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Category Archives: 43 Fraudulent Schemes Reduced

State v. Mr. C (DMC No. 14920) – Felony Benefits Fraud – Not Charged – Social Security Administration Investigated:  Mr. C had secured two different Social Security numbers and had been receiving benefits from Social Security which were duplicating under the two different identities.  We were able to put together a letter and speak with the Investigating Agent to show that somewhere along the line there had been a confusion or Scribner’s error regarding Mr. C’s Social Security number.  We negotiated the repayment of any overages that may have been paid, and the Investigator agreed that once the problem was fixed, that this took care of the incident.  No charges were ever brought against Mr. C.

State v. Ms. B (DMC No. 11862) – Felony Fraudulent Schemes, (2 Counts) Acquisition of a Dangerous Drug by Fraud & Identity Theft – Reduced to Solicitation Class 6 Open/Misdemeanor with 6 Months Probation and Zero Days in Jail –Maricopa County Superior Court (Case No. CR2013-002734).

Ms. B worked in a Doctor’s office as a medical assistant. She routinely would call in scripts on behalf of clients to various pharmacies. She was pressured into calling in some scripts for a coworker for various opiates. In addition, she called in a prescription for herself for an appetite suppressant. This was all done without the knowledge of the Doctor and in violation of ARS 13-3407, Acquisition of a Dangerous Drug by Fraud. It also qualified as a Fraud Scheme per ARS 13-2310 and Identity Theft per ARS 13-2008.

The Doctor found out about the scheme when she was called by Walgreens and the pharmacist asked if she normally prescribed this many pills (60) in a refill of Tramadol. The Doctor had no idea what the pharmacy was talking about and Phoenix Police Department was contacted. Eventually the Arizona Attorney General’s Healthcare Fraud and Abuse sections became involved, and an Investigator contacted Ms. B. Ms. B was interviewed with her boss/doctor present and she was never read her Miranda rights. She admitted to what had happened. She was then charged with Fraud Schemes, 2 Counts of Acquisition of a Dangerous Drug by Fraud, and ID Theft.

We became involved in the case and we informed the Prosecutor that it was the other coworker who was coercing Ms. B. into calling in prescriptions. The other coworker never cooperated with investigators, and we discovered that she had been convicted of Identity Theft in the state of New Jersey. Ultimately, we presented detailed Mitigation to the Prosecutor and they agreed to offer a plea to a single count of Solicitation, which is a Class 6 Open/Misdemeanor. She received 6 months of Probation and Zero Days in Jail. After 6 months of Probation, she had the case designated a Misdemeanor.

Unfortunately, her conviction qualified under 42 USC 1320(A)(7) and 42 CFR 1001.101(C). This means that Ms. B. was excluded from participation in any capacity (including employment) regarding Medicare, Medicaid and all Federal Healthcare Programs as defined under section 1128 B(F) of the Social Security Act for a minimum statutory period of five years. This includes any state healthcare program which is funded by Federal money. The exclusion had a significant effect on her ability to work in the healthcare field. However, because her conviction was designated a Misdemeanor, she had the ability to challenge the exclusion which was issued by the Department of Health and Human Services, Office of the Inspector General.

State v. Mr. H (DMC No. 11744) – Felony Illegally Conducting an Enterprise/RICO ($132,755 in Counterfeit Checks), Felony Computer Tampering, Felony Attempted Fraudulent Schemes & (2 Counts) Forgery – Reduced to Possession of a Forgery Device with Probation and Zero Days in Jail – Maricopa County Superior Court (Case No. CR2013-002470).

Mr. H was involved in an Illegal Enterprise which was engaged in manufacturing fake checks and then cashing them. The checks were manufactured by utilizing a computer to print false checks with false bank routing numbers. This particular activity is known as “Computer Tampering.” Once the Illegal Enterprise would create the fake checks, they would then be distributed to individuals to cash at various retail outlets. Mr. H. was one of the people who received checks that were created by the Enterprise and he was one of the individuals responsible for cashing them. Once the Police became aware of this, they arrested several of the check cashers and had them become “Confidential Informants.” Eventually, a 61 co-defendant indictment, which included 328 charges, was handed down by a Grand Jury.

