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FRAUDBARON.com
The Anti-Fraud Professionals'
Source for Fraud News
Source for Fraud News
| #518 Updated: 12/05/07 10:19 a.m. ORANGE COUNTY MAN CHARGED WITH FRAUD AND MONEY LAUNDERING FBI.gov | 11/30/07 | Press Release An Orange County man was charged with wire fraud, mail fraud and money laundering in a scheme in which victims in California, Colorado, and throughout the United States, collectively lost more than $1.5 million, announced Salvador Hernandez, Assistant Director in Charge of the FBI in Los Angeles, and Thomas P. O'Brien, United States Attorney in Los Angeles. Terrance D. Murphy, 60, formerly of Mission Viejo, California, was arrested yesterday after surrendering to agents with the FBI in Orange County. The indictment charges Murphy with eight counts of mail fraud, one count of wire fraud, and five counts of money laundering. The indictment alleges that Murphy took money from victims with promises that their investment would be used to make loans to companies in need of working capital. In return, Murphy promised victims that they would receive their principal, plus 10% interest. In addition, Murphy promised victims that they would receive shares of stock in the companies. Murphy allegedly told victims that they had a right to a refund of all their money on 72 hours notice. Murphy also allegedly told victims that he would personally guarantee their investments with funds he held in offshore accounts, or with stock he owned in one of the companies. Murphy is also alleged to have told victims that the value of the shares of stock they would receive would increase dramatically; in some instances, anywhere from one dollar to sixty dollars per share, within a short period of time. The indictment alleges these claims were false. Murphy is charged with spending victims' money on cash payments to himself and items for his own personal use, including the purchase of luxury vehicles such as Porsche and BMW automobiles, personal insurance and furniture. In most cases, victims did not receive any stock as promised by Murphy. When victims requested refunds, they were denied. Victims did not receive their principal, or the 10% interest as promised by Murphy. In addition, the indictment alleges that Murphy did not have money in offshore accounts to guarantee the security of the victims' investments, nor could Murphy guarantee any investments with stock he owned in one of the companies because the shares he held were not transferable. A grand jury in Santa Ana, California, returned the indictment on November 28, 2007. Murphy surrendered to authorities and made his initial court appearance on November 29. He was ordered released on $15,000 bail. His arraignment on the charges is set for December 10, 2007, in federal court in Santa Ana. If convicted, Murphy faces a maximum statutory penalty of 250 years in federal prison. An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court. Canada's Fraud Squad Hindered by Laws, Leadership, Report Says bloomberg.com | 12/4/07 | Joe Schneider Dec. 3 (Bloomberg) -- Canada's commercial crime unit is hindered by laws that make it tough to prosecute fraud, lengthy investigations that yield few results and high employee turnover, the former head of the Office of the Superintendent of Financial Institutions told the government in a report. The Royal Canadian Mounted Police's Integrated Market Enforcement Teams must investigate more, smaller, fraud cases that result in charges and convictions or face further public pressure to shut down, Nick Le Pan said in the report, released by the RCMP today. Since inception in 2003, the commercial crime unit won a conviction in the only fraud charge it brought. Michael Mitton, who was convicted of 103 prior fraud charges, pleaded guilty in March to fraud and money laundering in a scheme to drive up the shares of Pender International Inc. Ontario Superior Court Judge Edward Then sentenced Mitton to seven years in prison. ``The IMET should be producing more results, more quickly,'' Le Pan wrote. ``Without at least some charges and convictions, the goal of promoting confidence in Canada's capital market cannot be met.'' Canadian laws make it tougher to prosecute fraud than those in the U.S. or the U.K., Le Pan said. Canadian police can't compel people not charged with a crime to testify during an investigation, even though they may have relevant information. Police also can't charge people in stages, as the U.S. can with superseding indictments. ``It is clear to me that Canada's legal system hampers timely investigation compared to what is possible in the U.S. or the U.K.,'' Le Pan said. ``I also believe that the U.S. has been more aggressive than Canada in using tools that do exist in both countries. Partly it is attitude.'' Le Pan noted that of the 71 RCMP officers who held positions in IMET, 24 have left. All the officers in charge of the IMET units that started the program quit. More than a fifth of the jobs in IMET remain unfilled, Le Pan said. Winning more convictions would help retain people, Le Pan said. He also recommended paying investigators more. RCMP Commissioner William Elliott said in a statement the police force already has begun to implement some of the recommendations in Le Pan's 66-page report. He didn't provide specifics. ``Although I do not expect immediate dramatic results, clearly we can and must do better,'' Elliott said. U.S. to call Buffett as witness in fraud trial iht.com | 12/3/07 | Lynnley Browning NEW HAVEN, Connecticut: U.S. federal prosecutors intend to call Warren Buffett, the billionaire investor and chief executive of Berkshire Hathaway, to testify against five former senior insurance executives accused of helping the American International Group manipulate its financial statements through $500 million in phony transactions, according to court papers filed Monday. The former executives - four from General Reinsurance, a unit of Berkshire Hathaway, and one from AIG - were indicted by a U.S. grand jury in 2006 on charges of fraud, conspiracy and lying to the Securities and Exchange Commission in connection with what the government calls a scheme to inflate AIG's reserves. Speculation had swirled over whether Buffett, the chief shareholder of Berkshire Hathaway, would testify in the case. Prosecutors made it official