Eight Los Angeles-Area Residents Charged in an Alleged Medicare Fraud

May 2, 2012

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

“Eight Los Angeles-Area Residents Charged in Nationwide Medicare Fraud Strike Force Takedown

Total of 107 Defendants Charged in Seven Cities for Approximately $452 Million in False Billing

LOS ANGELES—Eight Los Angeles-area residents, including two doctors, were charged today for their roles in schemes to submit more than $14 million in false billing to Medicare, announced the Departments of Justice and Health and Human Services (HHS).

The charges in Los Angeles are part of a nationwide takedown by Medicare Fraud Strike Force operations in seven cities that led to charges against 107 individuals for their alleged participation in schemes to collectively submit more than $452 million in fraudulent claims to Medicare. This takedown involved the highest amount of false Medicare billing in a single takedown in strike force history.

“The results we are announcing today are at the heart of an Administration-wide commitment to protecting American taxpayers from health care fraud, which can drive up costs and threaten the strength and integrity of our health care system,” said United States Attorney General Eric Holder. “We are determined to bring to justice those who violate our laws and defraud the Medicare program for personal gain. As today’s takedown reflects, our ongoing fight against health care fraud has never been more coordinated and effective.”

“Medicare fraud drains vital resources and harms consumers across the nation,” said United States Attorney André Birotte Jr. “The problem is national in scope and it calls out for the type of coordinated national response that today’s crackdown represents. This office is dedicated to working with all our partners, both locally and nationally, to protect this important public program that serves our elderly and disabled.”

“As today’s strike force operation demonstrates, health care fraud is not limited to just one or two types of health care providers,” said Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of HHS’s Office of Inspector General (OIG). “Whether it is a physician, a business owner, or any other provider, OIG and our law enforcement partners are committed to pursuing those that attempt to steal precious dollars from the Medicare program.”

According to court documents filed in the Central District of California, two Orange County doctors and two of their co-schemers were charged for allegedly submitting nearly $5.7 million in false claims to Medicare for durable medical equipment (DME). Specifically, the defendants billed Medicare for enteral nutrition, a liquid nutritional supplement. Medicare will only pay for enteral nutrition if a patient has a feeding tube. According to the indictment, Dr. Augustus Ohemeng, 62, of Buena Park, and Dr. George Tarryk, 72, of Seal Beach, wrote fraudulent prescriptions for enteral nutrition for patients who did not have feeding tubes. Co-defendant George Samuel Laing, 41, of Sylmar, who managed the clinic where Tarryk and Ohemeng practiced, allegedly received kickbacks in exchange for referring the prescriptions to Ivy Medical Supply, owned by co-defendant Emmanuel Chidueme, 59, of Mira Loma. Ivy then fraudulently billed Medicare for the enteral nutrition, even though it was not medically necessary and was not delivered to patients in the quantities billed to Medicare. Ohemeng, Tarryk, Laing, and Chidueme were arrested this morning and are scheduled to make their initial appearances before a U.S. Magistrate Judge this afternoon.

“The charges announced today emphasize disturbing health care fraud trends, including the arrest of physicians, that exploit federal health care meant for those in need,” said Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The cases charged in Southern California and around the U.S. indicate the staggering amount of fraud adversely affecting the U.S. economy and illustrate the need for the continued focus on protecting federally funded health care programs.”

In a separate case, two defendants were arrested on charges related to their DME company, Latay Medical Services, which allegedly submitted more than $8 million in fraudulent billings to Medicare for power wheelchairs, orthotics, and hospital beds that were either not provided or were medically unnecessary. The indictment charges Latay’s owner, Bolademi Adetola, 46, of Harbor City, and Latay employee Yuri Martin Lopez, 46, of Lawndale, with obtaining fraudulent prescriptions for the DME, creating fake documentation to make it seem as though the DME had been delivered when it had not, and delivering DME less expensive than that listed on Latay’s Medicare claims.

Two additional defendants are scheduled to self-surrender today on charges related to Greatcare Home Health Inc., a home health agency that received more than $5.4 million from Medicare for skilled nursing and physical therapy services that were often either never performed or performed by unlicensed individuals. Greatcare’s owner, Hee Jung Mun, also paid illegal kickbacks to doctors, individuals known as marketers, and patients themselves in order to recruit Medicare beneficiaries. Mun, along with three other Greatcare employees, have already pleaded guilty to the fraud and are awaiting sentencing before U.S. District Judge Dean D. Pregerson. Yeong Ja Lee, 50, of Mid-City, is scheduled to make her initial court appearance this afternoon on charges that she visited and provided services to patients without a license and created false documentation for Greatcare and one of its referring doctors. Sang Whan Ahn, 60, of Koreatown, is also scheduled to appear on charges that she acted as a marketer, accepting kickbacks in exchange for referring patients to Greatcare.

