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Category Archives: 46 Theft Pre-Charge Victories

State v. Mr. K (DMC N. 11324) – Insurance and Medical Billing Fraud – Vacated Suspension of Physical Therapy License at Board Hearing – Arizona Board of Physical Therapy (Complaint No. 12-41):  Mr. K worked as a physical therapist and had submitted various medical bills to assisted healthcare services.  It was alleged that he billed for some services that he did not actually perform.  Once we were involved in the case, we were able to show that his billing practices may have fallen below the standard of ethics, but they were not criminal in nature.  This was true, even though they were claiming he had falsified his records.

We were able to get the case dismissed with an agreement to probation.  As a condition of probation, Mr. K was required to do classes in continuing education, along with monitoring of his billing submissions.  After one year, the probation was lifted and his license was unencumbered.  He was allowed to maintain his livelihood throughout the entire course of his probation.

State v. Mr. M (DMC No. 11444) – Felony Fraudulent Schemes (Counterfeiting $20 Bills), Felony Counterfeiting, Felony Theft & (2 counts) Felony Forgery – Not Charged – Maricopa County Sheriff’s Office investigated (DR#20XXX-XXXXX7).

Maricopa County Sheriff’s Office was called to a CVS Pharmacy located in Queen Creek. When they arrived, they spoke with a manager who sated that Mr. M. had come into the store and utilized a counterfeit $20 bill to purchase a $1 item and then he received $19 in change. They stated that this had occurred to them in the past also. The manager had taken down the license plate number from the video in the parking lot before Mr. M. left. The Officers ran the license plate and then showed up at Mr. M’s residence. Mr. M lived with his parents, and only the father was home when the Police arrived. The father allowed them to search Mr. M’s room, and it was discovered there was a computer, a scanner and a shedder inside the room. Contained in the shredder were several pieces of shredded counterfeit money.

When contact was made with Mr. M, he invoked his right to remain silent. We then became involved in the case and we had Mr. M. sign an Affidavit that he was invoking his right to remain silent if he were to be contacted by Detectives in the future. We also spoke with Detectives about the fact that the computer in the household was a “community computer”, and it was not password protected. Lastly, we pointed out that they had no video evidence of the alleged prior incidents occurring at that CVS and other stores in the surrounding neighborhoods. Eyewitnesses could not pick Mr. M out of any photo line-ups, and he had made no admissions to knowledge of the counterfeit money. Ultimately, the Sheriff’s Detective routed the case to the Maricopa County Attorney’s Office seeking a charge of Fraud Schemes, Theft, and two counts of Forgery. It was also possible that a charge of Counterfeiting could have been tacked on. However, the Maricopa County Attorney’s Office made the decision to “turn down” the case. Mr. M has no criminal record.

State v. Mr. A (DMC No. 9146) – Felony Embezzlement/RICO ($88,000 Misappropriated from Law Firm), Felony Fraudulent Schemes & Felony Theft – Not Charged – Resolved with Civil Settlement – Scottsdale Police Department Investigated (DR#20XX-XXXX2); Maricopa County Superior Court, Civil Division (Case No. CV2008-015240).

Mr. A. owned a collection service business. He contracted with a local Phoenix law firm to conduct their collections regarding overextended accounts receivables. Things were not going well at first, and Mr. A. convinced the law firm to let him take over all of the bookkeeper’s duties. This gave him access to all of the law firm’s bank accounts and he was authorized to sign checks into a bank (cost account) only. Over the course of a two month span, he began transferring all of the law firm’s money into various accounts. He would then use electronic transfers, write checks or use “check by phone” transfers to transfer money to himself. These were monies that he was not entitled to.

In addition, Mr. A. began charging the law firm for overhead incurred while working on the law firm’s accounts. The law firm received no benefit for this and they had no idea that this was going on. In essence, Mr. A. was “padding” the bills. The total amount of loss for the two months totaled $88,000. Once this was discovered, Mr. A. secured our services.

We began negotiating with the lawyer who was working on behalf of the law firm. As we were in Settlement negotiations, they filed a Civil Lawsuit against Mr. A., which included accusations of, among other things; RICO, Theft, Breach of Contract and Breach of Fiduciary Duty. We were eventually able to work out a Settlement with the law firm and they agreed that this appeared to be a situation of a miscommunication and bad bookkeeping practices. They decided that they were not going to seek any criminal charges against Mr. A. Initially, he could have been facing mandatory prison time, however, he has no criminal charges on his record.

State v. Mr. B (DMC No. 13979) – Felony Embezzlement ($1,855 Misappropriated from Educational Association), Felony Fraudulent Schemes and Artifices and Felony Theft – Not Charged –Bisbee Police Department Investigated (DR No. B20XX-XXX2).

