Mark Steven Szekely sentenced to prison

February 7, 2015

Mark Steven Szekely (54, Ponte Vedra) to nine years in federal prison for wire fraud. The Court also entered a money judgment in the amount of $454,972.65, the traceable proceeds of the offense, and ordered him to pay restitution to his victims in the same amount. Szekely pleaded guilty on October 14, 2014.

Mark Steven SzekelyAccording to court documents and testimony presented during the sentencing hearing, Szekely conducted a scheme to defraud others in which he swindled at least 17 individuals out of $454,972.65. Among the victims were his friends, members of his church, his children’s teachers, and a 17-year-old high school student who had saved money from babysitting. As part of his scheme, Szekely represented that he was an accomplished author with connections to entertainment lawyers in New York City that could assist the victims with copyrighting, publishing, and/or producing their works into Broadway plays or films. In reality, Szekely had no such connections, and instead, fraudulently created a list of fictitious lawyers and other professionals. In addition, several of the victims were defrauded into investing in “annuities” tied to a book Szekely had written and was allegedly being produced into a movie. Court testimony established that Szekely had not worked for approximately 12 years and had supported himself and his family with the proceeds of his fraud.


Christopher Wayne White Guilty of Mortgage Fraud

February 6, 2015

A Broward real estate broker was sentenced to 41 months in prison, three years’ supervised release and ordered to pay $4,029,892, in restitution to victims in three separate fraud cases.

Mortgage FraudChristopher Wayne White, 44, of Fort Lauderdale, Florida, pled guilty on November 21, 2014 in Case No. 14-60283-CR-Dimitrouleas to one count of wire fraud. According to documents filed with the court, White made numerous false statements to the mortgage lender in connection with the purchase of a luxury home on Sea Island Drive in Fort Lauderdale. According to court records, White inflated his bank account balances, income, deposit and assets to fraudulently induce the mortgage lender to issue a mortgage loan in excess of $4.9 million dollars. The property was subsequently foreclosed by the lender resulting in substantial losses.

In Case No. 14-60282-CR-Dimitrouleas, White pled guilty on November 21, 2014 to six counts of wire fraud. According to court documents, White was a licensed real estate broker and owner and operator of the Christopher White Group in Fort Lauderdale. White obtained multiple real estate deposits in excess of $750,000 via wire transfers involving properties in Broward County from individuals and refused to return the escrow deposits. Subsequently, the Secretary of Florida’s Department of Business and Professional Regulation ordered an emergency suspension of White’s real estate broker’s license.

In Case No. 14-60216-CR-Dimitrouleas, White pled guilty on November 21, 2014 to three counts of making material false statements to U.S. Citizenship and Immigration Services. According to documents filed with the court, these statements were included on White’s April 16, 2014, application for naturalization submitted to the U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services. White made the following material false statements in his naturalization application: (1) that he had never claimed to be a U.S. Citizen; (2) that he had never committed, assisted in committing or attempted to commit a crime or offense for which he was never arrested; and (3) that he had never failed to support his dependents.


Cynthia Head – former Church Treasurer sentenced to Prison for Embezzlement Scheme

February 5, 2015

Cynthia Head, 51, of Brookfield, MO was sentenced to 21 months in prison for embezzling funds from the Brookfield Church of the Nazarene by writing unauthorized church checks to herself and making unauthorized withdrawals from the church’s bank Church Embezzlementaccount. She was also ordered to pay restitution of $192,000.

As part of the embezzlement scheme, Head also made unauthorized purchases with church checks at local Walmart stores of such items as computers, cameras, and vacuum cleaners only to then return the purchased items for cash. Head’s fraud scheme began in September of 2007 and lasted until October of 2013 and netted approximately $192,000 in fraudulent proceeds which Head used for her own personal benefit. As Treasurer, Head held a position of trust within the Brookfield Church of the Nazarene and this position of trust significantly contributed to the commission and concealment of the fraud.


Out of Luck! Christopher Luck sentenced to prison for Securities Fraud

February 4, 2015

Christopher Luck was sentenced yesterday to 130 months in prison, and ordered to pay $33,222,148.82 in restitution for his role in a securities fraud, announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.

