years probation and fined $12,000 for his role in falsifying the company's reported revenue in 2001 and 2002. McQuillin pleaded guilty to conspiracy and securities fraud charges. He also settled a civil case brought by the SEC in which he was ordered to pay a $85,000 fine, plus disgorgement of $28,381.61 and is barred from serving as an officer or director of any public company. Aspen Technology founder Lawrence Evans settled similar charges.

Read the story here, here and here.

Massachusetts Man Pleads Guilty & Sentenced In Embezzlement Case

Brian Doane, 37, of Burlington, Massachusetts, was sentenced yesterday to 2 1/2 years in prison for stealing nearly $430,000 from his employer. Doane plead guilty to larceny and falsifying corporate books, admitting to embezzling $427,500 between March 2004 and October 2006 from Boston-based staffing firm, KNF&T Inc., for whom he was employed as financial controller. According to prosecutors, Doane made unauthorized transfers from company accounts to his personal accounts.

Read the story here, here and here.

Read the AG's announcement here.

Mark Cuban Accused Of Insider Trading By The SEC

Mark Cuban, Dallas, Texas-based entrepreneur, was charged yesterday with insider trading in a civil suit filed by the SEC. According to the complaint, Cuban, who owns the Dallas Mavericks, sold 600,000 shares of the search engine Mamma.com in June 2004, right before the stock was to be diluted. Cuban, who denied the charges in a written statement issued by his attorney, Ralph C. Ferrara, Esq. of Washington, DC-based Dewey & LeBoeuf.

See the SEC complaint here.

Read the litigation release here.

Developing story...

California Law Firm Administrator Accused Of $1 Million Theft

Regina M. Schenck, 45, of Herald, California, was fired last Friday and accused of embezzling more than $1 million from the law firm she worked for in Sacramento. Schenck had been an administrator with Diepenbrock Harrison since 1994 and most recently held the position of "office administrator" since 2000. Court filings allege that Schenck's embezzlement went as far back as 1999 and she used the funds to pay her personal credit card bills and other personal items, including a prize winning horse. While no one has yet been charged criminally, there is an active federal investigation ongoing and certain records have been seized at her home. Schenck and her husband, Emerson Schenck, 47, are the owners of Diamond K Enterprises, for which certain records were also seized by federal authorities.

Read the story here and here.