Identity Theft – Providencia Llanos, Providensia Llanos and Providencia Allison sentenced to Prison

January 30, 2015

Providencia Llanos, a/k/a Providensia Llanos, a/k/a Providencia Allison, 36, of Miami Gardens, was sentenced to 81 months in prison, followed by three years of supervised release, and was ordered to pay $42,828 in restitution.

Identity theftLlanos previously pled guilty to one count of access device fraud, in violation of Title 18 United States Code, Section 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18 United States Code, Section 1028A(a)(1).

According to court documents, on March 18, 2014, IRS-CI and USSS special agents conducted a search warrant at Llanos’ residence where they found numerous prepaid debit cards, multiple computers, and printed lists and notebooks containing the names, date of births, and social security numbers of at least 3,192 individuals. Eighty-six tax returns were filed from the IP address registered to the residence where Llanos lived using the names and social security numbers of individuals listed on the printed lists and notebooks. Numerous taxpayers stated that they did not know Llanos, that they did not authorize Llanos to possess their names, date of births, and social security numbers, and that they did not authorize Llanos to file federal tax returns for the 2013 tax year.

Antonio Stone – GUILTY! More Time in Prison for Identity Theft. Comments by Fraud Speaker Chuck Gallagher

September 19, 2008

There are some people who learn from there mistakes and others, it seems, can’t learn!  Apparently Antonio Stone is yet too young to get the concept that crime does not pay.

But, let’s spend a moment with a simple fraud lesson.  It takes three things to truly create an effective fraud:  (1) need; (2) opportunity and (3) rationalization.  Now of the three – OPPORTUNITY – is critical.  Without the big “O” it is not practical or possible to pull off the fraud.

Case in point – Antonio Stone in 2002 pled guilty to possession of counterfeit checks and received 50 months in federal prison. He served that time and was on supervised release.  It will soon be obvious that he didn’t get it – the message that every choice has a consequence didn’t sink in.  I guess almost four years in federal prison wasn’t enough for Antonio.

The ringleader in a counterfeit check and identity theft operation, Antonio Desmond Stone, 32, of Dallas, was sentenced today by U.S. Chief District Judge Sidney A. Fitzwater, to a total of 105 months in federal prison.  Stone, was convicted at trial in June of conspiracy to commit bank fraud, multiple counts of bank fraud and aggravated identity theft.  Stone was sentenced to 105 months in prison.


Well…how did this seasoned former inmate accomplish his new fraud.   Ah…it was the OPPORTUNITY that made it possible.

As the ringleader of the counterfeit check and identity theft operation, Stone recruited bank insiders to obtain confidential bank customer information and used this information to produce counterfeit checks, produce phony ID’s to pass the checks, and recruited others to pass the counterfeit checks.
Three of Stone’s co-defendants, Williana Sharee Johnson, Natasha Toinette McGruder and Meoshia Christine Guidry, pled guilty to bank fraud, and have been sentenced. Johnson was an employee of First Convenience Bank and provided customer account information through others to Stone.
As you read this you might assume that Stone and other co-defendants made off with massive amounts.  I honestly don’t know, but since Stone was ordered to pay restitution of $26,482 one might assume that he got all that time for very little money.
As a business ethics and fraud speaker (see my web site) I often speak to groups about how simple it is to get caught up in behavior that can ultimately have profound consequences.  Most white collar crimes start with a simple wrong that compounded can send one to prison.  In this case, it appears that Antonio Stone made a clear choice.

Mortgage Fraud Speaker Chuck Gallagher Comments: Mortgage Fraud in California – Iftikhar Ahmad Pleads Guilty!

May 13, 2008

Like many of my readers, I lived through the Savings and Loan crisis several decades ago and it wasn’t pretty. My fear – with the magnitude of potential mortgage fraud rising to the surface, what we might see in the future could dwarf the problems that were created by the S&L crisis.

And another man pleads guilty! IFTIKHAR AHMAD, 36, of Stockton, Calif., pleaded guilty to two counts of mail fraud and one count of engaging in monetary transactions involving criminally derived property. The charges relate to a widespread mortgage fraud scheme centered in the Stockton, California area.

After an extensive investigation conducted by the Federal Bureau of Investigation and the Internal Revenue Service–Criminal Investigation (IRS-CI), Ahmad saw the light and knew that a guilty plea would be best for him considering the circumstances. investigation remains ongoing.

