New federal task force to fight fraud

The Obama Administration has created a new task force that will work to combat fraud. It will replace the task force that Bush for the same reason.

U.S. Attorney General Eric Holder stated, "This task force's mission is not just to hold accountable those who helped bring about the last financial meltdown, but to prevent another meltdown from occurring. By punishing criminals for their actions, we will send a strong message to anyone looking to profit from the misfortunes of others."

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Former US Congressman Faces 13 Years in Jail

According to this post on IBN Live a former US Congressman William Jefferson has been sentenced to 13 years in jail after being found guilty in August of collecting bribes for personal interests after police found $90,000 stored in his freezer.

Jefferson lost his seat in 2008 elections after voters were completely turned off by all the indictments of bribery and money laundering. In exchange for the bribes Jefferson allegedly led business operations in Africa that included telecommunication deals with countries such as Ghana and Nigeria.

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More Money is Being Advanced to Madoff Victims

Looks like progress is slowly being made in Bernie Madoff's $65 billion Ponzi scheme. This article in Bloomberg discusses Madoff's liquidators are making repayments of about $534.2 million to 1,558 victims that suffered losses. There have been over 16,000 claims made since Bernie's arrest back in December, so there is still a long way to go. Irving Picard, a trustee, was able to recover $1.4 billion in assets to repay victims and more is expected back in fake profit from some of Madoff's biggest investors. There will be a lot controversy going forward on who gets paid and who doesn't.

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Madoff Investor Dies in Swimming Pool

A recent article in CNN mentioned that an investor of Madoff's Ponzi scheme recently died in his Florida pool. Jeffry Picower, a 67 year old investor from Florida was found dead in his swimming pool in Palm Beach.

Jeffry's Picower Foundation had announced earlier that it was shutting down because of losses from the Madoff sheme. His recent tax return valued the portfolio at $955 million. There are also allegations that Picower benefited from Madoff's secretive investment business.

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Millionaire Guilty of Money Laundering Charhe

According to this post on isleofman.com 69 year old Trevor Baines has been found guilty of money laundering. The prosecution claimed that Mr. Baines knew the origin of the $175 million he received through the Isle of Man Bank, which was the result of a massive fraud on US shareholders. Although he and his wife denied that they knew how the money was obtained, they both have been charged.

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Owner of Diamond Ventures Arrested for Wire Fraud and Money Laundering

According to this article in the Herald Tribune Beau Diamond from a Sarasota based Diamond Ventures group was recently charged with money laundering and wire fraud. Officials claim that he operated his venture like a Ponzi scheme, using investors' money to make profit payments to other investors and collecting about $38 million from over 200 people. $6.6 million of those funds were used for personal expenditures including a waterfront condominium, a Lamborghini Gallardo, and vacations. The FBI have been investigating Beau since early January.

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AMLAC 2009 Speaker Profile: Suzanne Williams, Federal Reserve Board

Suzanne Williams
Manager of the BSA/AML Risk Section of the Division of
Banking Supervision and Regulation
Board of Governors of The Federal Reserve System

Suzanne Williams is the Manager of the Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Risk Section of the Division of Banking Supervision and Regulation at the Board of Governors of the Federal Reserve System. In this position, she works with Reserve Bank and Board staff in designing and implementing supervisory strategies to address significant BSA/AML issues, including related enforcement actions, when appropriate. Ms. Williams develops BSA/AML policy guidance for financial institutions and interagency examination procedures, in coordination with other relevant federal and state government agencies, and conducts frequent industry outreach on BSA/AML matters.

Don't miss Suzanne speak on Procedures for Regulatory Compliance for Prepaid Cards at the AMLAC Conference in NY from October 19-21.

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Standford Group's #2 pleads gulity to fraud

According to the Wall Street Journal, James Davis, who was the second highest in the Standford Fraud case, pleaded guilty. He admitted to willingly defrauding investors for nearly twenty years. Davis is cooperating with officials to build a case against Allan Standford, who is currently being held in Conroe, Texas. Read the full article here.

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Park Rapids Man is Indicted on Counts of Wire Fraud and Money Laundering

According to this post on the Park Rapid Enterprise a 36 year old man who is licensed in real estate from Park Rapids has been charged with wire fraud, money laundering, and marijuana charges by a federal grand jury.

Eric Moen allegedly misrepresented the employment status of a borrower and obtained funds in connection with the mortgage of the home. Moen also transferred more than $640,000 from the mortgage company to the home, and pocketed nearly $15,000.

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First Indictment is Handed in Huge NJ Corruption Scandal

According to this report on MyFoxNy the federal grand jury has handed down the first indictment in the huge NJ corruption-money laundering scandal. The prosecutors have charged Jersey City Deputy Mayor Leona Baldini and Edward Cheatam with using their power to extort money from an undercover government witness posing as a developer.

These two officials were among 44 other rabbis and local elected politicians that were involved in the huge corruption scandal. Three mayors including Peter Cammarano of Hoboken, Dennis Elwell of Secaucus, Anthony Suarez of Ridgefield were also arrested. We'll keep posting late breaking news about this corruption scandal as it comes right on this blog so stay tuned.

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Former Miami business owner charged with healthcare fraud

According to the South Florida Business Journal, Heriberto Camacho-Garcia, a former health care business owner, submitted fraudulent claims worth $8,266,267 for Medicare reimbursement. He was sentenced to 92 months in prison. Read the full article here.

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Money Laudering Case Gets a little more Complicated

This latest blog post in the NY Times discusses how Mr. Krane, a Hollywood tax lawyer, has recently been charged with money laundering in what was proved to be an illegal tax shelter that he helped setup for the investor Haim Saban and also a passport fraud charge. What's intersting about thsi case is that when Mr. Krane showed up Monday morning for a bail hearing, his lawyer explained in court that friends allowed him to use their identities “for the purpose of protecting Mr. Krane’s life.” The case for the passport fraud charge is scheduled for this fall, but this case has certainly taking a strange turn.

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Money Laundering Ring Crackdown in China

BusinessWeek reports that the Chinese government recently broke a money laundering ring that sent over $1.46 billion in illegal transfers to Vietnam. One of the major ring leaders, Ruan Zhizhong, opened up 77 accounts and illegally transferred over $1 billion through 10,000 transactions over a period of four years. Many Chinese investors have turned to the underground banks which were run by the alleged gang, in order to evade restrictions put on by the Chinese government.

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Follow us on Twitter!

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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GE Pays fine

According to the Dow Jones Newswire, GE is paying a fine of $50 million due to misleading investors on financial statements. They used accounting methods that altered the reported earnings and revenue to avoid showing investors negative results. Read the full report here.

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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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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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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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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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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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