Fraud in the News

Bank of America Responds to Breach

Thu, 09 Feb 2012 12:42:23 -0500

Bank of America blames a suspected breach of credit card data on an unidentified third party. The incident illustrates the risks institutions increasingly face when they rely heavily on partners and suppliers.

BofA has sent letters to select customers, notifying them of a possible compromise that likely exposed details about their credit card accounts. Though the bank's spokesperson would not reveal how many of accountholders were affected, she did say the institution is taking necessary steps to address known security gaps.

Former Bank Worker Charged with Stealing More Than $1.8 Million from Employer

Thu, 09 Feb 2012 12:39:22 -0500

A former bank employee was arrested this morning and charged with stealing $1.8 million from her employer and concealing the thefts while acting as the victim’s executive assistant, U.S. Attorney Paul J. Fishman announced.

Karen R. Febles, 47, of Palisades Park, N.J., was arrested at her home by agents of the IRS and FBI and charged by complaint with one count each of bank fraud and money laundering. She was scheduled to make her initial appearance later in the day before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court.

Scott Rothstein’s uncle pleads guilty to fraud in $1.2 billion Ponzi scheme

Thu, 09 Feb 2012 12:35:28 -0500

Scott Rothstein’s uncle, the co-conspirator closest to the convicted Ponzi schemer, pleaded guilty Wednesday to helping his nephew carry out a $1.2 billion investment racket.

William “Bill” Boockvor was at the disgraced Fort Lauderdale lawyer’s side during his wild four-year ride fleecing investors from Florida to New York, until the scam unraveled in fall 2009.

Global financial fraud case goes to trial in Minneapolis

Thu, 09 Feb 2012 12:31:48 -0500

A world map splattered with red dots shows the reach of a massive identity-theft case that went to trial this week in federal court in Minneapolis.

Jurors will hear testimony about what prosecutors describe as a sophisticated international conspiracy that stole and counterfeited thousands of identities, took over accounts at some of the nation's largest financial institutions, defrauded mortgage lenders, credit card companies and consumers and then laundered the proceeds.

Cops bust GTA debit card skimming ring

Thu, 09 Feb 2012 12:14:12 -0500

Halton Regional Police announced on Friday the multi-force takedown of a fraud ring responsible for over a quarter of a million dollars in debit card skimming.

It was on Jan. 31 — after the fraud bureau launched an investigation — that officers from various police forces swooped on several homes in the GTA, arresting 12 people and seizing numerous pieces of equipment allegedly used to copy debit card information at bank machines and gas station ATMs, as well as at some other commercial points of sale.

Identity Theft Device Falls Off as Woman Uses ATM

Tue, 07 Feb 2012 12:03:34 -0500

A Bank of America customer got more than cash when she tried to use a Bleecker Street ATM recently — a device designed to steal her card details came off in her hand as she inserted her card, police said.

Amazingly, the man who planted the identity stealing technology then appeared — and asked for it back.

Anonymous Attacks Citi

Tue, 07 Feb 2012 12:00:41 -0500

Citigroup has confirmed its consumer banking sites were temporarily offline Friday because of what a bank spokesman referred to as temporary outages. Hackers with Anonymous have claimed to be behind the attacks.

Former Orion Bank President Pleads Guilty to Conspiracy to Commit Bank Fraud

Tue, 07 Feb 2012 11:56:55 -0500

U.S. Attorney Robert E. O’Neill announces that Jerry J. Williams (51), formerly of Naples, Florida, and currently residing in Fort Worth, Texas, pleaded guilty to conspiracy to commit bank fraud and making false statements to federal regulators. Williams faces a maximum penalty of 15 years in federal prison. A sentencing date has not yet been set.

According to the plea agreement, Williams, the former President of Orion Bank, participated in a conspiracy with top Orion Bank executives ...

Pharmacy Tech Embezzles over 200K from Employer

Tue, 07 Feb 2012 11:54:02 -0500

An Arkansas man has been charged with bank fraud after embezzling from his employer. 44 year old Michael Wallace was sentenced to 37 months in prison and 5 years supervised release for bank fraud and obstruction. An investigation revealed that from 2007 to 2010 Wallace wrote over $200,000 in forged checks from Hardin's Compounding Pharmacy in West Monroe.

