South Carolina Criminal Lawyer Blog

A hedge fund co-founder, a hedge fund portfolio manager, four financial analysts and a Dell employee have set a record for an insider trading fraud scheme that produced more than $61.8 million in illegal profits based on trades of a single stock. Authorities described a network of friends in finance who "made the most of their connections with corrupt employees of technology companies."

The fraud scheme was described in a criminal complaint in US District Court in Manhattan that charged four of the men with conspiracy to commit securities fraud and securities fraud, in addition to other charges. Three analysts have pleaded guilty and are cooperating with the government.

FBI Agent David Makol said in court papers that "the government built its case through information provided by the three cooperators, consensually recorded conversations, court-authorized wiretaps, telephone records, trading records, electronic communications, documents provided by a cooperator and other documents obtained from two hedge funds." The hedge funds were not identified in the court papers.

The insider trading plot as authorities described it "would be noteworthy for its size." Last month, hedge fund founder Raj Rajaratnam began serving an 11-year prison term the longest ever given in an insider trading case for a scheme that prosecutors said "produced as much as $75 million in profits on dozens of trades over a multi-year period."

Here is some important information the FBI provides regarding securities fraud:

Securities Fraud—A Basic Overview

The nation's economy is increasingly dependent on the success and integrity of the securities and commodities markets. As a result, the FBI diligently investigates criminal activity in the markets and against investors whenever it arises.

Definition

The term "Securities Fraud" covers a wide range of illegal activities, all of which involve the deception of investors or the manipulation of financial markets.

■High Yield Investment Fraud
■Ponzi Schemes
■Pyramid Schemes
■Advanced Fee Schemes
■Foreign Currency Fraud
■Broker Embezzlement
■Hedge Fund Related Fraud
■Late Day Trading

If you or someone you know has been charged with fraud, you will need to consult with an experienced fraud attorney in your area. Call one of the Myrtle Beach fraud lawyers at The Mace Firm to schedule your free consultation.

Continue reading "Insider Trade Case" »

Kenneth Paul Holmes, a real estate developer from Columbia, will begin serving a five-month federal prison sentence next week for due to his involvement in a Grand Strand mortgage fraud scheme. Holmes was once known in his community for his ability to sell homes for a profit.

Judge Terry Wooten sentenced Holmes in November and generously allowed him to remain out from behind bars until after the holidays. Holmes must also spend five months on house arrest after he is released from prison, followed by 4 ½ years of probation. Holmes was also ordered by the judge to pay nearly $2.5 million in restitution – at the rate of $1,000 per month – to banks that lost money on the real estate transactions involving homes he built in Garden City Beach and Surfside Beach.

Holmes originally faced a maximum sentence of 30 years in prison, but was given a lighter sentence because he cooperated with federal investigators and led them to six additional guilty pleas by others involved in the fraud scheme.

In broad terms, fraud is defined as a "deliberate misrepresentation which causes another person to suffer damages, usually monetary losses." Some people consider lying to be fraud, but legally, lying is only one small element of actual fraud. For example, a sales person may lie about his name, but as long as he is truthful about the product he is selling, he would not be guilty of commiting fraud.

One of the most important things to prove in a fraud case is a deliberate misrepresentation of the facts. To prove fraud, the accuser must demonstrate that the accused had prior knowledge and voluntarily misrepresented the facts.

Another important element of fraud that must be proved is justifiable reliance on the accused's expertise. For example, if a stranger asked you to invest five thousand dollars in his internet business, you would probably walk away. However, if a well-dressed business person held a seminar about his internet business, you may rely on his expertise and decide to invest in his company. A few months pass and you have not heard anything from the internet business or seen any benefits from your investment, you may assume fraud has occurred. You would have to testify in court that you invested in this company based on your reliance of the business person's expertise. On the other hand, the accused may claim that the victim had every opportunity to discover the potential for fraud and failed to investigate thoroughly.

If you have been charged with fraud, call one of the experienced fraud lawyers at The Mace Firm. Our Myrtle Beach fraud attorney is ready to speak with you about your case.

Continue reading "Developer in SC Begins Sentence" »

Insurance fraud involves the submission of fraudulent insurance claims in order to gain money or property. The intention to defraud the insurance company is the focus of this type of crime. Insurance fraud investigations maintain a rigorous and thorough procedure that is utilized to not only determine the validity of any and all insurance claims, but also to study patterns and trends within insurance claims with the hopes of catching individuals attempting to commit acts of insurance fraud.

The following are the most common types of insurance fraud:

1) Health insurance fraud
• Exaggerated injuries reported to an insurance company
• Falsified medical documents, which can include medical reports or medical bills reported to the insurance company
• Falsification of events that had taken place resulting in an injury, which are reported to the insurance company.

2) Life insurance fraud
• The falsification of death records or death notices reported to the insurance company
• The murder of an individual in order to collect the life insurance policy belonging to them
• Marrying an elderly person or a person at a high risk for death in the attempt to collect their life insurance policy.

3) Government insurance fraud
• The submission of fraudulent financial reports in order to collect welfare or government assistance
• The submission of fraudulent employment claims in order to receive unemployment benefits
• The submission of false reports of pregnancy in order to unlawfully receive maternity benefits
• The submission of fraudulent claims with regard to an injury sustained in order to unlawfully collect worker’s compensation.

Individuals are encouraged to consult with an insurance fraud attorney specializing in criminal law and, if possible, those who focus on criminal law and defense. In the preparation of a defense, the individual may be asked to provide the nature of the insurance fraud in question, any included threats, the biographical information with regard to any and all victims, any previous arrests and/or convictions, evidence and witness testimony, full account of the details surrounding the event in question, and the arrangement for bail or bond.

If you or someone you know has been charged with insurance fraud, call one of the experienced fraud lawyers at The Mace Firm. Our Myrtle Beach fraud attorney is ready to speak with you about your case today.

