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Entries in Fraud (27)

Saturday
Jul202013

Woman Accused of Pretending to Be Boston Bombing Victim to get Money

John Tlumacki/The Boston Globe via Getty Images(NEW YORK) -- A New York woman has been accused of collecting nearly half-a-million dollars in fraudulent claims from a fund created to support the victims of the Boston Marathon bombings.

On Friday, authorities arrested and charged 26-year-old Audrea Gause with larceny, having allegedly altering old medical documents to make it look like she received treatment for injuries suffered during the attacks. She received $480,000 from The One Fund, established to help victims of the bombings.

Gause was not even in Boston during the April 15 attacks, authorities said in a news conference Friday.

She is said to have submitted notarized claims and several pages of medical records that she claimed documented treatment for injuries suffered during the bombings, photocopying and altering them to make them appear authentic.

Massachusetts Attorney General Martha Coakley condemned Gause’s alleged crimes during the news conference.

“It is outrageous,” Coakley said, “… [that] some individuals have attempted to defraud The One Fund and to take dollars from those victims who need and deserve them.”

Copyright 2013 ABC News Radio

Tuesday
Feb052013

'Massive' Credit Card Fraud Steals $200M

Hemera/Thinkstock(NEW YORK) -- Eighteen people have been charged in what federal prosecutors in New Jersey called one of the largest credit card fraud schemes ever uncovered by the U.S. Department of Justice, spanning 28 states and eight countries.

"The defendants are part of a massive international fraud enterprise involving thousands of false identities, fraudulent identification documents, doctored credit reports and more than $200 million in confirmed losses," FBI Special Agent James Simpson said in court records.

According to court records, the scheme involved three basic steps: The defendants allegedly created thousands of fake identities, pumped up the credit histories of those fictitious people and then racked up charges on fraudulently obtained credit cards.

"Due to the massive scope of the fraud, which involved over 25,000 fraudulent credit cards, loss calculations are ongoing and final confirmed losses may grow substantially," Simpson said.

The proceeds, authorities said, were used for luxury automobiles, electronics, spa treatments, high-end clothing and millions of dollars in gold.

Prosecutors said the scheme started with small purchases over an extended period of time to build the credit scores of the false identities.  Once good credit history was established, court records say the defendants "ran up large loans" that were never repaid.

The defendants, including the alleged ring leaders, Babar Qureshi and Muhammad Shafiq, are due to make their initial court appearances Tuesday afternoon before U.S. Magistrate Judge Madeline Cox Arleo in a Newark, N.J., federal court.

Copyright 2013 ABC News Radio

Thursday
Jan312013

Florida Accuses Man of Fraud for Taking Wife’s Name, Then Backs Off

Jay Nguyen(NEW YORK) -- A Florida man is behind the wheel of his car again after the Department of Motor Vehicles suspended and then restored his license -- accusing him of fraud at first because he changed his last name to his wife’s.

“The suspension has been lifted,” said Kristen Olsen-Doolan, spokeswoman for the Florida Department Highway Safety and Motor Vehicles.  “We’re doing training so everyone realizes it [the name change] works both ways.”

Lazaro Dinh, formerly Lazaro Sopena, changed his name in July of 2011 after he married his wife, Hanh Dinh.  As “an act of love” to her, he said, he decided he’d change his name.

“I wanted to surprise her,” said Lazaro.  “My family has plenty of men and I thought it would be cool to surprise her with the news.”

He began to research the Florida DMV website and said he called to make sure he would have the proper documents to make the name change possible.  All he needed, according to the DMV, was a new Social Security card and the original marriage certificate.  

When he walked into the DMV offices in West Palm Beach, he paid the $20 fee and left with a new license.  The couple had been married a month.   Following the name change on his license, Lazaro changed his name on his credit cards, passport and bank accounts.

Fast forward a year and a half to Dec. 10, 2012.  Lazaro said he received a letter from the DMV saying that his license would be suspended for a year beginning on Dec. 30, 2012.

“It was just a simple letter saying they’re [the DMV] suspending my license because I obtained it under fraud,” said Lazaro.  “I thought it was a mistake.”

