James Arthur Ray – Sweat lodge leader sentenced to two years in prison

November 18, 2011

According to stories that have been released on major media outlets – James Arthur Ray has been sentenced to two years in prison for his involvement in several deaths in a sweat lodge incident.  Excerpts from a CNN report are shared below:

(CNN) — A judge sentenced a self-help expert to a total of two years in prison Friday for his role in the deaths of three people in a 2009 sweat lodge ceremony in the Arizona desert.

The judge instead imposed three two-year terms, to be served concurrently.

Ray and his attorneys asked for probation, but Judge Warren R. Darrow said the evidence shows “extreme negligence on the part of Mr. Ray.”

“A prison sentence is just mandated in this case,” he said.

During the trial, prosecutors argued that Ray’s recklessness caused the deaths of Kirby Brown, 38, of Westtown, New York; James Shore, 40, of Milwaukee; and Lizbeth Marie Neuman, 49, of Prior Lake, Minnesota. At least 15 others who took part in the sweat lodge ceremony became ill.

The lodge, made of willow trees and branches and covered with tarpaulins and blankets, was heated to a perilously high temperature, causing the participants to suffer dehydration and heatstroke, prosecutors alleged.

Ray tearfully told the court that he has “no excuse” for what happened that October day or since.”At the end of the day, I lost three friends, and I lost them on my watch,” he said. “And whatever errors in judgment or mistakes I made, I’m going to have to live with those for the rest of my life.”

Ray asked Darrow to sentence him to probation, saying he is no threat to society and promising never to conduct another sweat lodge ceremony again.

“It pains me beyond belief to be here today, with the best of intentions gone wrong,” he said.

Before Darrow announced his judgment, prosecutor Sheila Polk characterized Ray as a dangerous “pretender” who had cast himself as a victim of an overzealous prosecution.

And relatives of the victims told Darrow that Ray has done little to redeem himself and that he deserved the maximum possible sentence of nine years in prison.

“My heart’s been ripped out. My life has been blown apart, and the pieces are yet to land,” said Virginia Brown, Kirby Brown’s mother.

As I share in my seminars – “Every Choice Has A Consequence” – based on the published facts and circumstances – what do you think about the James Ray sentence?  YOUR COMMENTS ARE WELCOME!


Victimized by a Ponzi Scheme – Thomas Mitchell sentenced to 9 years in prison, but what about the Victims?

August 19, 2011

What is the impact when a fraud is perpetrated and the possibility of recovery is dismal?  How do people deal with the emotional impact of distrust created when scammed?  Those questions are central in the recent sentencing of Thomas Mitchell who ran a 15 year Ponzi scheme targeting 150 retired train and bus drivers in L.A.  Sentenced to 9 years in prison, Mitchell will be facing his consequences, but what about his victims?

Excerpts from a CNN article state the following:

Even after the man who stole 67-year-old Frances Wills’ entire life savings was sentenced to nine years in prison, she still didn’t feel as if justice had been served.

Mitchell will begin his sentence on Sept. 23. But it may take longer for Wills — who still can’t sleep at night or stop crying — to move on.

“I’m still hurting inside,” she said. “Nine years is not enough for what he’s done to all these people. We want him to suffer like we suffered.”

“It looks like there’s just no money to be had, so there’s nothing we can do,” said Anand. “It’s sad because many of these people are in terrible, terrible circumstances.”

“I used to get up at 2:30 a.m. to get to work driving my bus,” said Wills, who lost the $156,000 she had saved from her job as a Long Beach Transit bus driver for 23 years. “And then for him to just take it out of greed — I want to know: What did he do with our money?”

The judge at Mitchell’s sentencing invited victims to tell their stories in court. One woman took 30 pages of notes with her and didn’t leave until she was completely done. Others were such emotional wrecks they couldn’t stand to address the court.

“The whole courtroom was full of tears,” said Wills. “All Mitchell did was sit there and look stupid. There were a lot of people in there who wanted to slap him upside the head.”

According to court documents, Mitchell promised his clients returns of up to 12.5% on their investments to lure them in, but would then only invest “a miniscule fraction” of their money. He would make monthly payments to keep his clients from worrying — and which many used for living expenses.

Notice one of the biggest evidences that a fraud is happening is an UNREASONABLE PROMISE.  In the lectures I give on fraud prevention, I generally share that victims fall into the PIT.  That means the first part of the PIT is an Unreasonable PROMISE.  Mitchell promised his clients (victims rather) returns of up to 12.5%.  That’s a NEON sign flashing SUCKER I’m ABOUT TO ROB YOU!

