John M. Moore sentenced to Prison for Filing False Tax Returns

A tax preparer, John M. Moore, 53, was sentenced to 78 months in federal prison for filing false tax returns that cost a Kansas company more than $744,000.

Moore pleaded guilty to one count of filing a false tax return and one count of wire fraud. In his plea, he admitted a company he owns, Accent Payroll Services (APS), was hired to provide payroll processing services for Tytan International L.L.C. of Lenexa, Kan. From 2008 to 2010, APS was responsible for paying the wages of Tytan’s employees, withholding employment taxes, filing Tytan’s employment tax returns on Internal Revenue Service form 941 and paying withheld employment taxes to the IRS.

Moore transferred more than $2 million in employment tax withholdings from Tytan’s bank account to his company’s bank account. However, he only paid the IRS approximately $1.3 million. To keep Tytan from receiving notices from the IRS that taxes were not paid, Moore gave the IRS an address for Tytan at a post office box he controlled.

“These victims trusted Mr. Moore to properly remit their taxes, but instead he used their funds for his own purposes. Unfortunately, these victims are left holding the bag,” said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation. “Businesses who utilize a third party for paying their payroll taxes must realize that if the taxes aren’t paid, they are ultimately responsible for the tax liability. The IRS will work with victims to set up payment plans or possibly reduce penalties.”

Steven Metro – Indicted for Securities Fraud

A federal grand jury indicted the managing clerk of the New York office of a prominent, international law firm for his alleged participation in a multi-year insider trading scheme that netted more than $5.6 million in illicit profits, New Jersey U.S. Attorney Paul J. Fishman announced.

Steven Metro, 40, of Katonah, New York, is charged by indictment with one count of conspiracy to commit securities and tender offer fraud, one count of securities fraud, and one count of tender offer fraud.

According to documents filed in this case and statements made in court:

From 2009 to 2013, Metro, who was then the managing clerk of the New York office of Simpson Thacher & Bartlett LLP (the “Law Firm”), one of the nation’s premier mergers and acquisitions firms, repeatedly provided material, nonpublic information to his friend and former law school classmate, Frank Tamayo, 41, of Brooklyn, New York.  The inside information divulged by Metro to Tamayo related to corporate transactions, such as mergers and acquisitions or tender offers, in which the law firm represented a party or financial advisor to the transaction. As the firm’s managing clerk – a litigation-related function – Metro did not personally work on most of the corporate transactions at issue. In most instances, Metro allegedly stole the inside information by scouring the firm’s computer system using search terms such as “merger agreement,” “bid letter,” “engagement letter,” “due diligence,” as well as client names, client-matter numbers, or combinations thereof.

Metro then divulged the inside information to Tamayo in person, usually meeting at a bar, coffee shop, or other location near their respective workplaces in midtown Manhattan.  During such meetings, Metro provided Tamayo inside information pertaining to, among other things, the names and/or ticker symbols of the companies whose securities should be purchased, the general timing of the planned deals, and information related to how the deals would affect the issuers’ stock price once announced. Tamayo generally would write the security’s ticker symbol on a small piece of paper or napkin and commit to memory any pricing/timing inside information provided by Metro.

After Tamayo received the inside information from Metro, Tamayo would meet with Vladimir Eydelman, 42, of Colts Neck, New Jersey, a professional stock broker. Tamayo usually would meet Eydelman near Eydelman’s workplace, such as at the large clock in New York City’s Grand Central Terminal, where Tamayo would pass the inside information on to Eydelman. Tamayo would show Eydelman the paper or napkin on which Tamayo had written the ticker symbol of the company whose securities should be purchased. After Eydelman memorized the ticker symbol, Tamayo then would chew the paper or napkin until it was destroyed.

After receiving the inside information provided by Metro, whom Eydelman knew as Tamayo’s source at a law firm, Eydelman purchased securities for himself, family members, friends, and/or clients, including Tamayo. Eydelman quickly sold the shares and covered any positions once the relevant deal was publicly announced and the stock price rose.

Throughout the course of the five-year scheme, Tamayo reinvested the approximately $7,000 in profits that Metro made on the first deal and updated Metro on the running balance of his profits from the insider trading scheme. As of October 2013, by which time the conspirators had traded ahead of at least 13 planned corporate transactions, Metro’s share of the profits had reached approximately $168,000.  Metro sought to cash out his share of the accrued profits from the insider trading scheme, pressing Tamayo to “liberate some cash” during a meeting in January 2014.  Eydelman paid approximately $7,000 in cash to Tamayo in February 2014, with the expectation that Tamayo would use the cash to compensate Metro.
Tamayo, Metro and Eydelman netted more than $5.6 million in illicit profits over the course of the five-year insider trading scheme.