But how did this massive fraud get uncovered?

Rebecca Wood knew something was wrong when she got a call from Washington Mutual about a late house payment. Her response helped the FBI uncover millions of dollars in mortgage fraud.

According to property records, someone using Wood’s identity bought two houses in Stockton in 2003. When the loan for one of the homes went bad, Washington Mutual called Wood.

According to the US Attorney’s office, AHMAD admitted that from July 2003 through October 2005, he participated in a scheme to defraud Long Beach Mortgage, a wholesale lender, in connection with the sale (and in one instance resale) of 10 residential real properties primarily located in the Stockton, area. Between July 2003 and January 2005, AHMAD, through a company called I & R Investment Properties, LLC, fraudulently sold (and in one instance resold) 10 residential real properties, obtaining in excess of $1.5 million in loan proceeds. In each of the transactions, the purchaser financed the property with money borrowed from Long Beach Mortgage.

The scheme involved the use of some straw purchasers— purchasers who lent the name and credit to real estate transactions in which they in fact had no interest. The scheme also involved false statements on loan documents, including those that related to income and occupation, and undisclosed payments by AHMAD of the down payment on behalf of the purchasers.

The use of false documents is common among mortgage fraud convictions. However, based on my experience speaking about mortgage fraud to realty associations and mortgage groups, it is clear that many people somehow feel that simple “financial positioning” is acceptable. More times than not, on close examination – “financial positioning” can be construed as fraud.

In this case, AHMAD is the fourth defendant to plead guilty as a result of the investigation in the case. On December 17, 2007, JOHN NGO, 27, of San Ramon, California, a former Senior Loan Coordinator for Long Beach Mortgage, pleaded guilty to perjury for falsely stating in testimony before the grand jury that he had not received money from a mortgage broker who referred borrowers to Long Beach Mortgage, including borrowers involved in transactions with AHMAD, when in fact he had received more than $100,000 from the mortgage broker.

On March 31, 2008, MANPREET SINGH, 24, of Stockton, entered a guilty plea to a single count of mail fraud. She admitted as part of her plea that she had participated as a straw purchaser and borrower in connection with two properties that she purchased from I & R Investments in late 2004 and early 2005. She further admitted that AHMAD paid her in excess of $22,300 for her participation in the scheme. Clearly here a case of fraud for money!

On April 17, 2008, JOSE SERRANO, 44, of Stockton pleaded guilty to a single count of mail fraud. As part of his plea, SERRANO admitted that AHMAD had paid SERRANO to recruit straw purchasers, and that AHMAD and SERRANO caused several purchasers to be paid for participating in the scheme.

“This prosecution begins to bring into focus the ways that fraud occurred in the subprime lending market in the Stockton area in the 2003 to 2005 time frame,” said United States Attorney Scott. “False representations were made in loan documents; down payments were secretly made “This prosecution begins to bring into focus the ways that fraud occurred in the subprime lending market in the Stockton area in the 2003 to 2005 time frame,” said United States Attorney Scott.

“False representations were made in loan documents; down payments were secretly made by the seller on behalf of borrowers; buyers and recruiters were paid to participate in the scheme; and a loan coordinator working for a wholesale subprime lender was paid by a mortgage broker handling the transactions. The investigation continues.”

Every choice has a consequence! Considering the wide spread incidences of mortgage fraud, I suspect that this case is just the tip of the iceberg when it comes to what has been done and how many are yet to be discovered. As a mortgage fraud speaker, I am finding more and more that people are just now beginning to understand how wide spread mortgage fraud is and how easy it can be to be caught up in a mortgage fraud investigation.

Identity Theft – How Did They Get My Credit Card Number? Bobby Noy Soulinthong Sentenced to Prison for “Skimming”

May 2, 2008

Almost a year ago I was at the annual convention for members of the National Speakers Association. As a professional speaker, I attempt to make that each year. This year held something special for me – something unexpected. Upon return home to Dallas, Texas I found that I had become a victim of identity theft.

How? How could it be that my debit card was being used in San Francisco to make purchases at a wig shop. I’ll admit that while my hair is receding, I don’t need a wig. Fortunately, I was able to stop the process before it got out of hand. But the question still remained – HOW?

