Tuesday, September 30, 2008

Alberto W. Vilar's trial begins

Yesterday, the trial for Alberto W. Viler began. From 1986 to 2005, he was involved in a number of illegal activities at Amerindo Investment Advisers. Full details of the trial's first day can be read here at the New York Times. Charges against Mr. Viler and his partner, Gary Tanaka, include conspiracy and securities fraud, investment adviser fraud, mail fraud, wire fraud and money laundering.



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Monday, September 29, 2008

Minnesota trio charged fro medicare fraud

Mohamed Essa of Eden Prairie, Minnesota, his wife and a third member are responsible for Medicare fraud totaling $1.5 million. They cheated Medica, the Medicaid public health program in Minnesota, by submitting claims for translations services that never took place.

As reported by the Star Tribune, the wife, Indadeeq Omar, was sentenced to six years in prison in July, convicted under the following charges: one count of health care fraud conspiracy, 12 counts of health care fraud, one count of money laundering conspiracy, 19 counts of concealment money laundering and seven counts of promotion money laundering. Mohamed Essa failed to return to the United States in 2007 to face the charges he is facing. A date is not set for the sentencing.



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Thursday, September 25, 2008

SEC Finds Lauer Liable for Fraud

The SEC, as reported in the Wall Street Journal, has determined Michael Lauer, from Lancer Management Group and Lancer Management Group II, is liable for fraud. Lauer, a hedge fund manager, and acquired $1.1 billion from investors then lost around $500 million. SEC stopped the fraud in 2003 by freezing assets, and is not seeking $50 million as a penalty for his "allegedly fraudulent activity". Lauer has chosent to represent himself in the criminal case and has chosen not to comment.



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Wednesday, September 24, 2008

Fraud on Wall Street

Earlier this decade, the U.S. experienced a huge jolt when Enron collapsed and in the wake there was a five year investigation by the FBI relating to fraud. Now, the U.S. is experiencing another financial crisis with the collapse of several investment banks and as the Washington Post reports here, another round of investigations by the FBI is to commence. As has been reported by CNN, Federal Officials will be investigating potential criminal wrongdoing at the five firms of Fannie Mae, Freddi Mac, Lehman Brothers, Countrywide Financial and AIG. With these new additions, the total number of firms under investigation for corporate fraud is now 26, while the number of individuals under investigation, is closer to 1,400. It will be interesting to see how many more firms are put under investigation as the crisis continues.



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Tuesday, September 23, 2008

Money Laundering Case Against Tom Delay to be Reconsidered

DA Ronnie Earle, from Travis County in Texas, has requested for the appeals court to have another look at the money laundering case against Jim Ellis and John Colyandro, who were associates of Tom DeLay former U.S. House Majority Leader. For the original case the judicial panel had “volunteered that the state’s money laundering statute in 2002 did not cover checks,” as reported in this article. One of the justices on the panel, Diane Henson, felt that the case had not been handled correctly and asked that the panel review the constitutional challenge that was presented before the court. The panel turned this suggestion down, and as a result, Earle reacted by writing a strongly worded complaint that included some of Henson’s comments. A lawyer for Ellis, J.D. Pauerstein, responded by saying:

“It is way out of line. That sounds like it was written by a politician instead of a lawyer.”



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Monday, September 22, 2008

Swiss Committed to Combating Money Laundering

Taiwan's first family is in a bit of hot water over alleged money laundering. The family has reportedly opened accounts across the globe and have allegedly used these accounts for questionable activity. According to Taiwan News, the Swiss accounts that have been opened by the family will receive the utmost inspection, within legal boundaries, to combat any alleged laundering by the first family. But according to Swiss law, there must be proven criminal activity for the Swiss to have access to these accounts opened by the first family. Unfortunately, the criminal activity may only be proven if authorities are given access to these accounts. If there is probable cause to be criminal activity in these accounts, do you think the Swiss should step in further?



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Friday, September 19, 2008

Smith Convicted of Money Laundering for Illegal Alcohol Operation

The Franklin News Post reports that Jody Alton Smith and Margaret Smith have been found guilty on charges related to money laundering, conspiracy, and distribution of illegal whiskey in Western Virginia.

A jury will later decide if they will have to forfeit thousands of dollars in property and money. Agents from ABC and ATF raided the illegal still in Halifax and destroyed four 1,000-gallon blackpot stills, along with thousands of empty jugs, hundreds of pounds of sugar and two copper condenser coils. Four other people connected with this scheme have also pleaded guilty to money laundering and conspiracy.