The conspiracy count with which Metro is charged carries a maximum potential penalty of five years in prison and a fine of $250,000. The securities and tender offer fraud counts carry a  maximum potential penalty of 20 years in prison and a fine of $5 million.

IRS Tax Fraud – Dewayne Long faces Prison

Dewayne K. Long, 53, of Omaha, Nebraska, was sentenced for conspiracy to defraud the United States by filing false federal income tax returns for income tax refunds.  The Honorable Joseph Bataillon sentenced Long to one year and one day in prison, three years of supervised release and restitution in the amount of $440,924.00.

Beginning around December 1, 2008, through March 2010, Dewayne K. Long, and another individual conspired to defraud the Internal Revenue Service by filing false federal income tax returns which contained fraudulent claims for income tax refunds.  These claims were based upon false amounts of federal income tax withheld which were reported on false Forms 1099-0ID.  The Form 1099-OIDs (Original Issue Discount) improperly claimed that the clients had income and corresponding federal income taxes withheld, which resulted in a refund due from the IRS.  Long and his co-conspirator caused nine (9) false claims to be filed with the IRS, totaling $4,701,010.00.

“This defendant filed fraudulent tax returns with bogus claims in an attempt to steal from the U.S. Treasury and the taxpaying public,” said Tanya Brewer, Acting Special Agent in Charge of IRS Criminal Investigation.

Four Charged in Grant Funding Scam

Four persons have been charged with conspiracy and fraud for obtaining money from small business owners for grant funding and services that they never provided or intended to provide, announced U.S. Attorney Daniel G. Bogden for the District of Nevada and Laura A. Bucheit, Special Agent in Charge of the FBI for Nevada.

Jason Demko, 38, Lorraine Riddiough, 66, Lissette Alvarez, 27, all of Las Vegas, and Mark Jones, 32, of Barberton, Ohio, are charged in a criminal indictment with one count of conspiracy to commit mail fraud and wire fraud, five counts of wire fraud, and criminal forfeiture. Riddiough, Alvarez, and Jones were arrested in Las Vegas.

“Unfortunately, advance fee fraud schemes are very common,” said U.S. Attorney Bogden. “The con artist will ask for money up front before any tangible service or product is provided, and it will be very difficult to get your money back once you have turned it over to the scammers.”

“”These arrests emphasize the FBI’s continued commitment to investigate financial crimes,” said Special Agent in Charge Bucheit. “It also serves as a reminder for consumers to protect themselves, and remember if it seems too good to be true, it almost always is.”

According to the indictment and other court records, from about January 2013 to February 2014, the defendants allegedly made false and fraudulent representations and promises to small business owners to persuade and induce them to pay initial fees, usually between $2,500 and $5,000 for goods and services they thought would help them obtain grants for their businesses. The business owners were told that the total cost for obtaining a grant was between $10,000 and $15,000, depending on the total amount of funding requested, and that the remaining fees would not be charged until the owners received 100 percent of the grant funding. Among other things, the defendants falsely stated that they represented a company named Foundation Processing Center in Wilmington, Del., when in fact, they represented JCD Business Services in Las Vegas; falsely stated that only certain clients had qualified for grants, when in fact anyone who paid the fees were qualified by the defendants; and stated that they had obtained grants for other clients, when in fact they had not done so. The defendants also re-solicited clients for additional fees, including business plans, when they knew that the plans were not going to assist the clients in obtaining any grants. The defendants knew that the true purpose of their solicitations was to obtain funds to personally enrich themselves.

If convicted, the defendants face a maximum of 20 years in prison and a $250,000 fine on all counts.

Stephen Jacobs Chiropractor – Guilty of being Stupid by Bribing an IRS Official

Stephen Jacobs, 56, of Lowell, was sentenced to nine months in prison, two years of supervised release, and ordered to pay a $10,000 fine.  Jacobs must report to the custody of the Bureau of Prisons by Feb. 24, 2015.  In October 2014, Jacobs pleaded guilty before U.S. District Court Judge William G. Young to bribery of a public official.