I later found out I was a victim of “skimming”. So what’s that you might ask?

Well, a Texas, man, Bobby Noy Soulinthong, 26, who pled guilty to his role in a credit card “skimming” scheme, was sentenced to 18 months in prison. Other defendants, charged in separate indictments but involved in the same scheme, have also pled guilty and have been sentenced. Dung Ba Nguyen, 28, of North Richland Hills, Texas, and Bryan Nanthathongthip, 24, of Dallas, were each sentenced earlier this year to 12 months in prison. All three defendants were ordered to pay restitution.

Nguyen admitted purchasing stolen credit card account information that had been “skimmed” from restaurant customers, and admitted having more than 100 credit card account numbers stored on his personal “thumb drive.” Soulinthong and Nanthathongthip admitted purchasing goods from GameStop and Target with counterfeit debit cards, which they knew had been electronically encoded with a stolen account number.

The account numbers were stolen by a method known as “skimming.” Individuals working at North Texas restaurants surreptitiously recorded account numbers and other account information from the magnetic strips on restaurant customers’ credit and debit cards with a small hand-held device known as a “skimmer.” After purchasing the stolen account information, Nguyen encoded it onto other credit cards. Soulinthong and Nanthathongthip used the re-encoded cards to purchase consumer goods that they could then re-sell. The restaurant customers whose credit card information had been stolen would receive the bills for those purchases.

According to – Skimming – Thieves use tiny hand-held credit card readers to collect the information on your credit card’s magnetic strip. Skimming is common in restaurants and stores where you turn over your credit card to pay. When a skimming device is full of hundreds of credit card numbers, these numbers can be sold or used to create fake credit cards. Skimming devices can also be placed over the normal card reader on an ATM to steal your data when you try to withdraw money.

As a white collar crime speaker, often I am asked questions about how to protect yourself against identity theft. Many of the methods used can be avoided, but “skimming” is tough to avoid. When you go to the restaurant, you give your card to pay your bill and, hence, are relying on the honesty of the restaurants employees. Should one of them have been Soulinthong you may have been a victim of identity theft.

If you’ve been a victim of identity theft and have any comments or helpful hints to avoid this dreaded form of white collar crime – FEEL FREE TO COMMENT.

White Collar Crime Speaker – Chuck Gallagher – signing off…

Car Repair and Identity Theft – Charles E. Perry, Jr. Pleads Guilty! Just When You Thought It Was Safe To Get Your Car Fixed…

April 16, 2008

As host of Wise Choices – The Great Advice Radio Show on CBS Radio – KRLD, I had a guest on the program talking about identity theft. Certainly, that’s a hot topic – especially when the methods of stealing and using identities has changed in the past ten years. Often, however, we don’t think of the obvious when it comes to how and where our ID’s can be stolen.

Christopher Bianez – member of the crime prevention unit of the Plano, Texas police department was my guest on the show and he outlined three things that help when thinking of identity theft: Deter, Detect and Defend.

In the case of Charles E. Perry, Jr. it would have been hard to use Christopher’s first suggestion as Perry used the trust people placed in him for the simple task of auto repair to steal their identities. Other than paying with cash (which few people do these days and I don’t blame them), when Perry’s customers paid – with their credit cards – Perry took advantage of the opportunity.

According to the US Attorney’s news release: Perry used his auto repair businesses, previously located in Norfolk, Hampton, and Virginia Beach, to conduct assorted, fraudulent criminal activities in violation of federal law. Perry regularly stole the identities and credit card numbers of customers seeking vehicle repairs. He then used this data in various ways. For example, Perry applied for credit card merchant accounts and business cash advances in customers’ names. Perry also used customers’ identities to open dealer accounts with vendors and then ordered parts and supplies for which he never paid. Perry also fraudulently charged customers’ credit card accounts for repairs that were either improperly or never performed. The known losses are estimated at more than $500,000.

According to the – Perry used several business names, including Dog & Pony Automotive Inc., T & S Transmissions Inc., T & C Automotive Inc., Hampton Tune LLC, Hampton Tune Inc., Hampton Tune and Lube Inc., Hampton & Tune Inc., Cornerstone Mechanical, Corner Stone Mechanical Inc., Seven Cities Automotive Inc., J & P Cycle Repair, J & P Automotive & Cycles, Python Custom Cycles, S & P Transmissions, Tidewater Automotive Center, ATL Motor Mate and JLP Enterprises, according to court records.