Luck pleaded guilty on July 21, 2014, to one count of conspiracy to commit mail and wire fraud, one count of mail fraud, and one count of securities fraud. According to the plea agreement, Luck admitted that he made false and misleading statements to investors in order to cause them to invest in the GLR Growth Fund, an investment fund managed by his investment company, Geringer, Luck, and Rode LLC. Luck admitted that at the end of April 2009, his partner, John Geringer confessed to Luck that Geringer had been falsifying the Growth Fund’s trading records for several years. Instead of terminating the Growth Fund, or reporting Geringer to the authorities, Luck admitted that he began to recruit investors by making false and misleading statements to them, including that the Fund had a positive historical performance, and that the Fund made diversified equity trades.

Through his guilty plea, Luck acknowledged that these false and misleading statements to investors were necessary in order to cause new investors to invest and existing investors to maintain their investments or invest more money. Luck admitted that if he was truthful with potential investors after Geringer’s confession, new investors would most certainly choose not to invest, and that new investor money was critical to keeping the Growth Fund afloat. Luck also admitted that this new investor money was used to pay Luck’s salary and bonus payments. In total, from May 2009 through the end of the Growth Fund in 2012, Luck defrauded investors out of over $33 million.

Luck, 58, of Scotts Valley, California, was indicted by a federal grand jury on December 20, 2012. He was charged with conspiracy, mail, wire, securities fraud, and money laundering, all related to his fraudulent conduct at Geringer, Luck, and Rode, LLC.


John M. Moore sentenced to Prison for Filing False Tax Returns

February 4, 2015

A tax preparer, John M. Moore, 53, was sentenced to 78 months in federal prison for filing false tax returns that cost a Kansas company more than $744,000.

Tax Fraud1Moore pleaded guilty to one count of filing a false tax return and one count of wire fraud. In his plea, he admitted a company he owns, Accent Payroll Services (APS), was hired to provide payroll processing services for Tytan International L.L.C. of Lenexa, Kan. From 2008 to 2010, APS was responsible for paying the wages of Tytan’s employees, withholding employment taxes, filing Tytan’s employment tax returns on Internal Revenue Service form 941 and paying withheld employment taxes to the IRS.

Moore transferred more than $2 million in employment tax withholdings from Tytan’s bank account to his company’s bank account. However, he only paid the IRS approximately $1.3 million. To keep Tytan from receiving notices from the IRS that taxes were not paid, Moore gave the IRS an address for Tytan at a post office box he controlled.

“These victims trusted Mr. Moore to properly remit their taxes, but instead he used their funds for his own purposes. Unfortunately, these victims are left holding the bag,” said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation. “Businesses who utilize a third party for paying their payroll taxes must realize that if the taxes aren’t paid, they are ultimately responsible for the tax liability. The IRS will work with victims to set up payment plans or possibly reduce penalties.”


Steven Metro – Indicted for Securities Fraud

February 3, 2015

A federal grand jury indicted the managing clerk of the New York office of a prominent, international law firm for his alleged participation in a multi-year insider trading scheme that netted more than $5.6 million in illicit profits, New Jersey U.S. Attorney Paul J. Fishman announced.

securities fraudSteven Metro, 40, of Katonah, New York, is charged by indictment with one count of conspiracy to commit securities and tender offer fraud, one count of securities fraud, and one count of tender offer fraud.

According to documents filed in this case and statements made in court:

From 2009 to 2013, Metro, who was then the managing clerk of the New York office of Simpson Thacher & Bartlett LLP (the “Law Firm”), one of the nation’s premier mergers and acquisitions firms, repeatedly provided material, nonpublic information to his friend and former law school classmate, Frank Tamayo, 41, of Brooklyn, New York.  The inside information divulged by Metro to Tamayo related to corporate transactions, such as mergers and acquisitions or tender offers, in which the law firm represented a party or financial advisor to the transaction. As the firm’s managing clerk – a litigation-related function – Metro did not personally work on most of the corporate transactions at issue. In most instances, Metro allegedly stole the inside information by scouring the firm’s computer system using search terms such as “merger agreement,” “bid letter,” “engagement letter,” “due diligence,” as well as client names, client-matter numbers, or combinations thereof.

