Letter of Apology » Mail Fraud

Former Pennsylvania Judge Convicted In Insurance Fraud

Dave Westheimer — Thu, 20 Nov 2008 07:48:49 +0000

A federal jury in Pittsburgh on Wednesday convicted former Pennsylvania Superior Court Judge Michael Joyce on two counts of mail fraud and six counts of money laundering for giving false information to colllect an insurance settlement. Joyce collected $440,000 from two insurance companies after a slow-speed traffic accident in August 2001; evidence presented at trial showed that he used his official letterhead as part of his effort to obtain the settlement. He claimed to have debilitating neck and back injuries, but later engaged in physical activities in public, including golfing, scuba diving, rollerblading and piloting airplanes. Joyce was suspended last year after being indicted; he chose not to run for reelection. His sentencing is scheduled for March 10, 2009 (Law.com, AP).

Diploma Mill Webmaster Sentenced To Prison

Dave Westheimer — Fri, 31 Oct 2008 06:15:03 +0000

Kenneth Wade Pearson, the webmaster of the notorious St. Regis University diploma mill, was sentenced to 48 months in prison on Tuesday in US District Court in Spokane, Washington. He received a six month sentence for conspiracy to commit wire and mail fraud in connection with the St. Regis operation, and a concurrent 48 month sentence for receipt of child pornography. Pearson’s testimony was key in in implicating the Randock family, who ran the operation (earlier coverage). Owners Steven and Dixie Randock pleaded guilty and are currently serving 36 month prison sentences, while their daughter Heidi Lorhan is serving a 12 month sentence.

When Pearson was investigated during the diploma mill probe, authorities found over 11,000 child porn images on his computer. He claimed he had downloaded the porn images at Dixie Randock’s request so she could start a porn website, but she was never charged with porn possession. In any event, he immediately became a cooperating witness and provided critical information on the St. Regis operation, which resulted in prosecutors recommending a lesser sentence on the porn charge than called for by guidelines (Spokesman-Review).

Former Romney Fundraiser Sentenced To Nine Years In Prison For $39.5 Million Fraud Schemes

Dave Westheimer — Tue, 28 Oct 2008 06:42:09 +0000

In Baltimore on Friday. US District Judge Catherine Blake sentenced Alan Fabian of Cockeysville, Maryland to nine years in prison for operating two different investment schemes which defrauded a Georgia company, banks and other funding sources of an estimated $39.5 million. Fabian, a Republican donor and fundraiser, was co-chair of Mitt Romney’s national finance committee. He pleaded guilty in May to one count of mail fraud and one count of filing a false tax return (earlier) after being indicted in August 2007 on 26 counts including bankruptcy fraud, mail fraud, money laundering, obstruction of justice and perjury. In one scheme, Fabian used forged invoices and wire transfer receipts to convince Norcross, Georgia computer leasing company Solarcom into believing that he had purchased millions of dollars in computer equipment and software; he then sold the nonexistent products to Solarcom and leased them back, using the proceeds on a lavish lifestyle and to set up a nonprofit consulting firm. He took in $32 million from this operation. In a later scheme, he deceived Provident Bank, Wachovia Bank and an invoice discounting company into providing $7.5 million in funding for entities he controlled including the consulting firm he had set up with the stolen funds from his earlier scheme (Baltimore Sun, DOJ).

Advance Fee Telemarketer Gets Whopping 350 Month Prison Sentence

Dave Westheimer — Wed, 10 Sep 2008 06:32:07 +0000

In East St. Louis, Illinois on Friday, US District Judge Michael J. Reagan sentenced Kyle Kimoto of St. George, Utah and Las Vegas to 350 months in prison for operating an advance fee telemarketing scheme that allegedly defrauded over 300,000 consumers of approximately $43 million. A jury convicted Kimoto in April on charges of conspiracy, mail fraud and wire fraud. In the scheme, consumers with substandard credit paid an advance processing fee of $159 or more, believing they would receive a MasterCard; what they actually got was a “benefits package” with an application for a stored value MasterCard — a debit card with no credit line which had to be “loaded” with funds before it could be used (St. Louis Post-Dispatch).

Enzyte Maker Gets Naturally Enhanced 25 Year Prison Sentence

Dave Westheimer — Thu, 28 Aug 2008 07:27:27 +0000

In Cincinnati on Wednesday, US District Judge Arthur Spiegel sentenced Steve Warshak, founder of Berkeley Premium Nutraceuticals, to 25 years in prison for selling at least $100 million of fraudulent “natural” remedies and refusing to accept returns when the products didn’t work despite a “double your money back” guarantee. Berkeley is infamous for marketing Enzyte, a “natural male enhancement” pill which promised permanent growth and for a time also claimed to help erectile disfunction.

