Category Archives: Fraud

February 9, 2018

Bank fined $368M for laundering drug money at border branches

“Rabobank had an obligation to shine light on suspected drug traffickers, money launderers and organized crime,” U.S. Attorney Adam Braverman said in a statement. “Instead, this bank deliberately allowed hundreds of millions of dollars of suspicious cash transactions and wire transfers to flow through its branches and took measures to hide this activity from regulators.”

A Netherlands-based bank has agreed to forfeit more than hundreds of millions of dollars for laundering drug money at branches near the California border with Mexico.

The company admitted that several of its Southern California border-area branches laundered money for international drug traffickers, failed to properly investigate the suspicious transactions and then deceived and obstructed federal investigators who were on the verge of discovering the illicit activity.

On Wednesday, the bank pleaded guilty to a felony conspiracy charge in U.S. District Court in San Diego and agreed to forfeit more than $368 million, the largest financial penalty ever levied in a federal courtroom in the San Diego region.

The massive forfeiture sum corresponds to the estimated amount of suspicious transactions that went unchecked over a four-year period, the San Diego Union-Tribune reported.


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January 17, 2018

The Corrupt Politics of Low-Income Housing

State officials gleefully line their own pockets at taxpayers’ expense.

The rent is too damn high—so each year Congress appropriates billions of dollars to address the nation’s collective housing needs. The programs vary from loans to tax credits to straight-up subsidies, but a common feature is that federal taxpayers pony up the dough and then a motley collection of state-level politicians, financing agencies, and housing authorities decide how it’s spent. Can you guess where things go wrong?

In theory, oversight is provided by bureaucrats in Washington tracking every dollar and by local leaders increasing their re-election prospects by providing housing assistance to their constituents as effectively as possible. In practice, the feds turn a blind eye to inefficient uses of the funds while local officials gleefully engage in politically advantageous graft.

Take California Treasurer John Chiang. By virtue of his position on the three-member California Tax Credit Allocation Committee, Chiang exercises enormous influence over who gets $94.9 million each year in federal tax credits intended for developers of low-income housing.


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January 15, 2018

Texas Mayor and Owners of Health Care Company Charged With Health Care Fraud, Money Laundering and Obstruction

According to allegations in the indictment, Mesquias, McInnis, Garza and Pena participated in a health care fraud conspiracy that involved over $150 million in Medicare billings for hospice and home health services.

Four individuals, including a Texas mayor who was a licensed physician and medical director, and three owners of a health care company, were charged in an indictment unsealed today for their roles in a $150 million health care fraud and money laundering scheme. Three of the defendants were also charged with counts relating to obstructing justice and providing false statements.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Ryan K. Patrick of the Southern District of Texas, Special Agent in Charge Christopher Combs of the FBI’s San Antonio Field Office and Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Region made the announcement.

Rodney Mesquias, 47, of San Antonio, Texas; Henry McInnis, 47, of Harlingen, Texas; Jose Garza, 40, of Harlingen, Texas; and Franciso Pena, 82, of Laredo, Texas, were charged in an 11-count indictment filed in the Southern District of Texas. They were each charged with one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering. Mesquias and McInnis were charged with six counts of health care fraud, and Garza and Pena were each charged with one count of health care fraud. Pena was also charged with one count of false statements and one count of obstruction of a health care investigation. Mesquias and McInnis were each charged with one count of obstruction of justice.


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December 26, 2017

Indian National to Be Deported After Profiting $20M by Fraudulently Importing H-1B Foreign Workers

An Indian national who pocketed $20 million by fraudulently importing foreign workers through the H-1B visa program to the U.S. will be deported after he completes time in federal prison.

Raju Kosuri, a 45-year-old Indian-born U.S. resident, pleaded guilty to operating a cheap labor business where he brought nearly 1,000 foreign workers to the U.S. on the H-1B visa through fraudulent applications, according to the Washington Post.

Every year, more than 100,000 foreign workers are brought to the U.S. on the H-1B visa and are allowed to stay for up to six years. That number has ballooned to potentially hundreds of thousands each year, as universities and non-profits are exempt from the cap. With more entering the U.S. through the visa, Americans are often replaced and forced to train their foreign replacements.

Kosuri used his fraud foreign-importing business to bring his wife, 46-year-old Smriti Jharia, to the U.S. on a fraudulent H-1B visa. The two are the parents of an “anchor baby,” the term used to describe a U.S.-born child who is given birthright citizenship despite their parents being foreign nationals.

Kosuri was supposed to be given a tougher sentence, but U.S. District Judge ­Leonie M. Brinkema passed down a mere 28 months for the massive fraud scheme after she said there were issues with the prosecution’s case. When Kosuri completes the sentence, he and his wife, along with their anchor baby, will be deported from the U.S.


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December 13, 2017

Ghanian National Who Pleaded Guilty to Nearly $300,000 Worth of Food Stamp Fraud May Face Deportation

A Ghanian national who pleaded guilty Thursday to conducting nearly $300,000 worth of food stamp fraud may face deportation.

Prosecutors say that Esther Acquaye, 49, who owned Esther’s Fashion Paradise in Worcester, Massachusetts, allowed Supplemental Nutrition Assistance Program (SNAP) recipients to trade their benefits for cash, paying them 50 cents for every SNAP dollar redeemed.

She then pocketed the full value of the SNAP benefits from the federal government.

Acquaye pleaded guilty to several charges, including aiding and abetting food stamp fraud, conspiracy, and trafficking counterfeit goods.

She is expected to be sentenced March 7 and faces prison time and the possibility of deportation because she is a Ghanian national in the U.S. on a green card.

