Financial Fraud: ENRICO RUBANO And SHIVANAND MAHARAJ Charged to Commit Wire Fraud in Connection With a False Invoicing Scheme

Information Technology Chief And Consultant Charged With Multimillion-Dollar False Invoicing Scheme

Preet Bharara, the United States Attorney for the Southern District of New York, and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today the filing of a criminal complaint charging ENRICO RUBANO, a/k/a “Rick Rubano,” and SHIVANAND MAHARAJ with two counts of conspiracy to commit wire fraud in connection with a false invoicing scheme that defrauded health and retirement funds (the “Funds”) of millions of dollars. As alleged, over a period of six years, RUBANO, MAHARAJ, and their co-conspirators generated hundreds of invoices for work they had not performed, which RUBANO, in his role as co-head of information technology for the Funds, approved for payment. RUBANO and MAHARAJ were arrested this morning, and will be presented before U.S. Magistrate Judge Andrew J. Peck.

Manhattan U.S. Attorney Preet Bharara said: “As alleged, Enrico Rubano used his position as the co-head of IT for a health and retirement benefit fund to perpetrate a scheme to falsely invoice millions of dollars from the fund for consulting work never actually performed. Rubano allegedly had the fund make payments based on hundreds of fake invoices to Shivanand Maharaj’s company, not for IT work actually done by that company, but really in exchange for alleged kickback payments to Rubano. Money that should have gone to help pay retirement and health care benefits were instead allegedly diverted to Rubano and Maharaj.”

USPIS Inspector-in-Charge Philip R. Bartlett said: “These defendants devised a scheme to falsely bill their client for work that was never performed by allegedly using an ‘inside’ employee to approve bogus invoices. They went one step too far when they decided to use the US Mail to facilitate their criminal misdeeds. Postal Inspectors will resolutely pursue fraudsters who use the U.S. mail to facilitate fraud schemes.”

According to the Complaint:

From 2008 through October 2015, RUBANO was the co-head of information technology for the Funds and had the authority to approve the payment of invoices from third-party vendors. Beginning in 2009, and continuing through 2015, RUBANO, MAHARAJ, and others devised a scheme in which companies they owned or controlled submitted to the Funds invoices for millions of dollars in information technology services that were never performed or that had, in fact, been performed by employees of the Funds or other vendors. RUBANO, in his position as co-head of information technology, approved these fraudulent invoices, and received kickbacks from MAHARAJ and other co-conspirators. Between 2009 and 2015, RUBANO, MAHARAJ, and their co-conspirators falsely billed and fraudulently received from the Funds at least approximately $3.4 million.


RUBANO, 48, of Tappan, New York, and MAHARAJ, 36, of Cresskill, New Jersey, were arrested this morning in Tappan, New York, and Cresskill, New Jersey, respectively. RUBANO and MAHARAJ are each charged with two counts of conspiracy to commit wire fraud, each of which carries a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Bharara praised the efforts of the USPIS in this investigation. He added that the investigation is continuing.

This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Matthew Podolsky and Jacob Warren are in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Original PressReleases…
Information Technology Chief And Consultant Charged With Multimillion-Dollar False Invoicing Scheme
Preet Bharara, the United States Attorney for the Southern District of New York, and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”),
https://goo.gl/cj4c5H

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Financial Fraud: Jason R. Klein Pleaded Guilty to Illegal Bitcoin Exchange

Nixa Man Pleads Guilty to Illegal Bitcoin Exchange

SPRINGFIELD, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a Nixa, Mo., man pleaded guilty in federal court today to conducting an illegal money transmitting business by exchanging bitcoin for cash without a license.

Jason R. Klein, 37, of Nixa, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to a federal information that charges him with conducting an unlicensed and unregistered money transmitting business.

Klein was the founder of two technology-based companies: Logic Forte and Datality Networks. Logic Forte purportedly provided consulting and computer programming assistance for the restaurant industry. Datality Networks purportedly provided Internet housing and network consulting.

Klein is the president of the Association of Information Technology Professionals (“AITP”) – Southwest Missouri. AITP is a professional association focused on technology education for business professionals. AITP’s southwest Missouri chapter has approximately 230 members and is the largest chapter in the United States.

