Former CEO of Tech Company Pleads Guilty to Insider Trading

On February 21, 2018, Peter C. Chang, the former President and CEO of Directors of Alliance Fiber Optic Products (“AFOP”), pleaded guilty to insider trading and tender offer fraud.  AFOP, which is publicly traded on the NASDAQ, is a manufacturer of fiber optic components.  As part of his guilty plea, Chang admitted that he traded AFOP stock through brokerage accounts in the names of his wife and brother sold AFOP stock before two public announcements ... Continue Reading

New York Accountant Pleads Guilty in Stock Manipulation Scheme that Netted Millions in Illicit Profits

On February 20, 2018, a New York-based accountant pleaded guilty to a two-count criminal information charging him with conspiracy to commit securities fraud and conspiracy to commit tax fraud.  According to court documents, between 2014 and 2016 Shaun Greenwald conspired with Joseph Taub and others to manipulate the prices of several publicly traded companies through coordinated trading in dozens of “straw accounts” held at various broker-dealers.  Using accounts in the names of family members, the ... Continue Reading

Former Assistant Trader at Chicago Firm Charged with Misappropriating $2 Million in Bitcoin, Litecoin

On February 15, a former Chicago-based trader, Joseph Kim, was charged with fraud arising from his alleged misappropriation of $2 million in cryptocurrency.  Kim is alleged to have covered his own losses in trading cryptocurrency futures by shifting more than $2 million of Bitcoin and Litecoin from the accounts of his employer, Consolidated Trading LLC, to his personal account.  Kim is also alleged to have lied to the company when asked to account for the ... Continue Reading

New Jersey Hedge Fund Owner Convicted of Wire Fraud and Securities Fraud

On February 15, 2018, a jury convicted Nicholas Lattanzio, the owner and manager of the hedge fund Black Diamond Capital Appreciation Fund L.P., of defrauding investors in his hedge fund of over $4 million.  According to the evidence at trial, Lattanzio collected the fees from investors promising to provide future loans and investment opportunities, but instead used the fees for personal expenses. United States v. Lattanzio, 15-cr-446 (D.N.J.)

DOJ Press Release

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Manhattan U.S. Attorney Announces Criminal Charges Against U.S. Bancorp for Violations of the Bank Secrecy Act

On February 15, 2018, the DOJ announced that it was charging U.S. Bancorp (“Bancorp”) with two counts of violating the Bank Secrecy Act, based on conduct by its subsidiary, U.S. Bank NA (“U.S. Bank”), the fifth largest bank in the United States.  The DOJ agreed to defer prosecution for two years based on an agreement with U.S. Bank, in which it will pay a $528 million criminal penalty and undertake efforts to reform its Bank ... Continue Reading

Two Russian Nationals Involved in Global Hacking Scheme Sentenced to Federal Prison Terms

On February 14, two Russian nationals were sentenced for their involvement in a scheme that hacked the systems of corporate victims to steal credit card numbers for resale worldwide.  Vladimir Drinkman was sentenced to 144 months in prison, and Dmitriy Smilianets was sentenced to 51 months.  The two defendants, as well as three others who are fugitives, caused hundreds of millions in losses in a scheme that compromised 160 million credit card numbers.  The scheme ... Continue Reading

Five Former Venezuelan Government Officials Charged in Money Laundering Scheme Involving Foreign Bribery

On February 12, 2018, five former officials of Venezuela’s state-owned energy company were charged with laundering the proceeds of bribes.  According to the indictment, the defendants—all of whom were at the time officials of state-owned Petroleos de Venezuela S.A. (“PDVSA”) or other Venezuelan government instrumentalities—conspired to launder the proceeds of bribes that several of them had solicited from vendors in exchange for offering the vendors preferential treatment in dealings with PDVSA.  The five individuals allegedly ... Continue Reading

Thirty-Six Defendants Indicted for Alleged Involvement in Global Cyberfraud Organization