But Mitchell meanwhile used the rest of the money his clients had invested for himself. By the end, he didn’t even have enough money to pay his victims the monthly stipends.

Wills relied on those monthly checks from Mitchell. When they stopped coming, she had to sell her home and move into a mobile home. She can’t afford to pay her bills or fix her broken-down car. And she had to apply for food stamps a few weeks ago and now asks her children to help her out.

Some of the other victims duped by the Ponzi scheme include Bobby Bradley, a 70-year-old retired bus driver who lost his life savings of $215,000 and is now looking for work again.

An MTA service attendant, Charles Black, said he watched 23 years of his life go down the drain when he found out his entire retirement stash — $250,000 — was gone.

Mitchell’s own cousin, Robbie Gilbert — who lost $150,000 in retirement savings to Mitchell — wasn’t able to make it to the sentencing. But she said the fact that he will be behind bars for the next nine years is enough to ease her anger for the time being.

There are three components of most frauds from the perspective of the VICTIMS:  (1) Promise; (2) Illusion and (3) Trust.

Let’s look at what was reported and see if we can find those components.  ILLUSION – according to reports Mitchell used funds from other victims to pay earlier victims creating the Illusion that there were actually returns from investments taking place.

Ah, but the hook that gets VICTIMS in – in the first place – is the PROMISE.  Here the promise was a return (plus principle) of up to 12.5%.  I can’t speak to why…but in every case it seems clear that “investors” seem to gravitate to something that “others can’t have” – some call it greed.  I think, rather than greed, we have a psychological desire to be above average and if someone offers something that seems real that is “off limits” to the average guy…then we are more apt to bite.  Guess it’s DNA to want what we can’t or shouldn’t have…just think of the apple.  (Some readers will get that!)

Now, let’s be honest.  A PROMISE of a 12.5% return is not reasonable and ANY PROMISE of a guaranteed return should give us a moment to pause and investigate further!

The funny part about a Ponzi Scheme is that the ILLUSION that supports the PROMISE actually creates the TRUST needed to perpetuate the scheme.  More times than not, the “investors” VICTIMS actually are the ones that turn others on to the “scam” without having any knowledge that they are luring others into the trap!

The Ponzi scheme only collapses when the source of funding dries up.  Most of the time, the scheme gets so large and top heavy (the need for additional funding becomes so great) that it collapses on itself.

So…the FBI suggests the following which is worth repeating:

So how can you avoid being victimized by a Ponzi scheme? A few tips:

  • Be careful of any investment opportunity that makes exaggerated earnings claims.
  • Exercise due diligence in selecting investments and the people with whom you invest—in other words, do your homework!
  • Consult an unbiased third party, like an unconnected broker or licensed financial advisor, before investing.

If you were victimized by Thomas Mitchell and have wisdom to share with others about how to avoid being scammed, please share!

YOUR COMMENTS ARE WELCOME!


Convicted Ponzi Fraudster Nevin Shapiro provides a Tsunami of Evidence against the University of Miami Football program…

August 17, 2011

Talking about going from “FAN” to folly…Nevin Shapiro is squealing like a stuck pig in his allegations regarding his actions and wrong doing in the University of Miami football program.

Feeling abandoned by the U of M program in his conviction for his massive Ponzi Scheme…Shapiro is now speaking out loudly from his Atlanta prison cell suggesting the U of M program might face the “death penalty” as his hand.  The question is – is any of this real?

In an interview:

Shapiro said for the first time that not only was it players who sought favor with him, but also Hurricanes football staff was involved. According to Shapiro’s attorney, Maria Elena Perez, the information first came out under questioning by federal officials and bankruptcy trustee attorneys.

Shapiro is at the heart of an NCAA investigation and his involvement with the school dates back to 2001-2002. Shapiro’s attorney has claimed that he provided UM players with the use of a yacht and various other favors.

Shapiro said he gave money, cars, yacht trips, jewelry, televisions and other gifts to a list of players including Vince Wilfork, Jon Beason, Antrel Rolle, Devin Hester, Willis McGahee and the late Sean Taylor of the Washington Redskins.

Shapiro also claimed he paid for nightclub outings, sex parties, restaurant meals and in one case, an abortion for a woman impregnated by a player. One former Miami player, running back Tyrone Moss, told Yahoo! Sports he accepted $1,000 from Shapiro at about the time he was entering college.

