BBT ‘former’ Vice President Sentenced to Federal Prison for Massive Embezzlement! Did He do it for Love?

Former Vice President of Burlington Bank and Trust (BBT) Michael Dean Miller, age 51, was sentenced to 37 months in federal prison – and all this happened the day before Valentines day. What’s significant about that? Read below!

In March 2000, Miller was hired as Vice President for Operations at BBT. In June 2006, he was transferred to Vice President for Operations at TRBT, but also continued working in a dual capacity at BBT until his termination on December 12, 2006. During the relevant period, both Miller and his girlfriend (later fiancé, later wife) maintained various savings and checking accounts at BBT.

Starting on September 7, 2001, and continuing until December 12, 2006, Miller stole money from his employer, making 109 internal electronic transactions, or block entries, causing money to be transferred from internal bank expense accounts to his or his girlfriend’s personal accounts. Most commonly, Miller initially put the money went into one of the girlfriend’s accounts and subsequently transferred the money from there to Miller’s checking account. Miller attempted to disguise the movements as normal ones, causing notations such as “telephone transfer” or “miscellaneous debit” to appear on the account statements.

Now what is not clear from the news release from the US Attorney’s office is whether the girlfriend, fiance and later wife was implicated as part of the fraud. It appears (not appears) that she would have known about the funding since the transfers went into her account and then into his. The news release goes on to say:

Miller also made transactions causing bank checks to be issued or internet payments to be made to third parties, such as credit card companies, in payment of monies owed by Miller or his girlfriend.

Since Miller’s duties at the two banks included, among other things, reconciliation of internal bank accounts and review of employee account activity, and Miller was the security officer and had access to all computer applications used by the banks, Miller was able to prevent detection of his thefts for over five years.

As a white collar crime and business ethics speaker, I know first hand the impact that choices have. And, as I state to most audiences, every choice has a consequence. The strange thing is – most who make choices like this somehow think that they will get by with the cover up. But you do reap what you sow and there is no hiding from the consequences of the choice you make.

In December 2006, after other bank employees became suspicious of certain electronic transactions, officials at BBT discovered some of the recent thefts. Miller was confronted and admitting stealing about $46,000 during the previous year. A subsequent investigation by the FBI and Burlington Police Department and an audit by the FDIC revealed that Miller had embezzled a total of $569,115 over the course of more than 5 years.

The consequences – 37 months in prison – restitution of $539,130 – and $100 to the Crime Victim Fund.

Georgia Man – Anthony Christou – Convicted of Massive Mortgage Fraud Ponzi Scheme!

Christou was a gambler, in more than one way. But every choice has a consequence! It is like the law of gravity. The bold statement above is factual – you will reap what you sow. The question is here – what will the final consequence be for Anthony Christou, age 57, who was just convicted on charges of wire fraud and money laundering relating to an investment fraud scheme.

According to a Department of Justice News Release:

“This defendant personally met with dozens of victims, telling each that he would use their money to underwrite legitimate mortgages. He knew at the time that he had no intention of using his investors’ money legitimately, but rather that their funds would be put to use in keeping a massive Ponzi scheme afloat,” said United States Attorney David E. Nahmias. “Mr. Christou racked up more than $29 million in fraudulent investment in just two years, a significant portion of which was diverted to his gambling activities. The jury’s verdict after only five hours of deliberation and the likelihood of a long prison sentence in this case should send a clear message that this type of fraud will not be tolerated.”

Note: Christou has been convicted but not yet sentenced.

Between January 2004 and January 2006, CHRISTOU, who was at the time president of his own mortgage company, “Atlas Mortgage Inc.,” engaged in a scheme wherein he and others acting on his behalf solicited individuals, including business associates, personal friends and members of his church, to invest with him. CHRISTOU informed his investors that he would use their money to underwrite safe and secure “bridge loans” for wealthy individuals who were selling a house and needed funds to use as a down payment on newly acquired real property or to assist real estate developers with their short term capital needs. CHRISTOU entered into short term promissory notes with his lenders, the terms of which were dictated by
CHRISTOU, to memorialize their investment.

