Former Gunnison County Man Charged in Alleged Scheme to Defraud Investors in NASCAR Business

June 6, 2012

The Federal Bureau of Investigation (FBI) on June 5, 2012 released the following:

“DENVER— Michael Patrick Corrigan, age 57, formerly of Gunnison County, Colorado, was arrested early this morning without incident in Tuscaloosa, Alabama for mail and wire fraud offenses related to his fraudulent actions involving the sale of investment opportunities in a NASCAR memorabilia company, U.S. Attorney John Walsh and FBI Special Agent in Charge James Yacone announced today. Corrigan appeared in U.S. District Court in Birmingham, Alabama, where he was advised of the charged pending against him and the penalties related to those charges. A detention hearing is scheduled to take place later this week in Birmingham. He will eventually come to Colorado so that he can face the charges here, where he was indicted.

According to the indictment, Racezing Mania Corporation (RZM) was incorporated in Colorado in April 2006. Michael Patrick Corrigan was the registered agent. The purpose of RZM was to be a distributor of NASCAR memorabilia, specifically, die-cast cars and apparel. The business was registered to an address in Crested Butte. There was also a P.O. box in Clarksville, Indiana. NascarMania LLC was the parent company of RZM. NascarMania was incorporated under the laws of the Nevada in 2005. This company was also controlled by Corrigan. In addition, Markettron Holdings LLC was also controlled by Corrigan. From the companies’ inceptions, until the latter part of 2007, Corrigan was president of NascarMania and treasurer of RZM. Corrigan maintained his position as treasurer of RZM, and he and his wife had sole control of RZM finances of RZM.

The stated purpose of RZM was to specialize in racecar team sponsorships, custom-die cast car sales, and Internet marketing sales. RZM also offered “investment opportunity and value to both current and potential investors.” Between 2005 and 2008, Corrigan, using material misrepresentations and omissions, fraudulently solicited investors into his NASCAR memorabilia business. To create an appearance of credibility, the defendant created a RZM board of directors, which included several investors of RZM.

Corrigan solicited and interacted with investors through e-mail, telephone calls, mailings, and Internet websites. He also initiated a “club concept” in which investors contributed $500 for a membership position. Corrigan promised every investor a percentage of the sales of the NASCAR-related merchandise. He also sold membership to “affiliate sites,” or websites available for purchase by investors, for $1,250. The purpose of these sites was to sell NASCAR memorabilia through “spam” e-mails sent by RZM, which directed potential customers to the affiliate’s website. Corrigan guaranteed investors would receive a minimum of $100 weekly net profit, as well as 10,000 leads per week a $250 commissions for every affiliate site sale. An “E-Commerce” club offered membership positions for $5,000. Investors involved in this club were promised a percentage of the company’s returns from the Internet sales of NASCAR-related merchandise.

During the course of the scheme, Corrigan claimed to have the ability to generate income and profits through his three business units. He claimed to be expecting first-year sales totaling $38,500,000, netting $15,409.688 in profit. By 2011, Corrigan projected sales totaling $308,336,426, netting $135,852,298 in profit. Corrigan also informed investors and potential investors that RZM stock would be publicly traded, and, as a result, depending on the amount of the initial investment with RZM, several investors would become millionaires. The defendant was never authorized to use investor funds for his or his family’s personal use. Between 2005 and 2008, he obtained approximately $950,000.

“Combating investment fraud is one of this office’s top priorities: scamming investors out of their hard-earned dollars has criminal consequences, including potential prison time,” said U.S. Attorney John Walsh.

“The FBI does not take white-collar crime lightly and will aggressively pursue those that take advantage of hard working Americans,” said FBI Special Agent in Charge James Yacone. “The FBI will continue to protect the financial wealth of individuals enabling our economy to continue to grow safely and securely.”

Corrigan faces four counts of mail fraud and four counts of wire fraud. If convicted, he faces not more than 20 years in federal prison and up to a $250,000 fine, per count. He could also be ordered to pay restitution.

This case was investigated by the Federal Bureau of Investigation.

Corrigan is being prosecuted by Assistant U.S. Attorney Michelle Heldmyer.

The charges contained in the indictment are allegations, and the defendant is innocent unless and until proven guilty.”