Perry faces a maximum sentence of 20 years in prison and a fine of $1,000,000 on the wire fraud charge, and a mandatory, consecutive sentence of two years in prison on the aggravated identity theft charge.

Every choice has a consequence. As a white collar crime and business ethics speaker, I speak from first hand experience about the truth about consequences. Reality is – no one escapes the consequences of their choices. While Perry may have enjoyed the money for a time and avoided the consequences – he did not avoid the consequences all together. Prison is no fun and Perry is facing several years plus substantial restitution for his conviction. Likely he will serve time and that will prove to be a dramatic change from his prior activities. You do reap what you sow.

If anyone reading has any background on Perryfeel free to comment as I study the behaviors and backgrounds of those convicted of white collar crime. Likewise, if you were a victim…please share your experience so other may benefit.

White Collar Crime Speaker – Chuck Gallagher – signing off…

Former FEMA Employee – Robert G. Davis – GUILTY of Identity Theft!

April 7, 2008

Every choice has a consequence! In this case, stolen identities of over 200 people will likely get Robert G. Davis, age 44, a stint in federal prison.

Davis plead guilty to stealing personal identification information of over 200 persons, fraudulently opening over $150,000 in credit accounts with various retailers in the names of the victims, and ordering merchandise for himself on these accounts.

According to the US Attorney’s office,between December 2003 and November 2007, Davis stole the identities of over 200 people (“ID Theft Victims”) while working as a clerk at various mortgage companies operating in the District of Columbia area and as a FEMA Human Services Specialist who worked with the victims of natural disasters. Davis stole the identities of the ID Theft Victims without the knowledge of his employers by copying their personal information from loan applications the ID Theft Victims had submitted to FEMA or the mortgage companies. Approximately 30 of the 200 ID Theft Victims had their identities stolen from FEMA, an agency of the Department of Homeland Security after they had submitted their personal information as part of their applications for disaster relief.

After obtaining the ID Theft Victims’ personal information, Davis called various retailers impersonating the ID Theft Victims and fraudulently opened credit accounts in their names. Davis used the identities of at least 74 ID Theft Victims to open accounts with The Home Shopping Network, Ginny’s Inc., Shop NBC, QVC, Inc. (collectively, “Retailers”), and he fraudulently obtained credit with these Retailers in excess of $156,257. Impersonating the ID Theft Victims, Davis fraudulently ordered dozens of items that were delivered to his home, or other addresses near his home. The items ordered by Davis included gold and diamond jewelry, designer watches, digital cameras, DVDs, Dyson vacuum cleaners, gourmet food (including steaks, lobster, and seafood), lingerie, clothing, jackets, DVD players and other electronic items. After obtaining these items, Davis would either keep them for personal use or pawn them at pawnshops in and around the Washington, D.C. area. Between December 2003 and November 2007, Davis pawned dozens of items and obtained over $24,084 in cash from the pawnshops in exchange for the items he fraudulently obtained from the Retailers.

Davis is facing between 2 and 32 years in prison. His sentencing date is June 20, 2008.

Every choice has a consequence. As a white collar crime and business ethics speaker, I speak from first hand experience about the truth about consequences. Reality is – no one escapes the consequences of their choices. While Davis may have looked good for a time and avoided the consequences – he did not avoid the consequences all together. Prison is no fun and Davis is facing many years plus substantial restitution for his conviction. Likely he will serve time and that will prove to be a dramatic change from his prior activities. You do reap what you sow.

If anyone reading has any background on Davisfeel free to comment as I study the behaviors and backgrounds of those convicted of white collar crime.

White Collar Crime Speaker – Chuck Gallagher – signing off…

White Collar Crime – A Week in Review – 1st Week April, 2008. Comments by Business Ethics Speaker Chuck Gallagher

April 4, 2008

Spring has sprung and it seems that white collar crime is in full bloom – either in the form of indictments, convictions or sentences. As a business ethics and white collar crime speaker, I say on a regular basis – Every choice has a consequence. The following demonstrate the effect of choices and consequences.

