Dimitry Vishnevetsky Indicted by a Federal Grand Jury for Mail Fraud, Wire Fraud, and Bank Fraud in an Alleged Fraud Scheme

May 2, 2012

The Federal Bureau of Investigation (FBI) on May 2, 2012 released the following:

“Chicago Investment Advisor Indicted for Allegedly Causing Clients to Lose $1.5 Million in Fraud Scheme

CHICAGO— A Chicago investment advisor allegedly engaged in an investment fraud scheme that swindled clients, causing them to lose approximately $1.5 million, federal law enforcement officials announced today. The defendant, Dimitry Vishnevetsky, was charged with eight counts of mail or wire fraud and one count of bank fraud in a nine-count indictment returned yesterday by a federal grand jury. Vishnevetsky allegedly raised approximately $1.7 million from investors and misappropriated at least $1.5 million for his own purposes, including to pay for such business and personal expenses as mortgage and car payments, travel and vacations, restaurant bills, athletic club dues, and to make trades for his own benefit, while using additional investor funds to make Ponzi-type payments to clients.

Vishnevetsky, 33, of Chicago, will be arraigned at a later date in U.S. District Court. The charges were announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, and Robert D. Grant, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation. Also yesterday, the Commodity Futures Trading Commission filed a civil enforcement lawsuit against Vishnevetsky and his companies in federal court in Chicago.

According to the indictment, Vishnevetsky offered and sold investments, including commodities and promissory notes, primarily through Hodges Trading, LLC, and Oxford Capital, LLC, which purported to be in the business of providing brokerage/management services to investors and of managing commodities funds, including the Oxford Global Macro Fund, the Oxford Global Arbitrage Fund, and the Quantum Global Fund, which existed in name only. He also offered and sold promissory notes, described as London Interbank Offered Rate (LIBOR) adjusted notes, through Hodges Trading, which also existed in name only.

The indictment alleges that between September 2006 and March 2012, Vishnevetsky schemed to defraud investors and potential investors by making false representations about the profitability of his prior and current trading, the use of the invested funds, the risks involved, the expected and actual returns on investments and trading, and false representations about Hodges Trading, Oxford Capital and the commodities funds. For example, Vishnevetsky created and provided some investors fraudulent trading results showing profits as high as 36 percent per year, the indictment alleges. “In fact, to the extent that Vishnevetsky engaged in trading, the trading consistently resulted in net losses, not profits,” the indictment states.

The bank fraud count alleges that between 2007 and 2010, Vishnevetsky made false statements to Merrill Lynch Bank & Trust concerning his income and assets to cause the bank to issue, and later modify, two loans totaling approximately $519,500 to purchase a condominium in Chicago. Vishnevetsky subsequently stopped making payments on the loans, the charges allege.

The government is being represented by Assistant U.S. Attorney Jacqueline Stern.

Each count of mail or wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, while bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine, and restitution is mandatory. The court may also impose a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The investigation falls under the umbrella of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: http://www.StopFraud.gov.

An indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.”

US v. Dimitry Vishnevetsky – Federal Criminal Indictment

Federal Mail Fraud Crimes – 18 U.S.C. § 1341

Federal Wire Fraud Crimes – 18 U.S.C. § 1343

Federal Bank Fraud Crimes – 18 U.S.C. § 1344

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Alleged AWOL Pa. soldier obtained Microsoft co-founder debit card by changing account address

March 27, 2012

Newser.com on March 27, 2012 released the following:

“FBI: Pa. man stole Microsoft co-founder’s identity

By RANDY PENNELL | ASSOCIATED PRESS

An AWOL soldier’s simple scheme to defraud one of the richest men in the world has landed him in federal custody, according to a criminal complaint.

In the complaint unsealed Monday, federal investigators allege Brandon Lee Price changed the address on a bank account held by billionaire Microsoft co-founder Paul Allen, then had a debit card sent to his Pittsburgh home so he could use it for payments on a delinquent Armed Forces Bank account and personal expenses.

Price called Citibank in January and changed the address on an account held by Allen from Seattle to Pittsburgh, then called back three days later to say he had lost his debit card and asked for a new one to be sent to him, an FBI investigator wrote in a criminal complaint filed in February.

The card was used to attempt a $15,000 Western Union transaction and make a $658.81 payment on the Armed Forces Bank loan account the day it was activated, according to the complaint. Surveillance footage also captured him attempting purchases at a video game store and a dollar store, authorities alleged.

