Letter of Apology » Mail Fraud

Two Indicted In $132 Million Section 1031 Scheme

Dave Westheimer — Wed, 23 Jul 2008 07:11:14 +0000

A federal grand jury in Richmond, Virginia on July 10 returned a superseding indictment in the case of Edward Okun of Miami, who was indicted in March (earlier) in connection with the theft of $132 million in client funds held in trust by 1031 Tax Group (1031TG), his qualified intermediary company. Okun allegedly converted the funds for his personal and business use, including the purchase of a $6.7 million house and a $15.5 million yacht. There are allegedly 577 victims in the case. The 27 count superseding indictment charges Okun and Lara Coleman of Richmond, his Chief Operating Officer,with conspiracy wire fraud, mail fraud, money laundering and bulk cash smuggling and forfeiture. Okun also faces one count of making false statements. Coleman made her initial appearance in the case on July 10. Both Okun and Coleman pleaded not guilty on July 18 (Richmond Times-Dispatch, DOJ).

Father And Son Plead Guilty In Debt Elimination Scheme

Dave Westheimer — Mon, 14 Jul 2008 06:26:13 +0000

All in the family: Chad Wickline and his father Dan Wickline, both of Pickerington, Ohio, pleaded guilty on Thursday in connection with a so-called debt-elimination service they ran. The pleas came in the middle of their trial before US District Judge Algenon Marbley in Columbus. Chad Wickline pleaded guilty to one count of mail fraud and one count of conspiracy to commit money laundering; Dan Wickline pleaded guilty only to the conspiracy count. The Wicklines’ company, Liberty Resources, advertised a “100% legal” and “100% successful” plan to eliminate credit card debts, charging a $7,500 fee to reveal the “little-known fact that federally insured banks really don’t have the authority to issue credit.” And about 400 ~~idiots~~ people actually fell for it, going further in debt, dmaging their credit and in some cases going into bankruptcy. Sentencing will be scheduled later (Columbus Dispatch, DOJ).

Two Diploma Mill Principals Sentenced To Prison

Dave Westheimer — Wed, 09 Jul 2008 16:13:53 +0000

Two of the three principals in a notorious diploma mill operation were sentenced to prison on July 2 by UD District Judge Lonny R. Suko in Spokane, Washington. Dixie Randock, who operated Saint Regis University with her husband Steven Randock, was sentenced to three years in prison. Their daughter, Heidi Lorhan, was sentenced to one year in prison. Steven Randock’s sentencing was postponed until August 5 as he is recovering from open-heart surgery. All three pleaded guilty in March to conspiracy to commit wire and mail fraud. They sold degrees ranging from high school diplomas through Ph.D. degrees, as well as phony transcripts and professorships, from Saint Regis and other imaginary universities. Officials in Liberia were bribed to say the schools were acccredited. In addition, they sold counterfeit diplomas purporting to be from legitimate universities, including University of Maryland, George Washington University, Missouri University and Texas A&M University. From August 1999 to August 2005, about $6.3 million of fraudulent products were sold to about 10,000 people (Seattle Times, DOJ).

IT Contractor Pleads Guilty To Defrauding Cisco

Dave Westheimer — Tue, 08 Jul 2008 06:02:07 +0000

Michael Kyereme of Piscataway, New Jersey pleaded guilty in US District Court in Newark last Wednesday to a two count information charging him with mail fraud and tax evasion, in connection with a scheme which defrauded Cisco Systems of $6.9 million in computer networking equipment. It’s a case with disturbing similarities to the Kent Andrews case. Kyereme was an independent contractor for the City of Newark who handled IT support for city employees. He was authorized to order replacement equipment under its contract with Cisco, which allowed the city to order replacement parts and return the defective parts later. He allegedly ordered 280 pieces of equipment from Cisco under false pretenses, only returning a defective part in about half the cases — and most of those were different parts of much lower value. He admitted fencing the parts to a third party in California. The specific mail fraud count involves a single part he ordered worth $260,000, for which he returned a different part worth $2,000. When he was arrested, he had over $3 million in Cisco parts in his home and car. He faces a maximum of 20 years in prison on the mail fraud count. US District Judge Katharine Hayden scheduled sentencing for November 5 (DOJ press release, information). Again, where were Cisco’s auditors?

Minnesota Wind Power Manager Pleads Guilty In Billing Fraud

Dave Westheimer — Mon, 07 Jul 2008 05:02:00 +0000

Greg Jaunich pleaded guilty in US District Court in Minneapolis last Tuesday to one count of mail fraud for falsely billing almost 2 million kilowatt hours of non-existent wind turbine generated electricty. Xcel Energy was defrauded of about $400,000 in the scheme. Jaunich managed an alternative power company in southwest Minnesota. Xcel is required under the law to buy wind generated energy. Jaunich admitted instructing employees to bill 1.84 million kwh from 2 generators in 2003 and 2004 when he knew they only produced a total of 20,000 kwh between them during the period. US District Judge Paul Magnuson accepted the plea but has not yet scheduled a sentencing date (Star Tribune).