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Late last week, a federal jury in Minneapolis, concluding that South Carolina-based Mercantile Bank helped the music mogul defraud his lenders, awarded $16 million to 26 banks. The award stems from a failed $28.5 million loan received by boy band creator, Lou Pearlman. Pearlman was the music mogul behind the musical acts Backstreet Boys and ’N Sync. He’s serving a 25-year sentence in Texas after pleading guilty to running a Ponzi scheme and bilking banks and investors out of $300 million or more. But in 2006, he still looked to most like a successful business tycoon, with a fleet of aircraft in addition to his various music and entertainment ventures.

The group of smaller, community banks agreed to lend $28.5 million to Pearlman to finance an American version of a British television show called "Top of the Pops." Pearlman defaulted on the loan fairly quickly while his business operation unraveled. He was arrested in Indonesia in 2007 after fleeing authorities. American Bank sued him that year, but Pearlman’s operation filed for bankruptcy, and he turned out to be completely broke.

American Bank sued the Twin Cities loan broker that shopped the Pearlman deal to various banks: North American Capital Markets and its executives Stuart Harrington and Craig Mueller. But North American, based in Golden Valley, filed for Chapter 7 voluntary bankruptcy in 2009. American Bank then turned its scope on Mercantile Bank. The bank, based in Greenville, S.C., operated widely in Florida and did business with Pearlman in Orlando, Pearlman’s home base. In 2005, Pearlman had defaulted on a $6 million line of credit from Mercantile and Mercantile was trying to restructure it.

The kicker of this story is that Mercantile Bank had extensive knowledge about Pearlman’s bank fraud, American Bank argued, including the fact that the two accountants who prepared Pearlman’s financial records were fictitious. The jury trial started Nov. 7 and the most damning evidence was an email from one Mercantile employee to another saying that a loan analyst had figured out that Pearlman’s accountants did not exist and that they had asked Pearlman to exit the bank. Bank reps were actually presented with financial documents and tax returnes that they thought were prepared by real CPA's.

If you or someone you know has been charged with fraud, call one of the experienced Myrtle Beach fraud lawyers at The Mace Firm. Our fraud attorney is ready to speak with you about your case today.

Continue reading "Boy Band Manger and Fraud" »

Ford Shelley Jr, a Myrtle Beach developer, has been charged with mail fraud related to a condo development in town. He was charged with setting up fraudulent mortgages for condos at Pineapple Bay. Shelley's criminal defense lawyer in Myrtle Beach says that he "was the victim of a mortgage broker who misled him about a loan program used to sell the condos." During the height of the real estate market, a mortgage broker contacted him about a loan program and assured him it was legitimate. Shelley agreed to a plea deal in federal court papers which were filed last week. A hearing has yet to be scheduled and Shelley could face up to 20 years in prison.

John Potterfield, the assistant U.S. attorney who is prosecuting the case, said he cannot comment until after a plea is officially entered during a court hearing. The mail fraud charge carries a maximum sentence of 20 years in prison and a $250,000 fine followed by up to three years of supervised release. No hearing date has been scheduled. Shelleyadmitted in court documents that he agreed to pay the buyers at Pineapple Bay “large sums of money” after the sales were finalized. The documents do not say how much money Shelley paid the buyers; however, he failed to disclose those payments on loan documents which is required by law. Federal prosecutors say Shelley also delivered loan packages to banks that contained false, misleading and fraudulent information, according to court documents.

Meanwhile, Shelley is about to settle a civil lawsuit filed against him by Howard K. Stern in 2008. Stern accuses Shelley and his family of taking the late Anna Nicole Smith's computer equipment, videos and other personal things from a home in the Bahamas. Shelley's father-in-law owned the home and he was in the process of evicting Smith when she died.
In the lawsuit, Stern said Shelley and the others profited from selling Smith’s videos and belongings to the media after her death. Smith asked the court for unspecified actual and punitive monetary damages. A document filed in federal court last week states that Stern, Shelley and the others expect to settle the case out of court next year. Stern has asked the court that terms of any settlement be sealed.

Mail fraud is a very serious offense. US Postal Inspectors will investigate any crime in which the U.S. Mail is used to further a scheme--whether it originated in the mail, by telephone, or on the Internet. The use of the U.S. Mail is what makes it mail fraud. If evidence of a postal violation exists, Postal Inspectors may seek prosecutive or administrative action against the violator.

If you or someone you know is being charged with fraud, call one of the criminal defense lawyers in Myrtle Beach. Our Myrtle Beach federal criminal lawyers would like to speak with you about your case.

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U.S. Attorney Bill Nettles announced that Robert Daniel Kelly of Branford, Conn., has pled guilty before U.S. Magistrate Judge Holly B. Fitzsimmons in Bridgeport, Conn., to two counts of filing a false loan application. Kelly has been connected to a mortgage on property that he obtained through false applications in North Myrtle Beach, S.C. Accroding to the court documents and statements, Kelly applied for and received loans to purchase and refinance homes in Myrtle Beach.

He told the bank that his income was over $83,000 per month, when in reality his income is much less. As a result of Kelly filing false loan applications, Bank of America lost hundreds of thousands of dollars. Kelly is now facing a fine up to $1 million and a maximum prison sentence of 30 years. According to the article, "Kelly also faces an order of restitution in the amount of at least $959,002.03. He was originally investigated in and indicted on Jan. 25, 2011 by a federal grand jury in the District of South Carolina. The U.S. Attorney’s Office in South Carolina transferred the indictment to the District of Connecticut for entry of a guilty plea."

This is not the first time the Myrtle Beach area has been targeted for mortgage fraud cases. Earlier this year, eleven area residents were charged with mortgage fraud over the past year in an ongoing investigation that alleges a tight-knit network of real estate and financial professionals participated in a conspiracy to steal money from banks by filing fraudulent loan documents. Seven of those charged have pleaded guilty and are awaiting sentencing. The participants in this scheme overstated the sales price of homes and buyers' incomes to obtain inflated loans from banks, according to indictments and court records. The participants then split the proceeds from those loans while letting the homes fall into foreclosure, leaving banks with millions of dollars in losses and contributing to the collapse of this area's real estate market.