F&S Oil Company Auditor Admits Role in Bank Fraud Scheme

Tue, 07 Feb 2012 11:49:59 -0500

The United States Attorney for the District of Connecticut announced that DALE K. CICCARELLI, 57, of Southbury, waived his right to indictment and pleaded guilty today before Senior United States District Judge Alfred V. Covello in Hartford to one count of conspiracy to commit bank fraud and one count of aiding and assisting the filing of a false federal tax return. The charges stem from CICCARELLI’s role in a scheme by principals of F&S Oil to defraud Citizens Bank of millions of dollars.

Former Norfolk Resident Pleads Guilty to Bank Fraud

Thu, 02 Feb 2012 13:32:02 -0500

Jady Brooks, 39, of Atlanta, Georgia and formerly of Norfolk, Virginia, pled guilty today in Norfolk federal court to defrauding Navy Federal Credit Union and filing a false federal tax return. He faces a maximum penalty of 30 years in prison on the bank fraud charge, and three years in prison on the tax charge, when he is sentenced on May 7, 2012.

3 Former Traders at Credit Suisse Charged With Bond Fraud

Thu, 02 Feb 2012 13:28:45 -0500

The government charged three former Credit Suisse traders on Wednesday with inflating the value of mortgage bonds as the housing market collapsed, a rare criminal prosecution of Wall Street executives for their conduct during the financial crisis.

Federal prosecutors contend they deployed the scheme to increase their year-end bonuses.

Former VP of Jersey State Bank Sentenced for Bank Fraud

Thu, 02 Feb 2012 13:26:08 -0500

Mary S. Becker, 57, of Jerseyville, IL, was sentenced in federal court, today, for bank fraud, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced. Becker received a sentence of 63 months in prison, a $100 special assessment, five years’ supervised release, and mandatory restitution in the amount of $4,450,000.

Former Executive of Ocean Bank Pleads Guilty

Thu, 26 Jan 2012 12:46:39 -0500

A former executive of Miami-based Ocean Bank pleaded guilty today in U.S. District Court in Miami to participating in a scheme to accept bribes and to failing to report the income on federal income tax returns, the Department of Justice announced.

PA Man Pleads Guilty to Bank and Wire Fraud Charges

Thu, 26 Jan 2012 12:44:08 -0500

Bernard Stromberg, Jr., 40, of Morrisville, Pa., pleaded guilty today to conspiracy to commit bank and wire fraud charges.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement after the plea was accepted by United States District Judge Arenda Wright Allen.

Stromberg was indicted on October 13, 2011, by a federal grand jury on conspiracy to commit bank and wire fraud charges, engaging monetary transaction in proceeds derived from unlawful activity, and false statement on a loan application. Stromberg faces a maximum penalty of thirty years when he is sentenced on May 1, 2012.

Once-Convicted Con-Man Arrested

Thu, 26 Jan 2012 12:40:29 -0500

The U.S. Attorney and Postal Inspection Service announced Tuesday that Eric Stein, age 53, had been arrested and charged “with running an investment scam through Return-A-Pet LLC–a Manhattan-based company he operated…” Authorities who investigated Stein’s business say he may have lined his pockets with up to a half-million dollars over the last 3 years by hoodwinking consumers into buying “sham Return-A-Pet distributorships using false and misleading advertisements.”

Alabama Return Preparers Plead Guilty to ID Theft and Tax Fraud Scheme

Thu, 26 Jan 2012 12:37:01 -0500

Yumeitrius Manuel and Margaret Kirksey, both of Montgomery, Ala., pleaded guilty to charges of conspiracy to defraud the government and aggravated identity theft, the Justice Department and Internal Revenue Service (IRS) announced today. Kirksey pleaded guilty today. Manuel pleaded guilty on Jan. 11, 2012. The two had been indicted by a federal grand jury on July 27, 2011, on charges of conspiracy, aggravated identity theft, wire fraud, false claims and lying to federal agents.

