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Category Archives: 47D Bank, Mail and Wire Fraud (Federal Charge) Victories

State v. Ms. O (DMC No. 14836) – Felony Money Laundering ($25,000) and Felony Conspiracy – Not Charged Due to Cooperation and Testimonial Agreement – Pinal County Sheriff’s Office and Arizona Attorney’s Office Investigated.  Ms. O had befriended a man by the name of Francis and had begun dating him.  While she was dating him, he always had money but was unemployed.  He claimed he was a refrigeration repairman.  However, his house always smelled of marijuana and many people were coming in and out of the residence.

He would ask her to constantly deposit cash into a bank account which she opened.  That account was initially shut down at the first bank because it was “a risk to the institution.”  She then opened a second account at another bank and began depositing money into that bank account.  She began observing her boyfriend packaging marijuana in five-gallon paint buckets, and he would ask her to go to the PO Box in order to ship the packages.  He was eventually arrested and the police contacted her about potential Money Laundering in regard to the bank deposits.  She then retained our services, and we then became involved.

We contacted the Pinal Count Sheriff’s Office and the Arizona Attorney General’s office in order to negotiate a “Cooperation Deal.”  Due to Ms. O’s cooperation, she was never charged with any crimes.  Her ex-boyfriend was ultimately charged with multiple counts of Transportation of Marijuana and Conspiracy, along with multiple co-defendants.  If Ms. O was also convicted (as was her boyfriend) she would have gone to prison as well.

State v. Mr. X (DMC No. 15553) – Felony Wire Fraud ($710,290) and Felony Embezzlement – Not Charged Due to Cooperation and Co-Defendant Conviction – United States Attorneys Office, District of Arizona and FBI Investigated). Mr. X owned a company that sold large shipping containers, electronic control panel systems, and other types of business equipment. Mr. X had an employee who was locating the same types of equipment on the internet and purchasing them for lower prices. This employee then engaged in a Fraudulent Scheme whereby he would have Mr. X’s company pay the full price of what piece of equipment would normally be, and then he would simply purchase it for less on the Internet. The employee would then fulfill the order to the end-user, while also diverting new equipment manufactured by Mr. X to be sold separately.
There were 43 such transactions and the FBI became involved. They had issued a “Target Letter” to Mr. X indicating that the US Attorney was involved and that Mr. X may need to hire an attorney. When we spoke with the FBI agents and the Assistant US Attorney, we were able to show them that Mr. X had no knowledge of his former employee’s Fraudulent Scheme. The former employee was ultimately charged and sentenced to 30 months in prison. Specifically, in his plea agreement, it indicated that Mr. X had no knowledge, nor did his company, of the underlying scheme being perpetrated by the employee. Originally, Mr. X could have also gone to prison if we were not able to keep him from being indicted. He has no criminal record whatsoever.

State v. Mr. W (DMC No. 13130) – Federal Bank and Wire Fraud ($1,000,000), Felony Fraud Schemes ($450,000 Misappropriated from Wire Amount), Felony Money Laundering, Felony Sale of an Unlicensed Security and Felony RICO – Not Charged – FBI Investigated.

Mr. W had two co-defendants that were in the process of trying to raise money for a new energy company venture. They had a primary investor out of China who was to wire $1 million to a bank in Singapore to begin the investment. The idea was that Mr. W and the two co-defendants were to purchase AAA rated “paper,” which they would buy at ¢.85 and sell at ¢.92. By doing these securities transaction sales, they were attempting to raise $5 billion for the energy startup company. These types of transactions are illegal in the United States.

After the initial $1 million wire was sent out, $100,000 was immediately misappropriated by one of the co-defendants. The other co-defendant took $450,000, and the remaining $450,000 was split between all three co-defendants in order to cover past expenses.

The FBI became involved on behalf of the alleged victim, and they issued a subpoena for Mr. W to testify in a Grand Jury proceeding in the New Jersey District Court. We then became involved and began talking to the FBI agent and the Assistant U.S. Attorney General involved in the case. We were able to work with them in order to show that one of the other co-defendants should be the actual target of the investigation. We ended up providing the documents that they were seeking, and we also made Mr. W available for interviews. Mr. W was never charged with any crimes, and he has no criminal record.