Here are some facts about mortgage fraud according to the FBI:

■Mortgage fraud continued at elevated levels in 2010, consistent with levels seen in 2009. Mortgage fraud schemes are particularly resilient, and they readily adapt to economic changes and modifications in lending practices.

■Mortgage fraud perpetrators include licensed/registered and non-licensed/registered mortgage brokers, lenders, appraisers, underwriters, accountants, real estate agents, settlement attorneys, land developers, investors, builders, bank account representatives, and trust account representatives.

■Total dollar losses directly attributed to mortgage fraud are unknown.

■A continued decrease in loan originations from 2009 to 2010 (and expected through 2012), high levels of unemployment and housing inventory, lower housing prices, and an increase in defaults and foreclosures dominated the housing market in 2010. RealtyTrac reported 2.9 million foreclosures in 2010, representing a 2 percent increase in foreclosures since 2009 and a 23 percent increase since 2008.

■With elevated levels of mortgage fraud, the FBI has continued to dedicate significant resources to the threat. In June 2010, the Department of Justice (DOJ), to include the FBI, announced a mortgage fraud takedown referred to as Operation Stolen Dreams. The takedown targeted mortgage fraudsters throughout the country and was the largest collective enforcement effort ever brought to bear in combating mortgage fraud.

■The current and continuing depressed housing market will likely remain an attractive environment for mortgage fraud perpetrators who will continue to seek new methods to circumvent loopholes and gaps in the mortgage lending market. These methods will likely remain effective in the near term, as the housing market is anticipated to remain stagnant through 2011.

If you or someone you know is being charged with mortgage fraud, you will need to speak with a good mortgage fraud attorney. Our Myrtle Beach criminal lawyers are ready to discuss your case. Call one of our criminal lawyers in Myrtle Beach to schedule your free consultation.

Continue reading "Myrtle Beach Fraud Indictment" »

Despite the bankruptcy reforms of 2005, bankruptcy filings have remained high over the last three years due to the housing crisis and general economic downturn. With an increase in bankruptcy cases, comes an increase in instances of bankruptcy fraud. Some U.S. Attorney’s Offices have put investigating and prosecuting bankruptcy fraud as a top priority. Celebrities, including baseball great, Lenny Dykstra have recently been indicted on bankruptcy fraud charges.

Investigating Bankruptcy Fraud From the Top Down

The U.S. Department of Justice, which oversees the United States Trustee Program, has devoted pages of their website as well as a special email account for reporting instances of bankruptcy fraud. The federal government actively encourages peers to report bankruptcy fraud whenever possible or suspected. As a result of their fiduciary duty to creditors as well as their payment structure, chapter 7 bankruptcy trustees are encouraged to sniff out potential concealment of assets. Debtors who are found to intentionally hide assets from the bankruptcy court can be sued civilly or have the matter referred to the U.S. Attorney’s Office for criminal prosecution.

Know the System

It is important for bankruptcy debtors to understand how the bankruptcy system works before filing a case. Filing for bankruptcy is not nearly as much about debts as it is about assets. Bankruptcy trustees are paid 25% of all the property they liquidate, meaning their business model depends upon searching for assets.

When you file a bankruptcy case, you swear under oath and penalty of perjury that you have made an accurate and full disclosure as to all your assets and debts. Bankruptcy fraud cases often begin with a trustee realizing that a debtor has not been entirely forthcoming as to required disclosures and filing a civil lawsuit known as an adversary proceeding. An adversary proceeding gives the bankruptcy trustee the opportunity to engage in discovery which can put debtors in an uncomfortable position if they’ve intentionally tried to hide assets. Part of the civil discovery process involves taking depositions (testimony) making it entirely possible for a debtor to incriminate themselves criminally while being deposed.

When to Retain Criminal Counsel

If you’ve filed for bankruptcy and find yourself being accused by a bankruptcy trustee of fraud, especially in the form of concealing assets, contact a criminal defense attorney. Many people believe filing for bankruptcy is nothing more than organizing a few forms. Nothing could be further from the truth. There is more to chapter 7 than reaffirmation agreements and creditors meetings. Even a basic consumer bankruptcy case can quickly become an extremely litigous process in which you, the debtor, can quickly find yourself under oath testifying about matters that could escalate to a criminal level very quickly. Protect your rights and invest in a good criminal defense lawyer if your trustee is accusing you of fraud.

John S. O’Connor is a NC litigator with prior experience as a consumer bankruptcy attorney. The O’Connor Law Firm practices in the areas of mass tort litigation, IRS Tax Help and Real Estate Workouts. The firm represents clients with federal tax debts before the IRS nationwide.

Federal authorities have escalated their crackdown on health-care fraud yesterday. The announced charges against 91 people in eight cities. These people have been accused of cheating the Medicare system out of nearly $300 million and victimizing the elderly and disabled people who rely on the federal insurance program. Investigators focused heavily on the Miami area, where 46 of the 91 defendants were charged with participating in various fraud schemes.

Among those charged in the coordinated series of arrests was a doctor in Detroit who allegedly billed Medicare for services provided to dead people and claimed that he performed psychotherapy treatments more than 24 hours a day. Other doctors, nurses and health-care company owners were charged in various schemes to get paid for services that were medically unnecessary or never provided, officials said.

According to officials, across the United States, these defendants have treated the Medicare program as their personal piggy bank. At this time, it is unclear whether the defendants have retained criminal defense lawyers. 70 of the defendants were charged in indictments unsealed this week, the other 21 were charged in recent weeks. More than 55 defendants had been arrested by yesterday afternoon, in addition to others who turned themselves in to authorities.

These arrests are the latest steps to protect the integrity of Medicare. Officials are attempting to thwart schemes that are geared toward submitting false Medicare billings for home health care and other services.

Strike force operations were begun by the Bush administration in 2007 and have continued and been expanded under President Barack Obama. The Medicare fraud strike forces now operate in nine locations, and have so far resulted in more than 1,100 criminal charges.

