FBI: “Former Executive at First Command Financial Services Pleads Guilty”

August 26, 2014

The Federal Bureau of Investigation (FBI) on August 25, 2014 released the following:

“FORT WORTH, TX—A former executive at First Command Financial Services, an investment advisor and financial planning firm located in Fort Worth, Texas, pleaded guilty this morning before U.S. District Judge Reed C. O’Connor to a felony offense stemming from a fraud scheme she ran while employed there, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Redonda Russell, 66, of Fort Worth, pleaded guilty to a felony Information charging one count of wire fraud. She faces a maximum statutory penalty of 20 years in federal prison, a $250,000 fine, and restitution. She will remain on bond pending sentencing, which is set for December 8, 2014.

Russell worked for First Command for 22 years, before leaving the company in the spring of 2013. She is a registered Investment Advisory Representative and Broker-Dealer Agent. She is able to buy and sell securities, and she is authorized to give investment advice to clients. She is a Chartered Financial Consultant (ChFC), a designation she earned by completing a comprehensive course of financial education, examinations, and practical experience. Through First Command’s client database, Russell had access to clients’ personal identifying information (PII), investment/insurance account numbers, and balances for the account holder and beneficiaries.

According to plea documents filed in the case, beginning on approximately April 3, 2012, and continuing through April 18, 2013, Russell obtained PII for at least 18 First Command clients, eight of whom were deceased. Russell admitted using that information to forge, or otherwise present claims as the account holder, beneficiary, or legal representative of the account holder/beneficiary, to First Command’s affiliated investment and insurance partners to liquidate the targeted accounts.

Russell admitted that part of her scheme was to steal funds from inactive clients’ accounts, thus making the fraud harder to detect. She also targeted accounts that were maintained by First Command’s business partners that were part of an industry-standard, paperless signature program that eliminated the need for the verifying entity to send additional substantiating paperwork to the receiver. After Russell altered ownership/control of the targeted customers’ accounts, Russell sent a policy cancellation/disbursement form and W-9 tax withholding form and instructed the affiliated partner to either liquidate or take a loan against the targeted accounts.

Funds were subsequently wired into one of Russell’s 12 bank accounts or, if checks were mailed, Russell would endorse and deposit them. Checks were endorsed by Russell, Russell signing as her husband, Russell signing as her daughter-in-law, or an amalgam of signatures she used to perpetuate the scheme usually having the surname “Russell.”

Russell’s scheme resulted in the liquidation of more than $316,000 from First Command’s clients’ accounts.

The FBI investigated the case; Assistant U.S. Attorney Nancy Larson is in charge of the prosecution.”

More Information on Federal Wire Fraud Statutes, Jury Instructions, and Crimes
Federal Wire Fraud Crimes – 18 U.S.C. § 1343

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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

Federal Crimes – Appeal

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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.


FBI Los Angeles: “$11 Million Boiler Room Mail and Wire Fraud Indictment Unsealed Today”

October 2, 2013

The Federal Bureau of Investigation on October 1, 2013 released the following:

Owner, Manager, and Salesperson at Fraudulent Investment Venture Taken into Custody for Mail and Wire Fraud in Connection with $11 Million Fraudulent Oil and Gas Well Investment Scheme.

LOS ANGELES—Two men were taken into custody today by special agents of the FBI for their alleged involvement in an Orange County boiler room operation that defrauded investors by falsely claiming high returns from oil and gas wells and by failing to disclose high sales commissions on investments, announced Bill L. Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office and André Birotte Jr., United States Attorney for the Central District of California. A third defendant charged in this indictment is already in custody on unrelated charges.

Jerry Aubrey, 51, already in custody, his brother Timothy Aubrey, 53, of Moreno Valley, who self surrendered to the FBI’s Riverside Resident Agency, and Aaron Glasser, 30, of Mission Viejo, who was arrested without incident, are all in custody today after a federal grand jury indictment that charges them with mail and wire fraud was unsealed.

The indictment alleges Jerry Aubrey founded, managed, and operated the telemarketing investment scheme (also known as a “boiler room”) located in Costa Mesa, CA, doing business as Progressive Energy Partners, LLC (PEP). Timothy Aubrey worked as a PEP manager and salesperson, in addition to preparing, with Aaron Glasser, the sales scripts read to potential investors. Finally, Aaron Glasser was a PEP salesperson who worked as both a sales “fronter” and “closer,” making cold calls and closing deals. In his work as a salesperson, the indictment alleges Glasser raised around a quarter of the total amount of investments.