MONTGOMERY, ALABAMA: Seems that John W. Goff decided to use his license and influence to defraud others and then made false statements about his actions. A federal grand jury charged Goff with embezzlement, mail fraud and making false statements. The US Attorneys News Release states: the indictment alleges that from on or about January 1, 2002, through on or about April 30, 2003, Goff, while the sole owner of The Goff Group and the program manager and a fiduciary for XL Speciality Insurance Company (“XL Speciality”) and Greenwich Insurance Company (“Greenwich”), collected worker’s compensation insurance premiums for these insurance companies, but willfully failed to remit to XL Speciality and Greenwich their share of the premiums. Instead, Goff kept the premiums and spent the money for his own personal expenditures, including his exorbitant salary, lavish lifestyle, corporate aircraft, and real estate investments, and the expenses of The Goff Group.

The indictment alleges that Goff unlawfully and illegally withheld approximately $3,000,000 in premiums from XL Speciality and Greenwich. The indictment further provides that Goff unlawfully and illegally withheld approximately $25,000 in commissions he owed to independent agents located throughout the Southeast who Goff had used to sell worker’s compensation insurance policies issued by XL Speciality and Greenwich.

An indictment is merely an accusation of a criminal offense and the charged defendant is
presumed innocent until and unless proven guilty.

SACRAMENTO, CALIFORNIA: I guess there was just not enough profit in death, as former funeral director, Mark Davis, was indicted and arrested for 21 counts of bank fraud. Apparently, Davis formerly with Sacramento Memorial Lawn, stole a series of checks totaling more than $85,000 that had been submitted by customers and deposited them into his bank account at U.S. Bank. Keeping in mind innocence till guilt is proven, Davis plead not guilty.

PHOENIX, ARIZONA: If you’re going to prepare tax returns you need to do them right (at least to the best of your knowledge!) Guess that’s something that Maria Orona missed as a federal grand jury indicted her on charges of Aiding and Assisting in the Presentation of False and Fraudulent Individual Income Tax Returns.

The Indictment also indicates that between March 21, 2006 and April 4, 2006 the Criminal Investigation unit of IRS conducted three separate undercover operations in which IRS agents posed as clients in order to have Orona prepare their Federal Income Tax Returns for the year 2005. The Indictment states that in each undercover contact, Orona prepared tax returns in which she falsely reduced the tax due. These undercover contacts resulted in false returns being prepared that collectively claimed a total of approximately $44,853 in false expenses and a reduced tax liability of approximately $3,406. The undercover agents did not provide Orona with any indication that they had incurred any of the false deductions that were placed upon the completed income tax returns.

While Orona is innocent till proven guilty, I would suspect in this case guilt might not be hard to prove. Wonder if defrauding the government was worth an active prison sentence which could follow a guilty verdict?

MIAMI, FLORDIA: People get older and have health needs – that’s true. But, just because there are needs doesn’t mean you can get by with fraud. Every choice has a consequence and in these cases the consequences are severe. Michael Labrada, 27, of Miami was sentenced to a 97 month prison term and Miguel Castillo, 42, of Miami, to a 57 month prison term for their participation in a multi-million dollar health care fraud and money laundering scheme. OUCH!

Labrada was sentenced in connection with two criminal cases. In the first case, Labrada was convicted of conspiring with Angel Castillo, Jr. to commit health care fraud by serving as a straw owner of a medical equipment company known as JJ & D Medical Equipment, Inc. The company submitted more than $6.8 million dollars in bogus claims and received approximately $1.6 million in payments. In the second case, Labrada was convicted of money laundering charges in connection with a $2.3 million laundering scheme orchestrated by his co-defendant, Angel Castillo, Jr.

Miguel Castillo was also convicted of related health care fraud and money laundering conspiracy charges. In addition to serving as a straw owner of a medical equipment company, Miguel Castillo collected hundreds of thousands of dollars in fraud proceeds from check cashers at the direction of his cousin and co-conspirator, Angel Castillo, Jr.

Last month, Angel Castillo, Jr. was sentenced to a 235 month term in connection with his ownership of more than eight durable medical equipment companies in Miami during 2005 and 2006.

The companies collectively submitted in excess of $48,000,000 in false claims by way of two Miami based medical billing companies. WOW!

