Fomer Accountant Admits to Money Laundering

According to this article in philly.com Phillip D'Hedouville, a former financial account manager, has admitted to stealign roughly $1.2 million by keeping clients' money that were promised to be invested in the stock market.

Prosecutors said that the scheme operated from August 2006 to January 2008, and Phillip now faces up to 30 years in prison as he pleaded guilty in federal court to charges of mail fraud and money laundering.

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Madoff Says He Pulled Off Fraud Scheme Because Feds Weren't Watching

Fox News and the NYPost report that imprisioned fraudster Bernie Madoff said during a 4½-hour interview from behind bars, to San Francisco trial lawyer, Joseph Cotchett yesterday that he got away with his $65 billion scam because regulators weren't paying attention that the feds weren't watching so he was able to pull of his infamous ponzi scheme.

As we continue to see more and more mini-ponzi schemers coming to light; how many others have the feds overlooked?

Madoff Says He Pulled Off Fraud Scheme Because Feds Weren't Watching

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The One Man Truth Serum in Between NJ's Political Scandal

This post in The Business Insider details how Solomon Dwek, a NJ rabbi's son, became an FBI informant that helped unearth a web of corruption that included rabbis and many politicians from the state of NJ.

Solomon Dwek once deposited $25 million into an account, drawing on another PNC account that he controlled, which had insufficient funds. He assured the bank that he would be back the next day to cover it and the bank credited him the money. Solomon was a very trusted individual in NJ, and so the FBI were able to install taps and uncover and listen to conversations of detailed money laundering and fraud schemes.

Do you think wire taps is an effective way of combating money laundering schemes?

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Long Island Hedge Fund Manager Investigated for Fraud

The Wall Street Journal reports that Federal criminal authorities are investigating whether Corey Ribotsky, a Long Island, N.Y., hedge-fund manager who has said he has $770 million under management, lied to investors about their returns and the holdings of his various funds, according to people familiar with the matter.

Prosecutors from the U.S. attorney's office in Brooklyn and investigators from the Federal Bureau of Investigation and the Securities and Exchange Commission are looking at whether the 38-year-old Mr. Ribotsky and his firm defrauded investors as the stock market fell amid the credit crisis, these people said.

Hedge-Fund Manager Investigated for Fraud

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U.S. charges 12 in Israel-based lottery fraud

Forbes reports that twelve people have been indicted on charges of running an Israel-based telemarketing fraud that bilked elderly victims in the United States out of more than $25 million, authorities said.

The defendants are accused of calling victims in the United States and falsely declaring that they had won an international lottery, according to criminal indictments unsealed in U.S. District Court in Manhattan Tuesday.

The 12 were charged with conspiracy to commit fraud through telemarketing. Several also were charged with mail fraud and wire fraud.

The Jerusalem Post also reports that, following a joint investigation by the FBI and the Israel Police, Israeli officers on Tuesday arrested Avi Ayache, Michelle Yuval, Yaron Bar, Gillian Rosenberg, Toshin Charles Samuels, Oshrat Portolyoni, Naor Green, Yulia Rayz, Limore Cohen, Ian Kaye and Avi Perov. A 12th suspect, Matthew Getto, was arrested on July 4 at Newark International Airport in New Jersey just before catching a flight to Israel.

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Ex-Broker Set to Plead in Fraud Case

The Wall Street Journal reports that, former Credit Suisse Group broker Julian Tzolov, who returned to the U.S. last week after being a fugitive for more than a month, is expected to plead guilty Wednesday to fraud charges tied to the sale of auction-rate securities, according to people familiar with the matter.

A hearing, described as a "criminal cause for pleading," has been set for 9 a.m. Wednesday before U.S. District Judge Jack Weinstein in Brooklyn, N.Y.

Mr. Tzolov is expected to plead guilty to charges related to an alleged scheme to obtain higher commissions by selling clients higher-risk auction-rate securities backed by mortgages, when those clients wanted to buy lower-risk securities backed by student loans, according to a person familiar with the matter. It is not clear whether the expected guilty plea will be part of a deal with prosecutors.

Ex-Broker Set to Plead in Fraud Case

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Fugitive NY Broker Charged with Multiple Counts of Fraud

This article in novinite.com discusses how the collection of information about the activities, property and assets in Bulgaria owned by former former Credit Suisse Group broker Julian Tzolov has been ordered by DANS which is Bulgaria's State Agency for National Security. Tzolov was a fugitive that pursued an auction-rate securities scheme. Julian was recently caught by Spanish authorities, and is now being charged with conspiracy, securities fraud and multiple counts of wire fraud.

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Cuomo Says Schwab Faces Fraud Suit

Liz Rappaport of The Wall Street Journal reports that New York State Attorney General, Andrew Cuomo "warned that his office plans to sue the largest online brokerage firm for civil fraud over its marketing and sales of auction-rate securities to clients. Emails and testimony cited in the letter show Schwab's brokers had little idea of what they were selling and later failed to tell clients that the market was collapsing."

The attorney general's investigation of Schwab found that brokers were unaware of and misleading about the risks of the securities -- promoting them to customers as cash-like investments, according to the letter. It also found that some traders and executives knew the market was cracking as early as the autumn of 2007 and took steps to protect the company, but didn't disclose those problems to customers.

