Posts Tagged With Fraud

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CVS Pharmacy, Inc. to Pay $1.5 Million to Settle Civil Penalty Claims for Violations of The Controlled Substances Act

CVS Pharmacy, Inc. (“CVS”) agreed to pay $1.5 million to resolve a federal investigation into pharmacy stores located in Nassau and Suffolk counties on Long Island, New York.  The pharmacies were under investigation for potentially violating the Controlled Substances Act, a federal law that requires pharmacies to timely report the loss or theft of controlled substances to the DEA.  This civil settlement is the latest in a series of cases enforced by the United States ... Continue Reading

As Part of National Healthcare Fraud Sweep, Los Angeles-Based Prosecutors Filed 16 Cases Alleging $660 Million in Fraudulent Bills

On June 28, 2018, federal authorities in Los Angeles, California announced criminal cases naming a total of 33 defendants charged with a variety of schemes to defraud public and private insurance programs out of more than $660 million.  As part of a nationwide effort to target healthcare fraud, prosecutors charged numerous defendants, including doctors, pharmacists, marketers, and an attorney.  First, nine defendants were charged in Operation “Spinal Cap,” which targeted a healthcare fraud scheme involving ... Continue Reading

Theranos Founder and Former Chief Operating Officer Charged In Alleged Wire Fraud Schemes

On June 15, 2018, a federal grand jury indicted Elizabeth A. Holmes and Ramesh “Sunny” Balwani with two counts of conspiracy to commit wire fraud and nine counts of wire fraud.  According to the indictment, Holmes, the founder of Theranos, and Balwani, the former chief operating officer, engaged in a multi-million dollar scheme to defraud investors, and a separate scheme to defraud doctors and patients.  Theranos, based in Palo Alto, California, is a private healthcare ... Continue Reading

Former Brooklyn Assemblywoman Pleads Guilty to Multiple Fraud Schemes and Witness Tampering

On June 12, 2018, former New York State Assemblywoman Pamela Harris pleaded guilty to two counts of wire fraud, one count of making false statements to the Federal Emergency Management Administration (FEMA), and one count of witness tampering.  DOJ alleged that from 2012 to 2014 Harris defrauded FEMA of nearly $25,000 by submitting falsified lease agreements that allegedly showed she was forced out of her residence by Hurricane Sandy.  In reality, Harris continued to live ... Continue Reading

Investment Bank Vice President Arrested, Charged with Conspiracy and Securities Fraud in Insider Trading Scheme

On May 31, a complaint filed in Manhattan federal court charged Woojae Jung, the vice president at an investment bank, with conspiracy and securities fraud in connection with an insider trading scheme.  The complaint alleges that Jung obtained material non-public information through his position at the investment bank and, working with a co-conspirator located in South Korea, used this information to conduct securities trades through a brokerage account held in the co-conspirator’s name.  The complaint ... Continue Reading

Former CEO, CFO and Director of Healthcare Services Company Charged in Elaborate $300 Million Investment Fraud Scheme

On May 16, 2018, three former executives of a publicly traded healthcare services company were charged with conspiracy to commit securities fraud and securities fraud for their respective roles in an alleged scheme to defraud investors in connection with a purported $300 million going-private transaction.  According to authorities, New Jersey residents Parmjit “Paul” Parmar, Sotirios “Sam” Zaharis, and Ravi Chivukula used a variety of fraudulent methods to inflate the value of unnamed “Company A” to ... Continue Reading

Former CEO of Volkswagen AG Charged with Conspiracy and Wire Fraud in Diesel Emissions Investigation

On May 3, 2018, authorities announced the unsealing of wire fraud and conspiracy charges against former Volkswagen AG (“VW”) CEO and board chairman Martin Winterkorn in connection with VW’s use of so-called “defeat device” software to cheat U.S. vehicle emissions testing.  Winterkorn is accused of conspiring with other VW executives and employees to defraud the United States, defraud VW’s U.S. customers, and to violate the Clean Air Act through false representations regarding the compliance of ... Continue Reading

Barclays Agrees to Pay $2 Billion in Civil Penalties to Resolve Claims for Fraud in the Sale of Residential Mortgage-Backed Securities

On March 29, 2018, officials announced that Barclays Capital, Inc. and several of its affiliates agreed to settle a civil action brought in December 2016 in relation to the underwriting and issuance of residential mortgage-backed securities (“RMBS”) between 2005 and 2007.  Barclays agreed to pay $2 billion in civil penalties in exchange for dismissal of the government’s amended complaint.  The complaint alleged that Barclays misled investors about the quality of underlying mortgage loans in 36 ... Continue Reading

Martin Shkreli Sentenced to Seven Years’ Imprisonment for Multimillion-Dollar Fraud Scheme

