Texas Woman Accused Of Embezzlement While Office Manager Of Newspaper

Peggy Lanell Motley, 62, the former office manager for the Ennis Daily News of Ennis, Texas, turned herself into authorities yesterday after learning there was a warrant for her arrest for allegedly embezzling more than $100,000 from the newspaper. Motley is being charged with a second degree felony of theft between $100,000 and $200,000. She faces up to 20 years in prison and a fine of up to $10,000, plus restitution if convicted. The apparent embezzlement was uncovered by an in-house accountant who noticed shortfalls in the company's accounts. The ensuing audit showed evidence of shortfalls allegedly caused by Motley over a period of several several years totalling more than $100,000.

Read the full arrest report published exclusively by the Ellis County Observer here.

Read the story here, here and here.

As these pages have outlined before, small businesses are extremely susceptible to this sort of white collar crime. Few, if any, checks and balances probably existed at the newspaper, I am willing to wager.

South Carolina Bank Manager Admits To Embezzlement

Kimberly Marie Handy, 35, of Myrtle Beach, South Carolina, pleaded guilty Monday to embezzling some $114,000 from RBC Centura Bank where she served as branch manager. She also admitted to falsifying the bank's records in an effort to conceal her thefts. According to prosecutors, Handy had access to the banks vaults from which she stole the cash. She faces as much as 30 years in prison and $1 million in fines upon sentencing.

Read the story here and here.

Virginia Man Pleads Guilty To $40 Million Prime Bank Ponzi Scheme

Preston David Pinkett, II, 68, of Alexandria, Virginia, pleaded guilty today to conspiracy to commit mail fraud in connection with an international investment scheme involving his front company, International Fiduciary Corporation, S.A. According to prosecutors, Pinkett and others defrauded at least 180 by convincing them to invest some $40 million in IFC between 2004 through 2006. Pinkett and 2 Canadian co-conspirators promised investors a return of 6% per month by purchasing "1st tier medium term bank notes" at a discount and then sold them for a profit. In February, Pinkett, along with Malcolm Cameron Boyd Stevenson and Daniel Eric Byer, both of Abbotsford, British Columbia, were ordered by the B.C. Securities Commission to disgorge CAN$12.7 million plus pay a CAN$4 million fine for their part in defrauding 89 Canadian investors. In the domestic criminal case, Pinkett faces up to 20 years in prison and a $250,000 fine upon sentencing which is scheduled for March 6, 2009.

Read the story here, here and here.

Read the SEC's original litigation announcement here.

Former Texas Wheelchair Exec Sentenced To 5 Years For Healthcare Fraud

Edem James Etuk, 55, of Fiarburn, Texas and the former owner of PMS Medical Equipment Distributors, a wheelchair distributor based in Houston, was sentenced to 5 years in prison plus restitution of nearly $1.6 million for his role in defrauding the federal Medicaid and Medicare programs. He plead guilty in October 2007 to conspiracy to defraud Medicare and health care fraud admitting he engaged in a 14-month conspiracy with several other individuals. The fraud involved fraudulently being reimbursed by the programs for wheelchairs that were not needed or delivered. One key co-conspirator was Houston medical doctor, Michael D. Kim, to whom Etuk paid kickbacks for "Certificates of Medical Necessity" which are required to bill Medicare and Medicaid. Kim, who falsified the certificates, was convicted of the conspiracy to defraud Medicare and 17 counts of healthcare fraud, wire fraud and money laundering in August 2008 and is scheduled for sentencing on February 12, 2009.

Read the story here and here.

Read the FBI's announcement here.

Read the DOJ's original announcement here.

Colorado Pastor Under Investigation For Embezzling $400K From Church

Rev. Donald Armstrong, pastor at Grace Church & St. Stephen's in Colorado Springs, Colorado, is suspected of embezzling some $400,000 from the church. Police raided the church last week seizing computers and financial records as part of the investigation. The criminal investigation is reportedly unrelated to the apparent schism with the Episcopal Diocese of Colorado in Denver over the ordination of gay priests and was commenced before the factions split in March 2007. In August 2007, the Diocese filed a civil suit against the church and Armstrong, alleging the theft and an ecclesiastical court representing the diocese convicted Armstrong of stealing the money and filing a false tax return. Unfortunately, these actions carry no legal teeth, but did prompt the criminal investigation.