As a part of the operation, members of the strike force in Los Angeles also executed three search warrants today.

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since their inception in March 2007, strike force operations in nine locations have charged more than 1,330 defendants who collectively have falsely billed the Medicare program for more than $4 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams comprised of attorneys from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Central District of California, the Southern District of Florida, the Eastern District of Michigan, the Southern District of Texas, the Middle District of Louisiana, the Northern District of Illinois, and the Middle District of Florida; and agents from the Federal Bureau of Investigation, HHS-OIG, and state and local Medicaid Fraud Control Units, including the California Department of Justice and Los Angeles Sheriff’s Department’s Health Authority Law Enforcement Task Force.

An indictment is merely a charge and defendants are presumed innocent until proven guilty.

To learn more about HEAT, go to: http://www.stopmedicarefraud.gov.

CONTACT:
Assistant United States Attorney Kristen A. Williams
Major Frauds Section
(213) 894-0526

Special Assistant United States Attorney Grant Gelberg
Major Frauds Section
(213) 894-2872

Assistant United States Attorney Consuelo S. Woodhead
Major Frauds Section
(213) 894-3987″

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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.


Virginia Businessman Pleads Guilty to Federal Money Laundering Charge in Investigation of Federal Government Contracts

April 19, 2012

7thspace.com on April 18, 2012 released the following:

“WASHINGTON— James Edward Miller, 64, the owner of a Virginia-based construction management company, pleaded guilty today to a federal charge of conspiracy to commit money laundering in connection with an ongoing investigation into the awarding of millions of dollars of contracts by the United States Army Corps of Engineers.

The plea was announced by United States Attorney for the District of Columbia Ronald C Machen, Jr; James W McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; Eric Hylton, Acting Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI); Peggy E Gustafson, Inspector General for the Small Business Administration (SBA); Robert E Craig, Special Agent in Charge of the Mid-Atlantic Field Office of the Defense Criminal Investigative Service (DCIS); and Major General David E Quantock, the Commanding General of the United States Army Criminal Investigation Command (CID).

Miller, formerly of Virginia Beach, Virginia, pleaded guilty in the United States District Court for the District of Columbia. A sentencing date has not been set. The charge carries up to 20 years in prison as well as potential fines and an order of restitution. As part of the plea agreement, Miller must forfeit a money judgment of $4,055,063 and forfeit specific property, including bank account funds, a property in Virginia Beach, three vehicles, diamond rings, and other jewelry.

Miller is the sixth person to plead guilty to charges stemming from an investigation into a scheme that unfolded from 2007 to 2011.

The scheme allegedly involved two former managers for the United States Army Corps of Engineers, various businesses and executives, more than $20 million in bribes and kickback payments, and the planned steering of a government contract that potentially was worth about $1 billion.

Miller’s role in the crimes is described in a statement of offense that he signed as part of his plea agreement. Miller was the owner of Big Surf Construction Management LLC, a company based in Virginia Beach that was involved in residential and commercial construction projects. He was a close friend of another businessman, Harold Babb, the director of contracts at Eyak Technology (EyakTek), a business with an office in Dulles, Virginia.

In 2008, Babb proposed that Miller use Big Surf to obtain government contracts awarded by the United States Army Corps of Engineers. Under the plan, Big Surf would be hired by EyakTek as a subcontractor.

Initially unbeknownst to Miller, Babb was already involved in a conspiracy with, among others, Kerry F Khan, then a program manager for the United States Army Corps of Engineers, and Ananke LLC, a company that was controlled by Khan.

The statement of offense identifies three subcontracts awarded and paid by EyakTek to Big Surf in 2008 and 2009, totaling more than $8 million. Of this money, Big Surf channeled more than $3.6 million from the first two subcontracts to Ananke. According to the statement of offense, Babb directed Miller to pay another $2.9 million, from the third subcontract, to Ananke. However, Miller allegedly reneged on the plan and Big Surf kept the money.

