Showing posts with label fraud scheme. Show all posts
Showing posts with label fraud scheme. Show all posts

Sunday, July 6, 2025

Two men indicted for $86,000 fraud scheme in Prince George’s Co.

Prince George’s County State’s Attorney Tara Jackson announced indictments Thursday of two men charged with defrauding a 59-year-old county resident out of $86,000.

Jackson and county police said Zheng Hui Xie, 30, of Flushing, New York, and Jianwei Wang, 27, of Monterey Park, California, impersonated Federal Trade Commission officials in order to convince the resident, who was not named, that there had been fraudulent activity on her Apple ID and that several accounts were compromised.

The resident received a text message on April 28 about a large purchase made on her account, and called a number provided. The person who answered claimed to be with a fraud department, and transferred the woman to an individual who claimed to be an FTC agent.

On two separate occasions, the resident was asked to withdraw money from her bank in order to secure her money. She handed the money over to the fake agents who came to her home.

When the resident received another phone call May 15 from an unknown number, and was told to withdraw $24,000, she contacted police. On May 23, investigators with the Prince George’s County Police Department’s Financial Crimes Unit arrested Xie and Wang.

Both men are charged with two counts of theft, one count of theft scheme and one count of conspiracy to commit theft. Police said the men could face additional charges, along with others who may have helped them defraud other residents in financial schemes that may have netted a combined $700,000.

Although senior citizens are mostly preyed upon in similar schemes, Jackson said scammers also target those who are “very responsible.”

“If somebody texts you and says, ‘If you don’t pay this money immediately, then your license is going to be suspended,’ most of us that are responsible don’t want our license suspended,” she said. “Our message to our residents and others is to make sure that you just don’t respond.”

If others believe they may be been defrauded, they are asked to call police at 301-352-1200.

Last month, AARP Maryland kicked off a campaign to stop financial exploitation on older Americans.

Federal Trade Commission data showed that there were 44,195 fraud reports from Maryland residents in 2024, for a total loss of nearly $202 million, up from the 44,168 fraud reports and $168 million in the state in 2023.

Full Article & Source:
Two men indicted for $86,000 fraud scheme in Prince George’s Co. 

Sunday, May 25, 2025

Two Suspects Arrested for Financial Elder Abuse After Attempting to Defraud Couple of Yuba City Home

Elder Abuse Stopped in its Tracks - Suspects Arrested in Fraud Scheme 

May 11, 2025 – Yuba City Police Department officials report that in January of 2025, Yuba City Police Detectives were Yuba policealerted to possible Elder Abuse occurring at a residence in the 1600 block of Esplanade Way in Yuba City. The report stated two elderly victims, possibly with diminished faculties, had suspiciously appeared on a deed to an address in the 1100 block of Blackberry Drive in Yuba City.

Investigators began looking into the circumstances for potential violations of 368(d) PC (Financial Elder Abuse). Through their investigation, detectives were able to obtain information and physical evidence that showed the elderly victims had signed documents related to the purchase of the Blackberry Drive address. Ultimately detectives were able to obtain arrest warrants for the two suspects in this case, Aida Goines (69) of Yuba City, and Roda Delos Santos (48) of Yuba City.

On May 7, 2025, Detectives and Yuba City Police Officers served search warrants in the 1600 block of Esplanade Way and the 1100 block of Blackberry Drive. Both suspects were taken into custody without incident and booked into the Sutter County Jail. The case is still active and is being forwarded to the Sutter County District Attorney’s office for prosecution. The victims in this case did not suffer a financial loss, however, had been unknowingly made financially responsible for the Blackberry Drive residence.

Source: Yuba City Police Department

Source:
Two Suspects Arrested for Financial Elder Abuse After Attempting to Defraud Couple of Yuba City Home

Thursday, January 23, 2025

Husband, Wife Bilk Elderly Maryland Woman Out Of $1M During 'Complex ID, Fraud Scheme:' Sheriff

Story by Zak Failla


An elderly woman was robbed of more than $1 million after being targeted as part of "a complex identity theft and fraud scheme," according to the Harford County Sheriff's Office.

Devalkumar Harshadkumar Vyas and wife Mamata D. Vyas - who were arrested for a similar scheme in New York last month - preyed on a 73-year-old woman who was convinced to make bitcoin and gold purchases that they then took over the course of a five-week period. 

In June, investigators say that the woman received an unsolicited email from erickressman@tuta.io, purportedly from Eric Kressman of the Office of the Inspector General claiming that she was the target of identity theft.

Shortly thereafter, the victim received an unsolicited call from a person identifying himself as "Willy Le," an employee of the Social Security Administration.

"Le" was able to provide the woman with detailed information about her bank accounts, and advised that she had to transfer it to him for safekeeping, imploring her to keep the entire situation confidential.

After that call, a spokesperson for the sheriff's office said that she made multiple transactions over five weeks, including deposits into a bitcoin machine and purchases of gold. 

She met with the suspects on five different occasions to hand over the gold and cash, resulting in a total loss of over a million dollars.

During the investigation, it was determined the suspects were driving a silver Chevrolet Equinox that was registered to Devalkumar Harshadkumar Vyas.

Further investigation found that Vyas and his wife were involved in a similar crime in New York state. Both husband and wife were arrested on Wednesday, July 10, by the New York State Police and charged there.

Late last month, Devalkumar Vyas was interviewed by members of the Harford County Sheriff's Office, where he admitted to his role in the fraud scheme in Maryland.

Now, detectives are concerned there may be other victims of the couple who have not yet come forward.

While an arrest has been made, the sheriff’s office is continuing their investigation, they added.