WEST PALM BEACH, FLORIDA: Indicted for a host of crimes related to Mortgage Fraud, it seems that Gregory Claude Brown has also been charged with failing to timely file his federal income tax returns for the 2001 through 2005 tax years, and with income tax evasion with regard to his 1998, 1999, and 2001 through 2005 taxes. According to the superseding indictment, Brown failed to pay his 1998, 1999, and 2001 through 2005 income tax liabilities, which totaled approximately $214,299, and engaged in affirmative acts of evasion, including concealing his income and assets, filing false documents with the Internal Revenue Service, and placing funds and property in the names of nominees.

Should Brown be convicted, he faces up to one year in prison on the failure to timely file federal income tax return counts, and up to five years on the tax evasion count. The conspiracy to commit wire fraud, wire fraud, and mail fraud charges each carry a maximum penalty of 20 years imprisonment.

MARIETTA, GEORGIA: There always has to be a first. In Georgia this is it for Governor’s Secure Identity Initiative. Seems that AL AMIN PATNI, 47, of Marietta, Georgia, has been indicted by a federal grand jury on charges of misuse of a social security number, aggravated identity theft, and illegal reentry. According to the indictment, PATNI, a Pakistani national who illegally reentered the United States after a previous deportation, misused the social security number of someone else to open up a checking account.

It seems that it is alway something simple that is the trigger to catch someone doing wrong. Needless to say, opening that account might have been one of the most costly mistakes of Patni’s life.

ST. TAMMANY PARISH, LOUISIANA: I guess Hurricane Katrina just posed too much of an opportunity in a state known for corruption. Joseph Anthony Impastato, for St. Tammany Parish Councilman, (Yes…a public official), age 36 entered a guilty plea to federal bribery through the illegal solicitation and receipt of payments in connection with a Hurricane Katrina debris removal contract, and making false statements in his 2001 federal income tax return.

Impastato was caught on tape related to conversations and meetings in which he gave instructions for how to disburse payments through a convicted co-conspirator to conceal his share. Likewise, he under-reported his income by 34% in 2001. Impastato is facing a two year prison sentence under a plea agreement.

NEW YORK, NEW YORK: DENNIS PILOTTI, a Certified Public Accountant (“CPA”), pleaded guilty today in White Plains federal court to evading his income taxes for the years 2001through 2004 and making false statements to Merrill Lynch Business Financial Services, Inc. (“Merrill Lynch”) in connection with a $5.1 million loan.

As a result of his tax evasion scheme, PILOTTI understated his taxable income by more than $1,226,284 in total, and understated his tax liability by approximately $365,000 for the years 2001 through 2004. PILOTTI faces five years in prison and substantial fines. He is scheduled to be sentenced on July 8, 2008.

ROCKY MOUNT, NORTH CAROLINA: On April 2, 2008 a 45 count indictment was unsealed charging PAMELA D. EVANS, 33; GWENDOLYN P. EVANS, 49; TASHA BATTLE, 28; and BERTHA BATTLE, 28, all of Rocky Mount, North Carolina, with conspiracy to defraud the United States by obtaining fraudulent claims from the Internal Revenue Service.

According to the US Attorney’s news release – from January, 2004, to April 15, 2004, the defendants, while employees of Independent Tax Service located in Rocky Mount, North Carolina conspired to make, and did make, false claims for refunds from the Internal Revenue Service (“IRS”) by filing or causing others to file false 2003 federal income tax returns. It is alleged that the defendants inflated wages and/or withholdings and listed false dependants and/or false dependant information to qualify clients for the head of household filing status and earned income credit in IRS Forms 1040 and 1040A individual tax returns. It is further alleged the defendants sold fraudulent dependent information to some clients so they would qualify for a larger refund and claimed education credits their clients were not entitled to claim.

“As another year’s tax deadline rapidly approaches, please heed the lesson of this case: knowingly falsifying documents filed with the Internal Revenue Service is a criminal act, and once found, will be prosecuted,” stated United States Attorney George E.B. Holding.

As a side note – Wesley Snipes will be sentenced this month for his conviction for failure to file tax returns.