In August 2013, an IRS auditor met with Jacobs, a chiropractor, to examine numerous issues with his federal income tax forms for 2011.  During the initial interview, the auditor advised Jacobs that two $5,000 payments were not allowable deductions after Jacobs admitted that each was a payment to two different women after they accused him of touching them inappropriately during medical treatments.  Jacobs told the auditor that he paid the women because he was concerned that they would report him to the police or to the chiropractic board.  Jacobs admitted that he had begun kissing one woman’s feet while he was treating her.  He also admitted to other inappropriate contact when he was giving the second woman a massage.

Jacobs asked the IRS auditor if there was anything he could do to “just deal with this…”  When the agent said he could not “just deal with this,” Jacobs became agitated and combative, ultimately threatening the agent that he would “ruin [his] career.”

The following month, after several electronically monitored discussions regarding his non-deductible expenses, Jacobs offered to bribe the auditor in exchange for terminating the examination, saying, “. . . you want a bribe? You want me to pay you?…”  The auditor, acting under the direction of law enforcement, then accepted Jacobs’s offer of $5,000 to give Jacobs a favorable audit letter showing no additional tax for one year and a small refund for the next year.  Jacobs paid the auditor $5,000 in cash for the favorable treatment.

Investment Fraud – Christopher Anzalone pleads Guilty faces Prison

California resident pled guilty today to his leading of a commodities and investment fraud scheme that yielded an aggregate amount of over $16 million in investments from victims for the purported purchase of precious metal positions and over-the-counter stock.

According to the charging and plea documents:

From 2010 to December 2011, Liberty International Financial Services, Inc. (LIFS) was an investment firm in Fort Lauderdale with brokers who solicited investors for the purchase of purported precious metals positions in gold, silver, and palladium. Christopher Anzalone, 31, was a co-founder of LIFS and was responsible for overseeing LIFS brokers. Contrary to representations made to investors by LIFS brokers, LIFS invested less than $200,000 of the approximately $4 million provided by investors for the purchase of precious metals positions.

From mid-2011 through 2013, Liberty International Holding Corporation (LIHC) was a holding corporation in Fort Lauderdale whose stock traded in the over-the-counter market. LIHC brokers solicited investors for the purchase of LIHC stock. Anzalone was the co-founder of LIHC. Anzalone represented to brokers, and had brokers represent to potential investors, that LIHC had substantial assets, including a substantial position in metals held in a Panamanian depository. In truth and in fact, as Anzalone well knew, LIHC did not hold these positons or any assets of real value. Induced by misrepresentations made by LIHC brokers, investors purchased more than $9 million in LIHC shares.

From October 2012 through October 2013, Allied Financial Strategies, Inc. (Allied) was an investment firm operating in Miami. Allied brokers solicited investors primarily for the purchase of LIHC stock. Anzalone and co-conspirators induced investors to purchase LIHC shares by falsely and fraudulently representing to investors that a hedge fund or other large investment funds intended to purchase a substantial block of LIHC shares at an over-inflated price compared to the LIHC market price of those same shares. Anzalone used co-conspirators to falsely and fraudulently pose as other investors or hedge fund representatives to induce prospective investors to invest monies. Based on these false representations by these co-conspirators, investors wired over $3 million to accounts controlled by the co-conspirators.

Insurance Fraud – Vicky Lopes and Edward Rossi Sentenced to Prison

The owner and operator of a Brockton physical therapy company and her employee were sentenced for defrauding insurance companies in connection with physical therapy services purportedly provided to patients involved in car accidents.

Walkyrie Massie, a/k/a Vicky Lopes, 39, and Edward Rossi, 65, of Rochester, were sentenced by U.S. District Court Judge Richard G. Stearns to 30 months and 18 months, respectively, two years of supervised release, and ordered to pay $174,597 in restitution to the defrauded insurance companies.  Massie and Rossi pleaded guilty to conspiracy to commit mail fraud and two counts of mail fraud in September and August 2014, respectively.

“The scam perpetrated by Massie and her employees defrauded insurance companies and deprived injured patients of proper care,” said U.S. Attorney Carmen M. Ortiz.  “Patients deserve quality care and insurance providers need honest care-givers.  This kind of fraud is corrosive to our healthcare system.”