When we became involved in the case, we immediately began working with Detectives and Prosecutors in order to cooperate and to provide Mitigation on Mr. H’s behalf. Unfortunately, Mr. H. had become addicted to heroin, and had only gone for various brief stretches in his life where he was sober. He was married and had several small children when he fell off the wagon. He had lost his job and started using heroin again.

He became involved in the Conspiracy in order to receive money to support his drug habit. During the Pretrial phase of the case, we had Mr. H. go into inpatient rehab, which he successfully completed. We also had him make Restitution in full for his portion of the Fraud Scheme. Ultimately, the Prosecutor offered a plea to Possession of a Forgery Device, which included Probation and Zero Days in Jail. If Mr. H. had been convicted of all charges, there would have been mandatory Prison time required due to the amount of the loss being greater than $100,000. He is now sober and his family is intact.

State v. Ms. R (DMC No. 12851) – Felony Illegal Control of an Enterprise/RICO ($143,000), Fraudulent Schemes & (4 Counts) Trafficking in Stolen Property – Reduced to Solicitation with 2.5 Years in Prison – Maricopa County Superior Court (Case No. CR2014-002286).

During a four month period of time, six grocery stores had reported a high incident of retail theft revolving around baby formula. Baby formula is used by drug dealers to cut other types of drugs (such as cocaine) in order to increase the actual volume/weight of the drug, which increases the sales volume. The six stores that were being targeted were Walmart, Fry’s, Bashas’, Albertson’s, WinCo, and Food City. Surveillance was set up on one of the stores, and one of the thieves was observed loading a shopping cart with empty bags, he then entered the store and began loading those bags with baby formula. The person then ran directly for the exit door to jump in a waiting getaway car. The Police swooped in and arrested this individual.

This individual was questioned, and then became a “Confidential Informant” for the Police Department. He ended up leading Police to Ms. R. and a Search Warrant was obtained for her house. When the house was searched, 6,000 cans of baby formula were discovered with a value of $143,000. She was then taken into custody and questioned. During questioning, she admitted that she was selling all of the baby formula to one particular lady in California, who would then have her ship it to New Jersey and New York. She admitted she suspected it was for drug dealers, who used it to cut cocaine.

We became involved in the case, and cooperated with Detectives in order to have the case transferred to prosecuting and investigating agencies in California, New Jersey, and New York. We also presented significant Mitigation on behalf of Ms. R. This included the fact that she had no prior criminal history and had 14 year old twins who lived at home. Ultimately, we were able to secure an offer which included 2.5 years of prison. Originally, Ms. R. was facing the possibility of two decades in prison. She had originally been charged with Illegally Conducting an Enterprise per ARS 13-2308(A)(1), Felony Fraudulent Schemes per ARS 13-2310(A), and 4 Counts of Trafficking in Stolen Property per ARS 13-2307(B). With the final disposition of 3 Counts of Solicitation, this allowed her to receive a much lower sentence. Initially, Prosecutors wanted to give her a much harsher sentence due to the amount of actual cocaine that ended up on the streets, which was thereby affecting thousands of people.

State v. Mr. R (DMC No. 12396) – Felony Counterfeiting ($150,000 of Viagra, Cialis, and Levetra) & Felony Fraud Schemes – Reduced to Probation with Zero Days in Jail – Maricopa County Superior Court (Case No. CR2014-127144).

Mr. R. had discovered that he could purchase Counterfeit Viagra, Cialis, and Levetra off of a foreign website for approximately $1 per pill. These drugs are male enhancement pills that were very popular with television advertising. Mr. R. then advertised on Craigslist that he would sell these pills for $2 per pill, effectively doubling his money. A Detective for Pfizer Pharmaceuticals discovered that this ad been going on for some time and he arranged several fake buys. The Detective then put together all of his findings and submitted those to the Phoenix Police Department. Ultimately, Mr. R., was charged with Felony Counterfeiting under ARS 44-1453, and Felony Fraudulent Schemes.

