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This article in the Chicago Tribune reports that John Hoole of Marion has pleaded guilty to federal charges of money laundering and mail fraud in U.S. District Court in Benton.
Hoole was accused of using investors’ money to pay back other investors and for personal expenses as well.
He faces up to $250,000 in fines and up to 30 years in prison.
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Chicago Tribune reports in this article that attorneys for Tom Petters are trying to have the trial moved outside the state of Minnesota because they claim that he can not receive a fair trial there. His legal defensemen argue that the Minnesota news media has painted a public portrayal of Petters as a man in an orange jail uniform who will surely get convicted. His attorneys have suggested Iowa and Wisconsin as other locations.
Being that Petters has been charged with conspiracy, fraud and money laundering in a huge $3.5 billion scheme, do you think that Tom Petters will be able to find a fair trial anywhere?
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Here's the February edition of the newsletter we regularly send out to our AMLAC LinkedIn group members. Remember to join the AMLAC LinkedIn group if you haven’t so already in order to receive these communications on a monthly basis.
Read the Newsletter
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According to The Chicago Tribune, home buyers who purchased homes under false pretenses could soon sue the home sellers in Wisconsin. A bill being presented today in Wisconsin could reverse a Wisconsin Supreme Court decision last year that barred civil fraud lawsuits stemming from residential home sales. Dissenting Justice Ann Walsh Bradley said the decision made Wisconsin the only state to do so and allowed sellers to "look the buyer in the eye, lie about the condition of the home, and escape legal consequences." The decision limited lawsuits in real estate transactions to claims of breach of contract and false advertising.
The bill restores the ability of ripped off buyers to sue for fraud, which had been common and allows for greater damages. Let's hope the bill passes and other states implement the same consequences for phony home sales.
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Take a couple of seconds to take our latest poll here.
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After disappearing two days ago when accused of an $8 billion financial fraud, Robert Allen was located and served civil papers in Fredericksburg, Virginia dealing with the case. He is not officially charged with a crime, and authorities are working to put together their case in the fraud scheme. For more information, read the story at the New York Times.
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According to The Business Insider, Allen Stanford, the Texas billionaire charged Tuesday in an $8 billion fraud by the SEC, apparently lied to his clients about losing any money with Bernie Madoff; however, Allen Stanford did not do a "ponzi" scheme like Madoff. Further, the SEC accuses Stanford's company, Stanford Financial, of misrepresenting the performance and safety of its "CDs" by claiming that the money was invested in safe, liquid securities, while in actuality the money has been invested in in illiquid private equity and real estate ventures. So it looks like individuals and corporations who held their money with Stanford may not see the worst of the hedge fund blow-ups; but they'll still lose money.
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According to this post on Business Journal, investment advisor Charles Wesley Rhodes has been sentenced to 10 years in federal prison after pleading guilty to mail fraud and money laundering.
Rhodes raised more than $20 million from investors, but instead of buying stocks and bonds as requested by the investors, he used it for his own personal gain. Some of the companies Rhodes ran were Professional Practice Planning Services Inc., Resource Transactions Inc., Rhodes Econometrics Inc. and the Rhodes Co.
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The Palm Beach Post is reporting the arrest of three physicians from the Midway Medical Center in Miami were arrested for filing false claims to Medicare for $10 million in bills for HIV drugs that patients didn't receive. They payed money to the patients whose Medicare numbers they used to receive the money. For more information, read the article here.
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According to this article in the NY Times Ms. Wu, the former first lady of Taiwan, has admitted on Tuesday to have laundered $2.2 million that she received from a contractor in connection with a government construction project. She does not admit to embezzling money from this fund, but instead claims that the money was a political donation.
This case has sparked media frenzy in Taiwan, and the cable companies have covered every twist and turn.
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In an ABC News article they report that 500 cases of corporate fraud directly relate to the current financial crisis. Of these 500 cases, 38 are major firms.
"The FBI has more than 530 open corporate fraud investigations, including 38 corporate fraud and financial institution matters directly related to the current financial crisis," FBI Deputy Director John Pistole stated.
For more on the story, read ABC News.
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According to this article in Reuters UK, Swiss law experts claim that the suspected 17,000 Americans that hid $20 billion of assets in Swiss bank accounts did not commit tax fraud. The experts state that the Americans have instead exploited a loophole in the US system, and so the Swiss are under no obligation to disclose the customers’ name to US authorities.
UBS, along with many other Swiss banks are under constant pressure from the United States and Germany. Barack Obama has even singled out UBS as one of the banks who has helped many Americans cheat on their taxes. Urs Behnisch, a law professor at Basel University, believes that Americans, “they did not falsify their accounts, and the banks were only obliged to identify the wealth management companies holding U.S. securities, not the people investing in them.”
Do you agree that the Americans did not commit fraud?
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Jim Kouri, the fifth Vice President and Public Information Officer of the National Association of Chiefs of Police, has written in this article on the Examiner that US AML efforts have been improving gradually over the years. Jim gives the example of section 311 of the USA Patriot Act put into effect in 2001, which prohibits US financial institutions from keeping certain accounts for foreign banks if they believe it might be a primary money laundering concern.
Many foreign government officials set up enforcement and regulatory actions against US financial institutions because they thought the excess protocols were unnecessary. Do you believe that US AML procedures are finally improving?
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Charles Wilson and his wife used a fictitious collection agency to collect advertisers debt for the Tampa Tribune. As the credit manager for the newspaper, he collected over $1 million in debts over 10 years by diverting the funds to his account. He and his wife were charged with conspiracy to commit mail fraud. Forbes has more on this story.
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More mortgage fraud from Florida-Federal prosecutors say 49-year-old John A. Yanchek pleaded guilty Wednesday to conspiracy, money laundering and making false statements to a bank in connection with a commercial loan. The most serious offense, making false statements, carries a maximum sentence of 30 years in prison and a $1 million fine. According to the Associated Press, Yanchek and three other men conspired to get commercial loans to cover the purchase of vacant land in Sarasota and Manatee counties. The plan was to obtain loans in amounts that would let the conspirators purchase the property without down payments and then keep the extra money for themselves.
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This article on Banking Times discusses that cuts in IT budgets should not compromise a company’s AML compliance. Though recent financial hardships due to the economic crisis has caused many companies to reduce their IT spend, having an adequate AML system in place will outweigh any costs involved. Heavy fines and penalties may arise for those companies who are not taking the necessary steps to establish and maintain up to date AML systems. Is your company thinking about reducing its budget on AML compliance?
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Dr. Lisa Barden was arrested in southern California on Thursday, January 29 for prescription fraud. She's charged with 270 felonies. She is accused of stealing patients identities to obtain prescription drugs. She obtained drugs on 131 different occasions at43 different pharmacies. For more information, click here.
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As the economy dwindles, we're seeing more instances of petty fraud throughout the country. In Omaha, two men shrink wrapped empty Zune (.mp3 players) boxes and "returned" them to a West Omaha Wal-Mart. After they received gift certificates from customer service for the fraudulent items, they went on to buy two more Zune players. And in Florida, a high school teacher has been accused of fraud for lying on Section 8 applications. Six people, including a Palm Beach County teacher, appeared in court Thursday, accused of ripping off a government agency of nearly $137,000, investigators said.
While it seems more salacious to cover the large fraud out there, so much petty fraud abounds. What are you seeing? How is this sort of crime impacting the country as a whole?
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