By pleading guilty today, Klein admitted that he represented himself on the Internet to be a bitcoin exchanger. However, Klein was not a licensed money transmitter with the state of Missouri or with the Financial Crimes Enforcement Network, as required by federal and state law.

An undercover federal agent responded to an online advertisement posted by Klein. Klein told the undercover agent that his rate included a 10 percent commission “for an in-person $1,000 cash exchange.”

Between Feb. 6, 2015, and July 27, 2016, Klein, acting with another, met with two undercover federal agents on numerous occasions to exchange bitcoin for cash. Today’s plea agreement cites five separate transactions in which money (ranging from $1,000 to $15,000) was exchanged in person for an electronic transfer of bitcoin. Each of the transactions included a fee that Klein or another person charged the undercover agents, for a total of $2,122 in fees.

Under federal statutes, Klein is subject to a sentence of up to five years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

Bitcoin Background

Bitcoin are not illegal in and of themselves and have legitimate uses. Bitcoin are a decentralized form of electronic currency, existing entirely on the Internet and not in any physical form. The currency is not issued by any government, bank, or company, but rather is generated and controlled automatically through computer software operating on a “peer-to-peer” network. Bitcoin transactions are processed collectively by the software-enabled computers composing the network.

To acquire bitcoin in the first instance, a user typically must purchase them from a bitcoin “exchanger.” In return for a commission, bitcoin exchangers accept payments of currency in some conventional form, including cash, and exchange the money for a corresponding number of bitcoin, based on a fluctuating exchange rate. Exchangers also accept payments of bitcoin and exchange the bitcoin back for conventional currency, again, charging a commission for the service.

Once a user acquires bitcoin from an exchanger, the bitcoin are kept in a “wallet” associated with a bitcoin “address,” designated by a complex string of letters and numbers. The “address” is analogous to the account number for a bank account, while the “wallet” is analogous to a bank safe where the money in the account is physically stored. Once a bitcoin user funds his wallet, the user can then use bitcoin in the wallet to conduct financial transactions over the Internet by transferring bitcoin from his bitcoin address to the bitcoin address of another user.

This case is being prosecuted by Assistant U.S. Attorney Casey Clark. It was investigated by IRS-Criminal Investigation.

Original PressReleases…
Nixa Man Pleads Guilty to Illegal Bitcoin Exchange
SPRINGFIELD, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a Nixa, Mo., man pleaded guilty in federal court today to conducting an illegal money transmitting business by exchanging bitcoin
https://goo.gl/PrMQfW

Tax Fraud: Steven Caldwell And Gayane Lashina Charged Via Criminal Information With One Count of Conspiracy to Defraud The United States

Parma couple charged for conspiring to avoid paying taxes; people used as hotel housekeeping falsely treated as independent contractors

A Parma couple was charged in federal court for their roles in a conspiracy to avoid paying taxes, in which people used to clean hotels and motels were falsely treated as independent contractors, Acting U.S. Attorney David A. Sierleja said.

Steven Caldwell, 55, and Gayane Lashina, 51, were charged via criminal information with one count of conspiracy to defraud the United States.

A man identified in court documents as T.P. controlled various corporations that entered into contracts to provide maid and housekeeping services to various hotels and motels. These corporations included Evrica Inter Services Inc., Evrica International LLC, Antelope’s Services LLC and Zeromax LLC, according to the information.

Caldwell was the incorporator of Evrica International and Antelope’s Services, according to the information.

T.P. and his associates hired people, many of them immigrants from Africa or Eastern Europe, to work as maids and housekeepers. He, Caldwell and Lashina required employees to signed independent contractor agreements to work for the cleaning companies. These agreements specified the employee was responsible for all federal, state and local taxes, according to the information

T.P. hired the employees, assigned them work location, trained and instructed the employees and set their schedules, among other actions. He falsely treated the employees as independent contractors to avoid payment of employment taxes, according to the information.

Caldwell and Lashina made false statements to law enforcement agents about T.P.’s ownership, operation and control of the companies. They were also used to disguise his ownership of the companies, according to the information.

The investigation is ongoing.

If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.

This case is being prosecuted by Assistant U.S. Attorney Carmen Henderson following an investigation by the U.S. Department of Labor and the Internal Revenue Service.