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Thursday, September 18, 2008

Brazil Drops Money Laundering Charges Against Berezovsky

The Associated Press reports that Brazil’s top court has stopped a money laundering case against Russian billionaire Boris Berezovsky because the judge overseeing the proceedings didn't allow his lawyers to question witnesses after the prosecution.

The Brazilian authorities have accused Boris Berezovsky of being the mastermind behind a huge money laundering scheme with the soccer club Corinthians. The president and vice president of the Brazilian soccer club have been suspended for three years for allegedly letting the team be part of the money laundering front. Berezovsky remains in exile in Britain for the time being.



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Wednesday, September 17, 2008

Former Georgia Lawmaker is Serves Federal Time for Money Laundering

The Associated Press reports a former Georgia lawmaker has been sentenced to serve 63 months in jail for defrauding his church and for money laundering.

The former state Rep. Ron Sailor Jr’s lawyers initially asked the district judge for 30 months of probation, but the judge sentenced him to federal prison time instead. Agents arrested him on Dec. 19th and took $300,000 in cash which he planned to launder. Sailor was arrested for taking out a fraudulent $250,000 loan and using his church as collateral.



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Tuesday, September 16, 2008

Former NY Giants Star Ingram Faces Serious Jail Time for Money Laundering

Mark Ingram, a star in the 1991 superbowl winning team, faces nearly 10 years in prison when he is sentenced on Tuesday for charges related to bank fraud and money laundering according to this article in AM New York.

Mark Ingram pleaded guilty back in 2005 for money laundering charges associated with narcotics deals, bank fraud, and cashing counterfeit checks. For the past three years he has sought to revoke the plea and have hired and fired many court-appointed attorneys during this process.



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Monday, September 15, 2008

Follieri Pleads Guilty

We’ve been keeping a watchful eye on the Follieri money laundering case over the past couple of weeks. Australia.TO reports that Follieri has pleaded guilty in a Manhattan federal court to one count of conspiracy to commit wire fraud, eight counts of wire fraud, and five counts of money laundering. Each wire fraud count and money laundering count carries a maximum of 20 years in prison, as a result he faces up to 265 years in prison for all of his counts.

In addition, Follieri agreed to forfeit 12 watches and 9 pieces of jewelry as well as a payment of $2,4440,000.



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Friday, September 12, 2008

Defrauding Fannie Mae

Leib Pitner, former Brooklyn Mortgage executive has pleaded guilty for defrauding Fannie Mae of $44 million with a colleague. In federal Court on Thursday, he entered his guilty plea specifically for the charge of conspiracy to commit wire fraud. He had collected money from payoffs of 257 loans. Maximum penalty he could face is 20 years in prison, but as this article states, it is unlikely to be over 10. Pitner’s sentencing is scheduled for Dec. 19, while his partners case is still pending.



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Thursday, September 11, 2008

Enron Payout

As this article reports, the victims of the Enron Scandal will finally be getting their restitution. Enron shareholders, and investors alike, which totals approximately 1.5 million individuals, will be splitting the sum of $7.2 billion dollars. This amount is to be divided up and is not inclusive of the legal fees to be paid for the handling of this case. These monies have been sitting and accruing interest since 2002. It has finally been decided that the attorney’s fees to be paid out will come out to a final total of around $688 million. The total fees are said to be the largest payout for a securities fraud case.



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Wednesday, September 10, 2008

Update on Anne Hathaway’s Ex Plea Deal

We posted two months ago that Raffaello Follieri, Anne Hathaway’s ex, was being charged with conspiracy, wire fraud, and money laundering because of a scheme in which he led potential investors to believe that he had close connections to the Vatican, which enabled him to purchase the Catholic Church’s unwanted real estate properties in the US at bargain prices. The Wall Street Journal reports in this article that Follieri is nearing an agreement to plead guilty to the money laundering charges in which he could possibly serve up to five years in prison.

In addition to crimincal charges, Follieri is being sued by Burkle’s Yucaipa investment operation for charges of misappropriating more than $1.3 million from their real-estate ventures to fund his private jets and lavish lifestyle.