Lazaro called the DMV in Tallahassee, and soon sought out legal help.  Eventually, he spoke with Forronte Battles, the DMV official handling his case.  Lazaro said Battles could not “understand why a man would want to change his last name to his wife’s.”

The DMV allowed Lazaro an administrative hearing, but according to Spencer Kuvin, the attorney he called, “The hearing officer told him that he could not change his name in the same manner that a woman could.  He would need to get a court order to do it.  Dinh objected to that and said that it was unfair.”

Lazaro received notice on Jan. 14 that the DMV had denied his right to drive.  He decided to ask for a hardship license -- allowable if you’ve been accused of offenses such as drunk driving -- but he was denied because of his alleged fraud.

Lazaro and his lawyer decided to appeal the order in civil court, and they called the media.  Two days later, Battles called, saying that the DMV would restore Lazaro's driving privileges if he provided documentation of his name.  It took less than an hour for the DMV to scan Lazaro's documents, including his new passport.  He was then issued a transcript saying the infraction had been removed.

Kuvin said the DMV “did a full about-face.”  He said there are currently nine states that allow a man to change his last name to his wife’s, including California, Georgia, Hawaii, Iowa, Louisiana, Massachusetts, New York, Oregon and North Dakota.

“Why should a man go through all of that when a woman can walk to the DMV office with $20 and say, ‘I’m married.  Can I change my name?’” said Kuvin.  “No one has tested the the law going backwards.  It’s an entirely new concept now that society has tried to bring women’s equal rights up to the level of a man.”

Copyright 2013 ABC News Radio

Thursday
Oct042012

Government Makes Arrests for $430 Million in Health Care Fraud

iStockphoto/Thinkstock(WASHINGTON) -- Nearly 100 people have been arrested in a series of raids targeting health care fraud on a massive scale. Doctors, nurses, even top hospital administrators in eight cities in seven states were arrested in connection with separate scams totaling $430 million -- nearly a half billion dollars in pilfering. All kinds of fraud are alleged, much of it involving false billing for services that were unnecessary, or never even rendered.

"Today's enforcement actions reveal an alarming and unacceptable trend of individuals attempting to exploit federal health care programs to steal billions in taxpayer dollars for personal gain," said Attorney General Eric Holder during a press conference in Washington, D.C. "Such activities not only siphon precious taxpayer resources, drive up health care costs, and jeopardize the strength of the Medicare program -- they also disproportionately victimize the most vulnerable members of society, including elderly, disabled and impoverished Americans."

Ninety-one alleged fraudsters were targeted in cities that include Los Angeles; Miami; Dallas; Houston; Tampa; Baton Rouge; Chicago; and Brooklyn, N.Y. Together, those indictments charge more than $230 million in home health care fraud, more than $100 million in mental health care fraud, more than $49 million in ambulance transportation fraud, and millions more in other frauds. The defendants charged are accused of various crimes, including conspiracy to commit health care fraud, health care fraud, violations of the anti-kickback statutes, and money laundering.

"Today's coordinated operation demonstrates that law enforcement is flexible enough to address health care fraud in its many evolving forms," said HHS Inspector General Levinson. "When home health agencies, durable medical equipment companies, pharmacies or other health care providers are suspected of breaking the law, they can expect to be caught and held accountable."

Some of the government accusations involve allegations of stunning audacity.

According to the Justice Department, seven individuals are charged in Houston for their participation in a fraud scheme at a hospital that led to $158 million in fraudulent billing for community mental health center services. "The defendants who served as administrators at the hospital paid kickbacks -- in the form of cigarettes, food and coupons redeemable for items available at the hospital's 'country stores' -- to Medicare beneficiaries in exchange for those beneficiaries' attendance at the hospital's partial hospitalization programs (PHP)," Justice Department officials said. "Allegedly, beneficiaries watched television, played games and engaged in other non-PHP activities rather than receiving the services for which the hospital billed Medicare."

"In Brooklyn, 15 individuals, including one doctor and four chiropractors, are charged for their alleged participation in various fraud schemes involving a total of $23.2 million in false billings. In one case, nine defendants, including a medical doctor, are charged with participating in a fraud scheme at Cropsey Medical Care PLLC which led to approximately $13.8 million in fraudulent billing for physical therapy and related services. According to court documents, the defendants paid cash kickbacks to Medicare beneficiaries in exchange for physical therapy that was not medically necessary and on some occasions never provided to beneficiaries."