CHRISTOU falsely represented that his investors’ money would be secured by his borrowers’ equity and would be repaid, with substantial interest, in a short period of time. Between January 2004 and January 2006, CHRISTOU took in more than $29 million from investors, purportedly to fund bridge loans. Instead, he used his investors’ funds to repay his principal and interest obligations to earlier investors and, unbeknownst to his later investors, laundered more than $7 million of their assets to fund his gambling activities at casinos in Nevada, Mississippi, and New Jersey.

So how can such a fraud be accomplished? Easy! First there have to be three components present for a fraud like this to work. As a white collar crime speaker, I speak to groups nationwide about ethics, fraud and how to avoid it in your organization. What gives me the credential – training and experience. As a former CPA – trained with a Masters in Accounting – I am also (regrettably) a white collar criminal – having been convicted and spent time in federal prison for a ponzi scheme just like the one shown above.

The components of the crime: Need, Opportunity and Rationalization! Obviously, Christou needed the money. He needed it to fund his addition – gambling – and pay off the former folks defrauded. As long as he could pay them off he could continue the scheme. It appears that he made his own opportunity by using his skills in sales to convince others to invest in him. Rationalization – well I can’t begin to speak to his mindset. In my case, however, I convinced myself that it was a loan and even set up fake loan documents to support that illusion.

You cannot avoid the consequence of the choices you make. Consider wisely your choices and know that – stated again – Every choice has a consequence.

Payroll Tax Evasion Earns Lucky Mata 10 Years in Federal Prison! Maybe He Wasn’t So Lucky!

Sorry about the play on words, but Lucky Mata, 47, of West Palm Beach, and owner of Kodiak Construction and Management, Inc., was sentenced on Friday, February 22, 2008 to serve a total of ten years in prison on multiple charges relating to his evasion of federal payroll taxes.

Ten years in prison is nothing to sneeze at. Having been there, as best I recall, if one earns this dubious distinction – especially with that number of years – it won’t be spent in a minimum security facility. So “Lucky” won’t find himself so lucky when he enters a medium security federal prison.

So what’s the background? According to the news release from the US Attorney’s office:

Kodiak underpaid its federal payroll taxes by nearly $3,000,000 between 1994 and 2005, during which time it paid its workers nearly $18,000,000 in cash payments without any employer withholding.

Evidence at the trial showed that Mata paid cash wages to most of his workers in order to avoid federal payroll tax obligations. Check cashers posing as subcontractors helped him to perpetrate the scheme. Mata caused the check cashers to lie to banks about the final destination of the cash after it left the bank, and then caused multiple false federal payroll tax returns to be filed with the Internal Revenue Service. The total scheme involved more than $18,000,000 in Kodiak wages over a ten-year period.

According to the evidence, Mata caused fraudulent invoices to be presented to the grand jury that was investigating this matter. Kodiak paid cash to most of its construction workers, without any federal withholding taxes being deducted from the wages. In addition, the evidence showed that many of the workers were undocumented aliens.

Every choice has a consequence! How often I say this in the blogs I write or the presentations I make. As a white collar crime and ethics speaker, I know full well the effect of choices that one can make. Having made bad choices in my past and spent time in federal prison as a result, I know that you do reap what you sow. Likewise, I understand that good choices can yield outstanding consequences.

Unlucky for Lucky – he will be spending almost 20% of his life in federal prison. Perhaps during that stay, he’ll get a chance to explore whether the short term gain was worth the long term consequences.

Your comments welcome!

Child Sex Crimes Come From Many Walks of Life! Choices, Consequences and Convictions

The US Attorney’s office recently announced two high profile cases involving child pornography and child sex offenses.

First, Metropolitan Police Department Officer, Kenneth Longerbeam, age 39, has pled guilty to traveling to the District of Columbia in order to have sex with a minor in December 2007.