If you or someone you know has been convicted of committing fraud, call one of our Myrtle Beach criminal defense lawyers at The Mace Firm for a free consultation. Our federal criminal defense lawyers in Myrtle Beach are ready to speak with you about your case today.

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Evans Oniha and Camillus Ehigie owned and operated Caravan Medical Supplies and Prosperity Home Health Services both in California. According to the government from October 2002 through February 2011, the owners wrongly obtained Medicare beneficiary information and used it to submit false claims for equipment and home health services. Oniha and Ehigie have submitted more than $19 million in fraudulent claims to Medicare for durable medical equipment and in-home nursing services that usually were not provided to Medicare beneficiaries. They were both indicted in February 2011.

A federal jury in the Central District of California found Oniha guilty of one count of conspiracy to commit health care fraud, four counts of health care fraud and one count of false statements relating to health care matters. Ehigie plead guilty on July 5, 2011, to multiple health care fraud charges in connection with his participation in the health care scheme.

Medicare fraud is a serious charge, both co-owners could be looking at spending a lot of time in federal prison. Oniha is scheduled to be sentenced on September 19, 2011 and Ehigie is scheduled to be sentenced on January 30, 2012. Hopefully they have both been represented by a good federal defense attorney who helped them work with the government so that the time may be reduced.

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James Seymore was indicted for fraud this week by the United States Attorney's Office in Charleston, South Carolina. The indictment alleges the Mr. Seymore wrote fraudulent checks from a local labor union. The local union president, Kenneth Riley, was aware of the investigation and informed the Post that Seymore was not affiliated with the local union. This type of indictment will expose Seymore to several years in prison. He is also charged with aggravated identity theft.

The United States sentencing guidelines will more likely than not be the largest factor in this case. If the government can show early on that Mr. Seymore committed any of the alleged acts, it will be in his best interest to negotiate a deal. A good criminal defense lawyer in Charleston will be able to help him either defend his case or to negotiate a deal.

A good federal defense lawyer understands the sentencing guidelines and how to calculate a defendant's guideline range based on their criminal history and relevant conduct. It is a large mistake to hire an attorney for federal court that does not fully understand how the guidelines apply and how the federal government prosecutes cases. Federal court is completely different than most state court cases. The witnesses are usually much more experienced and the government has an unlimited budget to use in their case.

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The United States Attorney office in Charleston, South Carolina announced this week the plea of Blair Witkowski in a bank fraud indictment. Mr. Witkowski, who was a mortgage loan officer in Hilton Head, will faces prison time in the face of this fraud charge. Under the federal sentencing guidelines, a fraud indictment provides that the amount of prison time a defendant may face will be based on the amount of loss the government is able to prove at the sentencing. There will no doubt be more indictments to come related to this case. Witkowski has undoubtedly cooperated with the government in this case. His cooperation will allow him to reduce his possible prison sentence. The more information that he provides and that cooperation leads to the arrest and indictment of other individuals, the lower his prison sentence will be. The major problem with all these so called mortgage fraud indictments is the key defendant is never charged. THE BANK is the key to all of these cases.
The government never indicts the bank, only the employees and the other low level players. Very seldom does any bank president, or bank manager get charged as a co-conspirator. The fraud cannot occur without their consent. No matter how it is viewed, banks made money off these bad loans and our tax dollars bailed them out and now they will not lend money to anyone. The government never investigates the bank to determine if they were allowed to right off the loss on their taxes and actually receive a benefit from the loss. The banks did no checks to determine who they were loaning the money to and what they were doing with the money. The banks wanted to give the money away because they could sell the notes to other institutions at a premium. A good Charleston criminal lawyer should fight these indictments and show the jury and the court that the key to all of this was in the bank's hands.
In Witkowski's case, he has plead guilty and will now do what he can to reduce his time. It would be nice if he would actually describe what the bank did in this case beside point the finger. These banks have a duty of due diligence when loaning thousands or millions of dollars. Clearly that was not done by most of the banks giving out loans in the past 8 years. Fighting a federal fraud indictment is difficult, but hiring a good federal attorney will make a tremendous difference in the outcome of a case.

Continue reading "More Fraud Indictments to come in Charleston" »

Fraud schemes have become ever apparent in this stage of the United States' history. Individuals are struggling due to the hardship of the economy and believe that ponzi schemes will be the easiest way out. However, the increasing criminal activity as only heightened the FBI and court system's interest in these types of cases. Now, the trend among federal courts is to sentence individuals involved in fraud schemes to higher prison terms, serving as a lesson to members of the community.

The Three Hebrew Boys (Tony Pough, Joseph Brunson, and Timothy McQueen) were sentenced today in a $82 million Ponzi case. Judge Margaret Seymour sentenced the individuals to the highest fraud sentences in the history of the federal district. Brunson and McQueen received 27 years imprisonment and Pough received 30 years imprisonment. Along with their prison terms, they were ordered to pay $82 million in restitution so that those they defrauded can be reimbursed. As shown in the case of the Three Hebrew Boys, the court system is no longer taking these types of crimes lightly.

If you are being investigated for fraud or any federal crime, the first step is to contact a knowledgeable federal defense lawyer. Being indicted for a federal crime can be a frightening experience, but an experienced lawyer can put your situation into perspective. They can inform you of your options and determine what will be the best defense in your case.

Continue reading "Rise in Federal Fraud Sentencing...The Three Hebrew Boys" »

The Financial Fraud Enforcement Task Force has been conducting an investigation known as "Operation Broken Trust." It is the largest investment fraud investigation in the United States which started on August 16 and ended December 1, 2010. The operation consisted of approximately 231 cases and was mainly focused on schemes targeted at individual investors. The victims had lost more than $8 billion due to the fraud schemes. Many of the victims lost their life savings and homes. Most of the fraud schemes involved ficititous advertisements that tricked investors into endorsing in their company. The FBI and task force have been gathering information against the individuals participating in the fraud schemes secretly for the past several months through undercover operations and surveillance.