Mr. B worked for four years in the Cochise County School Superintendent’s Offices as a grants administrator and educational services agency employee. While he was there, he formed a separate Educational Association in which received dues from other County Superintendent Offices. He originally opened an account at Bank of America in order to deposit monies into that account. He collected approximately $1,855 to start this Association.

He then dissolved the Association with the Corporation Commission fairly quickly, He then transferred the remaining money to a different bank’s account and he rolled it into a new private Educational Foundation. He then closed the original B of A account. He was subsequently contacted by the Bisbee Police Department to discuss possible Embezzlement/Fraud Schemes and Thefts allegations.

Mr. B then contacted our office and we immediately made contact with the Cochise County School Superintendent’s Office. We were able to demonstrate that the one Foundation was properly dissolved and that the monies were then rolled into a separate/new Educational Foundation. There was some debate about whether this could legally be done, and we ultimately agreed that Mr. B make the full restitution in exchange to resolve this matter civilly. The County Superintendent’s Office agreed, along with the Bisbee Police Department, and restitution was made in full. No charges were ever brought against Mr. B and he has no criminal record.

State v. Ms. G (DMC 12809) – Felony Benefits Fraud ($8,500 Misappropriated from SNAP), Felony Fraudulent Schemes and Felony Theft – Not Charged – Arizona Department of Economic Security Investigated.

Ms. G was receiving food stamps through the Supplemental Nutrition Assistance Program (SNAP) on and off for about three years. In her application, she stated she had only between $1000 to $10,000 in savings. In reality, she had a 529 college savings account for her daughter which contained $87,000. She also had a UTMA account for her daughter in the amount of $105,000, and a Roth IRA for her children at $34,000. On top of that, she had a traditional IRA for $132,000, and a mutual fund account for herself which was valued at $150,000.

As she began going through divorce proceedings, she realized that the food stamps issue could become a criminal issue. She updated all of her income on the DES website and she ceased using food stamps. However, the DES saw the change on their website and began investigating her regarding the discrepancies. We then became involved and spoke with a DES Supervisor. During the course of speaking with the Supervisor, we indicated that her true income was basically zero when she started going through her divorce proceedings. We also pointed out that many of these accounts were retirement accounts, college payment accounts, or accounts in her children’s name, and not her name. The supervisor agreed with us and indicated that since she is no longer seeking supplemental nutritional assistance, that they would not view the past use of food stamps as a Benefits Fraud. No charges were ever brought against Ms. G. If they were, it could have seriously affected her ongoing custody battle in her divorce case.

State v. Ms. R (DMC No. 14569) – Felony Embezzlement ($50,000 Misappropriated from Interior Design Business), Felony Fraudulent Schemes, Felony Theft, Felony Identify Theft, Felony Forgery and Felony Obtaining a Credit Card by Fraudulent Means – Not Charged – Phoenix Police Department Investigated (DR No. 20XX-XXXXXXX3).

Ms. R was employed as a bookkeeper/personal assistant to the owner of an interior design business. She had access to all information regarding the business, and access to the checking accounts in order to pay business expenses. She was accused of using 3 different bank accounts and obtaining 5 different credit cards fraudulently by assuming the identity of the owner. Over the course of three years, she allegedly embezzled over $50,000.

We were brought into the case and we began defending Ms. R. We contacted the interior design business owner’s husband who was a licensed attorney in Arizona. We were able to demonstrate that some of the credit cards obtained were actually in our client’s name, and those were used actually to pay business expenses. The itemized business expenses on the credit card were then paid by company check. What became problematic was demonstrating other credit cards taken out in the owner’s name had a forged signature on the application in violation of ARS 13-2102. The owners ultimately filed a police report with the City of Phoenix. We had always contended that this was actually a civil matter, and not a criminal matter, and ultimately the Phoenix Police Department did not forward the case onto the County Attorney’s Office for charging. No criminal charges were ever brought against Ms. R. If they had been, and if she were convicted of all charges, she would have faced well over a decade in prison. As it finalized, no criminal charges were ever brought against Ms. R and she has no criminal record.

State v. Mr. M (DMC No. 15188) – Felony Fraudulent Schemes ($72,500), Felony Vulnerable Adult Abuse and Felony Theft – Not Charged – Adult Protective Services Investigated (Case No. 31XXXX).

Mr. M had a website building and SEO (Search Engine Optimization) company who would reach out to various website owners in order to sell them their services. The purpose was to improve their websites’ rankings and increase the actual organic traffic to the websites. Mr. M made contact with Bruce (a former lawyer) who was 79-years old. Bruce had a law website, but had a dream of building a directory website that was similar to “Angie’s List” for businesses. He was ultimately quoted a flat fee of $15,000 and he signed a contract.