Anyone who may have been victimized in a similar scheme has been asked to contact investigators by calling (410) 836-5428.

Full Article & Source:
Husband, Wife Bilk Elderly Maryland Woman Out Of $1M During 'Complex ID, Fraud Scheme:' Sheriff

Thursday, October 24, 2024

Former Correctional Officers Sentenced to Three Years in Federal Prison for Using Inmates’ Stolen Identities in International Fraud Scheme


For Immediate Release
U.S. Attorney's Office, Southern District of Indiana

INDIANAPOLIS—Martins Tochukwu Chidiobi, 34, and Lawrence Onyesonwu, 38, of Muncie, have each been sentenced to three years in federal prison, followed by two years of supervised release and payment of a $5,000 fine, after pleading guilty to aggravated identity theft and making false statements to a financial institution.

According to court documents, between on or about 2015 and their arrest date in January 2019, Chidiobi and Onyesonwu worked as Correctional Officers at the New Castle Correctional Facility, a privately managed prison within the Indiana Department of Corrections. During that time, Chidiobi and Onyesonwu stole at least five inmates’ personally identifiable information, including names, dates of birth, and social security numbers. The defendants used the stolen identities of the victim inmates to open at least nine accounts at various Indiana banks using fraudulent passports. The fraudulent passports were purportedly issued by Nigeria, Liberia, and Ghana, and included pictures of the defendants, but the names and other information of the identity theft victims.

The accounts opened by the defendants with the stolen identities were then used to receive the proceeds of broader fraud schemes. A total of at least $331,282 was deposited into the defendants’ fraudulent bank accounts from at least 11 sources. Investigators worked to identify and contact individuals who deposited funds into fraudulent accounts. Of the eleven depositors able to be identified, each was themselves the victim of a “romance scam” or other fraud scheme. Further investigation revealed that the defendants also received deposits of apparent fraud proceeds into their own personal bank accounts.

The vast majority of the over $331,282 in apparent fraud proceeds received by the defendants was withdrawn as cash. A large portion of the money was transferred into Nigerian bank accounts.

“It is simply reprehensible for correctional officers to exploit their positions to steal inmates’ identities and further the financial exploitation of scam victims,” said Zachary A. Myers, U.S. Attorney for the Southern District of Indiana. “Transnational fraud schemes have lasting repercussions for victims all over the country, and everyone who commits these crimes must be held accountable. The federal prison sentences imposed here should serve as a warning that the FBI and U.S. Attorney’s Office are committed to pursuing financial criminals and holding them accountable.”

“This sentence highlights the FBI’s resolve to investigate and prosecute those who exploit their authority for personal gain. The men and women of the FBI are committed to showing respect for the dignity of all those we protect including victims who are incarcerated,” said FBI Indianapolis Special Agent in Charge Herbert J. Stapleton. “I am extremely proud of the work we do to protect the rights of all Americans.”

The FBI investigated this case. The sentences were imposed by U.S. District Judge James P. Hanlon. 

U.S. Attorney Myers thanked Assistant U.S. Attorneys Tiffany J. Preston and Corbin D. Houston, who prosecuted this case.

###

Updated October 23, 2024

Source:
Former Correctional Officers Sentenced to Three Years in Federal Prison for Using Inmates’ Stolen Identities in International Fraud Scheme

Tuesday, August 27, 2024

Friday, August 9, 2024

Husband, Wife Bilk Elderly Woman Out Of $1M During 'Complex ID, Fraud Scheme:' Harford Sheriff

An elderly woman was robbed of more than $1 million after being targeted as part of "a complex identity theft and fraud scheme," according to the Harford County Sheriff's Office.


by Zak Failla

Devalkumar Harshadkumar Vyas and wife Mamata D. Vyas - who were arrested for a similar scheme in New York last month - preyed on a 73-year-old woman who was convinced to make bitcoin and gold purchases that they then took over the course of a five-week period.

In June, investigators say that the woman received an unsolicited email from erickressman@tuta.io, purportedly from Eric Kressman of the Office of the Inspector General claiming that she was the target of identity theft.

Shortly thereafter, the victim received an unsolicited call from a person identifying himself as "Willy Le," an employee of the Social Security Administration.

"Le" was able to provide the woman with detailed information about her bank accounts, and advised that she had to transfer it to him for safekeeping, imploring her to keep the entire situation confidential.

After that call, a spokesperson for the sheriff's office said that she made multiple transactions over five weeks, including deposits into a bitcoin machine and purchases of gold. 

She met with the suspects on five different occasions to hand over the gold and cash, resulting in a total loss of over a million dollars.

During the investigation, it was determined the suspects were driving a silver Chevrolet Equinox that was registered to Devalkumar Harshadkumar Vyas.

Further investigation found that Vyas and his wife were involved in a similar crime in New York state. Both husband and wife were arrested on Wednesday, July 10, by the New York State Police and charged there.

Late last month, Devalkumar Vyas was interviewed by members of the Harford County Sheriff's Office, where he admitted to his role in the fraud scheme in Maryland.

Now, detectives are concerned there may be other victims of the couple who have not yet come forward.

While an arrest has been made, the sheriff’s office is continuing their investigation, they added.

Anyone who may have been victimized in a similar scheme has been asked to contact investigators by calling (410) 836-5428.

Full Article & Source:
Husband, Wife Bilk Elderly Woman Out Of $1M During 'Complex ID, Fraud Scheme:' Harford Sheriff

Tuesday, April 25, 2023

Former lawyer from SC pleads guilty to bilking veterans, retirees in $31M fraud scheme

By Phillip Walter Wellman

Candy Kern, a former attorney from Anderson, S.C., pleaded guilty to federal charges in a $31 million fraud that took advantage of veterans and the elderly, the Justice Department said April19, 2023. (LinkedIn)

A South Carolina attorney who used her law firm to orchestrate a $31 million fraud scheme targeting veterans and the elderly faces up to five years in prison after pleading guilty this week to conspiracy.