We became involved in the case and we immediately had the Counterfeit pills analyzed by an independent lab. It was discovered that they did bear the Counterfeit mark of the Pfizer Corporation, and packaging of the three pharmaceutical companies. Although the drugs were manufactured with similar chemicals (known as “analog compounds”), they were still not the original product. We then began assembling the Mitigation materials regarding Mr. R. We presented these to the Prosecutor at the Maricopa County Attorney’s Office.

These materials demonstrated that Mr. R. was 68 years old with no previous criminal background. He was also a former Army veteran who was deployed to Vietnam and served as a sharp shooter. He was part of the 173rd Airborne Brigade. He was honorably discharged with a Purple Heart received regarding injuries he sustained in the line of fire. We also showed the Prosecutor the amount of cooperation provided by Mr. R. with the Police department after he was charged.

Due to the amount of Mitigation, the Prosecutor extended Mr. R. an offer of Attempt, which included Probation and the possibility of Zero Days in Jail, or up to 1 year in Jail. At Sentencing, the Judge found we had presented significant Mitigation regarding Mr. R’s remorse and cooperation, his good reputation in the community, a strong support network, prior good acts, lack of prior bad acts, good character and reputation, and that he had behaved admirably during the pretrial and presentence phase of his case.  The Judge agreed, and sentenced Mr. R. to Zero Days in Jail. This was done even though the pharmaceutical companies had presented evidence of a loss of $150,000 due to Mr. R’s Counterfeiting and Fraudulent Schemes activities.

State v. Ms. C (DMC No. 15373) – Felony Benefits Fraud/Fraudulent Schemes ($7,758 misappropriated from DES Contractor), Felony Conspiracy and Felony Theft – Reduced to Probation with Zero Days of Jail – Maricopa County Superior Court (Case No. 2017-001677).  Ms. C had been working through a company that contracted through DES’ Division of Developmentally Disabled (DDD).  It appeared that she had been overbilling people for services that were never performed.  The company that had contracted with DES discovered that their employee (Ms. C) had inconsistent hours which were being billed on the hard copies as opposed to what was billed on the computer systems.  Once the company had discovered this, they reported the Fraud Scheme to the police.  Multiple checks had been written to Ms. C for work that had never been completed.  These checks total $7,758.  We became involved and began cooperating with the Prosecutor and Detectives in order to secure a reduced sentence.  A co-defendant, who had been part of the scheme, was ultimately charged and convicted of the more serious crimes.  Ms. C was facing several years in prison if she would have been sentenced and convicted on all charges.

State v. Mr. F (DMC No. 13324) – (26 Counts) Felony Benefits Fraud ($6,200 Misappropriated from Unemployment Insurance), Fraudulent Schemes and Theft – Reduced to Misdemeanor False Statements with Zero Days in Jail – Maricopa County Superior Court (Case No. CR2015-000358).

Mr F had previously worked for a credit card processing company which was owned by his parents. He was ultimately let go from that job because of various problems. However, his parents did not tell him that they kept him on the payroll at minimum wage, and then direct deposited those paychecks to a bank account that he did not know about. They did this in order so that their son would not lose health insurance and would be able to pay child support that came out of that bank account. Mr. F, unbeknownst to his parents, then began applying for unemployment benefits.

After that point in time, he went to work for another payment solutions company for approximately 6 year. The company was audited by the Department of Economic Security’s Inspector General, Fraud Department, Criminal Investigator. It was discovered that Mr. F had received approximately $6,200 in benefits for unemployment while he was on his parents’ payroll. We became involved in the case and immediately contacted the Assistant Attorney General who was handling the prosecution. We explained the situation and made full restitution as quickly as possible. The Prosecutor still felt that Mr. F should have known he received benefits for 26 months, because his child support payment was still being made. However, he agreed to dismiss all but 1 Count of False Statements per ARS 23-785, which was amended down to a Misdemeanor, and included a $166 fine. Mr. F was originally facing quite a bit of prison time, but it was ultimately resolved with a small fine and no jail whatsoever, and he only has a Misdemeanor on his record.

Mr. D was a Sergeant for the Phoenix Police Department who had worked there for a number of years. An audit was conducted on his timesheets by the Department’s Professional Standards Bureau Inspection Unit based upon tips from other disgruntled officers who worked below Sergeant D. It was determined that Sergeant D had falsified his timesheets and had been overpaid for 206 hours of work based upon either showing up late, leaving early, or not showing up to work at all, and yet claiming full time employment. Ultimately, Sergeant D was charged with Felony Tampering with Public Records per A.R.S. 13-2407, Felony Fraudulent Schemes and Felony Theft. After these charges arose, Sergeant D retired from the Phoenix Police Department.