"In Baton Rouge, four defendants, including a licensed practical nurse, are charged for their roles in fraud schemes involving approximately $2.4 million in false claims for medically unnecessary durable medical equipment."

Since its inception in March 2007, the federal strike force has charged more than 1,480 defendants who collectively have falsely billed the Medicare program for more than $4.8 billion.

Copyright 2012 ABC News Radio

Tuesday
Oct022012

Voter Registration Fraud from GOP-Backed Firm Spreads

iStockphoto/Thinkstock(WASHINGTON) -- A GOP-backed consulting firm may have submitted "hundreds" of faked voter registration forms in Florida, according to the Florida Secretary of State.

The GOP cut ties with the third party voter registering company Strategic Allied Consultants on Thursday after the Palm Beach County elections supervisor flagged 106 of the firm's registration forms for having similar handwriting, incorrect addresses and incomplete information.

Since then, elections officials in nine Florida counties have unearthed hundreds of possibly fraudulent registration forms.

The firm claims the issue stemmed from one employee, who was fired on Sept. 15, but county election officials claim the fraud was more widespread, stretching across counties that are more than 500 miles apart.

"I don't subscribe to the theory that this was the action of one single individual who was able to get into more than half a dozen counties from one end of Florida to the other," said Paul Lux, the Okaloosa County Election Supervisor.

Lux said that out of 2,200 forms that Strategic Allied workers submitted, he and his staff have found about three dozen that appear to be faked.  Some have signatures that do not match the names, others are only partially completed and a handful of forms have addresses that do not exist, he said.

"The problem is when you pay someone to do something like this, it kind of lends itself to what do you do to get paid?" Lux said.

The Republican Party of Florida paid Strategic Allied Consultants $1.3 million to register voters starting in July.  State party spokesman Brain Burgess said the Republican National Committee asked the state party to hire the consultants and paid for the firm.  Before hiring the consulting group, Burgess said Florida Republicans relied solely on volunteers to register voters.

Burgess said the party first learned about the supposed fraud more than one week after the firm fired one of its Palm Beach area workers for allegedly faking the voter forms.

Two days later, the Republican National Committee cut ties with the firm and asked state party officials in four other states to do the same.  Strategic Allied Consultants was registering voters on behalf of the RNC in five battleground states: Florida, Virginia, North Carolina, Colorado and Nevada.

North Carolina election authorities have flagged five possibly fraudulent forms that the GOP-backed consultant firm submitted.  The state's chief election official Gary Bartlett said he believes it was an isolated incident because all five came from the same county.

None of the forms Strategic submitted in Colorado or Virginia have been flagged and the Nevada Secretary of State's office would not confirm or deny whether it was investigating any allegedly fraudulent forms.

But while Florida investigates these supposedly fraudulent registrations, election officials said they are not concerned that poorly filed forms will result in fraudulent ballots.

"I think the likelihood of that is very, very slim," Lux said.  "At the end of the day we aren't talking about fraudulent people getting on the voter rolls, we are taking about a lot of busy work."

Copyright 2012 ABC News Radio

Thursday
Aug162012

'Millionaire Matchmaker' Client, Convicted Fraudster, Sentenced to Federal Prison

Hemera/Thinkstock(TAMPA, Fla.) -- Michael Prozer III, who once appeared on the reality TV show The Millionaire Matchmaker and later pleaded guilty to federal fraud charges, has been sentenced to eight years in federal prison.

Prozer appeared on season two of the hit Bravo series that matches single wealthy people with potential spouses.

He was sentenced Thursday to eight years and six months in prison after pleading guilty in April to federal charges that he conspired to commit mail, wire and bank fraud, and made a false statement to a financial institution.

The 38-year-old Tampa, Fla., man admitted he swindled Park Avenue Bank, a now-defunct Georgia institution, out of a $3 million loan that he never repaid. Prozer paid a co-defendant $25,000 to falsify a document claiming he had more than $21 million on deposit that could be used as collateral. No such funds existed, according to the local U.S. Attorney's Office.