QUESTION:  What do you think about Nevin’s allegations?  Is he trying to gain favor by cooperating in a federal investigation (and thereby reduce his sentence)?  Do you think there is validity to his allegations?

COMMENT: One interesting aspect to Shapiro’s claims is that they would be consistent with the behavior of a Ponzi fraudster.  Most fraudsters tend to flaunt their ill gotten wealth as the reality is what they have is valueless to them since it cost nothing to begin with.  Most importantly, the fraudster is flaunting money in order to meet a need or feed ego.  So…not having the facts (which will come out) I have a sense that Shapiro’s claims may, at least in part, be true.

Interesting links:

https://chuckgallagher.wordpress.com/2010/05/11/another-ponzi-scheme-nevin-shapiro-from-the-fbi-website-no-less/

http://content.usatoday.com/communities/campusrivalry/post/2011/08/miami-athletes-cash-gifts-ponzi-scheme/1

http://galvestondailynews.com/ap/ee9797/

http://www.miamiherald.com/2011/08/17/2362972/accused-ponzi-swindler-nevin-shapiro.html

http://www.miamiherald.com/2011/08/17/2364074/questions-arise-as-um-reels-from.html

YOUR COMMENTS ARE WELCOME!


Ex-Virginia Lawmaker’s Unethical behavior earns Phillip A. Hamilton a 9 1/2 year prison sentence.

August 15, 2011

Ex-Lawmaker to Go to Prison in Old Dominion U. Case

August 12, 2011, 2:58 pm

Phillip A. Hamilton, a former state lawmaker in Virginia, was sentenced today in federal court to serve 9½ years in prison for arranging money to start a teaching center at Old Dominion University in 2007 and then becoming director of the center, the Richmond Times-Dispatch reported. Mr. Hamilton was convicted in May on federal charges of bribery and extortion. He is to remain free until September 19, when he must report to prison authorities.

The above story reported in the Chronicle of Higher Education shows an interesting abuse of power for an elected official and a clear breach of ethics.  The Richmond Times-Dispatch reports as follows:

Phillip Hamilton, 59, a Newport News Republican who was once vice chairman of the House Appropriations Committee, was found guilty of bribery and extortion by a federal jury in May for arranging funding for a center at Old Dominion University in 2007.

In exchange for obtaining the $500,000 appropriation to start the Center for Teacher Quality and Educational Leadership, Hamilton, a career educator, was hired as its director and paid $80,000 over two years.

Choices and consequences.  An unethical use of power resulting in an $80,000 a year job equals 9.5 years in prison.  What a powerful price to pay for such a poor reward.  It goes to show that rarely if ever does the reward justify the consequence.

Hudson said reaching his decision on a sentence for Hamilton was the hardest he has had to make in 13 years as a judge. He said he took into account Hamilton’s clean record, his good works as an educator and legislator.

But he told Hamilton he had betrayed the public trust, “as well as put a stain on the great deliberative body you were elected to serve in.”

Hamilton’s arrangement with ODU was exposed by news reports in 2009. He was defeated for re-election later that year, ending more than two decades in the Virginia general Assembly.

The loss of public trust cost Hamilton his elected position, job and now earns him 9.5 years in prison.  Again, a clear indication that often the consequences of choices are far greater than the short term gain enjoyed by unethical actions.

If you know Hamilton – feel free to comment on his motives behind the actions reported above.

YOUR COMMENTS ARE WELCOME.


Birdie Leroy Revis pleads Guilty to Multi-Million Dollar Health Care Fraud Scheme… Choices and Consequences…

August 9, 2011

HOUSTON – An accused recruiter in a multi-million dollar health care fraud scheme scheduled for trial on Monday, has instead pleaded guilty to conspiracy to violate the Anti-Kickback Statute, United States Attorney José Angel Moreno announced today. Birdie Leroy Revis, 60, of Houston, pleaded guilty before United States District Judge David Hittner this morning to conspiracy to violate the Anti-Kickback Statute. Trial had been scheduled to begin with jury selection on Monday, Aug. 8, 2011.

Revis was a recruiter for Sefan Medical Supply (Sefan), a durable medical equipment provider, located in Houston. Based upon the joint investigative efforts of the agencies comprising the Medicare Fraud Strike Force into a $2.8 million scheme to defraud Medicare by Sefan, evidence was obtained proving that Revis’ role in the scheme was to provide Medicare beneficiary information to Sefan. Sefan, in turn, then billed Medicare for medically unnecessary durable medical equipment and supplies which were either not provided to Medicare beneficiaries or a lesser product from what was billed to Medicare was provided. The information was provided on a prescription form for arthritis kits. All the kits included a knee adjustment with air chamber, rigid frame back brace, elbow with joint, ankle gauntlet, flex glove with elastic finger, heat lamp with stand and a wrist brace. Sefan would order these items for both the left and right side. If the beneficiaries received any items, they did not receive the rigid brace items billed to Medicare, instead they would receive neoprene sleeves, which was not covered by Medicare.

