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

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.

U.S. v. Mr. Z (DMC No. 12954) – Felony Federal Securities Fraud ($15,000,000 Misappropriated by way of Ponzi Scheme/Securities Fraud), Felony Federal RICO, Federal Bank and Wire Fraud, and Felony Federal Embezzlement – Not Charged in Arizona – Arizona Corporation Commission Securities Division Investigated.

Mr. Z lived in both Ontario, Canada and in Scottsdale, Arizona. He held himself out as a securities trader who traded the futures market. He advertised that he could generate guaranteed returns of 9% to 12% with “no risk trading.” He said that he could accomplish this by using a “positive expectancy system” (one that was granted to mathematically deliver profit over time).

In reality, he was not registered or licensed to sell securities. He had a total of $15 million invested with him through 59 separate people. He also held himself out to have a successful lifestyle, when in reality he was supported by his parents and his wife. After the Fraud was discovered, only $5 million could be paid back. Of the defrauded victims, his parents lost their life savings of $2.5 million and his estranged wife lost $300,000.

When investors’ money was lost in trading, Mr. Z would tell them that their money was safe and “locked up” in other investments. He would make interest payments by securing more money from new investors – a classic Ponzi Scheme. Once payments were stopped, the investors began to question him heavily and Mr. Z gave the excuses that the assets were either tied up in bankruptcy proceedings, that they were linked to short-seller real estate investments, or they were invested in Greek debt and in U.S. currency. When the Arizona Corporation Commission Securities Division began investigating, we became involved in the case. We were able to work with a local civil attorney who was dealing with Federal civil lawsuits filed against Mr. Z, and with a Canadian Attorney in Ontario, who was dealing with the Ontario Securities Commission on Mr. Z’s behalf. Ultimately, Mr. Z was charged and plead to only 1 Count of Fraud (above $5,000) in Canada. He was never charged in Arizona. He was sentenced to 4.5 years of prison in the Canadian system, but he was never charged in Arizona.

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.

NOT CHARGED | FEDERAL RICO/MONEY LAUNDERING/BANK and WIRE FRAUD ($300,000) NOT CHARGED – State v. Mr. R. (DMC No. 6695) (U.S. Secret Service/United States Attorney’s Office Investigated): Mr. R. was employed as a Telemarketer for a company in which he was to handle the funds that were deposited into a Wells Fargo Bank account.  During the course of the sales, the individuals would provide credit card numbers for purchase.  Mr. R. and his group were accused of posing as Account Holders in order to authorize electronic transfers for a higher dollar amounts.   Total loss was estimated to be $300,000.  Mr. R. was not the primary target of the Secret Services investigation, and a “cooperative deal” was negotiated in which no charges were brought against Mr. R.  Originally he was facing a lengthy stay in the Federal Bureau of Prisons.

 

NOT CHARGED | FRAUDULENT SCHEMES ($200,000) BANK and WIRE FRAUD, MONEY LAUNDERING, and THEFT of MEANS of TRANSPORTATION ($85,000) NOT CHARGED due to CIVIL SETTLEMENT – State v. Mr. G. and Mrs. G. (DMC No. 6372 and 6373) (IRS and JP Morgan Chase Bank Investigated): Mr. and Mrs. G. discovered that the bank had placed $100,000 in their checking account on two successive days by mistake.  This total of $200,000 was perceived to be a “wind fall”.  Mr. and Mrs. G. immediately transferred the money out and began spending it.  When the mistake was discovered, the bank and legal authorities began to investigate.  We were able to step in and negotiate a “civil settlement” with a payment schedule, and no charges were brought against Mr. and Mrs. G.  Originally they were facing a potential of decades in prison.

 

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