As a result, a fourth intended subcontract, worth about $1.9 million, was canceled.

In the early stages, according to the statement of offense, Miller believed that Ananke was actually providing services for the money. However, by the time of the second contract, he knew that Ananke was not providing services to EyakTek or the Army Corps of Engineers. He also understood that Babb was using his position at EyakTek to facilitate the award of orders to Big Surf in exchange for payments from Big Surf directly and indirectly to Babb.

Indeed, during the scheme, Miller and Big Surf provided a number of benefits to Babb, including cash payments, an investment in real estate, and money for a Porsche.

Babb, 60, pleaded guilty in March 2012 to federal charges of bribery and unlawful kickbacks. He is awaiting sentencing.

Khan, 54, was indicted in September 2011 on one count of conspiracy to commit bribery and wire fraud and aiding and abetting and causing an illegal act to be done, as well as one count of bribery and one count of conspiracy to commit money laundering. He pleaded not guilty.

In the overall investigation, to date, the United States has seized for forfeiture or recovered approximately $7.2 million in bank account funds, cash and repayments, 19 real properties, six luxury cars, and multiple pieces of fine jewelry.

In announcing the plea, United States Attorney Machen, Assistant Director McJunkin, Acting Special Agent in Charge Hylton, Inspector General Gustafson, Special Agent in Charge Craig, and Major General Quantock thanked those who investigated the case from the FBI’s Washington Field Office; the Washington Field Office of IRS-CI; the Office of the Inspector General for the SBA; DCIS; the Defense Contract Audit Agency; and the United States Army CID. They also expressed thanks to the United States Marshals Service for its assistance on the forfeiture matter.

They also praised the efforts of those who worked on the case from the United States Attorney’s Office for the District of Columbia, including Assistant United States Attorneys Michael K Atkinson and Bryan Seeley of the Fraud and Public Corruption Section and Assistant United States Attorney Anthony Saler of the Asset Forfeiture and Money Laundering Section. Finally, they expressed thanks for assistance provided by former Special Assistant United States Attorney Christopher Dana; Forensic Accountant Maria Boodoo; Paralegal Specialists Tasha Harris, Shanna Hays, Taryn McLaughlin, Sarah Reis, Christopher Samson, and Nicole Wattelet and Legal Assistant Krishawn Graham.”

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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 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.


GSA inspector general is investigating possible bribes, kickbacks

April 17, 2012

The Washington Post on April 16, 2012 released the following:

“By Lisa Rein and Ed O’Keefe

The inspector general for the General Services Administration said Monday that he is investigating possible bribery and kickbacks in the agency, as lawmakers accused the former GSA administrator of allowing a Las Vegas spending scandal to erode taxpayers’ trust in government.

Inspector General Brian Miller told a congressional committee scrutinizing an $823,000 Las Vegas conference that his office has asked the Justice Department to investigate “all sorts of improprieties” surrounding the 2010 event, “including bribes, including possible kickbacks.” He did not provide details.

Miller’s revelations of possible further misconduct by organizers of the four-day event, coming on the heels of a highly critical report, enraged Democrats and Republicans on the House Oversight and Government Reform Committee. The lawmakers put GSA officials on the defensive during a tense four-hour hearing, with some Republicans loudly rebuking former administrator Martha N. Johnson and her colleagues.

GOP lawmakers argued that the excessive spending proves their case for smaller government. Taxpayers picked up the tab for a mind reader, bicycles for a team-building exercise and a slew of private parties at the conference.

“There are those who believe government’s reach should be expanded,” committee Chairman Darrell Issa (R-Calif.) said in his opening statement. “What has come to light surrounding GSA’s activities should give pause to anyone who has opposed cutting government size and spending.”

But Democrats joined him in condemning the outsized tab for the conference, with Rep. Elijah E. Cummings (Md.), the committee’s ranking Democrat, calling it “indefensible” and “intolerable.”

“It’s not your money, it’s the taxpayers’ money,” Cummings scolded agency officials.

Johnson, speaking publicly for the first time since her abrupt resignation last week, called the biennial Western Regions Conference a “raucous, extravagant, arrogant, self-congratulatory event that ultimately belittled federal workers.” Closing her testimony, she said, “I will mourn for the rest of my life the loss of my appointment.”

Seated next to her was Jeffrey Neely, the senior executive in the GSA’s Pacific Rim region who organized the event. Neely, 57, who had received a subpoena from the committee, asserted his Fifth Amendment right to not incriminate himself and left the witness table.