Florida Loan Officer Sentenced in Connection with $2.5 Million Reverse Mortgage Fraud

Thu, 26 Jan 2012 12:33:58 -0500

A loan officer was sentenced Friday by U.S. District Court Judge William P. Dimitrouleas in Ft. Lauderdale, Fla., for his participation in a nationwide $2.5 million reverse mortgage fraud scheme, the Justice Department announced.

Louis Gendason, 42, of Delray Beach, Fla., was sentenced to 70 months in prison, five years of supervised release and ordered to pay over $2 million in restitution. Gendason was the mastermind ...

Former bank officer gets 2 years for bank fraud

Tue, 24 Jan 2012 12:04:08 -0500

A former Wachovia Bank officer was sentenced on Friday to more than two years in federal prison for bank fraud, the U.S. Attorney's Office in Tampa said.

Andrew Vulpis, 30, of Gibsonton, was sentenced to 30 months in federal prison and ordered to repay $1.2 million. Vulpis forfeited a 2007 Volvo S40-5 sedan in partial satisfaction of the money judgment, the U.S. Attorney's Office said.

Insider Stole from Fed Reserve

Tue, 24 Jan 2012 12:00:14 -0500

Prosecutors have charged a former computer programmer at the Federal Reserve with stealing software used to track federal collections and payments.

Prattville Man Pleads Guilty to $1,887,000 Bank Fraud

Tue, 24 Jan 2012 11:57:57 -0500

Brooks L. Lazenby, age 44, of Prattville, entered a guilty plea to a one-count felony information charging him with bank fraud, U.S. Attorney George L. Beck, Jr., announced today.

According to court records, Lazenby owned Brooks Lazenby Builders, L.L.C. (“BLB”), in Prattville. BLB maintained bank accounts at Guardian Credit Union, BankTrust, and First Community Bank of Central Alabama (“FCB”).

Norfolk Man Pleads Guilty to Health Care Fraud and Bank Fraud

Tue, 24 Jan 2012 11:52:06 -0500

On January 19, 2012, Mark Koehler, 52 years old, of Norfolk, Nebraska, appeared before Magistrate Judge Cheryl Zwart in federal court in Lincoln, Nebraska, waived indictment, and pled guilty to an information charging health care fraud and bank fraud. The information charged, and Koehler admitted, that between January 2007 and January 2010, in his position as bookkeeper and accountant for Heartland Physical Therapy (HPT) in Norfolk, he submitted false claims to Medicare, Nebraska Medicaid, and to various private insurance companies totaling slightly more than $1.4 million.

Herrin man sentenced to over 3 years for $700,000 in wire fraud

Tue, 24 Jan 2012 11:47:11 -0500

The U.S. Attorney Stephen R. Wigginton of the Southern District of Illinois announced Friday that a Herrin man was sentenced for wire fraud.

Francis T. Deutsch, 64, was sentenced in the U.S. Court in Benton, Ill. to over three years in prison and five years mandatory supervised release. The court also ordered him to pay $777,254 in restitution, $600,000 in forfeitures to the United States and a special assessment of $100. Deutsch pleaded guilty on June 9 to one count of wire fraud.

Breached Merchant Sues Processor

Thu, 19 Jan 2012 11:26:59 -0500

Family-owned Cisero's claims Elavon Inc., its former payments processor, and U.S. Bank, its former acquirer, illegally charged the Park City, Utah, restaurant chain fees and fines after an alleged card breach. Elavon and U.S. Bank are part of U.S. Bancorp.

Former CFO Pleads Guilty to Wire Fraud

Thu, 19 Jan 2012 11:24:54 -0500

The former chief financial officer of Columbus Hill Capital Management LP, an investment management firm based in Short Hills, N.J., today admitted to embezzling more than $10.4 million from his employer, announced U.S. Attorney Paul J. Fishman.

David Newmark, 39, of Towaco, N.J., surrendered to federal authorities today and pleaded guilty to an information charging him with one count of wire fraud and one count of tax evasion. Newmark entered his guilty plea before U.S. District Judge William H. Walls in Newark federal court.

