White Collar Crime

Identity Theft/Financial Theft Crimes on the Increase

Published on: August 9, 2010 | by Lasnetski Gihon Law

A recent report by the U.S. Department of Justice, Bureau of Justice Statistics, shows that identity theft, also referred to as financial theft, crimes increased as of 2007 when the most recent statistics were compiled. According to the report, 7.9 million households, or 6.6%, report that at least one member was a victim of some type of identity theft in 2007. That was a major increase over the previous two years.

The Bureau defined identity theft as the unauthorized use or attempted unauthorized use of a credit card or other financial account or misuse of personal information. The most common type of identity theft is the unauthorized use or attempted unauthorized use of one’s credit card. The average loss incurred by victims of identity theft was $1,830 in 2007 according to the report.

State Attorney’s Office Gives Back Millions in Florida Asset Forfeiture Case

Published on: July 27, 2010 | by Lasnetski Gihon Law

In a recent asset forfeiture case involving a client of the criminal defense and litigation law firm of Lasnetski Gihon Law, the state attorney’s office in South Florida agreed to return approximately $2.5 million of forfeited funds to the client, which constitute approximately 90% of the funds originally seized by the state.

In this case, Lasnetski Gihon Law’s client was a legitimate business in South Florida. The company was operating normally when the president learned that its main operating account had been frozen by law enforcement officials. The company was constantly ordering merchandise and paying vendors so that operating account was crucial for the normal operation of its business on a daily basis. However, with no notice of any kind, the state severely handicapped the business by seizing, and freezing, that account. The terms of the seizure allowed funds to be deposited into the bank account, but no money could be taken from that account. As a result, the company was at risk of bouncing checks to customers and vendors and was unable to make the regular payments required to make payroll and run the business.

After the initial sabotage of the company’s bank account, we learned that the state was accusing the company and its president of money laundering and money structuring. Money laundering occurs when a person or company obtains money that comes from an illegitimate source (such as drug money) and runs that dirty money through a business and mixes it with the business’s legitimate stream of income in a bank account in order to hide the source of the money, or clean it. Money structuring occurs when a person or company receives cash in excess of $10,000 and breaks that cash into lesser amounts to avoid the financial reporting requirement. When a business receives cash in an amount greater than $10,000, that business is required to prepare and file a form 8300 which provides identification information about the person providing the cash. The purpose of this requirement is to provide information to the government about people dealing in large amounts of cash so they can investigate the source of the cash. If a company receives $12,000 in cash from a customer and deposits $7,000 one day at one bank branch and $5,000 another day at a different branch, that is money structuring if it is done to avoid the financial reporting requirement.

Federal Authorities Announce Results of Mortgage Fraud and Financial Crimes Directive

Published on: July 19, 2010 | by Lasnetski Gihon Law

The federal government recently announced the results of a concentrated effort to arrest, prosecute and seek financial penalties from people across the country for financial crimes, including a specific emphasis on mortgage fraud cases. As we have stated several times on our criminal defense lawyer blog, the federal government (and the local state attorney’s office to a lesser extent) has significantly increased its focus on mortgage fraud and other financial crimes cases in light of the drastic decline in the value of real estate and the bailouts of financial companies. According to the government’s press release, the government’s Financial Fraud Enforcement Task Force (which is responsible for criminal investigations and civil enforcement of mortgage fraud and other financial crimes cases) has made 485 arrests over the last few months that relate to more than $2.85 billion in losses.

Based on comments by the Obama administration and the fact that mortgage fraud, real estate issues and bank problems continue to be hot topics in the news, we can expect the government to continue to focus its efforts and resources on mortgage fraud and other financial crime cases.

Jacksonville Beach Company Indicted in Federal Court on Fraud Charges

Published on: July 6, 2010 | by Lasnetski Gihon Law

Several Employees of United Directories, a company located in Jacksonville Beach, Florida, were indicted in federal court for allegedly defrauding businesses out of more than $400 million by allegedly sending fraudulent bills for Yellow Pages advertisements. Federal law enforcement officials said United Directories and its employees sent the false Yellow Pages advertisement bills of several hundred dollars each to more than 100,000 companies across the country over a four year period.