When we became involved in the case, we had Sergeant D pay back the misappropriated $9,861 immediately. In addition, we sent the Prosecutor mitigation documents showing that Sergeant D had been in the Air Force, was married with children, and he had been stabbed while on duty as a Police Officer, in which he had received multiple service metals for bravery and other commendations. We also showed that he was fired upon by a suspect who ended up killing a fellow Officer directly in front him. This left Sergeant D with PTSD that was never properly treated or addressed by the Phoenix Police Department.

Once we received an offer to the Class 6 Open/Misdemeanor Theft with Probation, we then proceeded to Sentencing. After a very detailed Sentencing with numerous letters and people from the community speaking on Sergeant D’s behalf, we were able to secure a Sentence of only 9 months of Probation and zero days in jail. Initially, Sergeant D was facing the prospect of prison time and the loss of his pension. Neither of those things happened.

Mr. W had gone through a divorce and his ex-wife lived with their child in California. He would have the child over Christmas break and in the summers. He applied for benefits through AHCCCS (Arizona Health Care Cost Containment System) for healthcare and for SNAP (Supplemental Nutrition Assistance Program) for food stamps. He included his daughter as a full time dependent and resident and part of those benefits. Over time, he received more than $10,000 in benefits.

An Investigator for AHCCCS began looking through the case and called Mr. W. He told the Investigator that his child did live with him, however, he could not remember the name of the grade school the child attended. The Investigator then called the mother who confirmed that the child lived with her year-round, except for summers and during the Christmas break. Ultimately, Mr. W was charged with 8 Counts of Unlawful Use of Food Stamps/Benefit Fraud, 2 Counts of Fraud Schemes and 2 Counts of Theft. Cost of the actual loss and investigation came to a grand total of $11,521.

Once we became involved in the case, we began having Mr. W repay the government all of the money that they had lost. We informed the Prosecutor of this and we also sent over a mitigation package. That mitigation package included letters from family, friends and coworkers, totaling 40 in number. Due to the great amount of community support, combined with a lack of any real criminal history, the Prosecutor agreed to extend an offer for Attempted Fraudulent Schemes as a Class 6 Undesignated Felony which allowed Mr. W to earn a Misdemeanor. It also included Probation with zero days in jail. Initially, Mr. W was facing well over a decade in prison if convicted on all charges and sentenced to the maximum consecutive punishment.

Mr. W worked as a Banquet Captain for the Omni Hotel Management Corporation for years. For a period of 117 weeks, he collected Unemployment Benefits as if he was unemployed. When he would get work, he was supposed to report any earnings he received. He only reported earnings 17 times out of the 117 weeks, and all of those earnings were underreported. He was ultimately contacted by an Investigator, and he claimed that he only had sporadic work, when in reality, he was working full time. He never sent a letter of explanation, which they had requested.

Ultimately, Mr. W was charged with 35 Counts of False Statements in order to obtain benefits (Benefits Fraud), 1 Count of Fraudulent Schemes and Artifices and 1 Count of Theft. If he was convicted of all counts and given the maximum, he could have spent more than 80 years in prison.

After Mr. W became our client, we contacted the Assistant Arizona Attorney General handling the case and we worked out a restitution plan. In exchange for fully paying back all of the amount of the loss plus interest (just over $26,000), the Prosecutor agreed to dismiss all but 3 Counts of False Statements and offered a Class 6 Undesignated Offense, with a possibility of it being designated as a Misdemeanor on the date of Sentencing. At Sentencing, we were able to show the Judge that Mr. W was remorseful and appreciated the wrongfulness of his actions. In addition, we showed that he had a lack of criminal history, that he had good character, had performed prior good acts, and that he had cooperated and behaved appropriately during the pre-trial and pre-sentencing period of the case. The Judge agreed with us and immediately designated Mr. W’s case as a Misdemeanor on the date of Sentencing.

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