Throughout the building of the site, he was repeatedly asked for more money and ultimately paid $72,500. The purpose of the site was changed from a directory to a site that would help people improve their credit scores. That particular site actually ended up generating approximately $30,000 in revenue to Bruce.

As Bruce was now in his eighties, his daughters sought to get a conservatorship and claim that he was suffering from dementia. They made a claim with Adult Protective Services that Mr. M had Taken Advantage of a Vulnerable adult in the amount of $72,500.

We became involved with the case and we contacted the Investigator for Adult Protective Services. We were able to show all the work performed on multiple sites, along with the change in direction of the site’s purpose, would justify the full $72,500. During this time, Bruce’s daughter sought to get a civil lawyer involved to potentially file a lawsuit. We also dealt with the civil lawyer and no civil complaint was ever filed. In addition, Adult Protective Services declined to seek any prosecution and they relayed the “turn down” of prosecution by the Arizona Attorney General’s Office to us. Mr. M was originally facing very serious felony charges which could have placed him in prison. Now, he has no criminal record whatsoever.

State v. Mr. K (DMC No. 14801) – Felony Embezzlement ($109,000 Misappropriated from a Non-Profit Educational Foundation), Felony Fraudulent Schemes and Felony Theft – Not Charged – Educational Foundation Investigated.

Mr. K secured his position as a Treasurer of an Arizona non-profit educational foundation. He informed them that he was a CPA, when in reality he had passed the CPA exam, but he did not have enough hours to actually receive his certification. In order to secure the position, he also informed them that he would be donating the office rent payment at approximately $1,000 a month while in that position. Again, in reality he was taking funds from the foundation’s checking account to pay those rent payments.

He held the position as Treasurer for 13 years. During that time, he misappropriated approximately $109,000 for both the office rent, and for his personal expenses. The Director, President/CEO and the Secretary began asking questions about the books being “sloppy.” Mr. K then secured our services in order to help him from being charged with any criminal activity. We contacted the Foundation and presented an accounting that showed much of the benefit was the rent paid for the Foundation’s offices. In other words, they were not actually out the benefit of the money used to pay the rent. We also showed that Mr. K’s elderly wife had various medical problems and dementia, and this placed a heavy mental toll on him. Ultimately, we were able to secure an agreement which would allow Mr. K to make a $30,000 payment over time, and no criminal charges would be sought against him. Originally, he was facing mandatory prison time due the amount of loss being above $100,000.

State v. Mr. E (DMC No. 14732) – Felony Fraudulent Schemes ($180,000 in Reversed Credit Card Charges) and Felony Theft – Not Charged – Tolleson Police Department and FBI Investigated.

Mr. E owned a waste solutions company and he acted as a waste broker working primarily in the state of Arizona however, he did some work in California, Texas and Colorado. As a broker of trash services, he was in the front load commercial service and roll off container business. He also placed portable toilets, fencing and storage containers for many fencing projects.

As a broker, he developed a close working relationship with a large international waste disposal company that he used as his primary hauling company. During a course of normal business, he used the following process: he would call or email in his request to customer service and they would charge a Visa debit card they had on file. The type of service requested was based on pre-determined and negotiated prices. When he placed the order, the large waste disposal company would charge his card and send him a purchase confirmation sheet receipt so that he would know that they received his order for the requested work, and that they were paid for the haul to the jobsites. This process was in place for an average of 50 times a month. Occasionally, he would receive invoices and he would call to see if they were actually paid or if he had open balances, and he was always told that they were paid in full. Lastly, as to the portable toilet service, he was billed every 28 days and the customer service representative of the large waste disposal company would simply run his credit card again and send him a receipt after it was completed.

Ultimately, Mr. E received a threatening phone call from one of the managers at the large waste disposal company claiming Mr. E had reversed charges for an amount of $180,000 over the past several years. He strongly disputed this and he was told by the company that they had contacted the Tolleson Police Department, and T.P.D. was referring the matter over to the FBI. We then became involved and immediately contacted the waste disposal company’s Attorney in order to get detailed spreadsheets of all charges and reversed charges. The company could not show that Mr. E had any knowledge of charges being reversed. In addition, it was questionable why it took years for the waste disposal company to see that charges had been reversed. Ultimately, the case appeared to be one of sloppy accounting practices. Civil resolution was reached in which $80,000 of the $180,000 disputed amount was paid in order to settle the case. Ultimately, no charges were brought against Mr. E for Fraudulent Schemes or Theft. If they had, he would have been facing a mandatory prison sentence if convicted due to the amount in question being above $100,000.

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.

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