Credit Card Fraud Earns Julia N. Bell Prison and Substantial Restitution! Comments by Fraud Speaker Chuck Gallagher

May 7, 2008

Wow…every choice has a consequence.  Every presentation I make that statement is made.  And, sure enough it is true!

Take, for example, Julia N. Bell.  Seems that she went shopping, took vacations, and ate in restaurants.  She did what normal people do every day.  The only difference is that she did all of these things using the credit card of the company she worked for. 

Now, most would think that when the bill came it, such a simple fraud would be caught.  But alas…no.  Seems that Bell was the office manager.  So, not only did she use the card for her personal gain, but she paid the card from the company’s funds that she controlled.

Guess she thought as long as she controlled it…no one would notice.

Now in order for most white collar crimes to exist there has to be three things: (1) need; (2) opportunity and (3) rationalization.  While I can’t speak to #1 or #3 – the clear lack of internal controls allowed for #2 to work in Bell’s favor.  As a white collar crime and fraud speaker, more times than not it is #2 that has the greatest potential to either allow or prevent white collar crime.

In Bell’s case, she was sentenced in federal court for wire fraud.    United States District Judge Cameron McGowan Currie sentenced Bell to 21 months in prison and ordered her to pay more than $140,000.00 in restitution.

If you know Julia N. Bell, feel free to comment.  My guess is that she is a nice lady who got caught up in her own illusion.  Now she will find that nothing she bought will be worth the time she will spend in prison.

White Collar Crime Speaker – Chuck Gallagher – signing off…


Fraud and Tax Evasion – Carol Irene Estep Sentenced to Prison! White Collar Crime in Virginia

March 21, 2008

Seven plus years in federal prison is no fun! Yet, for her fraudulent activities that is exactly what Carol Estep, age 54, of Hurley, Virginia got. “This defendant made one false statement after another, all in the name of greed,” U.S. Attorney John Brownlee said today. “In order to line her own pockets, Ms. Estep stole money from disabled individuals who were truly in need of financial assistance.”

As a white collar crime speaker, I often state that Every choice has a consequence. In the case of Estep her choices have significant consequences not only to herself but others she was associated with. Not only was a fraud committed by Estep – her son, Timothy Carl Ling, age 30, and Herman Scott Ling, age 67, her ex-husband were involved in the several frauds committed. Herman Scott Ling was sentenced to five years probation.

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The charges to which Timothy Carl Ling, Estep, and Herman Scott Ling pleaded guilty to centered around numerous fraudulent schemes. These schemes included a mail fraud scheme in which the family defrauded the Virginia Consumer Services Fund and received money to which they were not entitled by falsely claiming that Timothy Carl Ling was a quadriplegic. The Virginia Consumer Services Fund and Clinch Independent Living Services, Inc., which provides funding and services to disabled individuals so that they may live a more independent life, purchased a specially equipped van and built ramps at Estep’s home based upon the pair’s fraudulent representations that Timothy Carl Ling was a quadriplegic. According to testimony presented at the sentencing hearing, the agencies spent more than 50 staff hours and more than $14,000.00 assisting Timothy Carl Ling and Estep, money and time that could have been used to help the 2,000 other individuals with disabilities serviced in Buchanan, Dickenson, Russell, and Tazewell Counties by these agencies.

Timothy Carl Ling had previously pleaded guilty to Social Security fraud in which he admitted that he was fabricating his quadriplegia in order to avoid being sent to prison for probation violations pending in Buchanan County, Virginia. I must admit in writing about many white collar crime issues, I haven’t run across someone that creative. Faking a medical condition to avoid prison is gutsy and, no doubt, will result in significant prison time when sentencing arises.

Additionally, Timothy Carl Ling and Estep perpetrated a credit card fraud scheme between the summer of 2005 and October 2006 in which they defrauded five separate credit card companies and incurred a loss to these companies and merchants of $344,465.09. The money was used for shopping sprees, vacations, casino gambling, and to purchase property in both Pikeville, Kentucky, and Hurley, Virginia.