DAYTON, OHIO: Wow…this deserves a post of its own. Nicole Johnson, age 42, of Trotwood, was sentenced to a total of 100 months imprisonment for stealing millions of dollars from her employer and her employer’s company. Johnson stole millions from J.P. Morgan Bank and its customers between June 2001 and July 2005, using her position as Vice President of Operations to steal customer identity information and secure fraudulent lines of credit in their names, and then diverting the borrowed funds for her own personal use. At least 30 customers were affected by the scheme and more than $1 million was transferred into Johnson’s personal accounts during the four-year period.

Johnson’s sentence reflects the severity of the loss to J.P. Morgan Bank and the complexity of the fraud scheme,” said US Attorney Gregory Lockhart. “White collar criminals must be deterred from committing similar offenses.” Johnson was also ordered to pay restitution of more than $2.8 million to J.P. Morgan Chase Bank, pay $1.067 million in taxes to the IRS, and she must serve three years of supervised release at the conclusion of her prison term.

One reasonable question is, once someone finishing an eight year prison term, how or where would they ever get the funds to make the restitution required? You do reap what you sow.

SALEM, OREGON: Facing up to 10 years in prison, Brent Edward Crosson, 36, of Salem, Oregon admitted stealing $925,000 from the Oregon Department of Education (ODOE) between June 2006 and June 2007. The theft occurred while he was employed as Director of Accounting Services for the ODOE.

Now, as a former CPA and convicted felon, I understand now that every choice has a consequence. However, it makes you wonder what he was thinking about? He had to have known that a theft of almost $1,000,000 would go NOTICED! Then again, while in the midst of the crime you don’t think clearly – I know from experience.

PITTSBURG, PENNSYLVANIA: Mortgage Fraud is rampant these days. Five Pennsylvania individuals have pleaded guilty to mortgage fraud charges. Sharon Chamberlain, age 40, of Pittsburgh, Pennsylvania, and Ericka Stanford, age 35, of Carnegie, Pennsylvania, pleaded guilty to Wire Fraud Conspiracy. Stanford also pleaded guilty to one count of Money Laundering. Likewise, Andrea Revak, age 47, of Pittsburgh, Pennsylvania, Aaron McCarthy, age 43, of Pittsburgh, Pennsylvania, and Marlin Sprouts, Jr., age 52, of Uniontown, Pennsylvania, pleaded guilty to a Wire Fraud Conspiracy.

By pleading guilty they may minimize the overall impact of their sentence. However, the law provides for a total sentence of 20 years in prison, a fine of $250,000, or both for all of the defendants except for Stanford, who faces a maximum possible sentence of 30 years in prison, a fine of $500,000, or both.

SURFSIDE BEACH, SOUTH CAROLINA: Young and foolish, that’s how Meghan Renee Morris, age 23, could be described as she pled guilty to unauthorized use of a credit card. While working at Coastline Reporting in Conway between October 2006 and March 2007, Morris used her employer’s personal information to apply for several credit cards, and charged more than $28,000.00 in personal expenses. She then paid the resulting credit card bills by electronically transferring funds out of the employer’s bank account to the credit card companies. She faces up to 10 years in prison.

MEMPHIS, TENNESSEE: It’s tax time and a Memphis woman just got a prison sentence for her efforts to illegally reduce her taxes. Tanisha Burris, 30, pled guilty to filing false claims against the government. From January 2001 until approximately April 2002, Burris conspired with others to file false, fictitious, and fraudulent claims for payment by causing others to file false 2000 and 2001 federal income tax returns claiming refunds with the Internal Revenue Service. The indictment alleges that Burris prepared the returns that claimed larger refunds than the individuals were entitled to receive. The false returns allegedly contained either inflated or completely bogus W-2 forms, false Education Tax Credits, false Schedule C businesses, false Itemized Deductions, false Child Tax Credit, or false Earned Income Credit to boost the refund amounts.

PLANO, TEXAS: Sherman Ted Solomon, 64, pled guilty to one count of conspiracy to distribute Schedule III and IV controlled substances and one count of conspiracy to launder the illegally obtained proceeds, in relation to his operation of an Internet Facilitation Center (IFC) website.

While the crime was more complicated than we have space for here, according to the US Attorney’s news release during the pendency of the conspiracy and while Solomon was a participant in the conspiracy, the government can readily prove that Solomon could reasonably foresee the possession with intent to distribute or the distribution in excess of two million hydrocodone pills. 2,000,000 – an astonishing amount of drugs distributed which will net Solomon seven years in federal prison.