Two of the charges include mail fraud and money laundering. The federal government will charge someone with mail fraud any time a person is alleged to have used the mail to commit or facilitate fraud. Using the mail as part of a scheme to defraud confers jurisdiction upon the federal government in a criminal case. Money laundering involves taking money that is known to come from illegal activity or an illegal source and mixing it with legitimate money in an attempt to conceal the source of the money, or clean it. When this kind of money is involved in an alleged fraudulent scheme, the potential penalties can be quite severe.

White Collar Crime Prosecutions Were Up in 2009

Published on: May 11, 2010 | by Lasnetski Gihon Law

Recent statistics show that arrests and prosecutions for white collar crimes have markedly increased in the U.S. as of 2009. For instance, on a month to month basis, white collar crime prosecutions increased by an average of 8.8% in 2009 from the prior year and almost 20% from five years ago.

Two Florida districts were among the federal districts with the largest number of white collar cases per capita, but those were the Southern District and the Northern District. Jacksonville is in the Middle District of Florida. In Federal District Court cases, bank fraud was the most common lead charge. Wire fraud and mail fraud, which can consist of any number allegedly fraudulent activities, were the second and third most common lead charged.

Police Make Arrests in Jacksonville for Food Stamp Fraud

Published on: March 19, 2010 | by Lasnetski Gihon Law

Law enforcement authorities in Jacksonville and throughout Florida made several arrests of convenience store owners for alleged food stamp fraud according to an article on Jacksonville.com. The article indicates that at least four Jacksonville convenience store owners were arrested for food stamp fraud relating to the Ethio Shell station and the M&Y Food Store and at least 17 more people were arrested across the state. The arrests were apparently part of an ongoing undercover operation into alleged food stamp fraud with more arrests likely according to the article.

The food stamp system in states across the country, also called the Electronic Benefit Transfer system, authorizes people to purchase certain items from stores that are authorized to accept food stamps. In the past, the food stamps were actual paper coupons, but now the system has been modernized so that people in the food stamp program get a card that looks like a regular credit or debit card.

Traditional food stamp fraud involves people lying on their application for food stamps and receiving the benefits when they were not entitled to receive them. However, in this case it appears that the Florida Department of Law Enforcement (FDLE) was looking into a different kind of possible food stamp fraud. Because food stamps are only permitted to be used for certain merchandise, it is against program rules and the law for food stamp recipients to use, and store owners to accept, food stamps for unauthorized items such as liquor, cigarettes and prescription drugs.

Florida State and Federal Governments To Increase Health Care Fraud Prosecutions

Published on: March 9, 2010 | by Lasnetski Gihon Law

Based on the tone and substance of a recent speech and press release from Eric Holder, the federal government plans to step up investigations and prosecutions of medical professionals for health care fraud. Mr. Holder made it clear that the government considers health care fraud one of the country’s “most destructive” and “widespread” challenges. As a result, the federal government has created a couple of task forces specifically conceived to deal with health care fraud cases. Mr. Holder is also asking state and local law enforcement agencies to assist the federal government in making health care fraud cases and make their own cases.

Health care fraud, also referred to as Medicare or Medicaid fraud, can take several forms. Some of the more common accusations of health care fraud involve claims that doctors are charging the government for medical services or equipment that were not necessary or doctors are charging the government for medical services or equipment that were not provided. Investigators will look for what they consider to be excessive or unusual billing practices when investigating health care fraud cases.

According to the government, approximately $60 billion in public and private health care spending is lost each year to health care fraud. As a result, the government is increasing its budget to fight what they perceive to be health care fraud. In 2010, the federal government increased the health care fraud budget from $200 million to $300 million. As expected, health care fraud cases have increased. In the six months prior to the speech and press release, 60 health care fraud cases were filed and over 200 people were charged with health care fraud related crimes.