State v. Mr. G (DMC No. 11956) – Felony Securities Fraud ($1,747,000), Felony Bank and Wire Fraud, Felony Fraudulent Schemes and Felony Money Laundering – Not Charged – Private Law Firm Investigated and Resolved with Civil Settlement.

Mr. G was the manager of an LLC that bought foreclosure homes and flipped them for profit. The agreement was the LLC was to pay him 10% of the net profits. He had been paid approximately $180,000 – $200,000 from the LLC over time (roughly $2,000 per house sale). In addition, he had borrowed $30,000 to $35,000 from the LLC without their permission and had used landscapers and other contractors to perform work on his personal house without permission.

The LLC had secured a $400,000 and a $600,000 loan/investment from two individuals. These people were promised a 50/50 split of all of the profits of the sales. Ultimately, these people were never paid their money and they secured a private law firm to attempt to recover their money prior to filing a civil suit or contacting the authorities. The allegations were that the LLC engaged in a Sale of Unlicensed Securities, pursuant to A.R.S. 44-1801 (26). Also, Securities Fraud was alleged under the Arizona Securities Act, per Arizona Revised Statute 33-1991. That related to the $1 million Sale of Securities (i.e., the loan/investment) that was never paid back. In addition, the victims were entitled to a recovery which included interest, cost and attorney’s fees under Arizona Revised Statute 44-2001. This brought the total amount of loss to $1,747,017.

We became involved and we began working with the civil law firm, and the attorneys who represented the two principals of the LLC. Ultimately, the case was resolved with a civil settlement in which Mr. G paid the lowest amount of the three potential co-defendants. Because Mr. G had a prior felony conviction, it was very important to keep him from being charged. If he were to have been charged and found guilty of these crimes, the mandatory minimum would have been well over 10 years in prison due to the amount of loss and his previous felony convictions.

State v. Mr. F (DMC No. 14985) – (2 Counts) Felony Conspiracy ($30,000,000) to Manufacture and Distribute a Controlled Substance Analogue, Felony Conspiracy to Defraud the US, Felony Adulteration or Misbranding of a Drug, and Forfeiture – Forfeiture Dismissed and Other Charges Reduced to Probation With Zero Days in Jail – United States District Court, District of Arizona (Case No. CR-14-01607-1-PHX-SRB and United States District Court, Southern District of Alabama, Case No. 14-00272-CB):  Our client was a fitness buff who had a training facility in which he sold various body-building “supplements.”  He was charged with Conspiracy in two different Federal courts (Arizona and Alabama).  He was accused of importing chemicals from overseas, manufacturing chemical “analogues” to illegal drugs, packing and then distributing the drugs as “pot pourri” in various states.

The total quantity of the alleged illegal drugs was in excess of 110 kilograms of raw chemical, which was used to manufacture hundreds of kilograms of finished product, calculated as the equivalent of over 19,350 kilograms of marijuana.  The dollar amount alleged by the Government throughout the Conspiracy exceed $30,000,000.

We were involved in negotiations with the United States Attorneys’ Offices in several districts, as well as with the main Justice Department.  It took over a year of intense work from a cooperation and a lengthy sentencing battle in order to achieve an offer in which the Probation Department recommended a sentence of 78 months of prison time in Arizona, and 60 months, followed by 36 months of prison time in the Alabama case (all to run consecutively).  Due to our efforts, Mr. F was sentenced to Probation with Zero prison or jail time.  Lastly, the Forfeiture allegations which would have taken everything that Mr. F owned, were dismissed.  As part of the overall deal, any other charges which could have arisen out of any other Federal District Courts, were also permanently barred from being indicted.  These could have included Conspiracy (18 USC § 371), Fraud (18 USC § 545), Misbranding—as pot pourri (18 USC §§ 331A and 333(A)(2)), and Distribution (18 USC § 331(A)).