PEP allegedly employed salespersons called “fronters” and “closers” to raise over $11 million in five unregistered securities offerings for the purported purpose of developing and supporting oil and gas wells. In reality, most of the money was used to pay for the Aubrey brothers’ personal expenses, to pay up to 30% commissions to salespersons, and to make Ponzi-like payments to previous investors.

The defendants directed salespersons to cold call potential investors from purchased lead lists and solicit investments using scripts touting the profitability of investing in PEP. Fronters would pass the names of those who were potentially interested to closers, who could conclude the sale.

As alleged in the indictment, the defendants caused the salespersons to make material misrepresentations and conceal material facts when speaking to investors about, among other things, the percentage of investor money that would be spent on the development and operation of oil and gas wells, the anticipated amount and timing of returns to investors, and the payment of sales commissions to PEP salespersons, i.e., the fronters and closers.

Some of the false and deceptive statements indicated that investors would receive a greater than 50% annual rate of return on their investments; that almost half of the investor funds would be spent on oil and gas wells, and that the remainder of the investor funds would be spent on other business expenses; that salespersons would only receive a sales commission in the form of a share of the investment profits; and that PEP would use the assistance of an “independent CPA firm” to make distributions to investors.

The indictment alleges that, through the scheme, the defendants concealed from investors the material facts that approximately 30% of the investor funds would be spent on the Aubreys’ personal expenditures; that almost 20% of the investor funds would be used to make investor distributions and to return investor principal; that less than 10% of investor funds was spent on oil and gas wells; that investors would not, in fact, earn an annual rate of return of over 50%; and that defendant Jerry Aubrey, rather than an “independent CPA firm,” would determine the distributions to investors. The indictment alleges that by devising, executing, and participating in the above scheme, the defendants induced more than 200 investors to distribute to PEP over $11 million between 2005 and 2010.

In 2011, the Securities and Exchange Commission (SEC) obtained summary judgment against these defendants in connection with the PEP investment scheme. Additionally, Jerry Aubrey was charged in 1998 by the SEC with violating the broker-dealer registration provisions of the Securities Exchange Act of 1934 in connection with an offering fraud in which he sold securities in a fictitious cruise ship. The following year, he was permanently enjoined from future violations of Section 15(a)(1) of the Exchange Act (failure to register as a broker dealer), a permanent injunction he has violated through his alleged activities in PEP.

If convicted on all eight counts of Mail Fraud and two counts of Wire Fraud, the defendants face a maximum statutory penalty of 200 years in federal prison.

The criminal investigation was conducted by the FBI. The Securities and Exchange Commission conducted the civil investigation.

An indictment itself is not evidence that the defendants committed the crimes charged. Every defendant is presumed to be innocent until and unless proven guilty in court.”

More Information on Federal Mail Fraud Statutes, Jury Instructions, and Crimes
Federal Mail Fraud Crimes – 18 U.S.C. § 1341

Video on Federal Mail Fraud Crimes

More Information on Federal Wire Fraud Statutes, Jury Instructions, and Crimes
Federal Wire Fraud Crimes – 18 U.S.C. § 1343

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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.


FBI: “Former NBA Player and CEO of the George Group Convicted on all Counts in $2 Million Ponzi Scheme”

October 2, 2013

The Federal Bureau of Investigation on September 30, 2013 released the following:

“TRENTON, NJ— C. Tate George, former NBA basketball player and the CEO of purported real estate development firm The George Group, was convicted today on all counts on which he was indicted in connection with his role in orchestrating a $2 million investment fraud scheme, U.S. Attorney Paul J. Fishman announced.

The jury deliberated four hours before convicting George, 45, of Newark, of four counts of wire fraud after a three-week trial before U.S. District Judge Mary L. Cooper. George was immediately remanded into federal custody to await sentencing, which is scheduled for Jan. 16, 2014.

According to documents filed in this case and evidence presented at trial:

George, a former player for the New Jersey Nets and Milwaukee Bucks professional basketball teams, held himself out as the CEO of The George Group and claimed to have more than $500 million in assets under management. He pitched prospective investors, including several former professional athletes, to invest with the firm and told them their money would be used to fund The George Group’s purchase and development of real estate development projects, including projects in Connecticut and New Jersey. George represented to some prospective investors that their funds would be held in an attorney trust account and personally guaranteed the return of their investments, with interest.