Neely, who earns a salary of $172,000, is one of five senior managers who have been placed on paid administrative leave pending further discipline. Several lawmakers said it galled them that the managers are still receiving their full salaries. As civil servants, they have more protections than political appointees.

Johnson’s replacement, Acting Administrator Dan Tangherlini, told lawmakers that he has canceled almost every conference scheduled for GSA employees for the rest of the fiscal year. He also sent letters last Friday to Neely, former Public Buildings Service commissioner Robert Peck and Robert Shepard, Neely’s chief of staff, demanding repayment for private parties they threw in their rooms at the M Resort Spa Casino.

Peck has been summoned to appear Tuesday at the second of four congressional hearings on the scandal.

Tangherlini also wants repayment from an audiovisual company that was given hotel rooms as part of its $59,000 contract for the conference but that Tangherlini said double-billed the government.

Asked if the GSA has a “culture” problem that led to the freewheeling spending, which included poolside entertainment by a clown and a “Red Carpet” talent show, Tangherlini replied, “We definitely have a culture problem in Region 9,” referring to the four-state Pacific Rim office. “I can’t say I know enough to say we have a culture problem” in the rest of the agency, he said.

The officials’ apologies did little to satisfy lawmakers, who were outraged that top agency officials allowed the spending to take place, then waited to take action even after the inspector general briefed them midway through his year-long investigation.

Issa and others questioned how Johnson could have signed off on a $9,000 bonus for Neely last year over the objections of a committee that reviews bonuses for members of the Senior Executive Service.

In an e-mail released by the committee, Johnson wrote “yes on a bonus,” in part because Neely had to serve as regional administrator in an acting capacity “forever and a day.” She told lawmakers Monday that the reward was for his job performance. Pressed on whether she would deny the bonus knowing what she knows today, she said she could not say.

Johnson said she received a briefing on the preliminary findings in May 2011. She decided not to launch her own investigation, “as such action would have entailed a terrific duplication of government resources.”

Johnson said she believed that Miller would quickly conclude the investigation, but “the deadline slipped repeatedly from October to November to December.” She said her office received a final report last month — 15 months after it was requested.

“I personally apologize to the American people for this entire situation,” Johnson said.

Also at Monday’s hearing, David E. Foley, a former deputy commissioner at the Public Buildings Service, repeatedly apologized for poking fun at the lavish spending during the conference’s talent show, comments that were captured on video. But Foley stressed that he was not involved with planning the event.

Most of the contracts for the conference, including for an event planner, the audiovisual company and the bike-building exercise, were not competitively bid, as federal rules require.”

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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

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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 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.


Federal Prosecutors Charge John Heary, an Ohio Chiropractor, in an Alleged $1M Medicare and Private Insurance Fraud Case

April 5, 2012

The Republic on April 4, 2012 released the following:

“Federal prosecutors charge Ohio chiropractor in $1M Medicare and private insurance fraud case

THE ASSOCIATED PRESS

CLEVELAND — A northeast Ohio chiropractor has been charged with defrauding Medicare and private insurers out of more than $1 million, including orders for unneeded medical equipment and free dinner offers if patients would assist the alleged scheme.

Federal prosecutors in Cleveland announced the indictment Tuesday against 37-year-old John Heary, who most recently lived in Lodi (LOH’-dy) and had a practice in Medina (meh-DY’-nuh).

He was charged with 55 counts including health care fraud and paying kickbacks.

He allegedly offered patients the dinners or waived co-payments if they would come to his office and clear the way for the alleged billing fraud.

Heary’s attorney, Joseph Morse, declined comment Wednesday.”

US v. John Heary – Federal Criminal Indictment

18 U.S.C. § 1341 – Mail Fraud

18 U.S.C. § 1347 – Health Care Fraud

42 U.S.C. § 1320A-7B – Illegal Kickbacks

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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.


Former hospital exec wants acquittal, new trail

March 20, 2012

WJTV on March 20, 2012 released the following:

“By: | Associated Press

OXFORD, Miss. (AP) A former Mississippi hospital executive wants a federal judge to acquit him or grant a new trial in an alleged medical kickback and bribery scheme.

Raymond Lamont Shoemaker of Tupelo was charged last year with receiving kickbacks for nursing services, conspiracy, embezzlement and other charges last year at Tri-Lakes Medical Center in Batesville.