Candy Kern, 55, carried out a nationwide scam from 2012 to 2021 that took advantage of cash-strapped veterans and clients who were seeking a secure retirement investment, the Justice Department said in a statement Wednesday, the same day as the plea agreement.

The scheme offered veterans cash in exchange for temporary rights to their pensions and disability payments, usually until their loans were repaid with interest.

Kern was the managing partner at the law firm and “served as the banker, legal counsel, and debt collector” in the scheme, which bilked victims out of $31.4 million, according to the DOJ.

Despite knowing that the contracts were illegal, Kern and her associates persuaded retirees to fork over the money lent to the veterans, saying the payments would eventually yield returns, the Justice Department statement said.

She filed lawsuits against those who defaulted, even though the contracts were void.

Over time, some veterans realized that the pension assignments were illegal and stopped paying, according to the statement.

This led to the collapse of the scheme after more than eight years. Kern and an undisclosed number of associates pocketed over $1.4 million, the DOJ said.

“This elaborate scheme preyed upon and exploited some of our most vulnerable populations, and when it collapsed, it left thousands of veterans in financial ruin and scores of retiree-investors without adequate resources to retire,” Brian Boynton, head of the Justice Department’s civil division, was quoted in the statement as saying. 

Kern surrendered her law license in 2021. As part of her plea deal, she agreed to help prosecutors in their ongoing investigation.

“It is reprehensible that a former member of the South Carolina state bar would participate in such a scheme and use her standing as a lawyer to give victims a false confidence,” Adair Boroughs, the U.S. attorney for the District of South Carolina, said in the statement.

The date of Kern’s sentencing was not provided in the statement. Besides prison time, she also faces a $250,000 fine.

Full Article & Source:
Former lawyer from SC pleads guilty to bilking veterans, retirees in $31M fraud scheme

Tuesday, October 25, 2022

Art dealer faked lung transplant to rob seniors in $1.6 million fraud scheme, FBI says

by Tresa Baldas

KEY POINTS

  • A Michigan art dealer is being charged in U.S. District Court with running a $1.6 million scam that preyed on the elderly and involved more than 100 rare, fine art photographs.
  • Instead of honoring her clients’ contracts to sell the artwork on consignment, the FBI says, Wendy Beard sold the photos without their knowledge and kept the money.
  • The FBI also alleges that Beard created fake employees and email addresses, used to send clients messages that claimed Beard couldn't be reached because she was in the hospital or in a coma.

For years, Wendy Beard ran a lucrative art gallery she inherited from her millionaire father in Birmingham, Michigan.

But along the way, the FBI says, she got greedy – so greedy that she scammed seniors by taking their rare art on consignment, selling it and then keeping all the profits, including a mural-sized Ansel Adams photograph she sold for $440,000 without ever telling the owner.

When the 82-year-old owner of the photo tried to get the picture back, the FBI says, Beard came up with a story: She was in the hospital getting a double lung transplant and was too sick to deal with the request.

None of it was true, the FBI says.

Fake employees, fake emails, fake transplant

The 82-year-old woman – identified as Victim No. 1 in court documents – was not alone.

On Thursday, the FBI issued a plea to the public, asking for its help in identifying "additional potential victims" who may have provided art to Beard and never got paid, or who bought art from her and never received it.

In an alleged fraud scheme unraveling in U.S. District Court, Beard is charged with running a $1.6 million scam involving more than 100 rare, fine-art photographs that collectors entrusted her with to sell on consignment.

Instead of honoring her clients’ contracts, the FBI says, she sold the photos without their knowledge and kept the money. Moreover, the FBI says, Beard sold artwork to other victims but never delivered the goods – even after they had paid her – and created fake email addresses of fake employees she pretended worked for her.

It was these fake employees who came up with the lung transplant story, the FBI says, alleging it was really Beard who made up the tale in emails to her unwitting clients.

The FBI detailed these allegations in a criminal complaint in U.S. District Court, where Beard is charged with wire fraud and bank fraud for allegedly running a yearslong scheme that preyed largely on the elderly, out of a gallery that her father founded more than 50 years ago.

Beard is free on bond. Neither she nor her court-appointed attorney could be reached for comment.

How the scam allegedly worked

According to the complaint, Beard’s scheme started in 2017 – one year before her father died – and ran out of two locations.

The gallery, which was renamed the Wendy Halsted Gallery a decade earlier, operated for a few years out of a Birmingham storefront. But in 2020, the business closed and relocated to Beard’s home in Franklin, Michigan.

Full Article & Source:
Art dealer faked lung transplant to rob seniors in $1.6 million fraud scheme, FBI says

Thursday, August 26, 2021

Attorneys And Doctors In New York Charged With Defrauding Businesses And Insurance Companies Of More Than $31 Million Through Trip-And-Fall Fraud Scheme

Department of Justice
U.S. Attorney’s Office
Southern District of New York


FOR IMMEDIATE RELEASE
Wednesday, August 25, 2021
 

Attorneys And Doctors In New York Charged With Defrauding Businesses And Insurance Companies Of More Than $31 Million Through Trip-And-Fall Fraud Scheme

Audrey Strauss, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging GEORGE CONSTANTINE, MARC ELEFANT, ANDREW DOWD, and SADY RIBEIRO with conspiracy to commit mail and wire fraud, mail fraud, and wire fraud in connection with a scheme to obtain fraudulent insurance reimbursements and other compensation for fraudulent trip-and-fall accidents.  ELEFANT, DOWD, and RIBEIRO were arrested earlier this morning and will be presented today before United States Magistrate Kevin Nathaniel Fox in Manhattan federal court.  CONSTANTINE is expected to surrender and be presented in Manhattan federal court tomorrow.  The case has been assigned to United States District Judge Loretta A. Preska.