During his appearance on the Bravo show, Prozer, who is the father of two young boys, told television audiences that he was the millionaire CEO of Xchange Agent Inc., an online payment service for people in South America. He also claimed to own a mansion and private jet.

Prior to his guilty plea, Prozer had maintained his innocence, but said in court on Thursday that he took "responsibility for what happened," the Tampa Tribune reported.

Fedor Stanley Salinas, 36, of Bethesda, Md., also pleaded guilty in April to conspiracy to commit mail, wire and bank fraud. Salinas, who was a financial specialist at Wachovia Bank in Langley Park, Md., provided the false letter of credit stating Prozer had more than $21 million on deposit, the U.S. Attorney's Office said.

Salinas was sentenced to 27 months in prison, after which he will be deported to Ecuador, the Tribune reported.

Copyright 2012 ABC News Radio

Friday
Jul272012

Florida Authorities Arrest Fugitive Nightclub Owner Wanted for Alcohol Scam

Alex Simchuk is seen in this undated booking photo. Miami Police(MIAMI) -- A fugitive night club owner who allegedly used beautiful women to defraud wealthy men in an alcohol scheme is scheduled to appear in Miami federal court Friday.

Alec Simchuk, 45, was arrested at Miami International Airport on Thursday by the FBI and Homeland Security Investigations without incident, said Special Agent Michael D. Leverock.

In total, the FBI said 88 men were preyed upon by a crime ring that illegally brought in attractive women from Eastern Europe and used them to lure men from Miami hotspots like the Hotel Delano, Clevelander and Fontainebleau to shady clubs nearby where the girls plied their alleged victims with liquor, forged their signatures and charged them "exorbitant prices" for alcohol. Simchuk, who is from Latvia, faces pending federal charges for his role in the scheme.

John Bolaris, a former weatherman in Philadelphia who fell victim to the crime ring, told 20/20 last month how he was first approached by two women at a South Beach bar during his 2010 vacation.

"They came across very cutesy, and very sincere, and very nice, like the girls next door," Bolaris said "This wasn't a hooker-type thing."

But when a $43,712.25 charge hit his American Express card, Bolaris knew something about those nights he could not remember wasn't right.

After spending 13 months and more than an estimated $1 million investigating the case, the FBI staged a birthday party at one of the clubs to arrest the bar girls, often referred to as b-girls, and their managers.

Although Simchuk and several of b-girls already had returned to their native countries, an officer who had infiltrated the ring as a "dirty cop" invited all the remaining suspects to attend his pretend "birthday party" in April at Club Tangia.

The FBI raided the club fully armed, arresting 16 suspects that night, including almost a dozen b-girls and a handful of male managers and accountants.

Simchuk had already fled to his native Latvia at the time of the raid.

It was unclear what prompted him to return to Florida on Thursday.

Copyright 2012 ABC News Radio

Tuesday
Jul172012

Dozens Arrested In Massive Prescription Drug Scheme

US Department of Justice(NEW YORK) -- Four dozen people have been charged in one of the largest drug-diversion schemes ever, a federal prosecutor said Tuesday.  It is estimated to have cost taxpayers a half-billion dollars.

“The defendants worked a fraud on Medicaid, a fraud on pharmaceutical companies, a fraud on legitimate pharmacies, a fraud on patients who unwittingly bought second-hand drugs and ultimately a fraud on the entire health care system,” said Preet Bharara, U.S. Attorney for the Southern District of New York.

The fraud started on the streets of New York where AIDS patients sold pricey drugs that they received for free through Medicaid.

“People with real ailments were induced to sell their medications on the cheap rather than take them as prescribed,” said Janice Fedarcyk, Assistant Special Agent in Charge of the FBI field office in New York.

Buyers would pay $50 for medicine that cost Medicaid $650 per bottle.

“In any population there may be people who, notwithstanding the fact that they need to take medication, are willing to sell that medication if they’re in dire straits,” Bharara said.

Over seven years, according to court documents, the criminals exploited the difference between the cost to the patient of obtaining the prescription drugs through Medicaid, which was usually nothing, and the hundreds of dollars per bottle that pharmacies paid to purchase those drugs to sell to their customers.