The FBI and other federal agencies tend to focus most of their expenses in investigating white collar crime operations due to its high financial incentive. Since white collar crime has increased in the United States, persons indicted often receive higher sentences than in the past. In many cases, the individuals that are indicted are not aware of the extent of their involvement in the fraud scheme. Usually the high-level offenders will be used as informants and are offered a reduced sentence if they cooperate. This may be difficult for a person that does not have much information about the fraud scheme.

In the past few years, there has been a great increase in investigative efforts by federal agencies in white collar crime. As such, anyone indicted in these types of cases should consult with a good federal defense lawyer in order to prepare the best defense possible. A federal attorney would be able to provide advice and information on how to get a fair judgment in your case.

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The Federal Bureau of Investigation in Columbia has confirmed that former state representative, Robert Kohn, has been convicted of insurance fraud. Kohn worked as an insurance consultant and assisted companies on worker's compensation claims. Between the years of 2002 and 2004, Kohn helped a company by the name of Knight's Services prepare its annual insurance submissions. When submitting the information to Companion Property & Casualty Insurance Company, the payroll figures were exaggerated in order to avoid higher premiums. There was approximately $370,000 in premiums that both the company and Kohn saved. Kohn could face up to $250,000 in fines and a term of imprisonment of twenty (20) years. He is currently awaiting sentencing.

When an individual is being tried or has been convicted of fraud, the penalties are usually quite substantial depending on the amount of currency involved and the extensiveness of the conspiracy. It is important to hire a criminal defense lawyer that will be able to protect your best interests and advise you on any precautions you may need to take. Until you have spoken with an attorney knowledgeable in the field of fraud, you should not speak with anyone about the case. Our criminal defense lawyers in South Carolina are very experienced with federal indictments and can help you with your case.

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According to the Associated Press, federal authorities have arrested thirty-six individuals from five states who are allegedly involved in a Medicare scheme that totals approximately $251 million. This is reported as "the largest Medicare bust ever." Most of the suspects were arrested in Miami, Florida, which is considered the center for most of the medicare fraud investigations. There have been ninety-four (94) suspects indicted in this conspiracy and it is anticipated that there may be several more. There are also doctors and nurses that are accused with being involved in billing Medicare for unnecessary equipment, therapy and treatments.

There were more than 360 agents participating in these arrests and several have provided details relating to the indictment. Investigators have confirmed that patients were being recruited in the schemes, so that the information submitted to Medicare appeared reliable. These individuals are paid for allowing the companies to use their name and are never provided any of the services that are submitted to Medicare. They were even given additional payments for recruiting other members. As a result, researchers report that this type of crime has expanded and become even more widespread.

Since this indictment includes several suspects, the government will likely try to offer plea agreements to the lower level individuals charged in the conspiracy in exchange for information relating to the higher level offenders. Due to the large amount of defendants involved in this case, many will probably attempt to cooperate in order to receive a lesser term. This is the reason it is important to hire an experienced medicare fraud attorney to protect your best interests and determine the options that are available within your case. Our fraud lawyers in Miami, Florida are knowledgeable about these types of offenses and can assist if you are being charged with a crime.

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The F.B.I. has settled a criminal and civil case against a large pharmaceutical company that marketed specific drugs to doctors and paid the doctors to push those drugs. The company promoted the use of the drugs for medical conditions that the F.D.A. had not approved them for other uses and doses. This is know as off label marketing. This is illegal even if there are no side effects from the use of the drug. The company agreed to pay $2.3 billion to settle the criminal and civil violations. This is a classic example of how the criminal justice system works. No one is going to jail. Someone made a decision at this company to allow this program to go forward, that person is not indicted and is not in jail. The company was able to buy its way out of trouble and out of breaking the law. No matter how great the federal defense lawyer, this is not the case where the prosecutor is even looking to put someone in jail. This sends a message to other drug manufacturers that you can try any of these tricks and the worst that happens is you are fined.
Some of these drug were provided through Medicare and Medicaid, but still no one goes to jail for health care fraud. The government waits until they can get a doctor or a small provider that is over billing the government. The doctor is a small target compared to the larger hospitals that continually over bill the federal government for services. The small lawyer must get a good defense attorney with experience in federal court and defending fraud cases. There is no time to waste in preparing to fight the federal government.

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South Carolina law enforcement is now investigating the Democratic senatorial candidate Alvin Greene. Greene won the primary for the Democratic party earlier this year. There has been much speculation regarding where Mr. Greene allocated the money he used to pay for his application for the senate race. Mr. Greene is currently facing criminal charges in South Carolina state court. What can be done to Greene based on this investigation? Greene will be investigated by local law enforcement agencies (South Carolina Law Enforcement Division; SLED) and possibly the local sheriff's department. These agencies have the power to subpoena Greene's bank account information in order to determine if someone gave Greene the money to enter the senate race. The real danger for Greene will come from any statements he makes during the investigation.
If Greene decides to speak with the investigators and he lies, he will have opened the door to a federal indictment. A state charge of fraud would most likely not mean that Greene would be facing any incarceration. However, if Greene were indicted by the United States Justice Department, he would most certainly be exposed to some type of incarceration. Greene needs to have an experienced federal defense attorney representing him during the pendency of this investigation. Any misrepresentation can be reexamined by the government to form a basis of a fraud indictment.
Any federal indictment will end Greene's run for the senate. Several other candidates have now appeared to run for this senate seat in anticipation that Greene will be charged with either election fraud or fraud in his application for a public defender related to his state obscenity charge.

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According to the Federal Bureau of Investigation in Miami, Florida, Ernesto Angel Montaner was federally indicted on April 22, 2010 in the Southern District of Florida for conspiracy charges pertaining to health care fraud, in violation of 18 U.S.C. § 1349 and § 1347. Mr. Montaner’s son was also allegedly involved in the conspiracy. The indictment claims that the defendants were operating several physical and occupation (PT/OT) clinics in the Miami-Dade area. It is further speculated that Mr. Montaner would make payments to those who had recruited patients for the clinics. He supposedly made these cash payments to an undercover officer posing as a recruiter in exchange for information regarding Medicare beneficiaries. The indictment states that the conspirators paid these bribes without determining the Medicare beneficiaries’ health condition and whether the services of the physical and occupation clinics was needed. It is alleged that they submitted more than $2.5 million worth of false claims to Medicare.