There is no specific sentence that two parties agreed upon in the plea deal, but the federal government asked that Acquaye agree to three years of supervised release following her prison sentence and pay restitution, according to court documents.

Records show that federal investigators began looking into Esther’s Fashion Paradise after they noticed an unusual spike in SNAP benefit redemptions over the span of three months.


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December 6, 2017

Sweden child migrant tests ‘reveal many adults’

A Swedish investigation into migrants claiming asylum as children suggests that three-quarters of those tested were over the age of 18.

Sweden’s national forensic medicine agency checked the age of nearly 8,000 people and found that some 6,600 were 18 or over.

The checks were only carried out in cases where there were doubts as to the person’s age.

Child migrants are less likely to be sent back to their country of origin.

Between mid-March and late October, the agency (Rättsmedicinalverket) carried out a total of 7,858 age assessments.

Of those, examinations suggested 6,628 were 18 or older (84%), and 112 “possibly” 18 or older , The Local newspaper reports.

The Migration Agency has so far made 5,700 decisions on the basis of those assessments. In 79% of those cases, the agency decided to formally consider the applicant as older than they had initially claimed in their asylum application, reports Svenska Dagbladet.


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Former Rep. Corrine Brown Sentenced to Five Years in Federal Prison for Fraud

A judge sentenced former Rep. Corrine Brown, a Democrat, to five years in federal prison Monday after being convicted of mail, wire, and tax fraud in May.

U.S. District Judge Timothy Corrigan said at Brown’s sentencing hearing that she broke the public’s trust by abusing her position for her personal benefit, the Florida Times-Union reported.

“This was a crime born of entitlement and greed, committed to supporting a lifestyle that was beyond their means,” said Corrigan. “Just think of the good that could have been done with that money if it would have been used for its intended purpose.”

Corrigan also sentenced Brown to three years of probation in addition to the five-year prison sentence. Brown’s attorney said Brown plans to appeal her sentence.

Brown was found guilty in May of taking $800,000 worth of funds from a fraudulent charity, One Door for Education, that was supposed to provide scholarships to underprivileged students and using the money to pay for lavish parties, luxury vacations, and shopping sprees.


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November 30, 2017

South El Monte lawyer pleads guilty to $50M EB-5 visa-fraud scheme in San Gabriel

“Defendant Chan got rich by operating a long-term fraudulent scheme during which she manipulated a government program intended to encourage investors and stimulate the U.S. economy,” said Danny Kennedy, assistant director in charge of the FBI’s Los Angeles Field Office, in a statement.

A South El Monte attorney pleaded guilty Monday to federal fraud and money laundering charges stemming from a $50?million visa fraud scheme that gave green cards to Chinese nationals, including criminals on China’s most wanted list.

Victoria Chan pleaded guilty to exploiting the EB-5 visa program, which allows immigrants to the United States to receive green cards in exchange for investing at least $500,000 in an American business that creates jobs.

Chan ran the fraud scheme through a San Gabriel-based business called the California Investment Immigration Fund, according to a statement from the U.S. Attorney’s Office.

Investigators alleged that Chan’s father, Tat Chan, was also involved in running the scheme. Thom Mrozek, a spokesmen with the U.S. Attorney’s Office, said an investigation into Tat Chan’s involvement in the scheme was ongoing, but that there was no pending court case against him.

FBI and federal immigration agents seized records in an April raid at CIIF’s office in the Hilton hotel at 225 West Valley Blvd. in San Gabriel and at homes in Arcadia and South El Monte where Chan family members lived.


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November 27, 2017

The Rise and Fall of a Law-School Empire Fueled by Federal Loans

Don Lively’s mission to offer legal education to students rejected elsewhere is coming unraveled.

Don Lively had a plan to bring more blacks and Hispanics into the practice of law.

Mr. Lively, a professor who is white, set out to open a law school that would take minority students even if they had low test scores or did poorly in college. Using retirement savings, a loan from his father and a check from a retired couple who read about him in a local newspaper, he opened Florida Coastal School of Law in 1996 in Jacksonville.

That school and two others he later helped run—Arizona Summit in Phoenix and Charlotte School of Law in North Carolina—became among the fastest-growing law schools in the country. Half of their students were from minority groups. The for-profit schools became part of a business network called the InfiLaw System, backed by Chicago private-equity investors. Enrollment soared from several dozen at Florida Coastal in 1996 to roughly 4,000 at the three schools combined in 2012.


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October 28, 2017

Billionaire Pharmaceuticals Entrepreneur Indicted in Alleged Fentanyl Fraud Scheme

Federal authorities unveil superseding indictment against six former executives, managers.

Billionaire pharmaceuticals entrepreneur John N. Kapoor was arrested by federal agents at his Phoenix home and charged with leading a nationwide criminal conspiracy to illegally distribute an addictive prescription painkiller—the highest ranking former executive of Insys Therapeutics Inc. INSY -22.64% to be charged in a long-running investigation.

Dr. Kapoor, who co-founded Insys and served as its chief executive until earlier this year, was charged by federal prosecutors with participating in an alleged conspiracy to bribe doctors to prescribe large amounts of the drug, Subsys, a mouth-spray version of the potent opioid painkiller fentanyl that is approved by the Food and Drug Administration to treat cancer-related pain. The conspiracy also allegedly involved defrauding health insurers by misleading them into paying for the drug.

Dr. Kapoor, 74 years old, resigned his operational duties at the company earlier this year but retains a seat on its board and owns two-thirds of its shares outstanding.


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