Manhattan U.S. Attorney Audrey Strauss said: “As alleged, the defendants abused their professional licenses and positions of trust to steal millions of dollars from New York City businesses and their insurance companies through a massive trip-and-fall fraud scheme.  In carrying out the scheme, the defendants allegedly preyed upon the most vulnerable members of society.  Now, thanks to the FBI, the defendants are in custody and facing federal charges.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “The scheme allegedly carried about by the defendants charged today highlights the extent to which some are willing to go in the name of money.  Licensed attorneys are well aware of their obligation to uphold the law.  As we allege today, they did just the opposite, stealing from business owners and preying upon other vulnerable victims who were coerced into risking their own personal health and safety.  This alleged conduct is beyond reprehensible, and something we won’t let people get away with.”

As alleged in the Indictment unsealed today in Manhattan federal court[1]:

From in or about January 2013, up to and including in or about April 2018, the defendants engaged in an extensive fraud scheme through which the defendants defrauded businesses and insurance companies by staging trip-and-fall accidents and filing fraudulent lawsuits arising from those staged trip-and-fall accidents.  In or about 2015, certain members of the fraud scheme split from the original conspiracy and formed a separate conspiracy that operated in substantially the same manner.  GEORGE CONSTANTINE was the primary attorney who filed fraudulent lawsuits in the original conspiracy starting in 2013.  MARC ELEFANT was the primary attorney who filed fraudulent lawsuits in the separate conspiracy, formed in or about 2015.

Fraud scheme participants recruited individuals (the “Patients”) to stage or falsely claim to have suffered trip-and-fall accidents at particular locations throughout the New York City area (the “Accident Sites”).  In the course of the fraud scheme, scheme participants recruited more than 400 Patients.  In the beginning, scheme participants would instruct Patients to claim they had tripped and fallen at a particular location, when in fact the Patients had suffered no such accidents.  Eventually, at the direction of the lawyers who filed fraudulent lawsuits on behalf of the Patients, scheme participants began to instruct Patients to stage trip-and-fall accidents, i.e., to go to a location and deliberately fall.  Common Accident Sites used during the fraud scheme included cellar doors, cracks in concrete sidewalks, and purported “potholes.”

After the staged trip-and-fall accidents, Patients were referred to specific attorneys, including GEORGE CONSTANTINE and MARC ELEFANT, who would file personal injury lawsuits (the “Fraudulent Lawsuits”) against the owners of the Accident Sites and/or insurance companies of the owners of the accident sites (the “Victims”).  The Fraudulent Lawsuits did not disclose that the Patients had deliberately fallen at the accident sites or, in some cases, had not fallen at all.  During the course of the fraud scheme, the defendants, together with others known and unknown, attempted to defraud the Victims of more than $31,000,000.

The Patients were also instructed to receive ongoing chiropractic and medical treatment from certain chiropractors and doctors, including ANDREW DOWD and SADY RIBEIRO.  The fraud scheme participants advised the Patients that if they intended to continue with their lawsuits, they were required to undergo surgery.  As an incentive to getting surgery, the recruited Patients were offered a payment of typically between $1,000 and $1,500 after they completed surgery (“Post-Surgery Payments”).  Patients generally were told to undergo two surgeries.

Doctors in the fraud scheme, including DOWD and RIBEIRO, were expected to, and in fact did, conduct these surgeries regardless of the legitimate medical needs of the Patients.  For example, in a March 2016 email, before DOWD examined the shoulder of a particular Patient who had staged a trip-and-fall accident (“Patient-2”), one of the scheme organizers asked DOWD to “write us an additional report today stating that [Patient-2’s] Lt. shoulder has worsened [so that I can] book this surgery for you.”  DOWD provided the requested report and recommended that Patient-2 undergo arthroscopic surgery. 

Likewise, in an August 2015 email from RIBEIRO to the owner of a litigation funding company, in which RIBEIRO described the services that he performed, RIBEIRO wrote, “I will play very honest ‘game’ with you . . . I see the patient and I generate a very good dictation that justifies the treatment-there is a cost for that and I hope a profit.”

Members of the fraud scheme often recruited individuals who were extremely poor as Patients – individuals desperate enough to submit to surgeries in exchange for the small Post-Surgery Payments.  For example, it was common for Patients to ask for food when they would appear for their intake meetings with the lawyers.  Many of the Patients did not have sufficient clothing to keep them warm during the wintertime and had poor-quality shoes.  Members of the fraud scheme also recruited Patients who were drug addicts.  It was also common for scheme participants to recruit Patients from homeless shelters in New York City.

The Patients’ legal and medical fees were usually paid for by litigation funding companies (the “Funding Companies”), even if the Patient maintained medical coverage through an insurance company or a government-subsidized program.  The Funding Companies also paid the fraud scheme organizers and participants referral fees, typically $1,000 to $2,500, for each Patient who signed a funding agreement.  In exchange for funding Patients’ medical and legal costs, the Funding Companies charged the Patients high interest rates, sometimes up to 50% on medical loans and up to 100% on personal loans.  The interest rates were so high that oftentimes the majority (if not all) of the proceeds that were awarded in the Fraudulent Lawsuits were paid to the Funding Companies, CONSTANTINE, ELEFANT, DOWD, RIBEIRO, and others, with the Patients receiving a much smaller percentage of the remaining recovery.