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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 bank fraud cases up in north Alabama

May 14, 2012

Blog.al.com on May 13, 2012 released the following:

By Kent Faulk

“BIRMINGHAM, Alabama — Eight men and women have stood before federal judges in Birmingham the past few weeks on bank fraud charges.

Among them:

• A Mountain Brook man sentenced to four years in prison for embezzling nearly $1.2 million from his former employer by writing checks to himself on the company’s bank account.
• A former Union State Bank branch employee in Trussville sentenced to a month in prison for theft of about $25,000 from the teller drawer and bank vault in 2007 and 2008.
• A former Regions Bank telebanking representative who pleaded guilty to taking $190,000 from a customer’s account during a two-year period, and directing money from the account to pay her bills after she had left her job.

The number of cases being prosecuted for bank fraud by the U.S. Attorneys Office for the Northern District of Alabama has steadily increased in recent years. In 2011 federal prosecutors charged bank fraud in 22 cases, up from 16 cases in 2010, 15 cases in 2009 and 11 cases in 2008. So far, eight cases have been charged this year through May 4.

Some cases include more than one defendant and other charges are also included in some cases.

“I guess it’s a sign of the times,” said James Kendrick, a Birmingham attorney who has represented clients charged with bank fraud.

Rod Pittman, director of corporate security for BBVA Compass, stated in a written response to questions from The Birmingham News that recently they have “seen a significant increase in fraud attempts, the majority of which can be attributed to the economy and technology.”

“In this economy many people are unemployed and more likely to be in a desperate financial situation. This sometimes results in attempted fraud,” Pittman wrote.

Some of those charged with bank fraud in the past year have been bank employees working alone or with help from outside the bank.

Bank employees may be thinking they will pay it back, Kendrick said. “Before you know it, you’ve got more than you can pay,” he said.

Bank fraud isn’t always an inside job.

“The crime of bank fraud is broader than a bank employee stealing money from the bank,” said Peggy Sanford, spokeswoman for the U.S. Attorneys Office in Birmingham.

“The statute allows that if someone makes misrepresentations to a bank in order to get other people’s money held in that bank, then bank fraud has occurred.”

Some attorneys and bank security officials attribute the increase in people being charged by federal prosecutors to a more aggressive stance by the Justice Department on financial fraud.

In many cases the dollar amount is the difference between whether federal prosecutors or state prosecutors will handle a case, said Larry Meredith, director of corporate security for Birmingham-based Cadence Bank.

The U.S. Attorneys Office has been active when it comes to presentations to the banks on various issues, including the importance of the timely sharing of information on possible criminal activity, said Bill Burch, director of corporate security for Regions Bank. “The communication between prosecutors, federal law enforcement offices (and banks) has been enhanced dramatically,” he said.

Sanford said the push by U.S. Attorney Joyce White Vance’s office in north Alabama is consistent with the U.S. Justice Department’s efforts to make financial fraud a top priority and President Barack Obama’s creation of the Financial Fraud Enforcement Task Force.

Banks don’t generally share how much they lose to fraud schemes, but as an industry it’s in the billions of dollars each year, according to some estimates.

But it’s a lot more than the old fashioned way of illegally taking money from a bank.

“The losses are greater than if you had just walked in an robbed the bank with a note,” Meredith said.

While the money lost in a bank robbery may only be a few thousand dollars, the losses from both internal and external fraud is often tens of thousands of dollars and taken over a period of months and years.

The punishment for bank fraud varies. The range of sentences was one month to four years for those charged and sentenced so far in the 2011 cases on just the bank fraud charges. A few had longer sentences because they also had other charges besides bank fraud.

One person also was acquitted and couple had their bank fraud charge dismissed as part of plea deals at sentencing.

Wellington Monroe Phillips II was sentenced to four years in prison for bank fraud for embezzling nearly $1.2 million from a Birmingham-based natural gas supplier.

Twice a month Phillips issued himself an unauthorized check from the corporate bank account held at First Commercial Bank. He would forge the name of the company’s owner on each check and submit them for payment.

Bank corporate security officers say banks have increased security as new fraud schemes surface to tap into bank accounts.

Dan Bailey, chief executive of the Alabama Bankers Association, said that bank customers should take it upon themselves to help secure their accounts, including checking their accounts daily. “Catch it before it goes too far,” he said.”

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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 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.