Shoemaker was convicted March 2 with co-defendant Earnest Levi Garner Jr. of Batesville.

Shoemaker’s lawyers said in a court filing Friday that “the government’s evidence was insufficient to support the verdict.”

The indictment said Garner agreed to pay a kickback and bribe of $5 per hour for every hour of nursing services that Garner’s companies billed the medical center.”

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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 – Appeal

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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.


FBI sting nabs 13 in alleged kickback scheme

December 2, 2011

The Boston Globe on December 1, 2011 released the following:

“By Todd Wallack

The US government yesterday charged 13 corporate executives, lawyers, and penny stock promoters with agreeing to pay illegal kickbacks, the result of a yearlong FBI sting operation run out of Massachusetts.

As part of the sting, an undercover FBI agent pretended to work for a local office of a New York hedge fund in an unnamed Boston suburb, according to government documents. The agent then approached both companies and intermediaries, offering to arrange for his fund to invest up to $5 million in the firms – under the condition that the companies secretly kick much of the money back to him.

Authorities said the agent met with about 30 individuals in the Boston area office from October 2010 through August 2011.

The government filed criminal charges against executives of two Massachusetts companies: Michael Lee, 51, of Hingham, chief executive of ZipGlobal Holdings Inc., a former telecommunications firm in Hingham now focused on lighting products; and Paul Desjourdy, 50, of Medfield, chief executive of Symbollon Corp./Symbollon Pharmaceuticals Inc., a specialty biotechnology firm in Medfield. Both were charged with mail fraud and conspiracy to commit securities fraud.

Eleven other defendants from across the country were charged with fraud, including Edward Henderson, 69, of Lincoln, R.I. Henderson, who helps firms obtain financing, allegedly arranged for the agent posing as a hedge fund representative to meet Desjourdy in hopes of receiving a portion of the kickback.

The Securities and Exchange Commission also filed civil charges against Lee, Desjourdy, and Henderson, alleging they manipulated trading in microcap stocks – shares of companies with a small market value that are typically traded over the counter, rather than on better-known exchanges such as Nasdaq Stock Market or the New York Stock Exchange.

Lee’s attorney, Thomas Brant, said his client was “shocked and devastated’’ by the charges, but declined to comment further. Desjourdy’s lawyer declined to comment. Henderson’s attorney could not be reached.

As result of the investigation, the SEC suspended trading of Symbollon, ZipGlobal, and five other thinly traded public companies. ZipGlobal last traded at 3 cents a share before being suspended. Symbollon last traded for less than a penny a share.

David Bergers, director of the SEC’s Boston office, said it is important to thwart kickback schemes – even involving small companies – because they can hurt investors. A tainted hedge fund investment could artificially drive up a firm’s stock price, forcing other investors to pay more for shares or misleading them about the company’s potential.

“Although the stock price for these companies may be low, the damage can be very high,’’ Bergers said.

US Attorney Carmen Ortiz said the case was novel because FBI agents were able to partner with the SEC to use undercover strategies more common to drug and public corruption cases than securities.

“It’s really important that the markets operate in a fair and honest fashion,’’ Ortiz said. “We hope it serves a deterrent factor so that others will not engage in this kind of criminal activity.’’”

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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 McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Reports: Prosecutions going up for war zone crime

October 30, 2011

The Associated Press (AP) on October 30, 2011 released the following:

“By PAULINE JELINEK
Associated Press

WASHINGTON (AP) — A Marine in Iraq sent home $43,000 in stolen cash by hiding it in a footlocker among American flags. A soldier shipped thousands more concealed in a toy stuffed animal, and an embassy employee tricked the State Department into wiring $240,000 into his foreign bank account.

As the wars in Iraq and Afghanistan wind down, the number of people indicted and convicted by the U.S. for bribery, theft and other reconstruction-related crimes in both countries is rapidly rising, according to two government reports released Sunday.

“This is a boom industry for us,” Stuart Bowen, Special Inspector General for Iraq Reconstruction, or SIGIR, said in an interview.

“Investigators and auditors had a productive quarter,” said a report on the theft of Afghanistan aid by Steven Trent, Special Inspector General for Afghanistan Reconstruction, or SIGAR. The report covered August through October.