On February 7, a Las Vegas grand jury returned a nine-count superseding indictment charging 36 individuals from the United States and six other countries with involvement in an international cyberfraud enterprise.  All 36 individuals were alleged to be involved in the “Infraud Organization,” an Internet-based fraud organization alleged to have cost $2.2 billion in losses to victims since 2010.  The organization is alleged to have trafficked largely in identity theft and hacking, and its victims ... Continue Reading

Rabobank NA Pleads Guilty, Agrees to Pay Over $360 Million in Connection with Anti-Money Laundering Failures

On February 7, 2018, Rabobank National Association (“Rabobank”), a U.S. subsidiary of Netherlands-based Cooperative Rabobank U.A., pleaded guilty to one count of conspiracy to defraud the United States and to corruptly obstruct the examination of a financial institution.  According to court filings, Rabobank executives conspired to conceal significant deficiencies in the bank’s Bank Secrecy Act (“BSA”) and anti-money laundering (“AML”) program and to obstruct a periodic examination of Rabobank’s Southern California operations by the Office ... Continue Reading

New York Man Sentenced to 87 Months for Multi-State Biodiesel Fraud Scheme

On February 6, 2018, Andre Bernard was sentenced to 87 months in federal prison in connection with a multi-state scheme to defraud biodiesel buyers and U.S. taxpayers.  According to court documents and his plea colloquy, Bernard and his co-conspirators fraudulently claimed tax credits for already-credited renewable fuels by using a series of false transactions to transform the fuel back into feedstock in order to produce more renewable fuel.  Between March 2013 and March 2014, Bernard ... Continue Reading

Acting Deputy Assistant Attorney General M. Kendall Day of the Criminal Division Delivers Testimony Before the Senate Committee on the Judiciary

On February 6, 2018, Acting Deputy Assistant Attorney General M. Kendall Day of the DOJ’s Criminal Division testified before the Senate Judiciary Committee, which held a hearing titled “Beneficial Ownership: Fighting Illicit International Financial Networks Through Transparency.”  In his remarks, Day highlighted gaps in anti-money laundering laws that are increasingly exploited through the misuse of corporate structures, referring to the “pervasive use of front companies, shell companies, [and] nominees” as “one of the greatest loopholes” ... Continue Reading

Hedge Fund Manager Charged in Manhattan Federal Court with Scheme to Defraud Investors

On February 2, 2018, Nicholas Genovese was charged with securities fraud and wire fraud for allegedly inducing investments in a hedge fund that he founded, Willow Creek Investments LP, by misrepresenting his credentials and work experience.  Based on these representations, victims invested at least $4 million with Willow Creek.  When investors attempted to regain their investments, Genovese refused to return their money. United States v. Genovese, 18-cr-183 (S.D.N.Y.)

DOJ Press Release ... Continue Reading

Former CEO of Detroit Information Technology Company Indicted for Bribery of City Official

On January 30, 2018, John P. Cronan, the Acting Assistant Attorney General of the Criminal Division announced that the former CEO of a Detroit information technology company had been indicted for his role in bribing a public official.  Parimal Mehta, the former CEO, is alleged to have made payments to the former Director of Detroit’s Office of Departmental Technology Services Charles Dodd.  In exchange, he is alleged to have secured favorable treatment for his company—adding ... Continue Reading

Arkansas State Senator Pleads Guilty to Wire Fraud, Money Laundering and Bank Fraud

On January 29, 2018, Arkansas State Senator Jake C. Files pled guilty before Chief U.S. District Court Judge P. K. Holmes III of the Western District of Arkansas to an information charging him with one count of wire fraud, one count of money laundering, and one count of bank fraud.  Files admitted that, between August 2016 and December 2016, he used his government position to obtain state funds, known as General Improvement Funds (“GIF”), through ... Continue Reading

Three Defendants Convicted in Securities Fraud Investigation

On January 26, 2018, federal officials announced that three additional individuals have pled guilty to conspiracy charges in connection with several “pump and dump” and other stock manipulation schemes involving fraudulently registered companies.  According to public statements from the U.S. Attorney’s Office for the Southern District of Florida and court filings, owner of stock transfer agent Manhattan Transfer Registrar Co. (“Manhattan Transfer”) John Ahearn and California attorney Andrew H. Wilson each pled guilty to one ... Continue Reading

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