Tuesday, October 26, 2010

Time for a daily dose of fraud

DOJ's McInerney: Govt Trying To Speed Securities Fraud Indictments
A top U.S. prosecutor said the federal government is now applying to securities cases the same aggressive strategy it has used to speed up indictments for health-care fraud.

"We are no longer taking a long time to issue grand jury subpoenas to banks," Department of Justice Criminal Division Fraud Unit Chief Denis McInerney said at a conference in Washington Monday.

A health-care fraud strikeforce the Justice Department started in March 2007 has netted more than 800 indictments, about half of which have resulted in guilty pleas, McInerney said. Before the strikeforce, such indictments were in the single digits.

Drugmakers top list of DOJ fraud settlements
Pharmaceutical companies made up eight of the government's top 10 settlements related to fraud in the last year, according to the advocacy group Taxpayers Against Fraud Education Fund. An insurer and a hospital chain filled out the list.

Topping the list was specialty drugmaker Allergan Inc. which paid out $600 million to settle allegations that it marketed the anti-wrinkle injection Botox for unapproved uses. Trailing just behind was AstraZeneca, which paid $520 million over allegations it inappropriately marketed its psychiatric drug Seroquel.

As more baby boomers become eligible for Medicare, the government is spending more on prescription drugs, attracting scrutiny from government investigators.

Overall, the group estimates that in the fiscal year that ended Sept. 1, government prosecutors collected $3.1 billion under the False Claims Act, which allows the government to collect damages reported by private citizens.

County Launches Anti-Fraud Campaign
A new public awareness campaign aimed at curbing insurance fraud is being featured on more than 340 movie screens in theaters across San Diego County, authorities said Monday.

District Attorney Bonnie Dumanis said insurance fraud costs California consumers an estimated $15 billion each year.

SEC's Khuzami: Agency Is Focused On Municipal Securities Fraud
The Securities and Exchange Commission's director of enforcement said the regulatory agency is focused on rooting out securities fraud in the $2.8 trillion municipal bond market.

The SEC currently lacks the authority to require issuers to disclose financial information before selling debt in the $2.8 trillion municipal market. Rather, the agency largely oversees the market by cracking down on fraud committed by broker-dealers that sell municipal securities.

Morgan Stanley sued over alleged CDO fraud
In a complaint filed in Manhattan federal court, 18 investors in Singapore said they invested in notes issued by Pinnacle Performance Ltd, a Cayman Islands-registered entity, that Morgan Stanley had marketed as "conservative," with an eye to protecting the investors' principal.

Ex-stripper who brought down appellate judge is sentenced for bank fraud
A former New York City stripper was sentenced Monday to one year of supervised release for bank fraud, ending a lurid tale of deceit that brought down a Florida appellate court judge.

Christy Yamanaka, 50, pleaded guilty to one count of scheming with then-Judge Thomas E. Stringer Sr. to hide the fact that she gave him cash to buy a house in Hawaii.

In 2004, when Stringer and Yamanaka bought the house, she had filed for bankruptcy and was concealing money from creditors to whom she owed nearly $315,000. On the mortgage application, he wrote that none of the money for the down payment was borrowed, when, in fact, he got it from her.

After the house was sold, the two fell into a dispute over its profits, leading to a tabloid scandal that cost Stringer his reputation, his seat on the 2nd District Court of Appeal and, for at least five years, his license to practice law.

"I will not stray again," she said. "I am full of regret and sorrow for my conduct."
At least she didn't say, as almost all large corporations say after they "settle" a suit, "I did nothing wrong."

NJ man admits $1.7M fraud involving horseshoes
A New Jersey man has admitted he defrauded investors by persuading them to buy unregistered shares in a company that was supposed to make therapeutic shoes for horses competing in the Olympics.

The state Division of Criminal Justice says the Garfield resident received about $1.7 million from 300 investors. Prosecutors say he never bought equipment to manufacture the horseshoes and used investor funds for personal expenses.

Mobile Attic founder admits bank fraud in Ala.
The former Elba businessman admitted kiting $8.1 million in checks among the businesses' bank accounts.

His last name is "Cash". Really. Check the story link. Guambat will not purposefully lie to you.

Payroll Company President Gets Jail for Fraud
Andre served as president of Arizona Payroll Systems, Inc., which provided payroll services for small businesses in Camp Verde, Cottonwood and Sedona.

From 2005-2007, Andre collected worker’s compensation premiums from his small business clients but falsely reported the hours, wages and type of work to the State Compensation Fund of Arizona.

Because worker's compensation premiums are based upon type of work, hours worked and wages earned, Andre's misrepresentations caused the State Compensation Fund of Arizona to be underpaid by $72,453 in premiums.

Clinton Sisters Arrested On Insurance Fraud Charges
Two Clinton women have been arrested on multiple counts of insurance fraud, Attorney General Jim Hood announced on Monday.

Among the charges, Dinah Haralson is accused of filing false records on behalf of her daughter for injuries reportedly received in a bicycle accident in January 2008 and in September 2008, for a skating accident in March 2008 and for an automobile accident in April 2009, Hood's office said.

Additionally, Dinah Haralson claimed to have received severe burns while cooking in March 2007, to have had a bicycle wreck in February 2008, to have fallen down a set of stairs in April 2008 and to have had automobile accidents in August 2008 and April 2009, according to the news release.

Bandera woman named in securities fraud probe
A Bandera woman is under investigation over allegations that she helped dupe people into investing millions of dollars in a company whose principals made outlandish claims that, if true, would have made it the second-largest firm in the country, agents say.

A federal court affidavit filed Friday said Teresa Brown is one of the main sellers of unregistered shares for a Kansas City company called Petro America Corp., whose CEO, a man named I. Owen Hawkins, is the primary focus of the probe led by the U.S. Attorney for Western Missouri and the Internal Revenue Service's Criminal Investigation division.

The company has claimed to have hundreds of acres in oil and gas leases in Missouri, plus partial ownership of eight gold mines, a granite quarry, and several subsidiaries — including an alternative energy company, a financial services provider, a packaging company, a tech company, an insurance company and an electric-car company.

Investors have pumped more than $5 million into the firm, but federal agents have discovered that only a small fraction was actually invested in Petro America, the affidavit said.

Instead, the affidavit said, Hawkins, Brown and their associates withdrew the money in cash and spent it lavishly on themselves. Brown, for instance, bought a $37,000 boat, a $5,200 piece of Louis Vuitton luggage, expensive jewelry, and traveled to places like Switzerland, the document states.

Embezzler who got tax credit faces more charges
Short was arrested in mid-March a day after sharing the stage with Gov. Jennifer Granholm as she announced his company would get $9.1 million in tax credits for setting up its headquarters in Flint. RASCO and Short, the chief executive officer, got the grant after saying they planned to improve the lives of poor people overseas by using renewable energy to provide electricity, clean drinking water, sanitation and telephone and Internet service.

Short's ability to get a business tax credit for a company he apparently cooked up on his home computer in a trailer park deeply embarrassed the state's economic development officials. His prison record and the fact that he was on parole was easily accessible in the state's searchable offender tracking database posted on the Internet.

Officials at the Michigan Economic Development Corp. said they never conducted a background check on Short.

They also failed to check his other paperwork, including an apparently fake letter Genesee County Prosecutor David Leyton said Short wrote showing he had $10 million in a trust fund to finance RASCO's operations.

Guambat wonders if there's any pattern to who does the time for these crimes, and who doesn't.



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