105 Charged in Wide-Spread Florida Mortgage Fraud

RealEstateChannel.com reports that The Justice Dept. has charged 105 mortgage company representatives, brokers and other individuals in fraudulent schemes that have netted them $400 million in loans on 700 properties in Florida. In the four Florida markets targeted by federal and local law enforcement agencies over a nine-month period, 32 defendants are from Fort Myers, 30 from Tampa, 24 from Jacksonville and 19 from Orlando. Alex Finkelstein reports that this investigation was launched in late January 2009

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F.B.I. Indicts Dozens in Online Bank Fraud

The New York Times reports that in what it is calling Operation Phish Phry, the F.B.I. began arresting 53 people on Wednesday on charges of conducting a vast financial fraud based on phishing — the act of tricking Internet users into revealing their passwords and other information.

The arrests were in Southern California, Nevada and North Carolina, while the authorities in Egypt sought to arrest 47 people whom the F.B.I. said were co-conspirators.

It's reported that the total amount stolen from Wells-Fargo and Bank of America totaled nearly $2M. The investigation into this fraud began in 2007 and authorities noted that this operation was very clean and well organized.

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'McMansion' Mortgage Fraud Scam: Huge Homes Allegedly Became Boardinghouses

The Washington Post reports that allegedly that the family of Ruben Rojas would recruit straw buyers, help them file false loan applications and execute phony "HUD-1" settlement statements on down payments and closing costs. The Rojases would allegedly pay the straw buyers and reap the benefits of quick "flip" sales along with real estate commissions in some cases. Investigators have identified 34 houses bought using unqualified buyers and turned into illegal boardinghouses. The total value of those properties is about $20 million, police said. Investigators expect that the scheme might ultimately involve more than 200 houses in Virginia.

For more information, please click on the link below.

Va. Family Targeted in 'McMansion' Mortgage Fraud Scam

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East St. Louis pair pleads guilty for fraud in accociation to a daycare

According to the Chicago Tribune, Robby Owens and Monica Owens, a couple running a daycare in East St Louis, defrauded the government of $1.2 million by not paying taxes from 2004-2004. They also received $150,600 in federal funds for children who weren't in their care. Read the full article here.

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Hockey Owner to Pay $67.5M in Restitution

The San Francisco Chronicle reports that former co-owner of the San Jose Sharks, venture capitalist William "Boots" Del Biaggio III, 41, of San Jose must surrender Jan. 8 to begin serving a sentence of eight years and one month, U.S. District Judge Charles Breyer said at a hearing in San Francisco.

The judge also ordered Del Biaggio to pay $67.5 million in restitution.

Federal prosecutors said Del Biaggio defrauded numerous people to obtain and guarantee loans of about $100 million in connection with various ventures, including the purchase of a $25 million stake in the Nashville Predators of the National Hockey League.

Former Sharks co-owner gets 8 years for fraud

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Mortgage Fraud Task Force being formed

According to the New York Times, the ten state Attorneys Generals and four federal agencies have come together to create a Mortgage Fraud Task Force. They will focus on: equity skimming, bogus foreclosure rescue, straw purchases and unethical lending practices. Read more about the task force here.

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Bribery and Kickback Charges in D.C. District Office

The Washington Post reports that Sarosh Mir, who worked for a technology contracting firm, pleaded guilty in U.S. District Court in Washington to one count of conspiring to commit wire fraud. He faces six months to a year in prison under federal sentencing guidelines.

In court papers, Mir admitted that he inflated invoices for contracts with the D.C. government and submitted bills for "ghost" employees who did no work.

Mir admitted in federal court Thursday that he participated in a bribery and kickback scheme that involved the District government's technology office.

Man Pleads Guilty in Tech Office Fraud

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Straw Buying and Phantom Bank Balances Lead to $80M Long Island Mortgage Fraud

Former Suffolk Legis. George Guldi, 56, of Westhampton Beach, pleaded not guilty Tuesday in a Riverhead courtroom to 23 counts of a 130-count indictment against him and 16 others. The scheme involved the fraudulent purchase of 60 homes from Cold Spring Harbor to Bridgehampton by straw buyers using fake employer information and phantom bank balances.

According to Newsday, the others included in the scheme include a dominatrix, her male personal assistant, two employees at her Manhattan sexual fantasy club and her 65-year-old mother.

Prosecutors say that some of the straw buyers have pleaded not guilty in the fraud scheme.

DA: Guldi mortgage fraud scheme 'more expansive'

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"Operation Rain Check" Nabs Michigan Fraudsters

The Chicago Tribune reports that in Western Michigan, authorities have nabbed more than 200 Muskegon-area residents that are accused of cashing duplicated Social Security disability checks and defrauding the federal government of more than $400,000. The suspects were identified during a 10-month investigation code-named "Operation Rain Check." Investigators say many cashed duplicate Social Security checks after claiming the originals were stolen or lost. Some were collecting checks for other people as "representative payees."

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FTC Prohibits Oil Market Fraud

Today the the Federal Trade Commission approved a rule prohibiting fraud in wholesale petroleum markets, a regulation that will take effect on Nov. 4. According to MarketWatch.com,
the rule prohibits actions such as false public announcements of planned output expectations, false statistical or data reporting and false information about certain types of sale intended to disguise the actual liquidity of a market. The regulation also prohibits misleading omissions from company statements.

FTC OKs rule prohibiting oil market fraud

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Financial Integrity now has a twitter page! Make sure to follow us here for your Fraud, Compliance, and Risk Management Source for Maintaining the Integrity of Global Financial Institutions.

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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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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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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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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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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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Texan Ponzi Fraudster Indicted

According to the New York Times, R. Allen Stanford, the Texas billionaire accused of running a multibillion-dollar Ponzi scheme, and at least four others, including an Antiguan official, have been indicted in the fraud case, a federal prosecutor said Friday morning.

In February, the Securities and Exchange Commission shut down Mr. Stanford’s financial operations, while filing a civil suit accusing him and two other senior executives of committing a fraud it characterized as a “massive Ponzi scheme.”

The suspected fraud involved billions of dollars of certificates of deposit issued by Stanford International Bank on Antigua. The instruments paid unusually high returns and were marketed around the world, particularly in the United States and Latin America.

For more information, visit the original article referenced.

Texas Financier, 4 Others Said to Face Indictment

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Foreign Exchange fraud scheme investigated

According to the Dow Jones News Wire, Commodity Futures Trading Commission has filed a lawsuit against two individuals who were involved in a foreign-exchange fraud scheme.

Charged was Robert D. Watson, an executive professor in the Finance Department, Houston lawyer and accountant Daniel J. Petroski and two companies, PrivateFX Global One Ltd. and 36 Holdings Ltd. The CFTC accused the two men of urging potential investors to purchase shares in PrivateFX Global One by touting their supposed quarterly trading returns of 6% to 10% from January 2000 through June 30, 2006.

About 60 investors purchased $19.5 million in Global One shares since it began operations in 2006, according to the CFTC. The defendants reported returns of 1.5% to 3% a month and claimed to never have had a losing month, the agency noted.

Read the full story here.

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