Peer to Peer File Sharing Program Conviction – Gregory Kopiloff – Sentenced to Federal Prison for Identity Theft!

So many times today we hear about identity theft and how to take precautions to avoid it. The reality is – every choice has a consequence. In the first conviction in the Country – peer to peer file sharing produced a conviction for identity theft. GREGORY KOPILOFF, 35, of Seattle, Washington, was sentenced to 51 months in prison and three years of supervised release for Mail Fraud, Accessing a Protected Computer without Authorization to Further Fraud and Aggravated Identity Theft.

KOPILOFF pleaded guilty in November 2007, admitting he used file sharing programs to invade the computers of victims across the United States to get access to their personal information in tax returns, credit reports, bank statements and student financial aid applications. KOPILOFF used the personal information of more than 50 people to commit his fraud. At sentencing U.S. District Judge James L. Robart called KOPILOFF “…a highwayman in the virtual world… people were traveling by and he was able to seize their asset, their personal identity.”

According to the news release by the US Attorney’s office, KOPILOFF used peer to peer file sharing programs, which are most commonly known for their use in replicating copyright protected music and videos, to commit his fraud. Using peer to peer programs, including “Limewire,” KOPILOFF could “search” the computers of others who were part of the file sharing “network” for federal income tax returns, student financial aid applications, and credit reports that had been stored electronically by other real people on and in their own private computers. KOPILOFF would download those documents onto his own computer, and would then use the identity, and banking, financial, and credit information to open credit accounts over the Internet, in the names of the other real people whose identities he had stolen. KOPILOFF would make fraudulent online purchases of merchandise, have it shipped to various mailboxes in the Puget Sound area, and then would sell the merchandise for about half its retail value. KOPILOFF also used personal information he obtained by more traditional methods such as stealing mail or taking records from trash cans.

Bethany Pope, of Lake Stevens, Washington described at sentencing how she and her family were victimized in December 2006. KOPILOFF had made nearly $4,000 in charges on a credit card he obtained in Pope’s name. It took weeks working with the store, credit bureaus and the FTC to resolve the matter, and all the while Pope was worried she would have to pay the charges. “How do you explain to a 5 and 9-year-old about identity theft and why this impacts the gifts that Santa brings,” she said. “It was a really hard Christmas for them last year.” Pope says being an ID theft victim has permanently changed her. “I don’t have the same trust in people that I used to,” she said.

As an ethics speaker, I hear across the country people being concerned about identity theft and how to avoid it. Security experts have long warned that such programs could also enable criminals to access sensitive personal and corporate information on computer hard drives. One problem is that LimeWire and other programs automatically configure firewalls to view the programs as trusted, so external users can evade many security programs when accessing someone else’s computer, according to investigators.

According to the Seattle Times, to illustrate how criminals try to exploit such security holes, Boback conducted a demonstration during Thursday’s news conference at the U.S. Attorney’s Office in Seattle. Using his company’s technology, he showed — in real time — searches being conducted on peer-to-peer networks. As the searches were entered, they scrolled rapidly along the screen of his laptop. Many clearly concerned music files and pornography, but interspersed were scores looking for files that contained terms such as “password” and “medical billing.”

Every choice has a consequence. My next comment will not be popular, but where those defrauded victims? Most would say yes – my take – no. If you allow peer to peer software on your system – programs such as LimeWire then you are opening yourself up to trouble. While they may not have deserved the outcome, they contributed to the outcome – hence they are not victims.

Health Care Fraud – Two Texans Sentenced of Federal Prison – Comments by White Collar Crime Speaker Chuck Gallagher

You do reap what you sow. Lloyd McGriff, a Dallas, Texas area physician is currently serving a 16 month sentence for Medicare health care fraud. Now it looks like he’ll be joined by his co-conspirators – Udo Johnny, owner of Metropolitan Home Medical Equipment and Emmanuel “Bob” Edet owner of Medicare Supplies.

Johnny pled guilty to conspiracy to commit health care fraud and pay illegal remunerations. In October, his co-defendant Edet pled guilty to the same offense. As part of their guilty pleas, Johnny and Edet admitted to conspiring with others to pay illegal kickbacks to Lloyd McGriff, M.D., a physician in Dallas.

Johnny and Edet admitted that from September 2002 through August 2003, they intentionally caused, and participated in the submission of fraudulent claims to Medicare for payment of power wheelchairs and accessories. Johnny and Edet admitted that they paid $200 for each Certificate of Medical Necessity (CMN) that Dr. McGriff provided to their companies. Dr. McGriff falsified each CMN to ensure that, if scrutinized, Medicare would allow payment for the medical equipment. Dr. McGriff executed 257 fraudulent CMN’s that allowed Johnny and Edet to bill the Medicare program for K0011 power wheelchairs and accessories. Over the 11- month period, Johnny and Edet submitted more than $1.7 million in claims to Medicare. Medicare paid both Johnny and Edet $904,946.62 based on the fraudulent CMNs and claims.

Sentenced to 37 months in federal prison and restitution of $458,541.67 – Johnny will have time to consider whether the crime and short term gain was worth the long term pain he will experience in prison. Likewise, Edet will have the same opportunity as he was sentenced to 30 months in prison and restitution of $446,404.95.

Every choice has a consequence. As a white collar crime and business ethics speaker, I speak from first hand experience about the truth about consequences. Reality is – no one escapes the consequences of their choices. While the these three avoided their consequences for a time – they did not avoid the consequences all together. Prison is no fun and will prove to be a dramatic change from their prior activities. You do reap what you sow.

White Collar Crime Speaker – Chuck Gallagher – signing off…