Based on George’s representations, investors invested more than $2 million in The George Group between 2005 and 2011, which he deposited in both the firm’s and his personal bank account. Instead of using investments to fund real estate development projects as promised, George used the money from new investors to pay existing investors in Ponzi-scheme fashion, as well as paying for his daughter’s Sweet 16, extensive renovations on his New Jersey home (that has since been foreclosed), the mortgage on a New Jersey home, the mortgage on a Florida home, taxes to the IRS, and traffic tickets. The defendant gave money to family members and friends. He also spent $2,905 for a reality video about himself (a “sizzle reel” for “The Tate Show,” is available on YouTube). The George Group had virtually no income-generating operations.

Each of the wire fraud counts on which he was convicted is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; postal inspectors of the USPIS, under the direction of Postal Inspector in Charge Maria L. Kelokates; and criminal investigators with the U.S. Attorney’s Office, with the investigation leading to today’s conviction.

The government is represented by Assistant U.S. Attorneys Joseph B. Shumofsky and Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit http://www.stopfraud.gov.”

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

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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.


FBI: Two Men Charged with Allegedly Defrauding Charter Flight Company, Other Luxury Brands of Hundreds of Thousands of Dollars

August 5, 2013

The Federal Bureau of Investigation (FBI) on August 5, 2013 released the following:

“NEWARK, NJ—Two men were arrested by federal agents early this morning in Akron, Ohio for conspiracy to defraud an aviation company out of charter flights and other businesses out of services and luxury goods, U.S. Attorney Paul J. Fishman announced.

Dante G. Dixon, 45, of Miami, Florida, and Christopher L. Henderson, 32, of Akron, Ohio, were charged by complaint with conspiracy to commit wire fraud. They made their initial court appearances before U.S. Magistrate Judge Kathleen Burke in Akron federal court and were ordered held until they can be transported to New Jersey.

According to the complaint:

From May 2013 through June 2013, Dixon and Henderson and others allegedly conspired to fraudulently obtain at least four private charter flights from Jet Aviation, an international business aviation service with its United States’ headquarters in Teterboro, New Jersey. Dixon, Henderson, and others also conspired to obtain tens of thousands of dollars in other luxury goods and services, all via sham lines of credit issued to a well-known financial institution for the defendants and others’ use, by misrepresenting that they and others were employees at the financial institution.

On May 5, 2013, an individual using the name Josh Stevens called Jet Aviation’s offices in Chicago, Illinois and Van Nuys, California to inquire about its private charter flight services. That individual identified himself as being employed as a senior vice president at a well-known financial institution and provided an e-mail address purporting to be affiliated with the financial institution. It was later determined that this e-mail address was not, in fact, affiliated with the financial institution. A Jet Aviation employee sent an e-mail to the provided e-mail address. The e-mail from Jet Aviation contained a draft charter services agreement, which was signed by Josh Stevens and returned to Jet Aviation on May 9, 2013. The agreement falsely listed Josh Stevens as a senior vice president, Dixon as a vice president, and Henderson as a vice president of international affairs at the well-known financial institution.

On May 21, 2013, based on the false information provided by Josh Stevens, a Jet Aviation employee created an account and a $350,000 line of credit for the defendants and others. The line of credit was in the name of the financial institution on behalf and for the use of the defendants and others. Dixon and Henderson and others used the sham line of credit to take at least four private charter flights.

On June 7, 2013, a Jet Aviation employee at Teterboro met Dixon and Henderson before they boarded their charter flight to Miami, Florida. During the meeting, the defendants identified themselves as being employees at the financial institution. The Jet Aviation employee then contacted the financial institution and was informed that Dixon and Henderson and others were not, and had never been, employees at the financial institution.

As a result of their misrepresentations to Jet Aviation, Dixon and Henderson and others fraudulently obtained private high-end charter flights and limousine car services with a total value of $175,790. Jet Aviation never received payment from the defendants and others, or from the financial institution’s line of credit, for any of the services provided to the defendants and others, including the approximately $164,911 in charter flights and the approximately $10,879 in limousine services.

Dixon and Henderson and others made similar misrepresentations about their purported employment at the financial institution to other luxury service providers, including to a Tiffany & Co. store in Bal Harbour, Florida, and to The W South Beach Hotel in Miami, Florida. These misrepresentations resulted in the defendants and others fraudulently obtaining, via sham lines of credit with Tiffany and The W, approximately $19,991 in watches, sunglasses, sterling silver and leather business card holders, and men’s cologne from Tiffany, and approximately $25,466 in overnight hotel stays at The W.