Warshaw was convicted in February on 93 counts including conspiracy to commit money laundering, conspiracy to obstruct proceedings before the FTC, mail fraud, bank fraud and money laundering. Three others were also convicted, including his 75-year-old mother Harriet Warshak. Spiegel sentenced her to two years in prison (Kentucky Post).

“Three Hebrew Boys” Face Additional Federal Charges

Dave Westheimer — Mon, 25 Aug 2008 06:11:54 +0000

Joseph Brunson, Timothy McQueen and Tony Pough, the three African-American pastors/investment brokers who call themselves the “Three Hebrew Boys”, were indicted Thursday by a federal grand jury in Columbia, South Carolina on 12 counts of money laundering and 10 counts of transporting checks obtained by fraud. The new charges are in addition to the 35 counts of mail fraud they face from their May indictment which charged them with operating a fraudulent foreign currency trading scheme (earlier); they also face state securities fraud charges. The new counts arise from checks they received from investors which they allegedly converted to personal use. A September 3 arraignment is scheduled (WIS-TV).

Ex-Georgia Tech Employee Sentenced To 32 Months In Fraud Scheme

Dave Westheimer — Thu, 21 Aug 2008 06:18:25 +0000

Donna Gamble of Marietta, Georgia, a former Georgia Tech employee who pleaded guilty in May to all 22 counts of an indictment which charged mail fraud and theft from an organization receiving federal funds, was sentenced on Tuesday to 32 months in prison by Chief US District Judge Jack Camp in Atlanta. Gamble admitted using a Georgia Tech procurement card which was restricted to work-related expenses to make 2000 purchases of 3800 items for her personal use between 2002 and 2007. The procurement card was funded by a grant from the National Science Foundation. The total amount of Gamble’s illegal purchases was $316,000 and included personal watercraft, a popcorn machine, a wide-screen TV, robotic vacuums, a treadmill and Auburn University football tickets. Gamble hid the fraud by submitting fake receipts and making false entries in accounting records. Her activities were discovered after an audit and that was only conducted after a tip from an informant (Atlanta Journal Constitution, DOJ ).

Oregon Woman Indicted In Nigerian Check Scam

Dave Westheimer — Mon, 18 Aug 2008 06:41:26 +0000

Ella Mae Letellier of Ontario, Oregon has been indicted by a federal grand jury in Boise on 29 counts of mail and wire fraud in connection with a Nigerian check scam she allegedly helped run out of Payette, Idaho. It’s a rerun of the scheme for which a Washington woman was sentenced to prison in June (earlier): a seller is paid with a phony check for more than the amount of the goods, returns the excess money and winds up liable for the entire amount when the counterfeit check is eventually returned. Letellier allegedly acted as an accomplice for Patrick Anthony of Nigeria by sending out counterfeit checks on his behalf (Idaho Statesman). This scheme has been so well publicized online that it boggles the mind that people still bite. David Hannum was right.

California Man Sentenced To 7+ Years In Bust-Out Frauds

Dave Westheimer — Thu, 14 Aug 2008 06:07:10 +0000

Reza Bahram Tabatabai of Beverley Hills was sentenced on Monday to 87 months in prison by US District Judge Florence-Marie Cooper in Los Angeles for operating fraud schemes in three states which cost lenders over $8 million. Tabatabai operated a series of so-called bust-out schemes in which legitimate businesses were taken over and their lines of credit used to purchase large amounts of merchandise which were essentially resold with no intention of repaying the lenders. He was convicted in 2006 on 55 counts including conspiracy, interstate transportation of fraudulently obtained property, mail fraud, wire fraud and money laundering (AP, DOJ).

Third Family Member Sentenced To Prison In Diploma Mill Fraud

Dave Westheimer — Wed, 13 Aug 2008 04:46:09 +0000

Steven Randock, the third principal in the notorious St. Regis University diploma mill, was sentenced to 36 months in prison on August 5 by US District Judge Lonny Suko in Spokane, Washington for his role in the fraud. He ran the operation with his wife Dixie Randock and daughter Heidi Lorhan, who were sentenced on July 2 (earlier). All three pleaded guilty in March to conspiracy to commit wire and mail fraud; Steven Randock’s sentencing was delayed for medical reasons (Spokesman-Review, DOJ). The Spokesman-Review has also published a list of all known purchasers — 9,612 of them.