Financial Fraud earns Edward Louis Molz, III – aka Frank Sullivan 96 months in federal prison!

August 4, 2011

ETHICS AND WHITE COLLAR CRIME NEWS RELEASE:

Edward Louis Molz, III, aka “Frank Sullivan,” 29, of Plano, Texas, was sentenced by U.S. District Judge Sam A. Lindsay to 96 months in federal prison and ordered to pay $1,074,725 in restitution following his guilty plea in January to one count of wire fraud in connection with a fraudulent advance fee scheme he ran.

In addition, according to the plea agreement, Molz will be ordered to forfeit property that was derived from proceeds traceable to his offense, including funds seized on September 7, 2010, from the 3rd Street Financial LLC account at JPMorgan Chase, as well as a 2007 BMW 650, a 2005 Maserati and real estate located on Cartwright Street in Irving, Texas.

Molz was arrested in September 2010 at his home by FBI agents on wire fraud and mail fraud charges outlined in a federal criminal complaint, and was released on a personal recognizance bond. A federal grand jury returned a six-count indictment the following month charging Molz with four counts of wire fraud and two counts of mail fraud. In March 2011, Molz’s bond was revoked.

According to the factual resume filed in the case, from November 2009 through May 2010, Molz ran a scheme in which he induced small business owners, who were seeking alternative means of financing, to pay a fee to purchase an “aged” corporations. These “aged” corporations purportedly had access to lines of credit that were available to the purchaser.

To carry out his scheme, Molz established 3rd Street Financial, LLC, and, using the assumed name of “Frank Sullivan,” held himself out as its chief financial officer. He marketed 3rd Street Financial through a website and a loose association of financial brokers. He represented to potential purchasers that he had established and maintained a number of “aged” corporations which had been in existence for four to five years and had access to lines of credit between $250,000 and $400,000. For a $3250 acquisition fee, a purchaser could acquire a “Tier 1″ corporation with a minimum line of credit of $150,000. However, for a $6500 acquisition fee, a purchaser could acquire a “Tier 2″ corporation with a $250,000 minimum line of credit.

Molz represented that upon payment of the fees, he could deliver the aged corporation to a purchaser within nine to 12 weeks. He also represented that each “aged” corporation had additional benefits, including established “business trade lines,” a complete financial and business plan, a Dun & Bradstreet listing and three years of valid tax returns. He furnished potential purchasers with false and fictitious documents, including service agreements, testimonials from satisfied purchasers and letters from financial institutions confirming the issuance of lines of credit.

During the time frame mentioned above, approximately 247 individuals mailed or wired money to Molz and he deposited those funds into JPMorgan Chase and Compass Bank accounts. Molz did not deliver any “aged” corporations as promised. Instead, he used the money almost exclusively for his personal benefit, including the acquisition of personal assets and real estate.

YOUR COMMENTS ARE WELCOME


West Virginia Dentist James E. Kirkpatrick, III Sentenced to Prison for Drug Fraud

May 10, 2008

Going to prison for drugs isn’t limited to “so called” drug dealers. An Ohio man was just sentenced to prison for his role in obtaining drugs illegally.

JAMES E. KIRKPATRICK III, DDS, 44, who resides in Belpre, Ohio, was sentenced to eight months in prison for fraudulently obtaining hydrocodone. KIRKPATRICK previously pled guilty in January 2008, to a one-count information. DR. KIRKPATRICK’S office is in Parkersburg, WV. He began practicing in West Virginia after losing his Ohio dental license.

Information related to his Ohio license is here.

The conviction is the result of an investigation conducted by the Drug Enforcement Administration and the Washington County, Ohio, Major Crimes Task Force. The investigation revealed that at least three patients received prescriptions for controlled substances from KIRKPATRICK and then gave some or all of the drugs back to KIRKPATRICK for his personal use. Pharmacy records indicate the patients received multiple prescriptions for controlled substances from KIRKPATRICK in 2006 and 2007.

At sentencing, DR. KIRKPATRICK apologized to one of the patients from whom he attempted to fraudulently obtain hydrocodone following his January 2008 plea of guilty in Federal Court.

Every choice has a consequence. Often, as a speaker, I share that statement with my audiences. But, what is also true is – behavior changes only when the consequences become so significant that you want behavior to change. While losing his Ohio license may not have been directly related to the drug charge that sent Kirkpatrick to prison, certainly prison will be another consequence that will change his life.

Perhaps upon his release, Kirkpatrick can use the experience in a positive way to benefit others.

For now, business ethics and white collar crime speaker – Chuck Gallagher – signing off…