An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Original PressReleases…
Parma couple charged for conspiring to avoid paying taxes; people used as hotel housekeeping falsely treated as independent contractors
A Parma couple was charged in federal court for their roles in a conspiracy to avoid paying taxes, in which people used to clean hotels and motels were falsely
https://goo.gl/oiNq2v

Financial Fraud: Gabriel Martin Reed Charged With Federal Wire Fraud And Defrauded Investors

Concert Promoter Arrested on Federal Fraud Charges that Allege He Solicited Investment Money that Was Never Used for Music Events

LOS ANGELES – A concert promoter with operations in Dallas, Texas and West Hollywood has been arrested on federal wire fraud charges in a case that alleges he defrauded investors in connection with concerts and other events.

Gabriel Martin Reed, 46, a former Malibu resident who recently relocated to Las Vegas, Nevada, was arrested by special agents with the Federal Bureau of Investigation on Saturday afternoon in McKinney, Texas.

Reed, who does business under the name Gabe Reed Productions, was arrested pursuant to a criminal complaint filed on April 19 in United States District Court in Los Angeles. The case against Reed was announced today after the complaint was unsealed during Reed’s first court appearance. The complaint charges Reed with wire fraud and aggravated identity theft.

Over an 8½-year period, Reed represented himself as a promoter and organizer of hard rock music events, as well as wrestling matches for World Wrestling Entertainment. According to the affidavit in support of the criminal complaint, Reed solicited investors in concert events by touting longstanding relationships with well-known musicians, showing props from alleged previous tours, and, in some instances, creating fabricated financial records related to music events.

The complaint alleges that Reed falsely told investors that musical artists had agreed to participate in events and that their funds would be used to provide up-front financing for the events. However, in many instances, the musical artists had not agreed to participate and, rather than using the funds for the events, Reed allegedly used the investors’ funds for personal expenses.

One Los Angeles investor agreed to put $100,000 into a concert tour Reed was calling “Titans of Rock.” However, many of the promised artists had not agreed to participate in the tour. An FBI review of bank records showed the victim’s money was used to pay for Reed’s personal expenses, including child support, costs related to a birthday, and meals at Ruth’s Chris Steakhouse and Mr. Chow in Beverly Hills, according to the affidavit. Over the course of several months in 2015, the $100,000 “had been depleted,” due in part to ATM withdrawals, and the FBI was “unable to identify the payment of any expenses related to a concert or tour,” the affidavit states.

The complaint alleges that Reed solicited money from at least 15 victims who suffered losses of at least $1.4 million.

Reed made his initial court appearance this morning in United States District Court in Sherman, Texas. Reed has agreed to appear in federal court Los Angeles at a date to be determined. He remains in custody until a detention hearing set for Friday in Texas.

Reed is charged with wire fraud for allegedly bilking the Titans of Rock investor and aggravated identity theft in relation to another promoter whose name Reed allegedly used in connection with the wire fraud.

A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

If he is convicted of the charges, Reed would face a statutory maximum sentence of 20 years in federal prison for the wire fraud count and a mandatory, consecutive two-year sentence for the aggravated identity theft charge.

Investors who provided money to Reed and believe they were defrauded should contact the FBI’s Los Angeles Field Office at (310) 477-6565.

The case against Reed is being investigated by the FBI.

This case is being prosecuted by Assistant United States Attorney Poonam Kumar of the Major Frauds Section.

Original PressReleases…
Concert Promoter Arrested on Federal Fraud Charges that Allege He Solicited Investment Money that Was Never Used for Music Events
LOS ANGELES – A concert promoter with operations in Dallas, Texas and West Hollywood has been arrested on federal wire fraud charges in a case that alleges he
https://goo.gl/rzfNJT

Financial Fraud: Timothy S. Lenon Has Pleaded Guilty to One Count of Theft of Government Funds

Georgia Man Pleads Guilty to Stealing Deceased Father’s Social Security Benefits

ATLANTA – Timothy S. Lenon has pleaded guilty to one count of theft of government funds for stealing over $300,000 in Social Security benefits. Lenon received and subsequently spent his deceased father’s Social Security benefits for over 20 years after his death, and did the same with his father’s New York City pension.

“Lenon pocketed his deceased father’s Social Security payments for over 20 years, using the money to pay his own personal expenses,” said U. S. Attorney John Horn. “His theft ultimately diverted these scarce resources from those citizens who truly needed them to live.”