U.S. v. Mr. S (DMC No. 14784) – Federal Money Laundering ($50,000), Federal Bank and Wire Fraud, Federal Arms Trafficking (AK/AR-47s and 50-Caliber Rifles) and Felony Drug Trafficking (Meth, Marijuana) – Not Charged Due to Cooperation Agreement – Pinal County Attorney’s Office, US Attorney’s Office and ATF Investigated.

Mr. S had a female friend who asked to deposit some money into his bank accounts. He agreed and gave her his bank account numbers. Later on, she was contacted by a Pinal County attorney and she was questioned about the deposits. She said that she “sells cars” and that she would share the money with Mr. S. This turned out to be a lie. About one week later, the bank account of Mr. S was frozen, and he received a Forfeiture letter. Approximately $50,000 was deposited into his accounts over an 8-month timeframe.

Additionally, Mr. S had a male friend who would deposit money into the female friend’s account, who would then deposit it into Mr. S’ account. Every time Mr. S then returned an amount of $5,000 to the male friend, Mr. S would receive a $100 payment. It turned out that the male friend was selling drugs and was also running guns into Mexico for various organizations.

Once we became involved, the Pinal County Attorney’s Office had also brought the U.S. Attorney’s Office into the case. An Agent with the ATF also became involved, and we were able to negotiate a cooperation deal which would keep Mr. S from being charged with any crime. The US Attorney’s Office provided a Kastigar Letter and a Proffer Agreement. During the course of cooperation, Mr. S introduced undercover agents to various characters who were selling methamphetamine and guns. Ultimately, people were arrested and Mr. S was never charged with any crimes. In addition, we were able to stop any Forfeiture proceedings regarding the house owned by Mr. S by the Pinal County Attorney’s Office. Originally, Mr. S was facing decades in prison if he were to be convicted of all charges. Ultimately, he has no criminal record whatsoever.

State v. Mr. D (DMC No. 15136) – Felony Fraudulent Schemes ($350,000 Misappropriated Wire Transfer), Federal Felony Bank and Wire Fraud, Felony Theft, Felony Vulnerable Adult Abuse and Felony Unlawful Use of Power of Attorney – Not Charged – Mesa Police Department Investigated (DR No. 20XX-XXXXXX3) and  CFA Institute Investigated.

Mr. D was a financial planner. His mother went in for surgery and passed away. After that, his father (actually his grandfather that adopted him when he was a child) asked for help with his financial affairs because he was getting older and more forgetful. They then met with an Attorney and signed a Power of Attorney. This gave Mr. D access to a joint account with his father.

At some point, Mr. D wired $350,000 into his own account which he used to pay off his own mortgage. Also, funds were used to pay off about $80,000 on a Discover card. That $80,000 was later clawed back by his father. Lastly, he took a $124,000 payment to himself.  The balance was then used to purchase a third condominium for his father’s trust. Mr. D also transferred two other condominiums into the trust, which resulted in a net positive of $65,000 to his father. Because everything totaled positive for his father’s trust, he assumed that he had done nothing wrong. However, he was contacted by Mesa Police and the CFA Institute regarding various improprieties. Mesa Police were looking into Felony charges of Fraud Schemes, Unlawful Use of a Power of Attorney, Theft, and Vulnerable Adult Abuse. There was also a potential for a Felony Federal Bank and Wire Fraud claim due to the use of the wire transfer to a federal banking institution.

We became involved and we were able to shut down the investigation and keep it purely as a civil matter.  Through the course of the civil lawsuit, a proposal was made to have Mr. D. repay his father $400,000, in exchange for merely keeping  all three condominiums. Ultimately, the case resolved civilly and there were no criminal charges ever brought against Mr. D. Originally, Mr. D was facing mandatory prison time due to the fact that the amount of loss was above $100,000.

U.S. v. Ms. G (DMC No. 14158) – Federal Felony Mortgage Fraud ($1,100,000), Federal Felony Bank and Wire Fraud, Felony Fraudulent Schemes, and Felony Forgery – Not Charged – Large National Bank Investigated.