Jacksonville, Florida Man Arrested for Bank Fraud

Published on: February 15, 2010 | by Lasnetski Gihon Law

A Jacksonville, Florida man was arrested for bank fraud, according to an article on News4Jax.com. The article indicates that the suspect was getting assistance from bank employees who provided the suspect with ATM and PIN information. The suspect then allegedly would deposit fraudulent checks through the bank ATM’s and withdraw the cash before the bank realized the checks were not valid. Jacksonville police estimated that the suspect took more than $300,000 in the scheme.

We have seen several of these kinds of fraud cases along with similar cases involving fraudulent checks and ATM cards. While these types of schemes do exist, they are not always easy to prove. People on juries expect that ATM machines have surveillance cameras and checks have fingerprints. They expect to see concrete proof of who was involved. However, those important elements of proof are often missing from these investigations. Each case needs to be analyzed to see exactly what can be proven. It is one thing to prove that the bank suffered a loss but quite another to prove exactly how it happened and who was responsible. The money and customer information that are involved in these cases often pass through several hands. It is up to the police and the state to prove beyond a reasonable doubt which of those people are responsible for the crime.

Federal Law Enforcement Arrest 26 Doctors and Medical Providers for Medicare Fraud

Published on: January 3, 2010 | by Lasnetski Gihon Law

Federal law enforcement officials arrested 26 doctors, nurses and other health care providers in Miami, New York and Detroit for Medicare fraud according to a recent article. We are also aware of similar arrests made recently in the Jacksonville, Florida area. According to the article, the alleged Medicare fraud was committed in several ways. Medicare fraud typically involves a doctor or other medical provider billing Medicare for services that were never performed or required, billing for unnecessary medical equipment or billing at an excessive rate.

In these cases, the suspects allegedly committed Medicare fraud by billing for expensive shoe inserts while providing a much cheaper version to the patients, billing for expensive treatments that were not medically necessary, submitting old ultrasound readings that were found at another doctor’s office and billing for expensive home-care visits for homeless people or people who were paid to fake symptoms. The article indicates that the total amount of the Medicare fraud cost taxpayers approximately $16 million.

Federal Law Enforcement Authorities Make Twenty-Four Mortgage Fraud Arrests in Jacksonville, Florida

Published on: November 10, 2009 | by Lasnetski Gihon Law

Several times, we have discussed the trend we have seen towards more federal investigations and arrests in mortgage fraud cases in Florida and Jacksonville. Federal authorities are responding to the tremendous meltdown in the housing markets and numerous mortgages that have gone unpaid. In many local U.S. Attorney offices in Florida, mortgage fraud cases used to occupy a relatively small percentage of the caseload. However, since the mortgage and housing crisis, some offices in Florida have so many mortgage fraud cases that all of the prosecutors have one or more of them.

The trends towards increased federal prosecution of mortgage fraud cases certainly includes the Jacksonville, Florida market. According to a recent article on News4Jax.com, there were twenty-four recent mortgage fraud related arrests in Jacksonville. There were over one hundred such arrests throughout Florida. Florida is obviously a major target for mortgage fraud related criminal cases due to the sheer volume of real estate and real estate transactions in the state. For some reason, many people consider Jacksonville the number one city in Florida for mortgage fraud.

However, the crime of mortgage fraud is often not black and white like some other crimes. What one prosecutor or FBI agent calls mortgage fraud, someone else may call good business or a misunderstanding on behalf of one of the parties to the mortgage transaction. Whether a transaction is a mortgage fraud crime or not may depend on what disclosures were made, whether verbal or in writing. There are often honest and legitimate differences of opinion between what one side considers a legitimate way of conducting business and the other side considers a serious felony crime. When law enforcement casts the net of arrests so wide so quickly, it is certainly likely that many of these cases fall on the legitimate business side of the line.