The investigation has revealed that the financial institution was not aware that Dixon and Henderson and others were using its corporate identity. As a result of their scheme, Dixon and Henderson and others fraudulently obtained more than $220,000 in luxury goods and services.

The charge of conspiracy to commit wire fraud with which the defendants are charged is punishable by a maximum potential penalty of 20 years in prison, and a maximum fine of $250,000 or twice the gain or loss resulting from the defendants’ crimes.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s arrests.

The government is represented by Assistant U.S. Attorney Aaron Mendelsohn of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit http://www.stopfraud.gov.”

Federal Wire 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 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.


Tennessee Couple Indicted for Alleged Role in Warzone Contracting Scheme

July 17, 2013

The Federal Bureau of Investigation (FBI) on July 16, 2013 released the following:

Alleged to Have Steered $6.9 Million in Proceeds from Defense Subcontracts in Afghanistan

ALEXANDRIA, VA— Keith Johnson, 46, and Angela Johnson, 44, both of Maryville, Tennessee, were indicted by a federal grand jury today on charges of conspiracy to commit wire fraud and substantive wire fraud for their alleged role in a scheme to steer $6.9 million from Department of Defense (DOD) subcontracts in Afghanistan to shell entities through kickbacks and the use of assumed names.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Mythili Raman, Acting Assistant Attorney General of the Justice Department’s Criminal Division; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; Robert E. Craig, Defense Criminal Investigative Service (DCIS) Special Agent in Charge of Mid-Atlantic Field Office; John Sopko, Inspector General for Special Inspector General for Afghanistan Reconstruction (SIGAR); and Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU), made the announcement following the grand jury’s return of the indictment.

Keith and Angela Johnson face a maximum penalty of 20 years in prison for conspiracy and up to 20 years in prison on each count of wire fraud if convicted.

According to the indictment, between July 2007 and June 2010, Keith and Angela Johnson engaged in a scheme to defraud Company #1, a DOD contractor, relating to two contracts worth more than $269 million. The contracts at issue were to provide vehicle-fleet maintenance for the Afghan National Army (ANA). Keith Johnson worked for Company #1 in Kabul, Afghanistan, as its project manager and procurement manager for the ANA contracts. Johnson fielded requests for vehicle parts from Company #2, a Company #1 subcontractor. Company #1 would then issue purchase orders for those parts to subcontractors after receiving multiple bids. In September 2007, Keith and Angela Johnson formed Company #4 as a Tennessee corporation, but they listed Angela Johnson’s mother and daughter on its corporate documents. Thereafter, Keith Johnson used his position in Company #1 to steer parts-supply purchase orders and other business on the ANA contracts to Company #4. To conceal Keith Johnson’s relationship to Company #4, Angela Johnson used her maiden name when interacting with Company #1 on Company #4’s behalf.

According to the indictment, the Johnsons also agreed with two other individuals at Company #2 to further the scheme. The two Company #2 employees helped steer Company #1 business to the Johnsons through Company #4, and Keith Johnson helped steer Company #1 business to Company #3, an entity operated by the two Company #2 employees using a fictional name. The Company #2 employees allegedly paid kickbacks to the Johnsons through a shell company. As part of the scheme, the Johnsons also allegedly participated in a bid-rigging practice of coordinating inflated bids on behalf of Company #3 or Company #4 to ensure that the other company would receive particular contracts. The conspirators also caused Company #1 to order excess parts that were not yet needed on Company #1’s contracts, and Company #4 did not ultimately supply all parts in compliance with Company #1’s requirements.

According to the indictment, the conspirators obtained $6,933,179.31 in proceeds from the scheme, which they used in part to purchase, among other items, several luxury vehicles and more than $191,000 in jewelry.

This case is being investigated by the Defense Criminal Investigative Service, the Federal Bureau of Investigation, the Special Inspector General for Afghanistan Reconstruction, and the U.S. Army Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Ryan Faulconer of the U.S. Attorney’s Office for the Eastern District of Virginia and Trial Attorney Daniel Butler of the Criminal Division’s Fraud Section, who is also a Special Assistant U.S. Attorney in the Eastern District of Virginia.

Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.”

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

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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

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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.


Florida Man Indicted in an Alleged $4 Million Bank Fraud Related to Massillon Construction Project

July 3, 2013

The Federal Bureau of Investigation (FBI) on July 2, 2013 released the following:

“A Florida man was indicted on four counts for a scheme in which he defrauded Fifth Third Bank of approximately $4 million, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.