GEORGE CONSTANTINE, 58, and MARC ELEFANT, 49, are New York-licensed attorneys who represented hundreds of Patients and filed Fraudulent Lawsuits on their behalf as part of the fraud scheme.

ANDREW DOWD, 45, is a New York-licensed orthopedic surgeon who performed hundreds of knee and shoulder surgeries on Patients as part of the fraud scheme, earning approximately $9,500 per surgery.

SADY RIBEIRO, 51, is a New York-licensed pain management doctor and surgeon who performed back surgeries, among other medical procedures, on Patients.  RIBEIRO paid participants cash kickbacks in exchange for patient referrals and treated nearly 200 Patients during the fraud scheme.

GEORGE CONSTANTINE, MARC ELEFANT, ANDREW DOWD, and SADY RIBEIRO are each charged with conspiracy to commit mail and wire fraud, which carries a maximum sentence of 20 years in prison, mail fraud, which carries a maximum sentence of 20 years in prison, and wire fraud, which carries a maximum sentence of 20 years in prison.  DOWD and RIBEIRO are also charged with one additional count each of conspiracy to commit mail and wire fraud, mail fraud, and wire fraud.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.

*                      *                     *           

Ms. Strauss praised the outstanding investigative work of the New York FBI.  Ms. Strauss also thanked the National Insurance Crime Bureau for their assistance in the investigation. 

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Nicholas Chiuchiolo, Nicholas Folly, and Alexandra Rothman are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.                       

 

[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation. 

Source:

Tuesday, February 9, 2021

Two sentenced for exploiting elderly in McLean County construction fraud scheme

by  TRAVIS SVIHOVEC


Two men accused of using deceptive tactics and intimidation in a construction fraud scheme in McLean County were sentenced Monday to 15 months in prison and have paid more than $700,000 in restitution.

Bartley Gorman Jr., 56, of Minot, pleaded guilty to illegal control of an enterprise and exploitation of a vulnerable adult, court records show. Sean Gorman, 27, also of Minot, pleaded guilty to exploitation, construction fraud and operating without construction or merchant licenses.

The men were charged in late 2019. Authorities said Sean Gorman used deceptive tactics and intimidation to get a Garrison man to pay $42,000 for work he didn't request and that Gorman started without approval.

Sean Gorman and Bartley Gorman “victimized elderly or vulnerable people using residential construction fraud,” an affidavit filed by McLean County State’s Attorney Ladd Erickson states. The two did “deceptive and fraudulent work” on home improvements for an elderly widow, charging her $6,700 for the work. Sean Gorman allegedly attempted to steal $65,000 from another woman, asking for payment after starting an asphalt project she thought was warranty work. Sean Gorman used “threats and extortion,” the affidavit states, in an effort to get the woman to turn over a car and a camper as a down payment.

South Central District Judge James Hill suspended half of the 30-month jail sentence he ordered for each man, court records show. Bartley Gorman paid $63,000 in restitution and Sean Gorman paid $42,000 in restitution as part of the plea agreement. They've also paid $666,000 to McKenzie County victims who were discovered during the investigation.

They must spend two years on supervised probation after their incarceration.

Sean Gorman is charged with five more construction fraud and exploitation felonies in two other cases, court records show. He is scheduled for change of plea hearings on Feb. 12. The restitution agreement also covers those cases.

The two are alleged to be part of a crime ring known as Travelers, Irish Travelers and several other names, according to a McLean County court affidavit. In North Dakota, they've concentrated their efforts on construction scams in the rural areas of oil-producing counties, according to information from North Dakota Attorney General Wayne Stenehjem.

Defense attorney James Ochs, who represents Sean Gorman, did not immediately respond to a request for comment. Jesse Walstad, attorney for Bartley Gorman, declined comment.

Full Article & Source: 

Wednesday, February 3, 2021

Two Mass. women arrested in $100 million home health care scam, federal prosecutors say

By Travis Andersen

Two Massachusetts women were arrested Sunday on federal charges alleging their involvement in a $100 million home health care fraud scheme in which vulnerable patients were used in a plot to bill for services that were never performed, among other criminal actions, prosecutors said Monday.

In a statement, US Attorney Andrew E. Lelling’s office identified the defendants as Faith Newton, 52, of Westford, and Winnie Waruru, 41, of Lowell, and said the alleged scheme allowed Newton to purchase items including a Maserati and several homes, which the government is moving to seize in a separate civil action.

Raymond Sayeg, an attorney for Newton, said via e-mail that his client “denies the allegations contained in the Indictment and she intends to vigorously defend herself in this action.” A lawyer for Waruru declined to comment.

Both women were indicted on one count of conspiracy to commit health care fraud; one count of health care fraud — aiding and abetting; and one count of conspiracy to pay and receive kickbacks. Newton was also indicted on one count of money laundering conspiracy and seven counts of money laundering, the statement said.

In addition, Lelling’s office said, Waruru was indicted on two counts of making false statements and one count of making a false statement in a health care matter. Both women were slated to make their initial appearances in federal court in Boston on Monday afternoon.

Details on the hearing weren’t immediately available.

Lelling’s office said the indictment alleges that from January 2013 to January 2017, Newton was part owner and operator of Arbor Homecare Services LLC, and Waruru was a licensed practical nurse, or LPN, employed by the company as a home health nurse.

Newton and Waruru, the statement said, allegedly plotted to use Arbor to defraud MassHealth and Medicare of at least $100 million by committing health care fraud and paying kickbacks to get patient referrals. Newton then allegedly laundered the illicit funds, according to the statement.

