White Collar Crime Update – Week ended April 16, 2010

As the week draws to a close here are some of the items sure to make headlines in the arena of White Collar Crime:

Costa Rica-Based Business Opportunity Fraud Operator Sentenced to 115 Months in Prison by Miami Judge – full story here.

Dilraj “Rosh” Mathauda was sentenced to a term of 115 months in prison and five years of supervised release for illegally operating a series of Costa Rica-based business opportunity fraud ventures.

To fraudulently induce others to purchase the business opportunities, Mathauda and his co-conspirators made, and caused others to make, numerous false statements to potential buyers. Potential purchasers were falsely told that the companies were established years earlier, had a significant number of distributors across the country, and had a track record of success. Potential purchasers were referred to references who told false tales of their success as business opportunity owners. Through these and other misrepresentations, purchasers of the business opportunities were led to believe that they would likely earn substantial profits.

In addition, Titus misappropriated funds given to him by elderly or incapacitated clients who provided him with income intended to be held in trust and took steps to conceal those uses from those who inquired about the management of the trust. Trial evidence showed that Titus failed to make payments for the trust clients’ basic medical and housing needs. Titus engaged in a similar scheme to defraud involving real estate closing funds he held in trust.

Former transit agency official in Cleveland sentenced to 8 years for corruption – full story here.

A former project manager with Cleveland’s mass transit agency was sentenced to more than eight years in prison for corruption.  He was convicted of demanding bribes for contracts with the Greater Cleveland Regional Transit Authority and steering cleaning work to his wife’s business. She was sentenced to nearly two years for lying to the FBI.

Amerifirst Executive Executive, Jeffrey C. Bruteyn, found guilty in securities fraud scheme that targeted Senior Citizens – see full story here.

Following a week-long trial a federal jury has convicted Jeffrey Charles Bruteyn, formerly the managing director of the now-defunct Dallas-based AmeriFirst Funding Corp. and AmeriFirst Acceptance Corp., on charges stemming from his role in fraudulent securities offerings.  He faces a maximum statutory sentence of 20 years in prison and a $5 million fine, per count, and could be ordered to pay restitution. Bruteyn, who is in federal custody, will be sentenced by Judge Lynn on July 23, 2010.

The government presented evidence at trial that Bruteyn’s scheme raised more than $50 million from more than 500 investors living in Texas and Florida, many of whom were retired and all of whom were looking for safe and secure investments. In connection with the sale of securities, Bruteyn misled, deceived and defrauded investors by misrepresenting, and by failing to disclose, material facts concerning the safety of the securities. Bruteyn personally met with investors and he also arranged for his salesmen to sell the securities.

For those that follow my work – this sounds surprising like what is taking place in the BizRadio scandal that is currently unfolding.

Tennessee woman, Robin Smith Lankford, Admits to Falsifying Cancer Diagnosis to Obtain Insurance Benefits- see full report here.

According to court documents, on July 16, 2008, Lankford mailed to Loyal American Life a “Statement of Claim” that falsely represented that she had been diagnosed with ovarian cancer and fraudulently claimed insurance benefits. Shortly thereafter, she mailed to Loyal American Life various false medical records that she had fabricated that falsely stated that she had been diagnosed with and had been receiving treatment for ovarian cancer. Lankford’s fraudulent misrepresentation to Loyal American Life that she had been diagnosed with ovarian cancer induced Loyal American Life to send Lankford a $100,000 check which she deposited into her personal bank account.

She faces up to 20 years in prison.

Real Estate Investor, Disbarred Lawyer, Troy A. Titus, Sentenced 30 Years for Massive Fraud Schemes – see full story here.

On December 18, 2009, a federal jury in Norfolk found Titus guilty of 33 fraud-related charges after a four-week trial. According to court documents and evidence at trial, Titus was a lawyer practicing in Virginia who also conducted investment seminars focusing primarily on real estate and estate planning. Titus approached clients or seminar participants and induced them into investing money with him to purchase and rehabilitate real estate, promising to return the money at a later date with a high rate of interest. However, Titus obtained many of the real properties involved through fraud or transferring the properties into trusts controlled by him. Instead of using the funds as promised, Titus directed the investment income toward paying business or personal expenses, backfill investment losses, and at times to make token payments or repay previous investors.

In addition, Titus misappropriated funds given to him by elderly or incapacitated clients who provided him with income intended to be held in trust and took steps to conceal those uses from those who inquired about the management of the trust. Trial evidence showed that Titus failed to make payments for the trust clients’ basic medical and housing needs. Titus engaged in a similar scheme to defraud involving real estate closing funds he held in trust.

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