Russell W. Spitz, age 75, owned and operated his company, Vision Power Systems, out of the Jacksonville, Florida area, where is currently residing. He was indicted on one count of bank fraud and three counts of wire fraud.

The indictment charges that between in or around December 2006 and in or around August 2008, Spitz knowingly executed a scheme to defraud Fifth Third Bank of approximately $4 million.

The indictment alleges that this scheme began when Spitz’s company, Vision Power Systems, agreed to construct and operate a biomass boiler for FiberCorr, a corrugated paper company based in Massillon, Ohio. The biomass boiler was intended to reduce energy expenses by providing heat and steam power to FiberCorr’s paper mills. The project was financed by the Stark County Port Authority, but Fifth Third Bank issued a letter of credit to guarantee the bonds.

The indictment alleges that Spitz submitted a number of fraudulent documents to Fifth Third Bank during the loan negotiation process, which Fifth Third Bank relied up on when it decided to enter into the loan agreement with Spitz. Fifth Third Bank disbursed approximately $4.1 million for the project.

The indictment alleges that Spitz did not use the funds for construction of the boiler, and, as a result, construction on the boiler stopped in 2008. The project was never completed.

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 violation.

This case is being prosecuted by Assistant U.S. Attorney Chelsea S. Rice of the Cleveland U.S. Attorney’s Office, following an investigation by the Federal Bureau of Investigation.

An indictment 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.”

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.


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

July 2, 2013

Title 18 of the United States Code Section 1343 (18 U.S.C. § 1343) (2013) states the following:

“Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.”

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STATUTE OF LIMITATIONS FOR WIRE FRAUD (2013)

18 U.S.C. &Sect; 3282(a) states:

“(a) In General.— Except as otherwise expressly provided by law, no person shall be prosecuted, tried, or punished for any offense, not capital, unless the indictment is found or the information is instituted within five years next after such offense shall have been committed.”

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U.S. ATTORNEY’S MANUAL 18 U.S.C. 1343 — ELEMENTS OF WIRE FRAUD

“The elements of wire fraud under Section 1343 directly parallel those of the mail fraud statute, but require the use of an interstate telephone call or electronic communication made in furtherance of the scheme. United States v. Briscoe, 65 F.3d 576, 583 (7th Cir. 1995) (citing United States v. Ames Sintering Co., 927 F.2d 232, 234 (6th Cir. 1990) (per curiam)); United States v. Frey, 42 F.3d 795, 797 (3d Cir. 1994) (wire fraud is identical to mail fraud statute except that it speaks of communications transmitted by wire); see also, e.g., United States v. Profit, 49 F.3d 404, 406 n. 1 (8th Cir.) (the four essential elements of the crime of wire fraud are: (1) that the defendant voluntarily and intentionally devised or participated in a scheme to defraud another out of money; (2) that the defendant did so with the intent to defraud; (3) that it was reasonably foreseeable that interstate wire communications would be used; and (4) that interstate wire communications were in fact used) (citing Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit 6.18.1341 (West 1994)), cert. denied, 115 S.Ct. 2289 (1995); United States v. Hanson, 41 F.3d 580, 583 (10th Cir. 1994) (two elements comprise the crime of wire fraud: (1) a scheme or artifice to defraud; and (2) use of interstate wire communication to facilitate that scheme); United States v. Faulkner, 17 F.3d 745, 771 (5th Cir. 1994) (essential elements of wire fraud are: (1) a scheme to defraud and (2) the use of, or causing the use of, interstate wire communications to execute the scheme), cert. denied, 115 S.Ct. 193 (1995); United States v. Cassiere, 4 F.3d 1006 (1st Cir. 1993) (to prove wire fraud government must show (1) scheme to defraud by means of false pretenses, (2) defendant’s knowing and willful participation in scheme with intent to defraud, and (3) use of interstate wire communications in furtherance of scheme); United States v. Maxwell, 920 F.2d 1028, 1035 (D.C. Cir. 1990) (“Wire fraud requires proof of (1) a scheme to defraud; and (2) the use of an interstate wire communication to further the scheme.”).”

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CURRENT? CHECK THIS OUT:

18 U.S.C. § 1343

18 U.S.C. § 3282

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SIMILAR STATUTES:

18 U.S.C. § 1341 (Mail 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

Federal Crimes – Appeal

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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.