Decade-Long Virus Infection Discovered

Thu, 19 Jan 2012 11:21:47 -0500

Recently discovered viruses, consisting of Trojans and other malware, at City College of San Francisco have stolen personal banking information and other data from perhaps tens of thousands of students, faculty and administrators, says John Rizzo, president of the board of trustees.

Accountant From Chicago Accused of Bank Fraud and Defrauding Clients of Over $2 Million

Thu, 19 Jan 2012 11:19:36 -0500

A north suburban certified public accountant and tax preparer was indicted on federal charges for allegedly engaging in schemes to defraud U.S. Bankcorp and five of his clients of more than $2 million.

Zappos Breach Affects 24 Million

Tue, 17 Jan 2012 11:26:55 -0500

Online shoe and clothing retailer Zappos.com has issued an e-mail alert to more than 24 million customers regarding a newly-discovered data breach.

In a blog post, Tony Hsieh, CEO of Zappos, explains that a criminal gained access to certain parts of the network through one of the company's servers in Kentucky.

"We are cooperating with law enforcement to undergo an exhaustive investigation," Hsieh says.

Iowan to plead guilty in wire fraud case with Nevada victims

Tue, 17 Jan 2012 11:22:30 -0500

Prosecutors expect an Iowa man charged with swindling investors out of more than $800,000 in phony mining and gambling ventures to plead guilty to wire fraud and making false statements today, but the defendant said Monday he would not appear in court.

Donald K. Washburn, 62, of Cedar Rapids was expected to enter the guilty pleas as part of a deal in which he will agree to pay at least $821,000 in restitution, assistant U.S. Attorney Matthew Cole wrote in a court filing last week. Washburn has agreed to forfeit a golf cart and trailer, a Ford truck, a diamond ring and $325,000 in cash, Cole wrote.

California Man Enters Plea in Nearly $1,000,000 Theft

Tue, 17 Jan 2012 11:17:18 -0500

Charles M. Oberly, III, United States Attorney for the District of Delaware, and James F. Yacone, Special Agent in Charge, Federal Bureau of Investigation, Denver, Colorado, announced today that Wyatt Yeager, 33, of California, has entered a guilty plea to a one count felony information. The information is merely an accusation, and all defendants are presumed innocent unless proven guilty.

The criminal information charges Yeager with theft of major artwork, in violation of Title 18, United States Code, Section 668.

Man Accused of Over $1.5 Million Financial Fraud

Tue, 17 Jan 2012 10:49:19 -0500

A man facing dozens of financial fraud charges in five states has been booked in to the Baldwin County Jail. That's according to the Baldwin County Sheriff's Office.

Capt. Brad King says Akop Taymizyam faces financial card transaction fraud and id theft charges after the debit card information of a person living in Baldwin County was stolen and used in the Atlanta area.

2 more sentenced in massive $800M fraud at defunct Pa. soft drink company Le-Nature’s

Thu, 12 Jan 2012 12:14:14 -0500

Two more businessmen associated with the massive $800 million fraud scheme at a defunct western Pennsylvania soft drink company have been ordered to spend five years in prison.

Former Le-Nature’s Inc. Chief Operating Officer Jonathan Podlucky and North Carolina businessman Donald Pollinger both received sentences Tuesday well below federal guidelines in return for their cooperation in the case.

Teenager Sentenced for Card Skimming

Thu, 12 Jan 2012 12:11:38 -0500

A 17-year-old was slapped with a 60-day jail sentence after he was busted for skimming credit and debit details while working the drive-thru window at a McDonald's restaurant in Olympia, Wash. This insider scam highlights a card fraud trend the industry needs to watch, experts say.

Card-skimming expert and fraud consultant Jerry Silva says the case highlights just how easy it is for insiders to perpetrate card fraud, especially in a retail environment.

Feds Bust $1.5 Million ATM Skimming Scheme

Thu, 12 Jan 2012 12:08:32 -0500

Federal officials Friday announced the arrest of Laurentiu Iulian Bulat, a Romanian citizen who allegedly installed card skimmers on more than 40 ATMs in the New York City metropolitan area.

Prosecutors have accused Bulat, who overstayed his U.S. visa, of participating in a fraud ring that netted at least $1.5 million via the card skimmers between May 2011 and January 5, 2012. Bulat alone was charged Thursday with conspiracy to commit bank fraud, as well as bank fraud. If convicted of both charges, he could serve up to 60 years in prison.