“The Social Security Office of the Inspector General has no higher priority than the investigation and prosecution of those who violate the public’s trust by failing to report Social Security beneficiary deaths and continuing to receive the deceased’s benefits. I’m grateful that the U.S. Attorney’s Office shares our determination to protect the integrity of the SSA’s programs for those who rely on them now and into the future,” stated Special Agent-in-Charge Margaret Moore-Jackson.

According to U.S. Attorney Horn, the charges and other information presented in court: The defendant’s father died on January 16, 1994. At the time of his death, he received Social Security retirement benefits and New York City pension benefits that were deposited directly into his bank account. The defendant never notified Social Security that his father died and never closed his father’s bank account.

Two years after his father’s death, Lenon contacted Social Security and changed the address on his father’s account in order to maintain the appearance that his father was still alive. As a result, his father’s benefits continued to be deposited into his bank account until April 2014. Bank records showed that Lenon used the money in his father’s account to live beyond his means. Social Security money paid for multiple credit cards in both his and his partner’s names, dozens of monthly Amazon purchases, utility bills for himself and his family, and phone bills. In total, the defendant stole over $309,000 from Social Security.

When law enforcement questioned the defendant, he claimed that he thought the bank account was closed after his father’s death. Later, he told law enforcement that he never touched the money in the account. Eventually, he admitted that he spent some funds from the account, but continued to minimize the magnitude of his theft by claiming that he only spent money out of the account for a two-year period. The evidence, however, directly contradicted his version of events and showed that he spent all the money in the account.

Additionally, the defendant did not notify the New York City pension system of his father’s death, and therefore, his father’s pension benefits continued to be direct deposited into his father’s account from 1994 until 2008. In total, the New York City pension system deposited over $157,000 into his father’s account. Lenon also spent all of this money.

Sentencing for Timothy S. Lenon, 57, of Philadelphia, Pennsylvania, is scheduled for July 19, 2017 at 11:00 a.m., before U.S. District Judge Charles A. Pannell Jr.

This case is being investigated by the Social Security Administration – Office of the Inspector General.

 

Special Assistant U.S. Attorney Diane C. Schulman is prosecuting the case.

 

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov(link sends e-mail) or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

Original PressReleases…
Georgia Man Pleads Guilty to Stealing Deceased Father’s Social Security Benefits
ATLANTA – Timothy S. Lenon has pleaded guilty to one count of theft of government funds for stealing over $300,000 in Social Security benefits. Lenon received and subsequently spent his deceased father’s Social
https://goo.gl/qxyzLL

Insurance Fraud Tips And Examples

Insurance industries report a possible 3% to 10% of all insurance claims are frauds. There also are many reports of exaggeration, for instance if a thief has stolen a TV from someone, he will usually hide his computer and radio and add it too the report. The second ones usually are average people looking for a quick buck or have gone the bad road because of their current financial problems, such as bankruptcy or business failure. On the other hand we have usual criminal offenders and organized crime. Members are already having a police record and looking to benefit from insurance frauds on a regular basis. The money stolen by these fraudsters is the money from other people who are insured and those paying premium prices for extra security.

Auto Insurance Scam

Lets look at a professionally organized automobile insurance scam involving many con artists. You get up, dress for work and drive through your town to your workplace. Someone is following you, but you don’t recognize it. At one time the car following will over take you and next hit the brakes making a rear-end collision. You won’t even know whats going on and in panic maybe even forget the facts and events that happened before the car crash. The driver which you ran on to will immediately approach you, ask you what is wrong and if you need any help. “Is everything okay, do you need a doctor? If you want I can call my own. No? Lets examine the situation then. We should call a towing service and car body repair shop, I have one stored in my cell phone. We also should make proper legal arrangements, I will call my lawyer for us.” Perfect! You think to yourself, hmm thats the best accident I’ve ever been too! What you don’t know is that the Car Shop hired the driver to run onto you on purpose. The doctor and lawyer also were awaiting the call, being part of the game. In the end you or your insurance will pay the doctor, lawyer, towing fee, storage fee, car repair… If you are in a car accident, read the fine print on every paper you will sign. Don’t accept offers for services from anyone involved in the collision.