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Tuesday, September 9, 2008

Security breaches up in 2008

In 2007, there were 207 publically disclosed security breaches. As of August 22, 2008, there have been 449 publically disclosed security breaches according to the Resource Center in San Diego, a nonprofit organization for victims of identity theft. The Wall Street Journal discusses this issue here.

Cyber criminals have adopted more sophisticated ways to break into data systems. Business are doing little to combat this, as the majority are spending little money protect the mass amount of data they are now housing on their clients. There are 44 states that required business to disclose security breaches, and when they go public with the information, they’re rarely punished for the lack of security around their data.

Bruce Schneier, chief security technology officer at BT Group belivies that there are two ways to solve these problems: is if the government creates an incentive, either by allowing individuals to hold businesses liable for data breaches or by introducing regulations that impose criminal or stiff civil penalties on businesses that experience a breach.



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Monday, September 8, 2008

Bad Weather. . . Bad News

Officials are preemptively preparing for disaster fraud expected after the wake of Hurricane Gustav. As reported in this article, U.S. Attorney Dunn Lampton, stated that his office, as well as the Hurricane Katrina Fraud Task Force, is already getting ready for the onslaught of fraud cases expected. The Hurricane Katrina Task force was created in 2005, has already seen 898 defendants charged across 43 judicial districts, 25,000 complaints, with 17,000 cases being sent to law enforcement agencies for pending investigation. Another fact of note, is that the “largest fraud case in terms of loss,” for South Mississippi, was after Hurricane Katrina in Pearl River County in the amount of $716,677.



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Friday, September 5, 2008

China’s Central Bank Cracks Down On Money Laundering

China Daily reports that the Central Bank of China has helped police uncover 89 money-laundering cases last year involving $4.2 billion. Most of these cases according to the Central Bank of China were related to underground private banks.

Last year the People’s Bank of China imposed over 26.5 million yuan on 350 financial institutions that didn’t comply with strict anti-money laundering regulations. The PBOC has signed and approved all international treaties passed by the United Nations. What are some examples of other countries that have began to crackdown on money laundering?



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Thursday, September 4, 2008

A case of changing laws

In a recent story reported by the Houston Chronicle, U.S. Representative Tom DeLay and two others were absolved of their money laundering charges. The law that absolved them was passed eight months after their original indictment. The law was also authored by a representative who received some of the money.

In 2002, John Colyandro, James Ellis and DeLay, were all involved with a check for $190,000 that was sent to Republican National State Elections Committee in Washington. A large amount of the check, $100,000, was money given to a government official by a corporation, which is illegal. A few months later, Representative Larry Taylor received a check for $20,000 for the national committee. He then went on to author the bill relating to insurance fraud, which included a paragraph dealing with money laundering.

However, Taylor claims the bill had nothing to do with the three who were released from their money laundering charges:

"We were working on insurance fraud, and we had prosecutors from all over the state wanting us to help them. They said we also have another issue we have trouble prosecuting. In this electronic age, the drug smugglers are not just using cash. They said they weren't able to prosecute money laundering under the old statute."



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Wednesday, September 3, 2008

Bank of China Managers Have Been Convicted

In related news to this post from us, former Bank of China managers and their wives have been convicted on charges of racketeering and laundering $485 million they defrauded from the lender, as stated by the U.S. Department of Justice. This article reports that Xu Chaofan, and Xu Guojun, along with their respective wives, Kuang Wan Fang and Yu Ying Yi, were convicted by a federal jury in Las Vegas on Aug. 29. Yu Zhendong, another bank manager accused of fraud has sentencing scheduled for Nov. 24. In the meantime, amidst all of this press, shares for Bank of China have decreased by 12% this year in Hong Kong Trading.



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Tuesday, September 2, 2008

Islamic Bank Purchases Software to Combat Money Laundering

Arabianbusiness.com reports that Dubai Islamic Bank has signed an agreement to buy software to crack down on money laundering. The bank has bought the systems from Norkom Technologies, and will implement the solutions across operations in the UAE and Pakistan according to bank chiefs.

The Software will allow the bank to monitor and analyze the transactions and customer interactions across its entire database to investigate criminal activity. Waheed Rathore, head of Group Compliance at Dubai Islamic Bank mentions:

"This initiative demonstrates DIB's commitment to improve its defences against money laundering and terrorist financing. It also reflects DIB's belief that sustainable growth can only be achieved by maintaining high standards of regulatory compliance."



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