Ms. G and her husband were going to purchase a large house for approx. $1,000,000. The appraisal information was sent from the loan originator, and the loan originator specifically asked if any funds were going to be pulled from a retirement account, to which Ms. G and her husband said “no.” Ultimately, discrepancies were found in the closing documents, and in order to close on the house, Ms. G had the house purchased in her husband’s name only. This was accomplished through a Special Warranty Deed signed by the husband “as a married man as his sole and separate property.” Ms. G signed a Disclaimer Deed disclaiming any interest in the property. Also, they both signed a Warranty Deed conveying property from husband’s sole and separate property to husband and wife.

The potential problem was that the Disclaimer Deed signed by Ms. G indicated that none of her assets or community assets were used in the purchase of the home. This is not accurate as a joint check was used for the purchase. In addition, the intent was always to use community assets to buy the home. After the closing, the bank discovered discrepancies and began investigating. A potential concern was that Forgery was committed, along with allegations of Fraudulent Schemes, and Mortgage Fraud per Arizona Revised Statue 13-2320. Lastly, a  potential for Federal Bank and Wire Fraud was also possible due to the federal loan documents which were signed.

We were able to show although Ms. G did not sign the document indicating the property was purchased with separate funds of the spouse, that it must be read in conjunction with the other documents signed by Ms. G at the same time. Specifically, that Mr. G. received title through the Special Warranty Deed the day before the Disclaimer Deed, and that he signed the Warranty Deed at the same time as the Disclaimer Deed, thereby suggesting that they were meant to function together to promote the buyers’ intent (as outlined in both the purchase contract and the loan pre-qualification form).

We were able to show that none of the documents were indicative of any intent to defraud. The only real issue had to do with community property issues down the road should they become divorced. Initially, Ms. G was facing the potential of multiple years in prison, but we were able to convince the bank not to turn this into a criminal matter and get the authorities involved.

NOT CHARGED/ FEDERAL and STATE TELEMARKETING FRAUD (RICO), MONEY LAUNDERING and BANK and WIRE FRAUD ($3,000,000+) – State v. Mr. A (DMC No. 8850 & 7440) (United States Attorney and FBI Investigated): Mr. A had had run a telemarketing business in the past and was brought in to assist his son and business partner in their business ventures. He helped them set up their telemarketing room, along with scripts for sales pitches and information on how to set up bank accounts for wire transfers. He then managed his own telemarketing business selling GPS locators for cars. A massive search warrant was issued for his son and business partner, and the FBI and United States Attorney’s Office were attempting to question Mr. A and potentially implicate him in a scheme.

We were hired and reviewed all evidence against Mr. A’s son and his son’s business partner. We also spoke with FBI Agents and the US Attorney’s Office in order to show them that Mr. A had no knowledge of his son and business partners’ scheme. We ultimately convinced the US Attorney’s Office not to file charges for Wire Fraud, Bank Fraud and Money Laundering. In addition, the FBI did not turn their investigation over to State authorities in an attempt to have Arizona prosecute Mr. A. Although his son and business partner ended up serving prison time, Mr. A was never charged with any crimes. In addition, Mr. A never had to testify against his son.

NOT CHARGED | FEDERAL SECURITIES FRAUD/RICO/MONEY LAUNDERING/ BANK and WIRE FRAUD ($636,000) NOT CHARGED due to CIVIL SETTLEMENT – U.S. v. Mr. N. (DMC No. 7596) (FBI Investigated): Mr. N. owned a company which bought investments, fixed income investments, CD’s and bonds from banks and then sold them to various brokers.  Mr. N. was accused of diverting approximately $600,000 of client’s money into a separate account in order to fund a separate business.  We were able to explain to investigators that this was a “civil” issue, and not a criminal issue.  We also resolved a civil law suit filed by a large investor, by making sure that all monies were returned to proper accounts.  Mr. N. had been facing a large amount of prison time, along with the loss of his Securities licenses until we got involved.  Ultimately, all law suits were dropped, no charges were brought against Mr. N. and his licenses were left intact.

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