Investigators found Price was listed as Absent Without Leave from the Army and wanted as a deserter, authorities said in the complaint. He was arrested March 2 and ordered detained until April 2 unless the Army takes him into custody.

David Postman, a spokesman for Allen, said the fraud was detected by the bank, who alerted law enforcement officials. The only transaction _ out of four listed in the complaint totaling $15,936.99 _ that apparently made it through was the loan payment, Postman said.

While the financial loss is comparatively small, it shows the importance of the issue of identity theft prevention.

“Clearly, it’s a reminder that anyone can be a victim of this,” Postman said.

The complaint doesn’t specify how Price allegedly changed the address on the account.

A Citibank spokeswoman said the company does not comment on details of security breaches or customer accounts. In a written statement, spokeswoman Catherine Pulley said the company “identified the actions of a fraudulent account takeover and turned the matter over to law enforcement” and “will continue to work with law enforcement in the ongoing investigation.”

An email to Price’s public defender wasn’t immediately returned, nor was a voicemail left at a phone number for Price listed in the complaint.

Allen made the bulk of his fortune founding Microsoft with Bill Gates in 1975. He left the company in 1983 and now owns the Seattle Seahawks and the Portland Trail Blazers. He is the founder and chairman of Vulcan Inc., the company that manages his business and charitable undertakings. Forbes estimates Allen’s net worth at $14.2 billion.

Accounts with other credit card companies may have also been targeted, but none of Allen’s other accounts were compromised, Postman said.

“It certainly is a surprise and reason for everyone to make sure that all that stuff is properly cared for and monitored,” Postman said.

Just under 280,000 cases of identity theft were reported in 2011, according to the Federal Trade Commission’s Bureau of Consumer Protection. That includes complaints through the Better Business Bureau and state attorney general offices and other law enforcement agencies.

WPXI-TV first reported Price’s arrest.”

US v Brandon Lee Price – Federal Criminal Complaint

US v Brandon Lee Price – Affidavit in Support of Criminal Complaint

18 U.S.C. § 1343 – Wire Fraud

18 U.S.C. § 1344 – Bank Fraud

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Rodney Riddle Indicted by a Cincinnati Federal Grand Jury for Mail Fraud (18 U.S.C. 1341), Wire Fraud (18 U.S.C. 1343) and Bank Fraud (18 U.S.C. 1344)

August 11, 2011

Cincinnati.com on August 11, 2011 released the following:

“Written by Dan Horn

Real estate agent indicted for mortgage fraud

Officials: Scheme may have cost many their homes

A real estate agent was [arraigned] Thursday with orchestrating a multimillion-dollar mortgage fraud scheme that authorities believe triggered dozens of foreclosures throughout Greater Cincinnati.

Rodney Riddle, 44, is accused in a federal indictment of mail fraud, wire fraud and bank fraud. The Sycamore Township man, who faces up to 30 years in prison if he is convicted, pleaded not guilty Thursday in U.S. District Court in Cincinnati.

The scheme described by prosecutors is similar to the type of mortgage scams that exploded in Greater Cincinnati and across the country in the years before the real estate market collapsed.

Federal prosecutors say Riddle persuaded dozens of people, including friends and fellow members of Zion Temple church in Avondale, to buy houses at inflated prices so he could collect lucrative fees.

They say the scheme ran from 2001 to 2006 during the height of the real estate boom and did not begin to unravel until the crash in 2008, when many of the homeowners fell into foreclosure.

“That’s when these schemes fall apart,” said Fred Alverson, spokesman for U.S. Attorney Carter Stewart.

Although prosecutors say the scheme resembles other mortgage frauds, they say this one differs in at least one respect: Many of the 59 properties involved are located close together, often on the same streets.

“Certainly, that would have a greater impact on a neighborhood,” Alverson said.

Prosecutors would not disclose the addresses because they have not yet been entered into evidence. Records list Riddle as an owner or co-owner of just two Hamilton County properties.

According to the indictment, Riddle and others filled out loan applications with false statements and lied about income and the amount of assets held by the prospective home buyers.

Prosecutors say Riddle also claimed that his home repair business, Quality Home Maintenance, had done extensive work on many of the houses. They say he then used bogus invoices for work he never did to justify a higher home sale price.