Read the story here, here and here.

Read Armstrong's letter to the flock here.

Update (9/20/10): Armstrong, now 61, pleaded "no contest" to the 20 theft counts he was indicted on last year.

Former NBC Universal Employee Sentenced To 21 Months For Embezzlement

James Walsh, 35, former employee of NBC Universal, Inc., was sentenced yesterday to 21 months in prison, plus restitution for his role in embezzling some $238,450 from the company. Walsh, who left NBC in 2006 as treasury manager, pleaded guilty last August to conspiracy to commit wire fraud and one count of wire fraud. According to the criminal complaint, Walsh and his boss, Victor Jung, "engaged in a scheme to embezzle" money from the company, initially by taking petty-cash and later setting up a dummy company called NBC Universal Media Productions, LLC, to which three wire transfers were made. Jung, a 12 year NBC Universal veteran, pleaded guilty in May to conspiracy and three counts of wire fraud and is scheduled to be sentenced next week. Prosecutors believe the overall loss was more than $800,000.

Read the story here, here and here.

Read the DOJ press release here.

Report Says Mortgage Fraud Up 45% Over Same Quarter Last Year

A report published by the Mortgage Asset Research Institute says that incidents of mortgage fraud in the second quarter increased 45 percent over the same period last year. Florida, California and Illinois were the states with the greatest increases, according to the report. The Mortgage Bankers Association claims that mortgage fraud cost lenders $1 billion over the past decade.

Read the story here and here.

Find the whole report here.

Tennessee Bank Teller Addicted To Shopping On QVC Sentenced In Embezzlement

Cassandra Mull Ryder, 55, a former bank teller for the Branch Banking & Trust in Copperhill, Tennessee, was sentenced Monday to 15 months in prison, plus restitution for embezzling some $134,000 from the bank. Ryder took the money from a friends bank account, according to her testimony, because she knew the friend never reviewed the statements. She also said she took the money because she was "addicted" to shopping on the QVC cable television network.

Read the story here and here.

US Attorney SDNY Garcia In Departing Says Focus Should Be On White Collar Crime

US Attorney for the Southern District of New York, Michael J. Garcia, 47, has stepped down after three years at the position. His office brought several high-profile public-corruption cases, including cases against former New York City Police Commissioner Bernard Kerik, Norman Hsu, a one-time Democrat fundraiser, and fraud involving the U.N.'s oil-for-food program. Garcia said in an interview with Dow Jones, Garcia said that given the current financial crises, the focus of the office will most likely continue to be white collar crime.

Read the story here.

Tom Petters, Minnesota Businessman, Indicted Today In $3.5 Billion Ponzi Scheme

Tom Petters, 51, of Wayzata, Minnesota, was indicted today on allegations that he ran a $3.5 billion Ponzi scheme that since the mid-1990's, defrauded investors all over the world. Specifically, Petters was indicted on 20 counts of wire and mail fraud, conspiracy and money laundering involving Minnetonka-based Petters Group Worldwide, his primary holding company, and Petters Company Inc., the investment arm of the group. Several other executives of the company, including Deanna Coleman, Robert White, Michael Catain and Larry Reynolds, have all pleaded guilty in the case. Coleman has acted as the primary whistleblower and government informant in the case. The fraud involves a scheme to solicit cash from hedge funds, money managers and other investors to buy consumer electronics for resale to retailers such as Costco and Sam's Club. Prosecutors say the electronics never existed and the fraud simply fueled the extravagant lifestyle of Petters and the other executives.

Read the story here, here and here.

Read FraudTalk's earlier post here.

Former Owner Of Rhode Island Title Company Pleads Guilty To $1.3 Million Fraud

Angela Raposa, 32, of East Providence, Rhode Island and the former owner of Title America Closing Services, pleaded guilty today to one count of wire fraud. Raposa admitted taking $1.3 million from her company's escrow account to pay for personal expenses, including her mortgage, a car, travel, utility bills, cosmetics and hair salon visits as well as payments to relatives. She is scheduled to be sentenced on April 17, 2009.