Salem Man Charged with Bank Fraud and Identity Theft

Thu, 12 Jan 2012 12:05:08 -0500

A grand jury returned a four-count indictment charging Raymond G. Isabella, age 54, of Salem, Ohio, with three counts of bank fraud and one count of aggravated identity theft, federal officials announced today.

Isabella was a Certified Public Accountant licensed by the State of Ohio, and was the chief financial officer of Intrasee, Inc., a privately owned corporation, according to the indictment.

Big Twin Cities ID theft ring unmasked

Tue, 10 Jan 2012 11:45:23 -0500

Federal authorities in Minnesota are lowering the boom on a large group of individuals from the Twin Cities suspected of identity theft, bank fraud and money laundering activities that spread out to at least a dozen states and stole at least $2 million.

So far, eight people have been charged in the alleged conspiracy in U.S. District Court in St. Paul, and several have entered guilty pleas and are cooperating with prosecutors. Sources close to the investigation say they expect about 20 plea bargains, and a dozen or more people to be charged by grand jury indictments in the near future.

HSBC ATM Skimmer Arrested

Tue, 10 Jan 2012 11:42:55 -0500

New York law enforcement authorities have announced the takedown of an ATM skimming scheme that compromised more than 40 ATMs at HSBC bank branches in Manhattan, Long Island, and Westchester, N.Y.

According to a statement issued by the U.S. Attorney's Office and the U.S. Secret Service, the scheme, under investigation since May, involved compromised ATM card readers, the recording of PIN entries and the creation of counterfeit cards.

ATM fraud hits DBS to the tune of $500k

Tue, 10 Jan 2012 11:39:56 -0500

DBS Group has lost $500,000 to fraudsters who withdrew the cash from the accounts of about 400 customers earlier this week at ATMs in Malaysia but does not expect further losses, it said yesterday.

Customers who used two of its standalone ATMs at Bugis Street over a three-day period in late November are likely to have had their card details and personal identification numbers (PINs) stolen, according to the bank's analysis of the fraud victims' transaction records.

The bank has moved swiftly, contacting all 2,726 customers it believed to be at risk after using those ATMs, deactivated their ATM and debit cards, and offered them replacements.

Coraopolis Man Sentenced to 50 Months in Prison for Bank Fraud

Tue, 10 Jan 2012 11:37:09 -0500

A resident of Coraopolis, Pennsylvania has been sentenced in federal court to 50 months in prison and five years’ supervised release on his conviction of bank fraud and money laundering, United States Attorney David J. Hickton announced today.

Senior United States District Judge Alan N. Bloch imposed the sentence on Dimitri Manos, 25.

Top 10 scams of 2012

Thu, 05 Jan 2012 14:13:24 -0500

The Better Business Bureau has released its list of the top 10 scams of 2012, warning scammers are capitalizing by using false pretences to con consumers.

The list is developed jointly by the BBB, Consumer Protection B.C., and the B.C. Crime Prevention Association.

FORT LAUDERDALE POLICE OFFICER CHARGED WITH WIRE FRAUD

Thu, 05 Jan 2012 14:09:02 -0500

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Franklin Adderley, Chief of Police, Fort Lauderdale Police Department, announced the filing of a criminal Information charging defendant David Michael McElligott, 47, of Warner Robins, GA and currently stationed at Robins Air Force Base, GA, with one count of wire fraud, in violation of 18 U.S.C. §1343. If convicted, the defendant faces a statutory maximum of twenty years in prison.

Woman In $2.5 Million Bank Fraud Gets Long Prison Term

Thu, 05 Jan 2012 14:03:48 -0500

A woman has been sentenced to 12 1/2 years in federal prison for her role in stealing, or helping her friends steal, nearly $2.5 million from Pittsburgh's only minority-owned bank, which failed as a result.
Elexa Manos-Becton, 43, of Coraopolis, pleaded guilty in June to bank fraud and money laundering. Another woman, Jammie Harris, 46, was previously sentenced to nine years in prison.