From October 2004 through September 21, 2005, Solomon’s IFC and affiliates received approximately $13,139,535 from Internet customers for the distribution of controlled substances.

So, at age 64, Solomon who should be facing a pleasant retirement will be spending the latter years of his life in federal prison. Speaking from experience, he will certainly have time to reflect on his activity and will, no doubt, come to the conclusion that the short term gain will not be worth the price.

ALEXANDRIA, VIRGINIA: Sentenced to 16 months in federal prison and $650,000+ in restitution, Khalil Salim Arbid, 35, of Washington, D.C., received his sentence for his role in a mortgage refinancing scheme.

Arbid fraudulently attempted to obtain approximately $1,996,131.02, and successfully obtained $670,132.02, through the refinancing scheme. To carry out the scheme, Arbid took ownership of a residential property located in Vienna, Virginia by deed of gift. When Arbid obtained the property, it was encumbered by a pre-existing mortgage loan. Then, on three occasions, he attempted to obtain additional mortgage loans on the property, using the property as collateral. In applying for the loans, he provided the would-be lenders with false documentation. For example, Arbid provided false loan-payoff statements purporting to be from current mortgagees, and false Certificates and Affidavits of Satisfaction purporting to be from prior mortgagees. On one occasion, he successfully refinanced the property and obtained a loan in the amount of $670,132.02. He then arranged for $376,191.87 of the loan proceeds to be misdirected to himself by causing the title company closing the loan to send a check for the proceeds, which were ostensibly to be used to pay off the pre-existing mortgage on the property, to a false address. In reality, the address was a commercial mail drop located in the District of Columbia. The check was endorsed and deposited into a bank account that Arbid had previously opened.

FINALLY – SEATTLE, WASHINGTON: Now this is priceless. How many times have you flown and due to various reasons you felt you would not make your connections? Weather, a mechanical, a delay in one place causes your flight to be delayed – all have happened to those of us who are road warriors. But this story is a fitting end to a week in review.

Seems that KOU WEI CHIU, 32, of Nashville, Tennessee, was sentenced in Seattle to three years of probation, 500 hours of community service, and $81,249 in restitution for the felony offense of False Information and Threats. On July 25, 2007, CHIU, a physician, (yes a medical doctor) arrived at Sea-Tac airport and was late for his flight home to Memphis, Tennessee. The flight was Northwest Airlines flight 980. CHIU made three calls to 9-1-1 from a payphone near the gate. On each call CHIU falsely reported that there was a bomb on Flight 980. During his first call CHIU told the 9-1-1 operator “Flight 980 Memphis. There may be a bomb on board.” After the first call CHIU saw that the call had “no effect” so he made a second call. When that call too had no effect, CHIU made a third call. At that point, the plane returned to the gate. CHIU admits that he made the calls thinking that the plane would be held in Seattle for a few hours while it was searched, which would allow him to get on the plane.

Hum…guess he had never heard of the three strike and you’re out rule. Northwest Flight 980 was grounded for several hours. CHIU was arrested at the airport after passengers who had been nearby identified him to police as the person who was heard calling in bomb threats from the payphone.

At the sentencing hearing Dr. David L. Dunner, the former Director of the University of Washington Center for Anxiety and Depression, told the court that CHIU had stopped taking an anti-depressant in the days before the incident, and that CHIU entered a manic phase that “impaired his judgement.” CHIU told the court he realized “depression is not the common cold,” and vowed he “will be taking medication for the rest of his life. This will never happen again,” CHIU told the court.

Assistant United States Attorney Mike Lang agreed to recommend a probationary sentence after reviewing CHIU’s mental health history, and his history of service to his community. “Dr. Chiu has a true sense of wrongdoing and a desire to make it right,” Lang said. “This defendant can do a lot more good outside of jail than inside.”


Every choice has a consequence. As a white collar crime and business ethics speaker, I speak from first hand experience about the truth about consequences. Reality is – no one escapes the consequences of their choices. Many have tried to avoid consequences for a time but none avoided the consequences all together. Prison is no fun. Serving time will prove to be a dramatic change from the fraudsters prior activities. You do reap what you sow.


White Collar Crime Speaker – Chuck Gallagher – signing off…