Tax Fraud Scheme earns Georgia man Prison Sentence

February 2, 2015

A Georgia man, Sirhon “Ron” Rivers, 40, was sentenced in federal court to eight years and six months in federal prison without parole for a wire fraud scheme in which he used the identity information of deceased persons to obtain more than $2.3 million in tax refunds from several states.  The court also ordered Rivers to pay $2,358,612 in restitution.

Tax FraudOn Sept. 14, 2014, Rivers pleaded guilty to one count of wire fraud, one count of aggravated identity theft, one count of conspiracy to commit money laundering and one count of conspiracy to commit wire fraud and aggravated identity theft.

Rivers admitted that he unlawfully obtained $547,000 from the Missouri Department of Revenue from January 2008 to August 2012 by filing fraudulent tax returns. Rivers used the same scheme in others states—including Kansas, Alabama, Arizona, Connecticut, Delaware, Georgia, Idaho, Louisiana, Michigan, Minnesota, New York, North Carolina, North Dakota, Oklahoma, Rhode Island and Virginia—to unlawfully acquire a total of $2,365,617 in fraudulent state tax refunds.

Rivers obtained personal identification information—including names, Social Security numbers, and dates of birth—from deceased persons. He submitted state tax returns using that information, adding false and fraudulent information such as employment and wages earned. State tax returns were submitted electronically, with the refunds electronically transferred to bank accounts that Rivers opened at several financial institutions.


Georgia Man – Anthony Christou – Convicted of Massive Mortgage Fraud Ponzi Scheme!

February 25, 2008

Christou was a gambler, in more than one way. But every choice has a consequence! It is like the law of gravity. The bold statement above is factual – you will reap what you sow. The question is here – what will the final consequence be for Anthony Christou, age 57, who was just convicted on charges of wire fraud and money laundering relating to an investment fraud scheme.

According to a Department of Justice News Release:

“This defendant personally met with dozens of victims, telling each that he would use their money to underwrite legitimate mortgages. He knew at the time that he had no intention of using his investors’ money legitimately, but rather that their funds would be put to use in keeping a massive Ponzi scheme afloat,” said United States Attorney David E. Nahmias. “Mr. Christou racked up more than $29 million in fraudulent investment in just two years, a significant portion of which was diverted to his gambling activities. The jury’s verdict after only five hours of deliberation and the likelihood of a long prison sentence in this case should send a clear message that this type of fraud will not be tolerated.”

Note: Christou has been convicted but not yet sentenced.

Between January 2004 and January 2006, CHRISTOU, who was at the time president of his own mortgage company, “Atlas Mortgage Inc.,” engaged in a scheme wherein he and others acting on his behalf solicited individuals, including business associates, personal friends and members of his church, to invest with him. CHRISTOU informed his investors that he would use their money to underwrite safe and secure “bridge loans” for wealthy individuals who were selling a house and needed funds to use as a down payment on newly acquired real property or to assist real estate developers with their short term capital needs. CHRISTOU entered into short term promissory notes with his lenders, the terms of which were dictated by
CHRISTOU, to memorialize their investment.

CHRISTOU falsely represented that his investors’ money would be secured by his borrowers’ equity and would be repaid, with substantial interest, in a short period of time. Between January 2004 and January 2006, CHRISTOU took in more than $29 million from investors, purportedly to fund bridge loans. Instead, he used his investors’ funds to repay his principal and interest obligations to earlier investors and, unbeknownst to his later investors, laundered more than $7 million of their assets to fund his gambling activities at casinos in Nevada, Mississippi, and New Jersey.

So how can such a fraud be accomplished? Easy! First there have to be three components present for a fraud like this to work. As a white collar crime speaker, I speak to groups nationwide about ethics, fraud and how to avoid it in your organization. What gives me the credential – training and experience. As a former CPA – trained with a Masters in Accounting – I am also (regrettably) a white collar criminal – having been convicted and spent time in federal prison for a ponzi scheme just like the one shown above.

The components of the crime: Need, Opportunity and Rationalization! Obviously, Christou needed the money. He needed it to fund his addition – gambling – and pay off the former folks defrauded. As long as he could pay them off he could continue the scheme. It appears that he made his own opportunity by using his skills in sales to convince others to invest in him. Rationalization – well I can’t begin to speak to his mindset. In my case, however, I convinced myself that it was a loan and even set up fake loan documents to support that illusion.

You cannot avoid the consequence of the choices you make. Consider wisely your choices and know that – stated again – Every choice has a consequence.


Fraudulent Appraisals Earns Georgia Man Time In Prison – Comments by Business Ethics Expert Chuck Gallagher

January 16, 2008

A Decatur, Georgia man – Darryl L. Cooper, age 27, was sentenced to one year and six months for a mortgage lender fraud scheme. Cooper created fraudulent appraisals reflecting completed construction for homes that were incomplete.

Beyond his 18 month sentence, he will have three years of supervised release and must pay restitution of $4,720,500. That’s a big ole number. However, his active sentence was reduced due to his cooperation in the investigation.

Jeffrey Alan Teague was a builder/coconspirator. Teague was sentenced to 15 years 8 months in prison and ordered to pay over $7,800,000 in restitution. The mortgage fraud blog reports:

According to information presented in court, Cooper was recruited by coconspirator/builder Teague of ”The Pacific Group, Inc.,” d/b/a ”Value Homes Ltd.,” to prepare fraudulent appraisals reflecting photographs and $5 million in appraisal valuations for 15 completed houses in the Greenleaf Subdivision of Forsyth County, when Teague had not completed the construction of these homes. A California lender relied on Cooper‘s fraudulent appraisals which reflected completed construction to make $4.7 million in mortgage loans secured by these properties, which in fact had no value whatsoever. Many of the borrower/purchasers from California, New York and Florida also relied on the Cooper appraisals, rather than inspecting the properties before closing on their loans.

United States Attorney David E. Nahmias said of the case, “This case highlights the problems created by mortgage fraud in which the appraiser conspired with the builder to misrepresent that construction on homes was complete, compounded by out-of-state ‘investors’ who sign for loans without inspecting the properties. The partially built houses in this case may be subject to condemnation, as the portions completed were not built to code, leaving mortgage lenders with little security for their loans and ‘investors’ with nothing to resell, and neighborhoods full of vacant and uninhabitable houses.”

Every choice has a consequence. According to the FBI collusion is one of the key factors in mortgage fraud and in this case it cost both of them.

Keep in mind that part of the guilty plea was conspiracy. While I’m not an attorney, therefore my characterization might be lame, but conspiracy is easy to prove as it is the intent to commit the crime. How many times do you seen guilty verdicts when conspiracy is involved? Plenty.

Chuck Gallagher - The Ethics Expert

As a business ethics speaker, I often speak to financial institutions on fraud – and these days – mortgage fraud is the hot topic.  To view my demo video click here:  youtube
Question:

Have you ever been a victim of mortgage fraud or known someone who committed mortgage fraud? Perhaps you’d be interested in sharing some of that experience.