Monday when they filed court papers that included him as a government witness. The General Reinsurance defendants are Ronald Ferguson, former chief executive; Elizabeth Monrad, former chief financial officer; Robert Graham, former assistant general counsel; and Christopher Garand, a senior vice president who was chief underwriter. The defendant from AIG is Christopher Milton, who oversaw the company's reinsurance activities. The case against the defendants involves complex reinsurance deals designed to bolster balance sheets. Two other witnesses for the prosecution are John Houldsworth, the former chief executive of Cologne Re Dublin, a subsidiary of General Reinsurance, and Richard Napier, a former senior vice president of Gen Re who oversaw General Reinsurance's relationship with AIG Opening arguments in the trial are scheduled to begin on Jan. 7 in a U.S. courtroom in Hartford, Connecticut. The case is notable because the indictments followed the resignation in 2005 of AIG's longtime chairman, Maurice Greenberg, who was forced out of the company after nearly four decades at the helm amid concerns by AIG's board of the accounting irregularities at issue in the case. In 2006, AIG agreed to pay $1.64 billion to settle accusations by the U.S. and New York State authorities that it had engaged in deceptive accounting. While AIG admitted to wrongdoing with the transactions, Greenberg has not, and the allegations have not resulted in any criminal charges against him. In the past, Buffett has said that he was unaware that the transactions were used improperly. Man sentenced in bank fraud case bizjournals.com | 12/3/07 | Staff Writer Darius Green was sentenced to 41 months in prison on bank fraud charges, U.S. Attorney Catherine Hanaway said Monday. This sentence is to run consecutive to a 36-month sentence Green received in December 2006 for similar offenses, according to a release. Green, 37, of St. Louis, pleaded guilty last September to one felony count of bank fraud. According to Hanaway's release, Green recruited people to open checking accounts at Regions Bank with small initial deposits of $100, and when they obtained the checks for these accounts Green had them write checks for cash. When they cashed the checks, they account holders got a small amount and Green got the rest. The total amount of money that Regions Bank lost during this scheme is approximately $65,754. Former legal secretary sentenced for embezzlement Baron News Shield | 12/4/07 | Staff Writer Judge Robert W. Wing of the Pierce County Circuit Court has ordered former legal secretary Mindi K. Larson, age 33, to serve 5 years probation and 1 year in county jail for her conviction of embezzlement, Attorney General J.B. Van Hollen announced today. During her 1 year sentence in county jail she will have work release privileges, but still be required to pay all court costs. The total restitution amount to be paid will be determined at a later date and will be discussed through a mediator. Larson pleaded guilty to the embezzlement charge on October 8, 2007. According to the criminal complaint, Larson embezzled $95,715 from her former employer, the Brandt Law Office of Prescott, WI. She embezzled the money from 2002-2004, by writing herself payroll checks in excess of the amount she was entitled to and by paying her creditors with checks written on the law accounts. "Financial crimes, such as the embezzlement scheme in this case, are to be taken very seriously," Van Hollen said. "Agents at the Department of Justice's Division of Criminal Investigation and attorneys within our Criminal Litigation Unit are trained to assist in, and when appropriate lead, investigations and prosecutions of white collar crime." The case was investigated by the Department of Justice, Division of Criminal Investigation. The case was prosecuted by Assistant Attorney General Jeffrey Gabrysiak as special prosecutor for Pierce County. Democratic fundraiser Hsu indicted on fraud scheme news.yahoo.com | 12/4/07 | Johnathan Stempel Democratic fundraiser Norman Hsu was indicted by a federal grand jury for swindling investors in a $60 million fraud scheme and making illegal donations to U.S. political campaigns. The 15-count indictment, unsealed on Tuesday in Manhattan federal court, follows similar charges filed in September, in a case that prompted Democratic presidential hopeful Hillary Clinton to return $850,000 in campaign contributions. A lawyer representing Hsu, James Brosnahan, did not immediately return requests for comment. The indictment charges Hsu, 56, with six counts of mail fraud, six counts of wire fraud and three counts of violating the Federal Election Campaign Act, which limits individual campaign contributions. If convicted, Hsu could face 20 years in prison on each fraud charge and five years on each campaign finance charge, as well as fines, U.S. Attorney Michael Garcia said. Prosecutors accused Hsu of cheating investors out of at least $20 million in a Ponzi scheme. They said Hsu recruited victims from 2000 through August 2007 by promising them high returns on short-term investments, and using payments from newer investors to pay off older investors. Prosecutors also said Hsu, in an attempt to raise his public profile and attract more investors, pressured victims to contribute to politicians he supported, and threatened that failure would jeopardize their investment relationships. Hsu also violated federal campaign finance laws by reimbursing people for contributions they made to various candidates on his behalf, prosecutors said. In September, Hsu had been charged with one count of mail fraud, one count of wire fraud, and one count of violating campaign finance laws. He was arrested at a Grand Junction, Colorado hospital on September 6, after failing to appear at a California court hearing. Hsu had been wanted since 1992 after fleeing in the wake of another fraud scheme in which he was accused of bilking about $1 million from 20 investors. He had spent time in Asia before emerging as a donor to Democrats including Clinton, a New York senator, and Barack Obama, an Illinois senator also running for president. On September 10, the Clinton campaign said it would return about $850,000 in contributions from Hsu. Garcia had in September said the campaign had cooperated with his investigation. ________________________ |