Seattle mansion dwellers charged in alleged welfare fraud

May 9, 2012

SeattlePi.com on May 9, 2012 released the following:

“BY LEVI PULKKINEN

A Seattle couple accused of drawing welfare while living in a $1.2 million Lake Washington mansion has been charged with defrauding the government and is expected to plead guilty.

Accusing the couple of stealing more than $115,000 meant to subsidize housing for the poor, federal prosecutors have filed felony theft charges against chiropractor David Mark Silverstein and Lyudmila Shimonova.

Both are expected to appear in U.S. District Court next week to answer the felony charge of theft of government funds, which was filed by information Tuesday. Attorneys for both defendants said Tuesday their clients will be pleading guilty.

Noting that the thefts have cost Silverstein personally and professionally, attorney David Allen said his client will be paying back twice the amount of government assistance prosecutors allege the couple received.

“He’s very sorry for what he did,” said Allen, an attorney with the Seattle firm Allen, Hansen & Maybrown. “He takes full responsibility.”

Shimonova’s attorney Michele Shaw said her client is very sorry for the thefts and will be taking responsibility for her actions.

Federal investigators raided the couple’s Lake Washington home in late November looking for evidence that they’ve bilked government assistance programs for more than a decade.

At the time, investigators claimed Shimonova received $135,000 in federal housing assistance benefits that were paid to her “landlord” – Silverstein, described as her husband in court documents – for rent on the Island Drive South home. Shimonova was also alleged to have collected additional money through a federal program for destitute disabled Americans and state programs meant to feed needy families.

“All of these programs are need-based programs, meaning that a person can qualify for the programs only if he or she demonstrates that his or her income or resources fall below a certain level,” a Department of Housing and Urban Development special agent previously told the court. “The investigation has developed substantial evidence that the subjects defrauded theses programs by misrepresenting and concealing material information.”

Attorneys for the government previously filed a civil lawsuit aimed at recovering money they claim was taken from government coffers by fraud. That lawsuit remains ongoing; if the government prevails, Silverstein and Shimonova could be ordered to pay three times the amount of money they received in benefits.

The criminal charge was filed against the couple on Tuesday. Neither has been jailed in the case.

In November, HUD investigators and others searched the couple’s Island Drive South home, located on the shore of Lake Washington in Seattle’s Dunlap neighborhood. According to court documents, agents seized financial documents, Nordstrom receipts and framed photos of the couple.

Apparently following up on documents seized at the home, agents received a second search warrant and seized the couple’s safe deposit box.

In a search warrant affidavit, the HUD special agent noted Silverstein and Shimonova took numerous international trips together while Shimonova was collecting substantial amounts of money in government assistance. Among their destinations were the Dominican Republic, Moscow and Paris.

Government attorneys claim in civil filings that Shimonova had been receiving $1,272 a month in housing assistance payments since 2003. Those payments allegedly went to pay rent to her landlord, Silverstein.

In the civil lawsuit, Assistant U.S. Attorneys Harold Malkin and Kayla Stahman contended Shimonova told HUD officials that only she and her two children lived on the property, and that her total assets were less than $5,000. Agents watching the property noted that Silverstein’s Jaguar sedan was often parked at the home, and that his purported home address was actually his chiropractic clinic.

Beyond that, though, the prosecutors noted Silverstein and Shimonova are very likely married, despite claims to the contrary made to HUD. Silverstein describes himself as “happily married with two children” on his business website.

Since 1995, Shimonova has also been receiving disability payments meant to assist Americans with monthly incomes of less than $675, the assistant U.S. attorneys continued. Shimonova is alleged to have failed to disclose several savings accounts, holding tens of thousands of dollars, to which she had access.

At the same time, Shimonova was drawing food stamps and support checks from a program meant to keep poor families from starving, the government attorneys continued. She is also alleged to have received medical care through Medicaid.

Silverstein and Shimonova are expected to appear before U.S. District Judge Ricardo Martinez on Wednesday. Neither has been jailed.”

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Douglas McNabb – McNabb Associates, P.C.’s
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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.


Former Army Contracting Officials and Defense Contractor Indicted for Alleged Bribery and Theft of Government Funds

September 23, 2011

The Federal Bureau of Investigation (FBI) on September 22, 2011 released the following:

“WASHINGTON— A former member of the U.S. Army employed by a private security firm was arrested at Miami International Airport today on charges of bribery, fraud and theft of government funds, in connection with the award of a contract to provide services to a U.S. government provincial reconstruction team in Farah, Afghanistan.

The arrest and charges were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Steven J Trent, Acting Special Inspector General for Afghanistan Reconstruction (SIGAR); Special Agent in Charge Richard D. Zott of the Defense Criminal Investigative Service (DCIS) Central Field Office; and Brigadier General Colleen McGuire, Provost Marshal General of the Army and Commanding General of the U.S. Army Criminal Investigation Command.

Raul Borcuta was arrested in Miami today when he tried to enter the United States from Europe. Upon Borcuta’s arrest, the U.S. District Court for the Northern District of Illinois unsealed a nine-count indictment charging Borcuta and his co-conspirators, Zachery Taylor and Jared Close, with mail fraud, wire fraud, conspiracy, bribery, and theft of government funds.

According to the indictment, Borcuta, 32, defrauded the U.S. government in connection with a contract to provide two up-armored sport utility vehicles to be used by an official in the government of Farah Province, Afghanistan, who had received death threats from insurgent groups. The indictment alleges that Borcuta bribed U.S. Army contracting officials Taylor, 40, and Close, 40, with $10,000 each to award him the contract and to make full payment to Borcuta before the vehicles were delivered. Taylor and Close, formerly U.S. Army staff sergeants assigned to the provincial reconstruction team in Farah, allegedly authorized a payment of approximately $200,000 in U.S. government funds to Borcuta. According to the indictment, Borcuta received the payment and never delivered the vehicles required by the contract.

The defendants face a maximum penalty of 20 years in prison for each mail fraud count, 20 years in prison for each wire fraud count, 30 years in prison for each conspiracy count, 15 years in prison for each bribery count and 10 years in prison for each theft of government funds count.

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

This case was investigated by SIGAR, DCIS, the U.S. Army Criminal Investigation Command, and the FBI. The case is being prosecuted by Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section. The U.S. Attorney’s Office for the Northern District of Illinois provided assistance in this investigation.”

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.

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