There are seven (7) counts in the federal indictment associated with the health care fraud charge and the defendants are subject to a considerable amount of time. This type of case is considered to be a white collar crime because it is an economically motivated and committed within the corporate market. When these individuals involved in this case are prosecuted, they will not only face a term of imprisonment, but also significant fines. If a person is charged in a case relating to fraud, it is important to hire an experienced federal defense attorney to protect their best interests. It is frightening to be indicted in the federal system and having a good lawyer on your side to explain your options will make all the difference in your case.

Continue reading "Fraud - Federal Indictment" »

In these difficult economic times, more americans have been filing for bankruptcy under Chapter 7 and Chapter 11 compared to previous years. As a result, the government has increased the number of bankruptcy fraud indictments in South Carolina. Bankruptcy fraud is covered in 18 U.S.C. section 152 and includes a variety of offense conduct, including concealment of assets, lying during a bankruptcy proceeding, false claims, knowingly receiving property from the debtor and omission of assets on a bankruptcy petition.

The corresponding United States Sentencing Guideline is 2B1.1(b). Under this guideline, the amount of loss is an important sentencing factor because it can greatly increase a defendant's base offense level. For example, the base offense level for bankruptcy fraud is a level 6, however, a ten-level increase is applied if the amount of loss is more than $120,000.00. The amount of loss is the amount of loss caused by the fraud. A federal defense attorney will want to calculate this figure as early as possible in the case so that it can be decreased or capped at a certain amount. When calculating an offender's amount of loss, the sentencing court considers the amount of debt discharged or the amount that was intended to be discharged, as well as the value of any concealed or omitted assets from the bankruptcy proceedings. In certain circumstances, the district court may also consider intended loss when calculating this figure.

Other sentencing enhancements for bankruptcy fraud include the use of sophisticated means, multiple victims affected by the fraud and misrepresentation during the course of a bankruptcy proceeding, which is almost always applied in these types of cases. If the offense involved 10 or more victims, a two-level enhancement is applied to a defendant's base offense level. Victims may include creditors. If a defendant uses sophisticated means to perpetrate the fraud, another two-level increase is applied during the sentencing hearing. Sophisticated means is especially complex acts or methods which assist in concealing the offense conduct. This includes using offshore accounts or shell corporations as well as setting up fictitious entities.

A federal attorney will object to these enhancements which are listed in a offender's pre-sentence investigation report. A probation officer prepares the pre-sentence investigation report, but the ultimate decision to apply these enhancements rests with the District Court judge. Therefore, an experienced federal lawyer will file written objections to these enhancements in order to save their clients substantial prison time at the sentencing.

Continue reading "Indictments for Bankruptcy Fraud in South Carolina " »

The Federal Bureau of Investigation has several programs in South Carolina that they have instituted to combat white collar crime. Their white collar crime program covers a variety of related federal offenses.

The following are examples of what is covered by the White Collare Crime Program:
Insurance Fraud
Money Laundering (Usually Related to Drugs)
Financial Institution Fraud (FIF, i.e. Bank Fraud)
Telemarketing Fraud (Especially against Seniors)
Environmental Crimes (Dumping and Polution)
Public Corruption (Bribes)
Health Care Fraud (Medicare Fraud)(Medical Over Billing)
Bankruptcy Crimes (Usually Business Related)
Securities Fraud (Mortgage Fraud could be included here)

These criminal investigations in South Carolina are prosecuted by the United States Attorney in South Carolina. Walter Wilkins is the current United States Attorney in South Carolina. There is also a Federal Public Defender in South Carolina. Parks Smalls is the Federal Defender for South Carolina. The FBI has field offices in most of the cities in South Carolina. The FBI has offices in Myrtle Beach, Florence, Charleston, Columbia (Main Office), Greenville, Aiken and several other smaller cities in South Carolina.

Most of the high profile cases are listed on the FBI's website and the United States Attorney website for South Carolina. These press releases give the public a view as to what is being investigated and prosecuted by the government. All of these listed investigations have been indicted by the government. Defendants are indicted in the region in which the government feels the crime has been committed. Our office defends federal indictments all across the country. Defending a federal indictment takes experience, hard work and a willingness to communicate with a client about the government and its policies on white collar crime. A good Federal Defense Attorney in Columbia can help minimize your exposure to a federal indictment.

Continue reading "FBI and White Collar Crime in South Carolina" »

The Charleston Post Courier is reporting that economist Al Parish was sentenced to 10 years in state prison this week. This means that Parish would mostly likely serve no more than 4 years on this case. The real sentence is his pending 24 year federal sentence. Parish will not be able to be released on parole from the federal sentence. Parish had claimed amnesia when he realized the broad exposure he faced in the federal indictment for fraud.
Parish received a large prison sentence on his federal fraud indictment in Charleston because of the amount of money he is alleged to have taken. Fraud charges with very little monetary exposure will yeld a small prison sentence. Parish's sentencing guidelines increased dramatically based on the large amount of money he defrauded his client's out of over the years.
A federal fraud indictment usually involves millions of dolllars lost investments. The United States Attorney will not usually seek an indictment for a fraud case with very little money being taken. Under the United States Sentencing Guidelines, a defendant would not face much prison time for fraud if very little money is taken. A defendant could face more prison time in State Court on many fraud charges.

Continue reading "Parish Give 10 Years on State Fraud Charges " »

A bank teller from Sumter, South Carolina was found guilty last week of bank fraud. The teller, Robin Davis, defended the case by telling the jury that the money was placed into her account by God. This is one of the worst defenses to fraud I have ever seen. There should have been a psychological evaluation performed on Ms. Davis. Bank fraud is a specific intent crime and the mens rea required for a conviction cannot be overcome through religion. Bank fraud usually involves so called straw customers opening accounts and transferring non-existent funds from one account to the other. Many times fake identification is used to open the accounts and make deposits. On federal bank fraud indictments, the amount of prison exposure is based on the amount of money fraudulently obtained. Once the million dollar mark is reached, the prison time increases dramatically. Our attorneys defend bank fraud indictments from Miami to Charleston to New York. There is usually a conspiracy count included in the indictment.