Cuomo Says Schwab Faces Fraud Suit

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NY Councilman Admits to Fraud and Money Laundering

The NY Times reports that NY councilman Miguel Martinez has pleaded guilty on three counts of money laundering which involved him misusing funds that were intended for nonprofit organizations.

Each count carries a maximum of 20 years in prison, but prosecutors have brought that number down to 57 to 71 months of prison time. Miguel Martinez admitted to stealing about $106,000 which was intended for several city projects.

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Dreier sentenced to 20 years in prison

According to the New York Times, Marc S. Dreier, former New York City lawyer, was sentenced to 20 years in prison for defrauding hedge funds and investors of $700 million. Read the full story here.

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MetaBank Sued Over Fraudulent Certificate of Deposits

This article in DesMoinesRegister.com discusses how a former MetaBank employee, Charlene Marie Pickhinke, recently pleaded guilty of stealing $4.2 million, and now the bank is being sued by over 8 different groups that were affected by the fraudulent certificate of deposits.

Between the years of 1995 and 2008, Pickhinke sold fraudulent CDs to about 50 credit unions and banks. She faces an $8 million fine and up to 82 years in prison. MetaBank has since been cooperating with authorities on the case.

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20 arrested in Medi-Cal fraud targeting disabled patients

The LATimes reports that, "Twenty people were arrested yesterday in a $4.6-million Medi-Cal fraud scheme that law enforcement officials allege used unlicensed individuals to provide in-home nursing care for disabled patients. United States Attorney Thomas O'Brien said, "We believe that this is the largest single case alleging Medi-Cal fraud ever filed in the state of California."

About 75 patients, many of them children with cerebral palsy or developmental disabilities, were treated at home or at school by the unlicensed individuals who stole identities to pose as licensed nurses, according to the United States Attorney’s office.

According to the LATimes report, the operation was run by Priscilla Villabroza, who pocketed about $4M dollars in Med-Cal funding from the California government. Villabroza pleaded guilty to five counts of healthcare fraud last year. She is awaiting sentencing and faces up to 50 years in prison.

No reports of deaths relating to the "care" given by Villabroza's team have been reported.

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Sky Captial Charged for Fraud

According to the New York Times, Sky Capital employees were charged after involving themselves in a $140 million in a fraud scheme taking place between the US and Britain. Other charges included securities, wire and mail fraud. There was $61 million raised from investors between 2002 and 2006. Charges were filed against founder and chief executive Ross Mandell and five others. Read the full story here.

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Ex-Johnson Employee Faces Additional Money Laundering Charges

This article in timesnews.net reports that a former ex-Johnson city employee used a fake alleged company to contract with the city on projects that he personally profited from. Danny Lynn Davis was re-indicted on Monday on 83 additional counts of forgery in an extended money laundering case.

Davis used Gray Home Improvements, a non-existent company, to submit low bids on projects that he was in charge of reviewing.

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Missouri Fraudster Pleads Guilty to Wire Fraud

According to Infozine.com, Lindsey D. Crawford, 23, of Kansas City, waived her right to a grand jury and pleaded guilty before U.S. District Judge Ortrie D. Smith yesterday to a federal information that charges her with conspiracy to commit wire fraud. Crawford pleaded guilty in federal court to her role in a wire fraud conspiracy involving a scheme between two women to hire a man to assault them. Crawford was hoping to force a higher settlement of her sexual harassment lawsuit against a former employer.

The purpose of the conspiracy was to fraudulently increase damages in the sexual harassment lawsuit filed by Crawford against her former employer, Mercedes-Benz of Kansas City, as well as Soave Automotive Group, Inc., T.E.N. Investments, Inc., and Soave Enterprises, LLC.

Under federal statutes, Crawford is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000.

Kansas City Woman Pleads Guilty to Wire Fraud in Staged Rape, Assault

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SEC wants to do a better job of looking for fraud

According to the Times Call of Colorado, the SEC had received a tip to instigate Madoff a few years before his ponzi scheme failed. Now, they're trying to find better ways to detect fraud in advance. The article looks at several things they are doing to monitor and detect fraud better.

- The SEC is trying to improve the handling of tips and complaints that they receive
- Improve the examiners abilities to detect fraud and their knowledge of complex financial productions
- Making sure that a third party can verify all assets

What are other things the SEC can do to improve it's detection of fraud?

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Ruth Madoff, No Fraud Charges--Yet

Amir Efrati of the Wall Street Journal reports that, Federal investigators have concluded for now there is no physical evidence that Ruth Madoff, the wife of convicted swindler Bernard Madoff, actively participated in or concealed her husband's fraud, according to two people familiar with the matter. Ruth Madoff, who has been left with $2.5M from the fraudlent fortune that she built up with her husband has been blacklisted from all social events and even her hair salon. Pictures of Madoff riding the subway isntead of her towncar have flooded the internet. But it looks like Madoff will not join her husband in prision, left to, what some may seem a worst fate but being completely shunned by the world.

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Former TV Personality Pleads Guilty to Money Laundering

According to this latest article in KansasCity.com Ally Francis has been sentenced to 3 years of probation after being part of a group that defrauded Associated Wholesale Grocers. Ally and co-defendants Aponte Gomez, William Morrison, and Crystal Hall submitted fraudulent invoices requesting payments for services that the wholesale grocer never received. The group obtained more than $652, 549.

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