Prosecutors allege that Arbor, through Newton and others, failed to train staff; billed for services that were never provided, or that weren’t medically necessary; and billed for services that weren’t authorized.

Arbor, Lelling’s office said, through Newton and others, allegedly developed employment relationships as a way to pay kickbacks for patient referrals. They also allegedly entered sham employment relationships with patients’ relatives to provide home health aide services that weren’t medically necessary and routinely billed for fraudulent visits that Newton knew didn’t occur, according to the statement.

As alleged in the related civil complaint, the statement said, Newton, either directly or through Arbor, targeted vulnerable patients who were low-income, on disability, or suffering from depression or addiction.

Waruru and Arbor, the statement said, allegedly billed MassHealth for skilled nursing visits that she didn’t actually perform. Waruru also allegedly passed cash payments from Newton to an Arbor patient to retain that patient, according to prosecutors.

Newton allegedly used the laundered proceeds of “the $100 million scheme” to buy multiple homes and a luxury Maserati vehicle and to fund investment accounts, “a lavish lifestyle, and numerous financial transactions,” the statement said.

A related civil forfeiture case brought by the government seeks to compel Newton to forfeit to federal authorities five properties in Westford, North Andover, Chelmsford, and Dracut and to give up the contents of 40 bank accounts or investments, the statement said.

Both women face a possible prison term if convicted in connection with the case.

“The charges of health care fraud, conspiracy to commit health care fraud, money laundering conspiracy, and money laundering each provide for a sentence of up to 10 years in prison, three years of supervised release, and a fine of up to $250,000 or twice the amount of the money involved in the laundering,” the statement said. “The conspiracy to pay kickbacks, make false statements, and make false statements in health care matters each provide for a sentence of up to five years in prison, three years of supervised release, and a fine of up to $250,000.”

Sentences, Lelling’s office added, are imposed by a judge based on US sentencing guidelines and other statutory factors.

Full Article & Source:

Wednesday, May 29, 2019

'Who steals from the sick and the poor and the dying?': Woman pleads guilty in fraud scheme


While her victims lived with HIV and depended on social security, Paige Bohall enjoyed a lavish lifestyle. The once trusted financial manager of the Alaskan AIDS Assistance Association — or Four A's — is now the bad actor behind what one of the nonprofit's board members calls a "profound betrayal."

Bohall, 38, embezzled more than $105,000 from the nonprofit organization between 2013 and 2017, court records state. She not only misused her company credit card but also took money from individual client accounts to pay her personal bills.

According to its website, the statewide organization provides a range of services to AIDS patients ranging from health care to housing and also manages a needle exchange program.

Thursday, Bohall admitted to scheming to defraud and theft in exchange for a 90-day jail sentence and three months of probation, however, she'll receive credit for time served on an ankle monitor. She's also paid $120,000 in restitution.

Bohall took her friends out to dinner. She bought furniture. Her dogs wore fancy collars — It's knowledge Sarha Shaubach, a dedicated fundraiser for Four A's, says she wanted the court to consider before accepting the plea deal.

/>"I'd like [the judge] to think of how long it has been since Miss Bohall took over $120,000 from social security clients that have HIV and the type of lifestyle that she was living while she was doing that. I was very aware of that," said Shaubach.

She believes that Bohall should have to spend some time in jail.

"Paige has never even been handcuffed during this. The time that she did spend on ankle monitor was spent down in Vegas with her mother-in-law, while she has not had to face her local community at all," said Shaubach.

Candace Bell, a Four A's board member, spoke on behalf of the organization at Bohall's change of plea hearing. (Photo: Rachel McPherron)

Four A's board member Candace Bell addressed the court on behalf of the organization.

"Who does that, your honor?" she asked. "Who steals from the sick and the poor and the dying?"

Bell detailed the extensive fallout from the embezzlement. She said while the restitution is helpful, the measurable cost to date is closer to $160,000. Bell said more than 500 staff hours have been spent dealing with the fraud instead of supporting clients. They've had to trace every instance of theft to try to make things right and pay thousands of dollars in the process for things like forensic audits.

"I would be remiss if I did not admit to the fact that the lightness of the sentence stings," said Bell, "but Four A's as an organization is more inclined toward restoration than retribution and, therefore, we acquiesce to this plea agreement."

Bohall told the judge she is sorry.

"I never meant to hurt anyone with my recklessness," she said, "and I know returning the money that was owed doesn't solve everything, but I do hope the process of healing for the agency does begin with the clients that have had to wait for me to get this back to them."

Paige Bohall, 38, appeared in court for a change of plea hearing on May 17, 2019. (Photo: Rachel McPherron / KTVA)

Unfortunately, for some of her victims, the money can't help them now.

"Some of those clients are no longer living and they will never receive the benefit of the return of the money stolen from them," Bell told the judge.

Anchorage Superior Court Judge Erin Marston accepted plea agreement.

"It's especially painful because it was from a charity and people relied upon that money," he said. "On the other hand, she has paid a large amount of restitution. Often I'm in this position where almost nobody gets any money back and it's just kind of a sad tale all the way around."

Bohall pleaded guilty to a class B felony count of scheme to defraud and a third degree theft charge.

As for Four A's, Bell says the organization continues to help those in need, even if it is still recovering from the impact of Bohall's crimes.

"Our mission is alive and well," she said.

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'Who steals from the sick and the poor and the dying?': Woman pleads guilty in fraud scheme

Saturday, June 16, 2018

Nursing supervisor pleads guilty in health care scheme that led to early deaths of hospice patients

A nursing supervisor for one of the largest hospice providers in North Texas will plead guilty as part of a $60 million health care fraud scheme that prosecutors say included fatally overdosing patients for profit.