“Westgate Physical Therapy was solely motivated by profit rather than patient care when it forged patient records and billed for medical care never provided scamming private insurance companies out of hundreds of thousands of dollars,” said Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division.  “The FBI is dedicated to aggressively investigating this type of criminal activity because it has a great impact not only on private insurance companies but on the economy as a whole as well.”

Massie, the owner and operator of Westgate Physical Therapy in Brockton, and her employees submitted fraudulent medical progress notes to insurance companies, in connection with physical therapy the company purportedly provided to patients involved in car accidents.  Specifically, Rossi, a licensed physical therapy assistant, was supposed to provide physical therapy to patients several times a week until the physical therapist, Deidre Chouinard, re evaluated the patient and signed off that the treatment was complete.  Westgate would then send a bill to the responsible insurance company.  The progress notes contained in the patients’ chart would also be used to determine personal injury protection payments, as well as any bodily injury settlements with other insurance companies.

In reality, for the majority of patients, Rossi simply filled in cookie-cutter treatment notes for patients who either never showed up that day, came into the clinic for mere minutes, or were not seen at all by Rossi because he was not present.  Furthermore, Rossi signed notes for treatments that Massie performed, even though she was not licensed to do so.  Based on these fraudulent submissions, from 2009 to 2011, Westgate billed insurance companies more than $400,000 and received more than $174,000 in payments.

During the investigation into Westgate’s activities, federal law enforcement used a cooperating witness, who claimed to have been in a car accident and sought treatment at Westgate.  From March through June 2011, recordings made of this individual’s visits to Westgate captured how Massie boasted about forging the individual’s name to the sign-in sheets to falsely show that he had come in for treatment when he had not.  In one recorded conversation, Rossi can be heard demonstrating how the therapy exercise equipment worked so that the individual would be able to describe the physical therapy if he were called in to give a statement to the insurance company about his injuries and treatment at Westgate.

In December 2014, Chouinard, Westgate’s physical therapist, was sentenced to three years of probation.  A fourth defendant is awaiting trial.

Little Crimes earn Prison Sentences too – Just ask David Liptak

DAVID LIPTAK, 50, of Milford, was sentenced today by U.S. District Judge Jeffrey A. Meyer in Bridgeport to 10 months of imprisonment, followed by three years of supervised release, for embezzling $108,000 from his employer. LIPTAK also was ordered to pay full restitution and a fine of $3,000.

According to court documents and statements made in court, LIPTAK was employed by Consolidated Management Group (“CMG”) of Westport.  CMG provided management services to condominium associations, including managing the bank accounts and expenses of the associations. From approximately June 2008 to March 2012, LIPTAK embezzled approximately $108,000 from CMG.

On May 14, 2014, LIPTAK pleaded guilty to one count of interstate transportation of money obtained by fraud.  He was ordered to report to prison on February 23, 2015.

Geoffrey W. Nehrenz indicted for role in Ponzi Scheme

An eight-count federal indictment has been returned charging a Uniontown man for his role operating a Ponzi scheme in which 19 investors were defrauded out of approximately $5.5 million, law enforcement officials said.

Geoffrey W. Nehrenz, 36, faces one count of securities fraud, three counts of wire fraud, one count of mail fraud, one count of fraud by an investment advisor, and two counts of money laundering.

“This defendant took advantage of people who trusted him and used their hard-earned money to fund his lifestyle,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.

“Geoffrey Nehrenz callously preyed on the desires of 19 individuals to make wise investments and duped them out of millions,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office. “The FBI will continue to root out fraudsters like Mr. Nehrenz.”

“Promoters of Ponzi schemes prey upon trusting investors and then steal their hard-earned money. Investors should be wary that programs promising unbelievable returns on investments should be looked at carefully,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Remember the old cliché: ‘If it’s too good to be true, it probably is.’”

Between October 2009 and September 2013, Nehrenz promoted and sold investment contracts to clients through Keystone Capital Management, LLC (“KCM”) an investment adviser company located in Uniontown, which is an Ohio limited liability company registered as an investment adviser firm, but not registered with the Securities and Exchange Commission. Nehrenz was the managing member, president, and chief executive officer of KCM, according to the indictment.

Nehrenz induced 19 clients to invest in Keystone by promoting KCM’s ability to generate positive investment returns in equity markets while mitigating risk. He falsely represented to potential clients that their funds would be pooled, invested during the day in large- and mid-capitalization, publicly traded U.S. securities exclusively, and converted to cash overnight. Rather than investing the funds, Nehrenz used client money to pay his personal expenses, to pay business expenses to promote and prolong his investment scheme, and to make speculative, high-risk trades with domestic and overseas private placement vehicles without his clients’ authority, transactions known as “side pocket investments,” according to the indictment.