Metro then divulged the inside information to Tamayo in person, usually meeting at a bar, coffee shop, or other location near their respective workplaces in midtown Manhattan.  During such meetings, Metro provided Tamayo inside information pertaining to, among other things, the names and/or ticker symbols of the companies whose securities should be purchased, the general timing of the planned deals, and information related to how the deals would affect the issuers’ stock price once announced. Tamayo generally would write the security’s ticker symbol on a small piece of paper or napkin and commit to memory any pricing/timing inside information provided by Metro.

After Tamayo received the inside information from Metro, Tamayo would meet with Vladimir Eydelman, 42, of Colts Neck, New Jersey, a professional stock broker. Tamayo usually would meet Eydelman near Eydelman’s workplace, such as at the large clock in New York City’s Grand Central Terminal, where Tamayo would pass the inside information on to Eydelman. Tamayo would show Eydelman the paper or napkin on which Tamayo had written the ticker symbol of the company whose securities should be purchased. After Eydelman memorized the ticker symbol, Tamayo then would chew the paper or napkin until it was destroyed.

After receiving the inside information provided by Metro, whom Eydelman knew as Tamayo’s source at a law firm, Eydelman purchased securities for himself, family members, friends, and/or clients, including Tamayo. Eydelman quickly sold the shares and covered any positions once the relevant deal was publicly announced and the stock price rose.

Throughout the course of the five-year scheme, Tamayo reinvested the approximately $7,000 in profits that Metro made on the first deal and updated Metro on the running balance of his profits from the insider trading scheme. As of October 2013, by which time the conspirators had traded ahead of at least 13 planned corporate transactions, Metro’s share of the profits had reached approximately $168,000.  Metro sought to cash out his share of the accrued profits from the insider trading scheme, pressing Tamayo to “liberate some cash” during a meeting in January 2014.  Eydelman paid approximately $7,000 in cash to Tamayo in February 2014, with the expectation that Tamayo would use the cash to compensate Metro.
Tamayo, Metro and Eydelman netted more than $5.6 million in illicit profits over the course of the five-year insider trading scheme.

The conspiracy count with which Metro is charged carries a maximum potential penalty of five years in prison and a fine of $250,000. The securities and tender offer fraud counts carry a  maximum potential penalty of 20 years in prison and a fine of $5 million.


Robert Burton of Pinnacle Financial Consulting LLC sentenced to Prison – Investor Fraud

February 2, 2015

The former owner of a Lawrence-based financial services company was sentenced today for defrauding investors, filing false tax returns on behalf of certain clients, and filing his own false tax returns.

Investor FraudRobert Burton, 37, the former Managing Director of Pinnacle Financial Consulting LLC, Pinnacle Strategic Investments LLC, and the Pinnacle Asset and Capital Management Group LLC, was sentenced by U.S. District Court Senior Judge Mark L. Wolf to four years in prison, three years of supervised release, and ordered to pay $159,500 in restitution to the fraud victims, as well as $271,640 to the Internal Revenue Service.  In August 2014, he pleaded guilty to three counts of securities fraud, two counts of procuring false tax returns, and three counts of subscribing false tax returns.

Burton acted as an investment advisor to at least some of his clients and promised to invest their money in various securities, including stocks, mutual funds, and in a debt portfolio allegedly managed by Pinnacle.  In some instances, he promised to return the principal invested within approximately 30 days, along with an interest payment equal to 100% of the amount invested.  Burton did not invest the money as promised, did not make the promised payments and, in some instances, provided investors with checks that ultimately bounced.

Through Pinnacle, Burton also provided tax preparation services and, in at least two instances, prepared, and filed, false tax returns on behalf of his clients.  Finally, although Burton derived substantial income through the operation of Pinnacle, he failed to identify that income on his own tax returns and admitted to filing false tax returns for the 2008 through 2011 tax years.


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