Jessica Love, 38, of Gainesville is scheduled to plead guilty to one count of conspiracy to commit health care fraud, according to a plea agreement and factual resume filed Monday in U.S. District Court in Dallas. The documents state that Love participated in the fatal over-medication of two patients.

Love is the second of 16 defendants to reach plea agreements in criminal charges involving Frisco-based Novus Health Services Inc. and Optim Health Services Inc., collectively known as Novus.

She worked as a registered nurse case manager and regional director for Novus, which shut down several years ago amid the federal investigation. Love worked for Novus from August 2012 to about July 2014, documents state.

Last month, Melanie Murphey also pleaded guilty to conspiracy to commit health care fraud. Murphey worked as Novus' director of operations.

As part of the plea deals, both women are expected to testify against the other defendants. The federal trial is scheduled to start Jan. 7.

Court documents for the pair outline an elaborate scheme involving Novus' owner and CEO, Bradley Harris, his wife, Amy, and several doctors, nurses and other employees. Their goal was to get as many patients admitted into hospice care as possible, even if they weren't eligible for hospice services. The patients would then be enrolled in around-the-clock care, which Medicare paid for at a higher rate than routine care. If patients were in this continuous care for too long, they were overmedicated so they would die sooner, documents stated.

Hospice care is meant to help terminally ill patients who are not seeking curative treatment.

Details of scheme


Indictments in the case allege that from July 2012 to September 2015, Novus billed Medicare and Medicaid over $60 million for fraudulent hospice services. The government paid Novus over $35 million.

As part of the scheme, assisted-living facilities and doctors earned money to refer patients to Novus. Patients were also lured into signing with Novus after they received wheelchairs, walkers or other equipment, documents say.

The scheme also included falsifying records, according to documents. Federal prosecutors say the paperwork showed doctors had evaluated patients when they had not. Stacks of prescriptions, all pre-signed by doctors, were readily available to obtain narcotics such as morphine.
<p>Court documents outline an elaborate scheme involving Novus owner and CEO Bradley Harris and his wife, Amy, as well as several doctors, nurses and other employees. Their alleged goal was to get as many patients admitted into hospice care as possible, even if they weren't eligible. </p>(File Photo)
Court documents outline an elaborate scheme involving Novus owner and CEO Bradley Harris and his wife, Amy, as well as several doctors, nurses and other employees. Their alleged goal was to get as many patients admitted into hospice care as possible, even if they weren't eligible.
(File Photo)
All patients joining Novus were required to sign "do not resuscitate" orders that had already been notarized and signed in advance by doctors. That's because Novus didn't want to pay for any medical care used to resuscitate its patients who went to the hospital or called 911, documents state.

Documents from Love and Murphey also stated that the "purported medical services for which Novus billed Medicare and Medicaid were often directed by Bradley Harris. These directions included Bradley Harris's [sic] instructing nurses to intentionally overmedicate beneficiaries with medications such as hydromorphone and morphine with the intent to hasten their deaths," documents state.

If nurses didn't follow Harris' orders, he replaced them, documents stated.

Harris is a certified public accountant with no formal medical training, prosecutors say.

Harris has denied wrongdoing. His attorney disagreed with the information in Murphey's factual resume filed last month. Much of that same information is in Love's plea documents.

"We are not aware of any evidence that shows that Mr. Harris caused, hastened or otherwise contributed to the death of the hospice patients being treated by Novus," defense attorney Chris Knox said last month. Knox said Friday that he had no further comment.

Love has been a registered nurse in Texas since 2006. But after disciplinary action by the Texas Board of Nursing in 2012, she was forbidden to work as a registered nurse at a hospice company. So at Novus, she supervised registered nurses and licensed vocational nurses in her region. She also served as a liaison between doctors and nurses, recruited doctors and performed other tasks directed by Harris, her direct supervisor.

Love described dictating notes to a doctor as he filled out evaluation forms for patients he had not seen. Novus paid $150 for each of those falsified forms, according to documents.

'Works like a little charm'


Love also stated that she participated in overmedicating two hospice patients who died. In one case, documents state, Harris called in a nurse to replace others who weren't medicating at the maximum levels he wanted.

In a text message, Love directed the nurse to "give the Jessica CC orders." Those continuous care orders included turning off the patient's oxygen, increasing Ativan and morphine and rolling the patient onto the left side. This "works like a little charm," Love texted. The patient died within five hours, documents state.

In a second case, Love had stored leftover morphine from one patient at her home. She delivered the drug to a nurse, who then used it to overmedicate another patient who died, documents state.

Love and Murphey each face up to 10 years in federal prison and a fine of up to $250,000. Sentencing for Murphey is set for Oct. 24. Love's sentencing date has not been set.

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Nursing supervisor pleads guilty in health care scheme that led to early deaths of hospice patients

Friday, June 1, 2018

Attorney charged in fiscal elder abuse, fraud scheme

An 82-year-old attorney is behind bars Tuesday after allegedly embezzling more than $460,000 from a 92-year-old woman and her disabled and dependent son over a four-year period, according to the San Mateo County District Attorney’s Office.

Initially the family’s attorney, Daly City resident Albert Boasberg eventually became the financial and medical power of attorney for the elderly woman, who is living with dementia at the Marymount Greenhills Retirement Center in Millbrae, as well as her son, who is in his 60s and living at the Burlingame Long Term Care Center. He allegedly filled out 12 life insurance applications using false information about the man’s medical history and listing himself as the beneficiary and stole some $17,000 from the man’s mother between 2010 and 2014, according to prosecutors.