Insured Documents Scam

Lets look at an example of fake insurance claims for travels. Even though nowadays travelling package at airports is highly automatized and computerized, there still are many reports on packages getting lost. Lugging baggage at airports is usually insured for a cost much less than the one paid if the package gets lost. Organized criminals therefor can and “loose” these to get money from an insurance company. More often at jobs like this there will be an insider person cooperating with the person who is about to “lose” their package. Same goes for insured papers and documents. During their transportation they somehow get lost during the way.

Fake Paper Claims

This is pretty simple. The con artist is trying to fool the insurance by making them believe an event that in reality never happened but only exists on the paper.

Fake Or Bogus Insurances

You are starting up a small business. As usual you have a low budget on start, but if you want to operate you have to get some insurances for your business or at least health care insurance for yourself and the employees. You ask around, look in newspapers, all across the internet to find a perfect deal. All of a sudden you find a special deal at a very low rate. You call the agent and sign the papers, happy you found this agent. Two months later one of your employees gets sick and you send him to your local hospital, but somehow he is denied to receive basic health care. You figure out you have signed a false insurance and gave the money to a thief.
Insurance industries report a possible 3% to 10% of all insurance claims are frauds. There also are many reports of exaggeration, for instance if a thief has stolen a TV from someone, he will usually hide his computer and radio and add it too the report. The second ones usually are average people

Healthcare Fraud: Poplar Healthcare PLLC, Agree To Pay to Resolve A False Claims Act Allegations

Poplar Healthcare to Pay Nearly $900,000 to Resolve A False Claims Act Allegations

PROVIDENCE, RI – Acting United States Attorney Stephen G. Dambruch and Philip Coyne, Special Agent-in-Charge of the Boston Office of Inspector General for the Department of Health and Human Services (HHS-OIG), today announced that Poplar Healthcare PLLC, and Poplar Healthcare Management, LLC (“Poplar”), of Memphis, TN, have entered into a civil settlement agreement with the United States, under which Poplar will pay $897,640 to resolve allegations under the federal False Claims Act. The government alleges that Poplar, directly and through a subsidiary known as GI Pathology, promoted and billed the government for diagnostic tests that the government contends were not medically necessary.

An investigation by the HHS-OIG and the United States Attorney’s Office for the District of Rhode Island determined that these tests, known as immunohistochemical mast cell tryptase stains, were the subject of an extensive, multi-year promotional campaign designed to promote the use of the stain, claiming that Poplar could use the test to definitively diagnose a condition known as “mast cell enterocolitis.” The Government alleged that Poplar’s promotion of the test was not consistent with FDA approval requirements, and not supported by adequate scientific evidence.

“Federal funding for diagnostic tests and procedures is predicated on the principle that those tests are ordered because they are medically necessary and in the best interest of patients, and not on other, inappropriate factors.” said Acting U.S. Attorney Stephen G. Dambruch. “We will continue to take aggressive action to address situations where profit, rather than the best interests of patients, drives the decision to conduct and bill for medical tests.”

“Our agency will continue to aggressively investigate health care providers that bill Medicare for unnecessary services just to boost profits,” said Special Agent in Charge Phillip Coyne, U.S. Department of Health and Human Services Office of Inspector General. “And we will not tolerate abuse of the system for personal gain, which can undermine medical decision-making and the public’s trust in the health profession.”

The investigation that led to the settlement began after Gordon Wang, M.D., a pathologist formerly employed by Poplar, filed a complaint against the company on behalf of the United States in the U.S. District Court for the District of Rhode Island. Under the federal False Claims Act, a private individual who has uncovered fraud against the federal government may file a suit in federal court on behalf of the United States. If the United States is successful in resolving those claims, the individual who filed the complaint may receive a share of the recovery. Dr. Wang will receive $205,841 from the proceeds of the settlement.

The government’s case was handled by Assistant U.S. Attorneys Zachary A. Cunha and Bethany N. Wong, with the assistance of Trial Attorney Michael E. Shaheen of the Department of Justice’s Civil Division.


Contact:

Jim Martin (401) 709-5357

email: USARI.Media@usdoj.gov(link sends e-mail)

on Twitter @USAO_RI
Poplar Healthcare to Pay Nearly $900,000 to Resolve A False Claims Act Allegations
PROVIDENCE, RI – Acting United States Attorney Stephen G. Dambruch and Philip Coyne, Special Agent-in-Charge of the Boston Office of Inspector General for the Department of Health and Human Services (HHS-OIG),
https://goo.gl/U46cE5