Read the story here.

Read the DOJ press release here.

West Virginia Woman Sentenced To 3 Years For $700K Embezzlement

Marcia L. Masters, 43, of Kenova, West Virginia and the former administrative officer of the Guyan Conservation District, was sentenced today to 3 years in prison for embezzling some $704,000 from the organization during her tenure between 2003 and 2007. As part of her sentencing, Masters was also was ordered to pay $704,606 in restitution. She also had to forfeit two vehicles and the proceeds from a business she bought and sold, Pet Palace, between 2007 and 2008. As administrative officer, Masters had access to the finances and was able to deposit checks intended for various projects and then "skim" some by redepositing funds into her own personal accounts.

Read the story here, here and here.

This article describes the inadequacies of a standard audit in uncovering embezzlement schemes like the one in the Masters case.

Longtime Illinois Village Clerk's Embezzlement Trial To Be Continued

Marilyn Davis, 73, of Sherrard Village, Illinois and its former clerk, who is on trial for embezzling more than $250,000 from the village, will have her trial continued after pre-trial motions today. Davis was previously charged with two felony counts of theft and official misconduct, according to the complaint. Davis allegedly wrote checks to herself in excess of her salary. She had been employed with the village as city clerk for 41 years.

Read the story here, here and here.

Birmingham, Alabama Mayor Arrested On 101 Counts Of Fraud

Larry P. Langford, 62 , the mayor of Birmingham, Alabama, was taken into custody today on federal fraud charges alleging that he steering millions of dollars of bond work to a friend in exchange for more than $230,000 in bribes that paid his debts for flashy clothes, jewelry and Rolex watches. The 101 count indictment filed against Langford and two co-conspirators, William B. Blount, 55 and Albert W. LaPierre, 58, include charges include bribery, conspiracy, money laundering and filing false tax returns. Prior to becoming mayor of Birmingham, Langford was president of the Jefferson County Commission and had been charged by the SEC with taking more than $156,000 from Blount's investment banking firm, Blount Parish & Co., Inc., via a friend and lobbyist, LaPierre, according to the SEC complaint. Both Blount and LaPierre were indicted in today's filing, along with Langford. Blount received more than $7 million in commission on a bond deal Langford steered to him.

Read the story here, here and here.

Read the DOJ's press release here.

UK To Revise Anti-Bribery Laws - Seen As Long Overdue

The United Kingdom is set to revise its anti-bribery and corruption laws akin to the US's Foreign Corrupt Practices Act. The revision is a result of the UK Law Commission's November 20th report, "Reforming Bribery," which calls for sweeping reforms in the existing statutes which date back to the 18th and 19th centuries. This is seen as a long overdue and very welcome development in the fraud fighting universe.

Read about it here and here.

Read the UK Law Commission's report on "Reforming Bribery" here.

Former Enron Broadband Exec Pleads Guilty

Joseph Hirko, 52, of Portland, Oregon, the former CEO of Enron Broadband Services, pleaded guilty last week to one count of wire fraud in order to avoid a second trial. In his guilty plea, Hirko admitted to allowing press releases to be issued in 2000 that said the company's technology, broadband operating system, would allow customers to pay for only the bandwidth they use. Unfortunately for Hirko, the technology was still under development and not yet available, thereby deceiving shareholders and customers alike. Hirko's and four other company executives' trial ended in September 2005 with hung juries on most counts. Hirko was acquitted in the 2005 trial on 14 of the 27 charges against him, two of them for insider trading and 12 for money laundering. He was charged in a new indictment with wire fraud, securities fraud and insider trading. This plea set all of that aside. Other executives charged in this case include Rex Shelby, Scott Yeager, Kevin Hannon and Kenneth Rice. He is scheduled for sentencing on March 3, 2009 and faces up to 16 months in prison. The plea also requires him to forfeit some $8.7 million in compensation.

Read the story here, here and here.

See the original SEC litigation release here.