He pleaded not guilty to felony charges of fiscal elder abuse and insurance fraud Tuesday. Boasberg is facing eight to 10 years in prison after a yearslong investigation produced a warrant for his arrest this week. The thefts were discovered when both facilities, where the victims receive 24-hour care, reported his failure to make monthly payments for the victims’ care to the county Health System’s Adult Protective Services, which resulted in his removal as the victims’ power of attorney in 2015. The county’s Public Guardian has been the victims’ conservator after Boasberg was removed as their attorney, according to prosecutors.

Boasberg is believed to have used the funds for personal reasons, including diversion of some $100,000 to his wife’s home country, the Philippines, and luxury vacations in Las Vegas, according to prosecutors.

Boasberg was ordered to have no contact with either victim when he appeared in court Tuesday and will next appear in court for a motion to reduce his bail, which has been set at $450,000, according to prosecutors.

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Attorney charged in fiscal elder abuse, fraud scheme

Sunday, March 19, 2017

Hospice CEO gets 6 1/2 years for fraud scheme

Businessman Seth Gillman was sentenced Tuesday to 6 1/2 years in federal prison for masterminding a $20 million hospice care fraud scheme that exploited some of Illinois' most vulnerable residents.

"I am ashamed of what I did and I am sorry for it and I have no excuse," Gillman told the court, his voice hoarse and cracking.

By paying kickbacks to nursing homes and giving bonuses to employees who took part in the fraud, Gillman built his Passages Hospice LLC into the largest such company in Illinois, serving terminally ill patients in 89 counties and billing Medicare more than $90 million from 2008-2012, government records show.

But Passages didn't provide much care to many of those patients, and Medicare was "paying huge sums of money for basically nothing," prosecutors wrote in one court filing. Gillman pocketed millions annually and enjoyed a lavish lifestyle that included corporate airplanes, luxury sports cars and "ingesting cocaine on a daily basis," as Gillman's lawyers put it in one federal court pleading.

"I betrayed the trust of Medicare and I besmirched the integrity of hospice altogether," Gillman told U.S. District Judge Thomas Durkin. "I was stupid and I was wrong."

Noting Gillman's privileged background — he was licensed as both an attorney and nursing home administrator — Durkin said: "There's nothing that drove this other than greed."

Under Medicaid rules, hospice care is typically reserved for patients who are medically certified to have less than six months to live. But Passages colluded with nursing homes to designate their patients as close to death — including many who were not that sick and had years to live.

This higher level care, known as "general inpatient" services, or GIP, would boost Passages' Medicare reimbursement from an average of about $150 per day to well over $600 for each patient.

Gillman then paid himself a $75-per-day "bonus" for each patient elevated to GIP — he took $1.2 million in bonuses in 2009 and 2010 alone, court records show, in addition to his $320,000 annual salary. And he passed out smaller bonuses to other key hospice managers who assisted in the scheme.

"They would cut deals with nursing homes to give them a share of the GIP rate," paying the homes about $250 per day for every patient upgraded to GIP, Assistant U.S. Attorney Stephen Lee said in court.

Federal investigators named several of those nursing home chains in court documents, but none has been charged. Lee said Tuesday that Gillman waited until last year to begin cooperating with authorities who were trying to build additional cases. "This was far too late to be effective."

Starting in 2008, Gillman berated and fired nurses who challenged his fraud attempts, and several former employees filed whistleblower lawsuits. Federal agents finally raided Passages' Lisle offices in 2012, and Gillman was indicted two years later. The hospice firm collapsed financially and ceased operations. Several key Passages employees have also been convicted in the case.

In addition to Passages, Gillman also ran his family's nursing home company, Asta Healthcare. The Tribune's 2009 "Compromised Care" investigation found that Asta consistently failed to notify state officials that they were housing sex offenders who molested elderly and disabled patients.

In the wake of the Passages prosecution, Gillman gave up his stake in Asta as well, records show.

In court Tuesday, Lee recommended a 10-year sentence. Gillman's attorney, Edward Genson, asked for three years in prison, asserting that Passages actually did provide extra assistance to hundreds of patients. He said Gillman got into the hospice business because he is religiously devout, altruistic and caring, but he "went out of control. ... He was drinking. He was involved in drugs."

Previously, Gillman pleaded guilty to one count of felony health care fraud. Gillman on Tuesday also agreed to an $18 million civil judgment to be paid to the federal government, as well as to paying $9 million in restitution to Medicare.

Durkin, however, noted that authorities have little chance of collecting that money because Gillman says he is broke. "In my mind it's fool's gold," Durkin said.

Taxpayers weren't the only victims of Gillman's fraud scheme. In some cases, the families of former patients told the Tribune that Passages employees misled them into believing that their loved ones had serious or terminal illnesses — when they didn't.

"They lied to me about everything. I could never comprehend anyone being that cruel," said Cynthia Chadwick, 65, of Watseka, Ill., who was told by Passages in 2012 that her younger sister needed hospice care because she had terminal cancer and would die in six to eight weeks.

"She never had cancer. Never ever," Chadwick told the Tribune. "It really indicated to me how low down they were, using a deaf and blind person. That's despicable."

In addition, Passages employees told the Tribune they were not paid for their final months' work.

"He owed a lot of people a lot of money," said Sonya Anderson, an assistant director of nursing at Passages. "Elderly people, people that are dying — and you take advantage of them? That's low."

Another former Passages employee, clinical director and nurse Karen Wilson, said outside of the courtroom Tuesday that she was glad to see Gillman sentenced to prison, but added: "I think he deserved more."

Full Article & Source:
Hospice CEO gets 6 1/2 years for fraud scheme