This case tragically illustrates that child predators come from all walks of life, even those sworn to uphold the law” stated U.S. Attorney Taylor. “We must be vigilant in our efforts to protect our children from those who wish to do harm to the most precious, yet vulnerable members of our community.”

“Every member of the Metropolitan Police Department is held to the highest standard of public service. Inherent in every officer’s oath is the promise to protect others. Longerbeam’s actions are contrary to everything the Department stands for, and as a result of his guilty plea I am seeking to suspend him without pay,” said Chief Lanier.

The next portion of this will likely be repulsive to my readers. However, it is necessary in order for parents, and those concerned with the welfare of children, to become aware of the attitudes of child predators. According to the news release:

Longerbeam, the defendant acknowledged that on December 18, 2007, he received a text message from a friend who informed the defendant that he had a boy coming over and that he was going to engage in sex with the child. During the ensuing exchange of text messages, the defendant asked how old the child was and was told that the child was 14 years old. After the defendant’s friend stated that he was going to have sex with the child, the defendant asked whether the boy was “into 3 ways.” When the friend told the defendant that the child was into “3-ways”, the defendant responded: “Kool, when can I join?”

The defendant subsequently traveled from the State of Maryland into the District of Columbia to serve his tour of duty at the Metropolitan Police Department’s Fourth District. When the defendant completed the his tour, he traveled to his friend’s house to have sex with the child. The defendant was arrested by task force members at that time.

The second to be reported here is a guilty plea for possession of child pornography from a former aide to a U.S. Senator. James Michael McHaney, 28, of Washington, D.C., pled guilty today before the Honorable Chief Judge Thomas F. Hogan in the U.S. District Court for the District of Columbia to one count of Possession of Child Pornography.

According to the government’s evidence, on November 30, 2007, a cooperating witness (“CW”) working in an undercover capacity under the supervision of law enforcement agents, went on-line and observed that “Mike,” previously identified as James “Michael” McHaney, was on-line with the screen name of “lilmikierocks.” The CW and “Mike” had previously met and had exchanged images of child pornography. At approximately 12:15 p.m., the CW initiated contact by saying “Hey, what’s up?” The on-line conversation took place using AOL.

After approximately ten minutes, the CW asked “Mike” whether he was going to be at work all day, to which “Mike” responded that he could take a long lunch. CW asked whether “Mike” was interested in engaging in sex with a 13-year-old boy, and “Mike” replied, “I’ll be there.” “Mike” asked whether the child was at the CW’s residence and agreed to meet the CW and the child there. “Mike” then asked whether the CW had a photograph of the child with whom he and the CW were going to have sex and whether the child had “pubes” (referring to pubic hair). When the CW answered “barely any pubes” and “none under his arms” to the latter question, “Mike” replied that was “hot.” “Mike” also agreed to bring “visual aids” on a flash drive that contained both videos and over 1000 images of child pornography. “Mike” said that his hard drive was at another individual’s house being loaded with more images of child pornography.

At approximately 1:15 p.m., law enforcement officers observed James Michael McHaney at the lobby of the CW’s residence, located in Northwest Washington, D.C., and he was placed under arrest. A search incident to the arrest of the defendant revealed a flash drive which contained in excess of 600 images of child pornography. The majority of the pornographic images were of prepubescent males, which the defendant possessed for his personal use, and to distribute to others. The ages of the children appeared to range from approximately three to five years old to young teens. Among the images were movie files depicting prepubescent male children engaging in sexual acts.

Every choice has a consequence! As a speaker on teen ethics and social networking child protection, it is sick to see what and who child predators are. One would never think that a child predator would be an aid to a U. S. Senator or a police officer, but as evidenced above – child predators can be anyone!

While the two guilty pleas show evidence that law enforcement is vigilant, you know that more crime takes place against children than any would like to admit. However, parents need to take an interest in knowing how the new playground for sexual predators works and how to protect children from those predators.

Comments are welcome!