Riddle used money from the sale of the homes to buy more homes and made most of his money collecting fees as the real estate agent, prosecutors say. The case was investigated by the FBI and postal inspectors.

Both Riddle and his lawyer declined comment.

Alverson said most of the buyers got into trouble when their adjustable rate mortgages shot up after the housing market crashed. Many had put little or no money down and could not afford the higher payments.

Prosecutors say almost all of the properties have been foreclosed, for a total loss of at least $2.6 million on the original $7 million in loans.

The indictment indicates others assisted Riddle, but it identifies them only as “close business associates.”

“Obviously, when you have a scheme like this, it’s not a one-person operation,” Alverson said.

But he said no charges are expected against anyone else. He would not comment when asked whether anyone got a deal with prosecutors in exchange for their cooperation.

Judge Karen Litkovitz accepted Riddle’s not guilty plea Thursday and allowed him to remain free pending his trial.”

Attached is Rodney T. Riddle Federal Indictment.

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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Attorney Kevin Harold Lewis Pleads Guilty in Federal Court to $47,000,000 Bank Fraud Scheme

August 4, 2011

The U.S. Attorney’s Office Eastern District of Arkansas on August 3, 2011 released the following:

“ATTORNEY PLEADS GUILTY TO $47,000,000 BANK FRAUD SCHEME

Little Rock – Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Valerie Parlave, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation, announced today the waiver of indictment and plea of guilty to a felony Information by Kevin Harold Lewis, age 43, of Little Rock, Arkansas. The Information, which was filed in open court today, charges Lewis with one count of bank fraud in violation of Title 18, United States Code, Section 1344.

“This case demonstrates that the actions of one individual can have far-reaching, detrimental effects, including the collapse of a financial institution,” stated Thyer “The amount of fraud loss in this case is one of the highest in the history of our office. Fraud, whether of this magnitude or not, cannot be tolerated, and the Department of Justice will aggressively investigate and prosecute such schemes.”

“With each creation of a fraudulent bond, Mr. Lewis added to his house of cards that ultimately collapsed,” stated SAC Parlave. “The FBI remains committed to rooting out such schemes, which threaten the stability of our financial institutions.”

Until around October 2010, Kevin Harold Lewis, a licensed attorney in the state of Arkansas, operated several businesses throughout the state in addition to running his law practice. Lewis primarily concentrated on developing property owners’ improvement districts and issuing special assessment bonds to fund these districts. These assessment bonds are also known as special improvement district bonds.

At the plea hearing held before United States District Judge James M. Moody, Lewis admitted that between December 31, 2008, and September 29, 2010, First Southern Bank, a federally insured financial institution located in Batesville, Arkansas purchased special improvement district bonds, totaling approximately $23 million from Kevin Lewis. Prior to the purchase of each bond, Lewis would provide the bank with offering documents describing the details of bonds. At the plea hearing, Lewis acknowledged that these bonds were fraudulent. On or around August, 2009, Lewis, through PA Alliance Trust, a trust he formed in February 2009, purchased a controlling interest, approximately 53%, in First Southern Bank. To facilitate this purchase, Lewis borrowed approximately $4.6 million from First State Bank in Lonoke. Lewis pledged the First Southern Stock as collateral for this loan. In or around September 2010, Lewis, through his PA Alliance Trust, purchased an additional $5.5 million in First Southern stock, which increased his ownership in the bank to 64.9%. To facilitate this purchase, Lewis, in part, used funds from the sale of two fraudulent bonds to First Southern Bank.

In addition to the fraudulent bonds provided to First Southern Bank, a bank that was forced into FDIC receivership upon learning of the status of the bonds, the following financial institutions provided loans to Kevin Lewis which were collateralized, in whole or in part, by fraudulent bonds: Centennial Bank, Citizens, Liberty Bank, First Community, Allied, Simmons, and Regions Bank. The following banks currently hold fraudulent bonds which were originally sold by Kevin Lewis: Centennial Bank and Bank of Augusta.

The intended loss amount in this case is approximately $47,000,000.

The statutory penalty for bank fraud is not more than thirty (30) years imprisonment and a fine of up to $1,000,000. Lewis remains free on his own recognizance pending sentencing, which will be set for a later date by the court.

President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The investigation was conducted by the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation. It is being prosecuted by Assistant United States Attorneys Karen Whatley and Stephanie Mazzanti.”

To find additional federal criminal news, please read The Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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