Estep and Timothy Carl Ling were in the process of building two houses in Pikeville, Kentucky. In the course of that scheme, Timothy Carl Ling and Estep used the social security number and date of birth of another family member in order to attempt to hide their criminal conduct and falsely implicate this individual.

What a massive fraud with far reaching tentacles. But, it doesn’t start with what written above – using some of the proceeds of the credit card fraud, Timothy Carl Ling and Estep, both recipients of Social Security disability benefits, established a recycling business in Hurley, Virginia, known as “The Yard,” which posted gross profits of $210,641.93, during 2005 and 2006. The profits from “The Yard” were divided between Timothy Carl Ling, Estep, and others. None of these individuals reported their income to the Internal Revenue Service or the Social Security Administration Office and Timothy Carl Ling, Estep, and Herman Ling actively tried to hide this income from the Internal Revenue Service by engaging in money laundering transactions.

Wow…social security fraud, tax fraud, wire fraud, – this would be a good movie if it weren’t so sad. From personal experience, I speak to group about the Truth about Consequences. In most cases, one can trace back white collar crime to three key components: NEED – OPPORTUNITY – AND RATIONALIZATION.

If anyone is familiar with Estep and the others, and have some insight into the fraud and crimes…feel free to comment. It would be interesting to understand how and why something like this was done.


Credit Card Fraud Earns Man 13 Years In Prison – No Fun Says Business Ethics Speaker Chuck Gallagher

December 23, 2007

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Peter Porcelli II, age 55, will now get to serve 13 years (or almost one-fourth of his life thus far) in prison for credit card fraud. Wonder now if he feels that his ill gotten gains are worth it?

The Associated Press article printed in the International Herald Tribune is reprinted as follows:

A man accused of orchestrating a scheme to sell bogus credit cards was sentenced to 13 years in prison and must repay the nearly $12 million (€8.3 million) he scammed from tens of thousands of U.S. customers.

Peter Porcelli II, 55, who lives in Florida, pleaded guilty in May to all 19 conspiracy and fraud counts related to the telemarketing scheme. U.S. District Judge William Stiehl also ordered Monday that he spend five years on supervised release after his prison term.

Prosecutors alleged Porcelli offered consumers a MasterCard credit card for a fee ranging from $160 (€111) to $500 (€347). Those charged the fee were sent offers that usually were already available for free to the public, along with an “acceptance form” for what amounted to a prepaid card, which cost consumers an extra $15 (€10.41).

Authorities say Porcelli defrauded or tried to dupe at least 165,000 Americans, many with poor credit histories.

The U.S. government alleged that Porcelli carried out the scam through several Florida-based companies beginning in June 2001, using call centers in several states and outside the U.S.

Porcelli has been free on $1 million unsecured bond since shortly after his federal indictment in March.

“Obviously, we are pleased with the sentence,” said Randy Massey, the U.S. attorney who prosecuted Porcelli. “We hope it sends a message that this type of fraud perpetrated on our citizens will not be tolerated.”

Comments from an article from TampaBay.com follow:

“Kathy Visceglie, a Pasco County woman who is the organizer of the homeowners group, said Monday that she was cheered by the stiff sentence handed Porcelli but unhappy that he gets to spend the holidays at home before reporting to prison.

Because Porcelli is recuperating from shoulder surgery, the judge said he could complete his rehabilitation and begin his sentence after 60 days.

“Mr. Porcelli didn’t have that kind of charity for the people whose homes he was taking last year,” said Visceglie. “The holidays for those who lost their homes were ruined.”

When Porcelli reports to prison he’ll have time to think about his formerly profitable business. He’ll be required to serve 85% of his 13 year sentence. By the time he gets out he’ll be at retirement age as a convicted felon. Likewise, his restitution of $11,886,317 will prove to provide their own financial burdens.

Every choice has a consequence.

I know from first hand experience the consequences of unethical choices.

If you have been a victim of credit card fraud – feel free to comment.

Business Ethics Speaker – Chuck Gallagher – signing off