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Category Archives: 47 Miscellaneous Theft/Fraud Victories

U.S. v. Mr. S (DMC No. 15036) – Federal Felony Misappropriation of Postal Funds ($301) – Reduced to Probation with Zero Days in Jail – U.S. District Court, District of Arizona. (Case No. 4:17-CR-01474-TUC-LCK).

Mr. S. was a U.S. Postal carrier who had his route in a suburb of Tucson. Part of his duties included the delivery of U.S. Mail with Cash on Delivery (“COD”) service requested. Per the USPS Domestic Mail manual, the COD recipient pays postage and the cost of the mailed article upon delivery, the delivery employee collects payment for the COD from recipient, remits it to the Postal Service and the Postal Service delivers the payment to the sender. Mr. S. had delivered a COD package to a customer who had remitted $301 to Mr. S. Mr. S. did not turn the COD payment over to the USPS in order to remit to the sender. When he was questioned by the USPS Office of Inspector General, Special Agents, he acknowledged he experienced a lack of personal funds while retaining the $301 COD payment, and thus used a portion of the COD money for personal expenses. He was then charged with Felony Misappropriation of Postal Funds per 18 USC 1711.

Mr. S. then retained our services and we contact the Assistant U.S. Attorney in order to resolve the case. We explained that Mr. S. had put the money in his wallet and was planning on remitting the money to the Postal Service within the next couple of days. He was merely short on cash before his paycheck, and he used some of the COD money to pay his expenses. While acknowledging the wrongfulness of his actions, he did plan on only keeping the money for a couple of days. The Assistant U.S. Attorney then offered us a plea which included a reduction to Probation and Zero Days in Jail.

U.S. v. Mr. A (DMC No. 12448) – Federal Felony Theft of Mail by Postal Employee ($175) & Federal Felony Unlawful Possession of Stolen Mail – Reduced to 1 Year Probation and Zero Days in Jail – U.S. District Court, District of Phoenix (Case No. 2:14-CR-14-00534-001-PHX-SPL).

Mr. A. was a postal carrier in Glendale. One of the households on his route contacted the Postal Inspector to claim that they had not received a card that was mailed from Wisconsin which contained cash. There had been several complaints against Mr. A. along his route in the past. The Postal Inspector then prepared a mailing which contained a $25 Target gift card. This mailing was called a “test mailing” and it would have an address that has “no such number.” Whenever a piece of mail ends up with having no such number, it is to be designated as UBBM (Undeliverable Bulk Business Mail). It is then to be returned by the Postal Carrier to the station. In this case, the card was never returned and he instead utilized it to buy goods at Target.

Mr. A. was brought in to be questioned by the Postal Inspector and he was requested to sign a Garrity Form. In this form, which is designed for questioning government employees, it states that if the Employee makes any admissions, they can be used against them “in any future criminal proceedings.” It also states “If I refuse to answer questions because my answers might result in criminal charges being brought against me, I will not be disciplined solely for remaining silent.” However, usually if the employee invokes their right to remain silent, they will lose their job with the government.

During the interview process, Mr. A. denied the allegations. When he was confronted with the used Target card, he then made an admission. He then invoked his right to remain silent and secured our services. Shortly thereafter, charges of Theft of Mail by Postal Employee per 18 USC 1709, & Felony Unlawful Possession of Stolen Mail per 18 USC 1708 were filed against Mr. A. We contacted the Assistant U.S. Attorney in this case in order to come to a resolution. It was determined that the total amount of loss was $150 to the individual household on Mr. A’s route and the $25 spent int the gift card by the Postal Service. In exchange for a $600 fine and the $175 in restitution, Mr. A’s case was reduced to one year of Probation with Zero Days in Jail.

State v. Ms. S (DMC No. 13490) – Felony Illegal Control of an Enterprise/ RICO & Felony Conspiracy – ­Reduced to Misdemeanor Facilitation with Zero Days in Jail – Maricopa County Superior Court (Case No. CR2011-007595).

The Phoenix Police Department had received information that a place known as the “Phoenix Temple Goddess” was running an Illegal Enterprise as a House of Prostitution. A six month long investigation ensued in which they found there was numerous reviews posted on “The Exotic Review” (TER). That particular website purportedly detailed specific sex acts performed by employees of the temple in exchange for money. The Phoenix Police Department then deployed three female Undercover Detectives to go to the temple in order to secure employment.

The Undercover Officers were told that a “gatekeeper” for the Temple would take a “donation” in order for them to perform “naked life coaching.” They were also to be known as “healers” and “practitioners.” They were then given a handbook that showed that the donation amounts would range from $125 for a half hour, up to $804 for a 4 hour session. It also specified what percentage of the money would go to the Temple, and what percentage would go to the “Practitioner.” After that point, an indictment was handed down against multiple codefendants, and Ms. S was arrested for being one of the Practitioners.