Revis provided to Sefan information for more than 686 beneficiaries for which Sefan paid Revis approximately $400 per beneficiary for a total of more than $353,000. With the information provided by Revis, Sefan billed Medicare for more than $2.8 million worth of claims for arthritis kits and was paid more than $1.7 million for those fraudulent claims.

Revis remains on bond pending sentencing, which is set on Nov. 2, 2011. Revis faces a maximum of up to five years in prison to be followed by up to a three-year-term of supervised release and a fine of up to $250,000 for the kickback conspiracy conviction.

The owner of Sefan and the physician whose signature was on the prescriptions have also been convicted following their respective pleas of guilty to conspiracy to commit health care fraud. Kate Ose Olear, the owner of Sefan, was sentenced to 57 months in prison on Feb. 10, 2011, by United States District Judge David Hittner. John Edward Perry III, the physician, pleaded guilty in June 2010. He remains on bond pending his sentencing on Oct. 21, 2011, before United States District Judge Gray H. Miller.

The investigation leading to the charges in this case was conducted by the Medicare Fraud Strike Force comprised of agents with the Department of Health and Human Services, Drug Enforcement Administration Diversion Division, Texas Attorney General Medicaid Fraud Control Unit, United States Railroad Retirement Board and the FBI. Assistant United States Jennifer Lowery and Special Assistant United States Attorney Justin Blan are prosecuting the case.


Ex-Detroit mayor Kilpatrick released from state prison – what next?

August 6, 2011

Still facing a host of federal charges – Southlake, Texas resident and former Detroit Mayor Kwame Kilpatrick walked out of prison a free man after serving just over 14 months of a 5-year sentence at a state facility in Jackson, Michigan.

Kilpatrick had been serving time for violating probation related to a 2008 case against him. He is to check in with a Texas parole officer on his arrival as he is required to serve two years of parole.

As you might remember , Kilpatrick pleaded guilty in September 2008 to two felony counts of obstruction of justice stemming from his efforts to cover up an extramarital affair.  Following his plea, he spent more than three months in jail before being released in February 2009 on five years of probation.  However, in May 25, 2010, Wayne County Judge David Groner sentenced Kilpatrick to five years in prison for failing to report assets that could be used to pay the restitution, a violation of his probation.

Kilpatrick will be subject to usual restrictions for parolees, plus an order to pay back what his lawyer called $860,000 in restitution.

YOUR COMMENTS ARE WELCOME


Texas duo – Silverio Garza, jr. and Joel Javier Garza sentenced to federal prison for embezzlement! Choices and Consequences…

August 6, 2011

Silverio Garza Jr., 60, and Joel Javier Garza, 42, both of  Rio Grande City, Texas, have been sentenced to prison for embezzlement, United States Attorney José Angel Moreno announced.

U.S. District Judge Randy Crane sentenced Garza Jr. and Garza to two years and four months, respectively, in federal prison without parole at a hearing yesterday afternoon in federal court in McAllen.

Garza Jr. and Garza (not related) pleaded guilty on June 7, 2011, to embezzlement – admitting they embezzled and converted property belonging to the United States government over a two-year-period between May 2007 and August 2009. Garza Jr. was the area operations manager for the Falcon Dam Power Plant, while Garza was the superintendent of the plant. The embezzlement was accomplished with the use of a government International Merchant Purchase Authorization Credit (IMPAC) card issued to Garza.

In deciding their sentence, Judge Crane considered the amount of embezzled property and the position held by each defendant at the Falcon Dam and power plant project. Following completion of their term of imprisonment, the court ordered each defendant to serve a three-year-term of supervised release. As part of their sentence, the court ordered Garza Jr. to  pay $31,521.40 in restitution within 30 days, while Garza must pay $64,600.45 in restitution with $10,000 due within 30 days and the balance to paid during the term of supervised release in equal monthly installments.

The defendants have been out on bond since their Dec. 2 and Dec. 3, 2010, arrests. They were allowed to remain on bond pending their surrender to the United States Marshals Service on Aug. 15, 2011, pending transfer to a U.S. Bureau of Prisons facility where they will serve their sentence.