Defending bank fraud and conspiracy indictments takes a tremendous amount of time. The criminal defense attorney may have to hire an accountant and a forensic accountant to properly prepare a defense to a federal fraud indictment. Understanding the flow of the monetary transactions is critical to preparing for defending a fraud indictment.

Continue reading "South Carolina Bank Fraud Arrest and Conviction" »

Economist Al Parish was in the news again after the accounting firm Legare & Bailey agreed to pay 952,000.00 to potential claims from investors. The firm has stated that it was unaware of any investor fraud by Parish, but there were indicators that should have raised "red flags." It is rare for a party that is not indicted to contribute to loses created by one of its clients. Usually, for this to occur, there is a possible threat of prosecution. Many times the lead defendant will also implicate the accounting firm in the fraud prosecution. This sharing of the blame will allow the defendant to cut his time and any possible fine. Enron and its' accounting practices were one of the first large scale examples of this type of federal indictment.

Parish has appealed his sentence arguing that it is to high for a fraud indictment. His appeal will go to the Fourth(4th) Circuit Court of Appeals in Richmond, Virginia. The appeal of his sentence will be based on the Federal Sentencing Guidelines. His prison exposure is based in large part on the amount of money he is alleged to have taken in the fraud scheme. In this case, if he plead guilty to 66 million there is very little the appellate court will change on appeal. His key appellate issue will be to argue that the trial court failed to consider mitigating factors. Our appellate attorneys in South Carolina have over 14 appeals currently docketed with the 4th Circuit Court of Appeals. This Court is one of the more conservative appellate courts, but they do review each appeal in great detail. We have had great success appealing verdicts and trial court rules in Florida, South Carolina and Georgia.

Continue reading "Charleston Man Sentenced for Investor Fraud" »

In recent news, Anne Hathaway's former boyfriend, Raffaello Follieri, has been arrested in Manhattan, New York on federal criminal charges. He was arrested on conspiracy to commit wire fraud and money laundering. When a person is indicted on counts of wire fraud and conspiracy, it is usually a federal criminal case. Therefore, an excellent federal criminal defense attorney is needed to defend the case.
Mr. Follieri should be able to get a bond on these charges, and will most likely plead not guilty to these federal crimes. Reports have indicated that he has been the subject of an extensive investigation by federal authorities in New York. A good criminal defense lawyer will demand to be notified of all the evidence, reports, and records linking the defendant to the crime.
In order to be convicted of conspiracy, whether it is in New York, the Eastern District of Michigan, the Southern District of Florida or the District of South Carolina, the government must prove that there was an agreement between two or more individuals to participate in some kind of illegal activity. The government will not have to prove that the defendant actually committed wire fraud, but will only have to prove that there was an agreement to commit wire fraud.
If a person in Myrtle Beach, Garden City, Surfside beach or Conway was charged in federal Court with conspiracy to commit wire fraud or money laundering, the case would be heard in District of South Carolin, Florence Division. If a person was charged with conspiracy, wire fraud or money laundering in Charleston, the case would be heard in the District of South Carolina, Charleston Division.
If there is a great deal of evidence linking Mr. Follieri to these charges, he may plead guilty to these charges. If he pleads guilty, he will attend his sentencing hearing in federal court shortly thereafter. Although the sentencing guidelines are advisory pursuant to the landmark case of Booker, the District Court Judge still uses them as a reference. The sentencing guidelines take into consideration a personís criminal history. Mr. Folleri most like has a criminal history of zero, meaning he was never been convicted of a crime. However, if he lies or impedes the ongoing investigation, he may face additional charges of perjury or obstruction of justice. His sentencing guideline range may be enhanced if he also does not fully cooperate with authorities.
Mr. Follieri should hire an attorney as soon as possible, to ensure that he receives proper defense in all aspects of his case.

In Columbia, South Carolina, 3 defendants were freed on bond after being indicted on mail fraud charges. The 3 defendants (Tony Pough, Tim McQueen, and Joseph Brunson) are each charged with one count of conspiracy to commit mail fraud. The defendants allegedly were presenting an investment plan called "3 Hebrew Boys." The United States Attorney Office in Columbia has stated that the total loss is around $80 million with over 7000 victims. This is the major problem with a mail fraud indictment. The government is most likely over exaggerating the actual loss that may have occurred in this case. The mail fraud count is charged under the conspiracy doctrine. This is a concept that most Americans and Europeans do not understand because it would seem to go against the traditions of our countries.

Under the conspiracy indictment, any company or person that participates or furthers the interest of a crime is guilty of conspiracy to commit the crime. In practical terms, this means that even if you do not know what your are helping someone do or loaning money for, you could be charged as a coconspirator by the federal government. I have defended many clients for mail fraud and each time the amount of loss given by the government is never correct. The amount is always higher than my client was responsible for in the case. The reason that the numbers are always increased is because it increases the amount of exposure to prison time and the amount of asset forfeitures that may occur. One of the best ways to defend a mail fraud indictment is to contest the amount of loss attributable to a client. In this Columbia indictment, there is no way each of these defendants is responsible for this $80 million. The other avenue to pursue in defending this case is the Legally Compelled Mailing Doctrine. This doctrine is a defense to mail fraud.

Lastly, if there was an actual loss of $80 million, there will be superseding indictment filed against these defendants for other charges. These charges will include wire fraud, bank fraud, money laundering and possible tax fraud.