Authorities said they dismantled a “national, underground market” for some of the most expensive drugs available to treat HIV, schizophrenia and asthma.  The pills ended up in Texas, Florida, Nevada, Utah and Alabama.  From there they were resold to pharmacies across the country.

The FBI seized more than $16 million worth of second-hand prescription drugs, comprised of more than 33,000 bottles and more than 250,000 loose pills, kept in uncontrolled and sometimes egregious conditions.

“End users of the diverted drugs were getting second-hand medication that may have been mishandled, adulterated, improperly stored, repackaged and expired” Fedarcyk said.

In many cases authorities seized the drugs before they were sold to unsuspecting consumers but the FBI has asked anyone who may have purchased second-hand prescription drugs to call an FBI hotline at 212-384-3555.

Copyright 2012 ABC News Radio

Friday
Jul132012

Three Women Arrested in Massive Counterfeit Coupon Ring

Jupiterimages/Thinkstock(PHOENIX) -- Phoenix police have arrested three women believed to be involved in the largest counterfeit coupon scam in U.S. history.

The Phoenix Police Department, aided by the Coupon Information Corporation and some of the at least 40 wronged manufacturers, conducted an investigation to end the scam that police say has been operating for at least four years.

In the past four years, manufacturers became aware that copies of their coupons were being produced. They asked for the help of private investigators and the Coupon Information Corp. to find the source of the copies.

The investigation led them to Phoenix, where the properties of Robin Ramirez, Amiko Fountain, and Marilyn Johnson were raided Tuesday.

Investigators found $25 million in forged coupons in those raids. “That’s $25 million worth of counterfeit just sitting around their daily operations on a random day. You have to wonder how much money passed through their business,” said Bud Miller, executive director of Coupon Information Corp.

Police learned that Ramirez, who they consider the ringleader, had been mailing valid coupons to an international source that counterfeited mass quantities of them. The forged coupons were primarily sold on Ebay and her website, savvyshoppersite.com.

These coupons offered large discounts on products, even making some free, resulting in catastrophic losses for the manufacturers.

Police don’t yet know how enormous those losses are, and probably won’t for a while given the scale of this operation. Investigators found that Ramirez had at least four online accounts and 12 bank accounts.

“The Coupon Information Corp. says that manufacturers are losing tens of millions of dollars in coupon fraud. We’re finding evidence that makes [Ramirez] a main player in this type of fraud,” Holmes said.

Miller echoed how enormous this scam was. “Make no mistake, this was run as a business. These were not amateurs.”

Ramirez is being held in jail on a $450,000 bond, while Fountain and Johnson have $250,000 bonds. None of the women have criminal records.

The charges they face include fraud, forgery, counterfeiting and operating a criminal enterprise.

Copyright 2012 ABC News Radio

Tuesday
Jun262012

Fallen Soldier’s Picture Used in Craigslist Scam

KATU/ABC News(PENSACOLA, Fla.) -- An Oregon father was angered to find an image of his son, a fallen soldier, posted on Craigslist as part of a scam to collect money for a fictitious wounded soldier.

“It’s disheartening. This just seems to be really low to take someone’s reputation and memory and tarnish it to make money,” said Dr. Craig Fennerty.

His son, Sgt. Sean Fennerty, died in Iraq in 2007 after being hit by a roadside bomb. A photo from Fennerty’s obituary was lifted and used in the posting on the Pensacola, Fla., Craigslist website.

The ad, which Fennerty said was removed Monday, claimed the man pictured smiling in a helmet and fatigues was Chris Fennery, a soldier who had lost both legs and needed help paying his medical bills. A link was provided to a donation site and readers were encouraged to share the posting on Facebook and Twitter.

Fennerty said he was made aware of the photograph after a local newspaper investigated the scam and someone who knew his son recognized the picture.

He said he contacted Craigslist but received no response or apology.

“It sure took a curiously long time [to take it down],” Fennerty said. “I want [Sean] remembered for what he did, which was honorable and patriotic. Now his memory is somewhat attached to a financial scam and there’s an element of anger.”

Craigslist confirmed to ABC News the post had been removed.

No arrests have been made and it could not be immediately determined how much money was collected by the fraudulent site.

Copyright 2012 ABC News Radio







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