Doctor Connected To Rezko Case Indicted In Separate Fraud

Dave Westheimer — Thu, 03 Jul 2008 07:28:16 +0000

A Chicago doctor and businessman connected to Stuart Levine, the government’s star witness against convicted Illinois developer and Democratic fundraiser Tony Rezko, has been indicted by a federal grand jury in a case involving Levine. Robert J. Weinstein was indicted last Thursday on three counts: one count each of wire fraud, mail fraud and making false statements. He is accused of joining with Levine to siphon and pocket millions of dollars from two organizations, the Rosalind Franklin University of Medicine and Science, formerly the Chicago Medical School, and the Northshore Support Organization, a charity he founded allegedly to support the medical school. He and Levine were trustees of both organizations; the loss to the Northshore Support Organization alone is alleged to be $6 million. The false statement count arose from statements he made to FBI agents in the Rezko case which were contradicted by his conversations with Levine which were wiretapped. Levine has pleaded guilty in the case and is cooperating with prosecutors (Chicago Tribune, DOJ).

Nigerian Check Scam Accomplice Sentenced To Two Years In Prison

Dave Westheimer — Mon, 30 Jun 2008 06:09:33 +0000

In Tacoma on Wednesday, US District Judge Benjamin Settle sentenced Edna Fiedler of Olympia, Washington to two years in prison for her role as an accomplice in a Nigerian check scam. This is the all-too-familiar scheme in which a mark who has goods for sale is paid with a phony check for more than the amount and asked to return some of the proceeds, eventually winding up on the hook for the whole amount. Fiedler had pleaded guilty in March to conspiracy to commit bank, wire and mail fraud. She worked in connection with a man from Lagos, Nigeria who shipped counterfeit checks and money orders to her with instructions on how to fill them out and where to ship them. When she was arrested in December she had already shipped out over $600,000 in phony checks and money orders and had $1.1 million more ready to ship. No word on whether the people who fell for the scam will be investigated for terminal idiocy (Seattle Times).

Seventh Circuit Upholds Convictions Of Conrad Black And Associates

Dave Westheimer — Wed, 25 Jun 2008 20:50:50 +0000

A three-judge panel of the US Court of Appeals for the Seventh Circuit on Wednesday unanimously affirmed the mail fraud convictions of former Hollinger Inc. CEO and chairman Conrad Black, as well as the convictions of his co-defendants Jack Boultbee, Peter Atkinson and Mark Kipnis.The court also upheld Black’s obstruction conviction which arose from his removal of boxes of documents from his Toronto office in violation of a court order. The Canadian Press covers the decision here. Black was sentenced in December to 78 months in prison; he began serving his term on March 3 after the Seventh Circuit denied his request to remain free on bond during his appeal. Boultbee, Atkinson and Kipnis have been free on bond during the appeal.

New Jersey Man Pleads Guilty In Phony Defense Contract Ponzi Scheme

Dave Westheimer — Wed, 25 Jun 2008 06:43:15 +0000

In Camden, New Jersey on Monday, Glyn Richards of Haddon Heights pleaded guilty before US District Judge Renée Marie Bumb to a two-count information charging him with mail fraud and money laundering in connection with the operation of a Ponzi scheme. Richards operated a company called Air Freight Logistics. He allegedly solicited investors by telling them his company had Defense Department contracts to ship military equipment overseas and needed funds to pay up-front costs, typically promising 44% return on a 120-day $25,000 investment. However, his business never had any such contracts and he was simply operating a typical Ponzi scheme. The overall loss amount has not been determined but he is said to have taken in over $10 million from more than 100 investors. Sentencing is scheduled for October 14 (Philadelphia Inquirer, DOJ).

Former Chicago Bear Pleads Guilty In Minority Contractor Scam

Dave Westheimer — Mon, 23 Jun 2008 06:53:54 +0000

Former Chicago Bears fullback Roland Harper pleaded guilty last Tuesday to one count of mail fraud for allowing his landscaping business to be used as a front by a white-owned firm to land contracts from the Chicago Public Schools that were set aside for minority-owned businesses. Harper, who is black, admitted that he allowed the real contractor, Monahan Landscape, to use his Rohar Construction to secure $1.5 million in contracts between 2003 and 2006. Harper’s plea came six days after Aidan Monahan, owner of Monahan Landscape and a Democratic Party fund-raiser, pleaded guilty to one count of mail fraud in the case.

Both pleas were entered before US District Judge John Darrah. Harper will be sentenced on October 14 and prosecutors will ask for approximately 16 months in prison. Monahan has agreed to pay $100,000 restitution and is also facing prison time; his sentencing is scheduled for September 30 (Chicago Sun-Times on Harper, Monahan).