On March 8, 2018, Martin Shkreli was sentenced to seven years’ imprisonment for committing securities fraud and securities fraud conspiracy.  A jury found that Shkreli, a former hedge fund manager and CEO of the biopharmaceutical company Retrophin Inc., made false representations and omissions to defraud investors.  Shkreli was also convicted, alongside former Retrophin outside counsel Evan Greebel, of illegally attempting to control the price and trading volume of Retrophin’s stock.  In addition to his prison ... Continue Reading

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

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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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

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

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

Investment Fund Manager Sentenced to Prison for Orchestrating Multimillion-Dollar Fraud Schemes

On January 25, 2018, Diane W. Lamm, a manager of Capital L Financial Group, LLC (“Capital L”) and Aegis Capital Fund, LLC (“Aegis Capital Fund”), was sentenced by U.S. District Judge Frederic Block of the Eastern District of New York to 36 months in prison and ordered to pay restitution in the amount of $15,640,582.46.  Lamm pled guilty to two counts of securities fraud in two separate schemes.  U.S. Attorney for the Eastern District of ... Continue Reading

Former Executive of New York Hotel Company Admits to Stealing over $13 Million from Employer

On January 24, 2018, George Dfouni pled guilty to an information charging him with one count of wire fraud and one count of tax evasion.  Interim U.S. Attorney for the District of New Jersey Craig Carpenito announced that Dfouni, the Chief Operating Officer of a New York-based hospitality company, admitted to embezzling millions of dollars.  According to court filings and statements made in court, from 2007 through September 2015, Dfouni negotiated multiple contracts on behalf ... Continue Reading

Chicago Futures Trader Pleads Guilty to Wire Fraud in Options Trading Scheme

On January 24, 2018, Chicago futures trader Thomas Lindstrom pled guilty to one count of wire fraud before U.S. District Judge Harry D. Leinenweber.  Lindstrom gained $285,000 through his scheme, which caused losses of $13.7 million and led to the folding of the firm where he worked, Rock Capital Markets LLC.  Lindstrom fraudulently made it appear that his trading was profitable by using deep out-of-the-money options on ten-year Treasury Note futures, knowing that these options ... Continue Reading

Five Former KPMG Executives and PCAOB Employees Charged for Fraudulent Scheme to Steal Valuable and Confidential PCAOB Information

On January 23, 2018, an indictment was unsealed in the Southern District of New York against David Middendorf, Thomas Whittle, and Davis Britt, former executives of accounting firm KPMG LLP (“KPMG”), Cynthia Holder, a former employee of KPMG and the Public Company Accounting Oversight Board (the “PCAOB”), and Jeffrey Wada, a former employee of the PCAOB, with conspiracy and wire fraud charges.  Brian Sweet, a former KPMG partner and PCAOB associate, pled guilty to his ... Continue Reading

Securities Broker and Investment Adviser Sentenced for Securities Fraud after Three-Week Trial

On January 18, 2018, U.S. District Judge Andrew L. Carter sentenced Christopher Cervino to one year and one day in prison and Sheik F. Khan to 53 months in prison.  Following a three-week trial, Cervino and Khan were convicted of participating in a securities fraud scheme led by Edward Durante, who pled guilty in August 2016.  Cervino and Khan, along with Durante and other co-conspirators, artificially inflated the market for stock in a publicly traded ... Continue Reading

Former Director of Barclays New York Foreign Exchange Trading Charged for Defrauding HP In Front-Running Scheme

On January 15, 2018, John P. Cronan, Acting Assistant Attorney General of the Criminal Division; Alex G. Tse, Acting U.S. Attorney for the Northern District of California; and Jay N. Lerner, Inspector of the Federal Deposit Insurance Corporation, announced that Robert Bogucki had been indicted in connection with an alleged multibillion dollar front-running scheme at Barclays Capital in September and October 2011.  Bogucki, the former head of Barclays’ foreign exchange trading operation, is alleged to ... Continue Reading

Scott Tucker Sentenced to 200 Months in Prison for Operating Fraudulent Internet Payday Lender

On January 5, 2018, Acting Deputy U.S. Attorney for the Southern District of New York Joan Loughnane announced that Scott Tucker had been sentenced to 200 months in prison for his role in a fraudulent internet payday lending operation.  Tucker, along with attorney Timothy Muir, had been convicted on October 13, 2017, following a five-week trial, of fourteen counts of racketeering, wire fraud, money laundering, and Truth-In-Lending Act offenses.  Muir was sentenced to 84 months ... Continue Reading

Turkish Banker Convicted of Conspiring to Evade U.S. Sanctions against Iran and Other Offenses

On January 3, 2018, Mehmet Hakan Atilla, a citizen and resident of Turkey, was found guilty of conspiring with others to use the U.S. financial system to conduct transactions on behalf of the Government of Iran and other Iranian entities and to defraud U.S. financial institutions by concealing the nature of these transactions.  After a four-week trial before U.S. District Judge Richard M. Berman, a federal jury convicted Atilla on five of six charges in ... Continue Reading