We became involved in the case and we immediately discovered that we would have to reduce the case to a misdemeanor, otherwise our client would be deported to Canada, and she would not be allowed back into the United States. This has to do with the immigration rules as her charges were regarded as a crime of “moral turpitude.” We ultimately were able to show the Prosecutor that there was no direct evidence that Ms. S engaged in any sexual activity. In addition, she would be more useful as a witness for the Prosecution, as opposed to just being regarded as a defendant. Ultimately, the Prosecutor agreed to extend an offer to a misdemeanor of Facilitation which included Probation and Zero Days in Jail. Ms. S was allowed to remain in the country, and she has no Felony convictions on her record.

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. 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. Ms. F (DMC No. 12153) – Felony Illegal Control of an Enterprise ($2,300,000 Misappropriated with Counterfeit Coupons), Felony Fraud Schemes, Felony Forgery and Felony Counterfeiting – Reduced to Counterfeit Marks Class 6 Open /Misdemeanor with Probation and Zero Days in Jail – Maricopa County Superior Court (Case No. CR2012-136421).

Ms. F had recently returned from Georgia and was a licensed chiropractor. When she returned to Arizona, she became an avid animal rescuer and she saved over 140 abandoned dogs and cats. She would feed the animals by buying discounted pet food with coupons that she found on a website known as savvyshoppers.com. Eventually, the owner asked her to work for their internet business.

Her job consisted of the following: after FedEx would deliver a box of coupons, Ms. F would take off the mailing labels on the box. She was then instructed to throw away all of the mailing labels. She would receive orders for customer coupons from the owner of the company, and then she would complete the orders by compiling the coupons. She was taught where to put the CIC labels, and how to put the coupons together in order to assure the coupons would be accepted at various stores. She would then package them for mailing and give the package to the U.S. Postal Carrier. It turned out that all of these coupons were counterfeit copies, which would result in a flood of these coupons being submitted to stores. When the manufacturers would receive a large number of coupons, they would tell the retailers not to honor them. Then, whatever loss was incurred would then shift to the retailer when the retailer did not prevail in a dispute with the manufacturer. All in all, there was over $2.3 million in losses due to this counterfeit coupon scam.

Ms. F was arrested in this high-profile case and charged with Felony Illegal Control of an Enterprise, Fraud Schemes, Forgery and Counterfeiting. We became involved in the case and entered into a Cooperation Agreement with the prosecutors. We also presented a significant mitigation package which included information regarding her prior good acts in the community, lack of prior bad acts, her good character and reputation, and her appropriate behavior during the pendency of the case. We then presented letters from family and friends that demonstrated Ms. F felt true remorse for what had occurred. It was also determined that she had a lack of any potential for future offenses. Ultimately, the prosecutor agreed to offer her a plea to Counterfeit Marks the Class 6 Open/Misdemeanor designation with Probation and Zero Days in Jail. She also successfully completed probation, and the case was designated a misdemeanor. Originally, she was facing mandatory prison time due to the severity of the charges and the amount of the loss being above $100,000.

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.

State v. Mr. L (DMC No. 14773) – Felony Illegal Control of an Enterprise (RICO), Felony Money Laundering and Felony Possession of Marijuana for Sale – Not Charged – Scottsdale Police Department Investigated (DR No. 20XX-XXXXXX9).

Mr. L was an independent contractor who was working to sell e-tickets for various sporting and entertainment events.  He worked out of a side office for the owner who also owned a mail and parcel express service. While he was working there selling event tickets, he learned that the owner was running a business known as Arizona Cancer Center. Basically, he would take “donations” of $250 in exchange for an ounce of marijuana.

This owner of Arizona Cancer Center was not licensed with the Dispensary Department/Medical Marijuana Program with the Arizona Department of Heath Services. At some point, the office was raided by Scottsdale PD and HEAT (High Enforcement Arrest Team). All of Mr. L’s computers and e-ticket company information was seized.

We became involved and we immediately contacted the Scottsdale Police Department. We were able to show that Mr. L had no involvement with the co-conspirators. All people involved were being investigated for Illegal Control of an Enterprise (RICO), per A.R.S. 13-2312A; Conspiracy, per A.R.S. 1003A; Possession of Marijuana for Sale, per A.R.S. 13-3405(a)(4); and Money Laundering, per A.R.S. 13-2317. We explained that Mr. L was an independent contractor who never sold any marijuana, and never received any money for the co-defendants selling of marijuana. In addition, we were able to show the authorities that he was a witness, not a co-conspirator. Although, all of the other members of the conspiracy were charged, Mr. L was never charged with any crimes, and has no felony record.

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.

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