"This is not a case of a bank going down because of packaging bad loans or derivative packages," said U.S. Attorney David Hickton. "This was a good bank taken down by opportunistic financial predators."

Former UNC Basketball Player Guilty of Bank Fraud

Tue, 03 Jan 2012 11:26:55 -0500

Former University of North Carolina basketball player Courtney Dupree was found guilty last week of lying about receivables to New York-based Amalgamated Bank to maintain a line of credit for his holding company GDC Acquisitions LLC, which owned lighting and furniture dealers.

Though the jury heard a month long trial, it only took them five and a half hours to deliberate ...

HSH Nordbank, Credit Suisse, Madoff, GE in Court News

Tue, 03 Jan 2012 11:21:25 -0500

Six former HSH Nordbank AG executives were charged with breach of trust and accounting crimes over their role in collateralized-debt obligations that led to writedowns of 500 million euros ($647 million) in 2008.

Prosecutors have been investigating the so-called Omega 55 transaction since 2009. Among the six now charged are former Chief Executive Officers ...

Former Credit Union Victim of Multimillion Dollar Mortgage Fraud

Tue, 03 Jan 2012 11:14:24 -0500

Coastway Community Bank, formerly known as Coastway Community Credit Union, has been the victim of a multimillion dollar mortgage fraud, according to the Rhode Island State Police.

The police have announced the arrests of two brothers, Dr. Timothy O'Brien of South Kingstown, R.I., and Eugene O'Brien of Westport, Mass., for the alleged fraud.

Elizabeth Bernal Wanted on 19 Counts of Fraud Charges

Tue, 03 Jan 2012 10:49:20 -0500

Hot check writers, take note: they will find you. This week's Manhunt Monday Most Wanted Fugitive is sought on a slew of forgery and fraud charges dating back to 2004.

49-year-old Elizabeth Bernal is the target of the El Paso County Sheriff's weekly feature.

Bernal is wanted on 19 counts of forgery or fraud charges.

ATM Skimmer Pleads Guilty

Thu, 22 Dec 2011 12:03:38 -0500

A suspect linked to an ATM skimming scheme in New England, impacting more than 250 bank accounts, has pleaded guilty to charges of conspiracy to commit bank fraud.

Gabriella Graham, a 21-year-old who once lived in New London, Conn., on Dec. 19 told a U.S. Court in New Haven that she helped produce counterfeit ATM/debit cards with skimmed card data, copied PINs and occasionally used the counterfeit cards to make unauthorized ATM cash withdrawals. She also told the court she served as a lookout while two other co-conspirators installed and removed skimming devices.

Man Sentenced to 46 Months for Role in ATM 'Skimming' Scheme

Thu, 22 Dec 2011 12:00:57 -0500

Ion Constantine, one of four people arrested for their involvement in an ATM “skimming” scheme at People’s Bank in Cos Cob, among other Fairfield County banks, was sentenced to 46 months in prison, followed by five years of supervised release, in federal court in Bridgeport today, according to statement issued by David B. Fein, United States Attorney for the District of Connecticut.

Father and Daughter Indicted for Bank Fraud

Thu, 22 Dec 2011 11:57:57 -0500

U.S. Attorney Brendan V. Johnson announced that a father and daughter from the Wentworth area have been indicted by a federal grand jury for bank fraud.

Dan Feige, age 57, and Heather Feige, age 34, were indicted by a federal grand jury on December 6, 2011, for Bank Fraud...

Guilty Pleas Entered in Ohio's Largest Mortgage Fraud Case

Thu, 22 Dec 2011 11:54:56 -0500

Uri Gofman, Anthony Capuozzo, The Real Asset Fund, Clear Choice Realty and Karka, Inc. pleaded guilty to mortgage fraud crimes covering more than 500 real estate transactions totaling $50 million, involving $44 million in fraudulent loans, and earning $31 million in profits.

Uri Gofman, 39, Beachwood, Ohio, pleaded guilty to eleven (11) counts including; one (1) count of engaging in a pattern of corrupt activity, one (1) count of theft, two (2) counts of money laundering, one (1) count of telecommunications fraud, and six (6) counts of tampering with records.