Nehrenz induced at least 19 clients to invest approximately $7 million into his hedge fund, resulting in losses to his clients in the amount of approximately $5.5 million.

Mortgage Fraud – Emeka Udeze Sentenced to Prison

Emeka Udeze, age 39, of Bowie, Maryland, was sentenced to 37 months in prison followed by five years of supervised release for conspiring to commit wire fraud in connection with two separate mortgage fraud schemes. Judge Messitte also entered an order that Udeze pay restitution and forfeit $2,098,378, the amount of actual losses suffered by the mortgage lenders as the result of the minimum of 20 transactions Udeke brokered in furtherance of the fraud schemes.

According to his plea and court documents, Udeze was a licensed mortgage broker who worked at various companies, including Newgate Mortgage, owned by co-defendant Shola Risikat Balogun, and EWA Mortgage. Udeze also registered a Maryland company called E&T Consulting, Inc., which he claimed was established to provide general services.

Udeze admitted that in both schemes, he submitted fraudulent mortgage loan applications for buyers, inflating the buyer’s income and creating bogus employment information in an effort to qualify these individuals for loans that they otherwise were unqualified to secure. In some cases, no mortgage payments were made and the property went swiftly into default. In other cases, the borrowers attempted to make mortgage payments for a period of time until they could no longer make payments.

In the first scheme, from at least 2006 through at least December 2008, Udeze, Balogun, Daniel Ofei and others contacted individuals who wished to purchase homes. The buyers, who typically had moderate to low incomes, provided the conspirators with accurate income and employment information. Udeze and others then submitted fraudulent loan applications on behalf of the buyers, inflated the buyer=s income and created bogus employment information in an effort to secure the loan. Udeze, Balogun and others collected origination fees, commissions, yield spread premiums and broker=s fees from each loan that closed. In all, Newgate Mortgage was responsible for originating nearly 100 fraudulent transactions, causing millions of dollars of losses to lending institutions.

In a separate scheme, from May 2009 to January 2010, Udeze conspired with Bonnie Kreamer, Nieshia Williams and Rhonda Scott to arrange for individuals to buy and sell real estate so they could improperly obtain money from the transactions. The co-conspirators used many fraudulent techniques, including: short sales in which the property would be sold for a higher price than the seller was aware of; sales of properties not owned by the seller; multiple sales of the same property at the same time; the seller and/or buyer were shown different settlement statements and the conspirators used the difference in sales price to enrich themselves; and money that should have been paid to lien holders was instead disbursed to the co-conspirators, including shell companies created by Udeze and others in order to disguise that the money was really for their benefit. This fraud scheme involved at least 25 victims, including lenders, sellers and buyers of real estate, title insurance companies and lien holders, who incurred losses of over $3 million.

Bonnie Kathleen Kreamer, a/k/a Bonnie Meehan, age 49, of Riva, Maryland; Shola Risikat Balogun, age 48, of Upper Marlboro; Rhonda Scott, age 53, of Oxon Hill, Maryland; Daniel Ofei, age 40, of Bowie, Maryland; Nieshia Williams, age 35, of Fort Washington, Maryland; Gregory Green, age 50, of Waldorf, Maryland; and Demetrius Peete, age 47, of Manassas, Virginia, each previously pleaded guilty to their roles in the fraud schemes. Kreamer, who was responsible for the daily operations at Sanford Title, was sentenced on to 51 months in prison, and ordered to pay restitution of $2,499,048 to the victims and forfeit $4.8 million. Scott was sentenced to 30 months in prison and ordered to forfeit $2.7 million and pay restitution of $703,000. Balogun, who organized the mortgage fraud scheme involving Newgate Mortgage, was sentenced to 37 months in prison and ordered to pay restitution and forfeit $1,352,378. Ofei, was sentenced to 37 months in prison and ordered to pay restitution of $5,950,000. Williams was sentenced to 27 months in prison and ordered to forfeit $3.1 million and pay restitution of $1,445,593. Peete was sentenced to a year and a day in prison and ordered to pay restitution of $394,908 and forfeit $1.5 million. Green was sentenced to three months in prison and ordered to pay restitution of $404,596.