In the last 13 months U.S. investigators in Iraq secured the indictments of 22 people for alleged aid-related offenses, bringing to 69 the total since the SIGIR office was created in 2004. Convictions stand at 57. Several hundred more suspects are under scrutiny in 102 open investigations and those numbers are expected to climb.

The rise in caseloads derives partly from spinoff investigations, where suspects facing prosecution lead investigators to other suspects, said Jon Novak, SIGIR’s assistant inspector general for investigations.

“More and more people are ratting out their associates,” he said, turning in conspirators who helped launder money after it was stolen, others who were aware of it and others implicated in the crimes.

As investigators gain experience, they’re received better information from a growing network of sources in Iraq, said Dan Willkens, Novak’s deputy. Development of an automated data-mining system for investigations has helped, he said, as did a decision two years ago to speed prosecutions by hiring three former assistant U.S. attorneys and detailing them to the Department of Justice.

At the inspector general’s office for Afghan reconstruction, created in 2008, officials report only nine indictments and seven convictions so far. They say they’re trying to ramp up after years of upheaval and charges the office was mismanaged. Trent was named acting inspector general after his predecessor left in August and is the third person to hold the job.

Still, Trent reported that during the last quarter a SIGAR-initiated investigation netted the largest bribery case in Afghanistan’s 10-year war. Former army reserve captain Sidharth “Tony” Handa of Charlotte, N.C., was convicted, sentenced to prison and fined for soliciting $1.3 million in bribes from contractors working on reconstruction projects.

Most crimes uncovered by U.S. investigators in the two war zones include bribery, kickbacks and theft, inspired in part by the deep and pervasive cultures of corruption indigenous to the countries themselves.

Among some of the cases listed in the reports were those of:

Gunnery Sgt. Eric Hamilton, who pleaded guilty to conspiracy in what prosecutors say was a scheme to help Iraqi contractors steal 70 generators that were meant to supply electricity for fellow Marines. He sent some of their payments home in a footlocker and had other money wired, the report said.

Several U.S. government employees, who received kickbacks for steering contracts to local conspirators and providing inside information to people competing for contracts. A former army sergeant, who was not identified, is charged with pocketing more than $12,000 in cash that a contractor never picked up after the money was allegedly stolen by another army sergeant and mailed to California inside a stuffed animal.

Jordanian national and U.S. embassy employee Osama Esam Saleem Ayesh, who was convicted in April for stealing nearly $240,000 intended to cover shipping and customs charges the State Department incurs when it moves household goods of its employees. The money wound up in Ayesh’s bank in Jordan.

Money stolen from reconstruction projects also has been shipped off of U.S. battlefields tucked into letters home and stuffed in a military vest. Tens of thousands of dollars were once sewn into a Santa Claus suit.

Prosecutors have retrieved some of the money. More than $83 million will be returned to the U.S. from Iraq cases completed in the budget year that ended Sept. 30, bringing the total recovered over the last seven years to nearly $155 million, Bowen’s office said.

As well as stolen cash, the total includes court-ordered restitution, fines and proceeds from the sale of merchandise seized from those convicted, including Rolex watches, luxury cars, plasma TVs and houses.

SIGAR prosecutions recovered $51 million over the past year, Trent’s report said.

But the amount recovered is believed to be a tiny fraction of what’s been stolen in the two war zones, a figure that will probably never be known for certain. Far more money is believed to have been lost through waste and abuse that resulted from poor management and the often-questioned U.S. strategy of trying to rebuild nations that are still at war.

The U.S. has committed $62 billion to rebuilding Iraq and $72 billion for the reconstruction of Afghanistan.

The independent Commission on Wartime Contracting estimated in August that at least $31 billion has been lost to waste and fraud in Iraq and Afghanistan, adding that the total could be as high as $60 billion. It studied not just reconstruction spending, but $206 billion for the logistical support of coalition forces and the performance of security functions.

The commission found that from 10 to 20 percent of the $206 billion in spending was wasted, while fraud accounted for the loss of another 5 to 9 percent.

Bowen called the cost of fraud “egregious.”

“This is open crime occurring in a war zone,” he said. “And the purpose of a lot of these expenditures is to win hearts and minds. Obviously we lose hearts and minds” when local populations see foreigners steal money meant to help rebuild their country.

SIGIR and SIGAR are only two of the U.S. government offices looking into fraud, waste and abuse. Others include State Department inspectors and Army criminal investigators.”

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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

————————————————————–

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 McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.