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FBI Agent Joe Gordwin was indicted in Arizona last week for wire fraud, making false statements and witness tampering. The agent was arrested inside the Federal Bureau of Investigation office in Phoenix. Agent Gordwin was having an affair with the wife of a defendant in a robbery case. The relationship was hidden from his FBI supervisors for 3 years. This type of case is not uncommon for many of the governments law enforcement agencies. The agents get so involved in the case that they spend more time with suspects than they do with their own private life. I have defended law enforcement officers for various crimes and they are always treated more harshly than a regular defendant.
The press is reporting that Agent Gordwin is facing up to 285 years in prison. Although I do not know the specifics of the indictment, that number is extremely high for a non violent crime. The United States Attorney does not tolerate any violations of the law by federal agents, unless it is in the best interest of the government. This type of indictment usually occurs in major cities and not in areas like Myrtle Beach or Charleston. I have seen these indictments in New York and Miami several times. This could be attributable to the larger number of agents in these larger cities and the increased number of investigations. Defending an agent is very tricky. Luckily I have a former FBI agent as a key partner in defending police officers and federal agents.

A father and daughter in Jackson, Mississippi were indicted last week for a mortgage fraud scheme. The indictment included 12 counts of wire fraud and 4 counts of money laundering. There were also another 8 counts related to money laundering offenses. The father and daughter will face a significant amount of time under the United States Sentencing guidelines. The father, Mark Calhoun, was a mortgage broker for Professional Mortgage Consultants Corporation and also worked as the operator of New World Mortgage. New World Mortgage was working with Silver Cross Financial Group LLC. Mark Calhoun's daughter April was employed by Silver Cross Financial Group. The indictment charges Mark Calhoun with preparing loan documents that contained false information and with receiving a fee if the loans were successful.
What the Calhouns probably did not realize? They are going to be held liable for all the money that was obtained in these fraudulent loans. Although the Calhouns did not receive the $8.5 million that was loaned out based on fake documents, they will be held accountable for this amount. Under the Sentencing Guidelines, there will be an increase or upward departure based on the amount of money that was fraudulently obtained. This could increase their prison exposure by many years. The key witnesses against the Calhouns will be the very people they assisted in getting these loans. As I have mentioned many times before, the federal case is centered on the "flip witness." With the fall of the real estate market there are going to be many more mortgage fraud indictments in the coming months. The Federal Bureau of Investigation, the Internal Revenue Service, U.S. Postal Inspection Service, Federal Deposit Insurance Corporation (Inspector General), and the Housing and Urban Development Office will are just some of the federal agencies that will be investigating mortgage fraud cases.
Realtors, mortgage brokers, lenders, and borrowers will all be possible defendants in a mortgage fraud indictment. Depending on the alleged illegal conduct defendants will lose property(forfeiture), be exposed to extreme fines and prison time. It is important to have a defense attorney in a mortgage fraud case that is willing to prepare a timeline of events and go over each and every element of the case. Depending on the alleged victim and the monetary loss, a plea offer from the United States Attorney may include several years of prison. You and your attorney must be ready to go to trial. The real estate market in Miami, Ft. Lauderdale, Ft. Myers, Orlando, Charleston, and Myrtle Beach grew very rapidly in the past 5 years. Now with deals failing, there will be investigations into the basis of the loans and the information provided. We are able to defend individuals and companies in most jurisdictions around the country.

The South Carolina legislature is in the process of passing new legislation that would require a state license for mortgage lenders. South Carolina and Indiana are the only two states that do not require a license for mortgage lenders. This new law will also provide for criminal penalties. The FBI has previously ranked South Carolina as one of the top ten states for mortgage fraud. Although this new law, The Mortgage Lending Act, will provide state law enforcement with a new tool, there are still federal mortgage laws that can affect mortgage brokers and mortgage lenders for their actions in the past several years. Mortgage fraud will be a target for the United States Attorney in the coming months. The more foreclosures and mortgage defaults that occur, the more the government will be investigating the lending practices of mortgage companies. These mortgage fraud indictments will be hard for a criminal defense attorney to defend. Most juries will not have sympathy for mortgage brokers or lenders. The borrower will be extremely sympathetic to a jury. With the mortgage fraud indictment there may also be the conspiracy count, a possible RICO count, and a wire or mail fraud count depending on how the mortgage was completed. Recent over developed areas will be targets for federal investigations. Myrtle Beach, Charleston, Miami Beach, and Miami have suffered losses with recent real down cycles.
Criminal defense lawyers representing mortgage companies or lenders must be aware of possible forfeiture counts and defenses to fraud. The key witness to this case will be the borrower who is seeking to get out of a substantial debt. Many borrowers over extended during the real estate boom of the past 10 years. The legitimate mortgage broker or mortgage company may be the scapegoat to a troubled borrower. The mortgage broker decisions will be evaluated by what information is provided to banks and lenders. Any false statements on mortgage or loan documents that a broker or mortgage company was aware of or had a duty to investigate will form the basis for an investigation. Once major lenders begin complaining about false statements they were provided in the lending process, the mail or wire fraud indictment becomes a real possibility.
A Federal Court in Atlanta sentenced five defendants to federal prison for mortgage fraud in April of this year. One defendant was from Hilton Head, South Carolina. The indictment charged bank fraud, wire fraud, conspiracy and money laundering. The group used inflated mortgage loans to unqualified straw borrowers. These unqualified borrowers were paid hundreds of thousands of dollars for their participation in the fraud. The use of false qualifying information is key to these indictments. The lending information passed on to the lending company will be the star exhibit in the trial. This case is just the beginning of the United States Attorney aggressively prosecuting mortgage fraud cases. Just as when Enron cost the public millions of dollars, the more the real estate market hurts the country, the more indictments will be served. Mortgage fraud and wire fraud defenses can be presented by prior actions of the defendants in their lending process and the very hard defense of lack of knowledge. Federal case law provides for a deliberate ignorance instruction. This instruction allows the prosecutor to tell the jury that a defendant charged with fraud intentionally ignored facts that would have lead a normal person to question the information being provided. In other words a mortgage broker or company would need to almost polygraph the borrower on the information they provide on the loan. If the borrower comes in with fake documents, false tax returns and other documents to support the loan, the mortgage broker may still be held accountable. I have been the defense lawyer for individuals charged with fraud and know very well the difficulties with fighting the government on these charges