Former CEO Charged With Embezzling $547,000+ From Employer By Creating Fake Company – August 13, 2020
According to the indictment, Jason Cory was the Chief Executive Officer of an information technology services company. From approximately March 2017 through March 2019, Cory embezzled $547,071.10 from the company by authorizing and directing wire transfers out of its corporate accounts to an entity named Gambit Matrix LLC (Gambit). Cory informed employees that Gambit had performed consulting services for the company, when in reality, Gambit was a shell company controlled by Cory. Cory also controlled the Gambit bank account into which the embezzled funds were transferred, and used them for his personal expenses, including the purchase of a Rolex watch costing $11,630.30. Cory attempted to conceal his embezzlement by lying to employees and board members about his control over Gambit, attempting to persuade people to portray fictitious owners of Gambit, creating social media profiles and email addresses for those fictitious owners, and falsifying documents to substantiate the fictitious work being performed by Gambit.
https://www.justice.gov/usao-mdfl/pr/former-ceo-charged-wire-fraud-and-money-laundering
Former Union Officer And Daughter Charged With Embezzlement Of $40,000+ – August 13, 2020
Linda Rogers was formerly employed at the Jersey City Medical Center as a medical clerk; she also held a part-time position at Local 2254 as its secretary treasurer. She had sole control over the union’s checkbook and savings account. From July 2016 through August 2017, she and her daughter, also a former employee at the hospital, deposited 112 unauthorized checks from the Local 2254’s checkbook to their joint checking and savings accounts, totaling $35,267. From October 2016 through December 2016, Linda Rogers made six telephonic wire transfers from the Local 2254’s savings account, totaling $5,188, into her personal credit card account. None of the expenditures were authorized or for legitimate union purposes. The total loss to AFSCME Local 2254 was $40,455.
https://www.justice.gov/usao-nj/pr/former-union-officer-and-daughter-charged-embezzlement
Employee Provides Access To Hacker So He Could Access Company Network To Steal Proprietary Business Records – August 13, 2020
The evidence at Tyler King’s trial in November 2019, established that King conspired with Ashley St. Andria in 2015 to gain access to the computer network of a New York-based technology company that employed St. Andria. While on the company’s network, King and St. Andria created unauthorized administrator accounts that gave them access to proprietary company information, including real-time access to the emails of senior company executives, personnel files, and financial records.
In response to the company shutting down the fake administrator accounts, King regained access to the network with the assistance of St. Andria, stole proprietary business records, and – through a series of sophisticated steps, including the use of password-cracking programs – bypassed the company’s security measures. In doing so, King illegally used the credentials of two company employees based overseas. The jury convicted King of conspiring to commit computer fraud, computer fraud, and two counts of aggravated identity theft.
Former Employee Of 42 Years Pleads Guilty To $700, 000 Fraud Scheme – August 12, 2020
Sandra Stiner worked at the Rusk County Health and Human Services Department (HHS) for 42 years before retiring in January 2019. While working for HHS, Stiner misappropriated $702,351 during a nine-year time span from June 2010 to January 2019, by creating and submitting fictitious invoices allegedly from a home-based therapy company (R.Y.P.) for nonexistent intensive in-home autism services to two children.
Stiner admitted that she forged the signature of R.Y.P’s founder on various documents and IRS forms to make these documents appear legitimate to Rusk County. Stiner also admitted that she took the name of a CPA and misused it to create a fictitious letter and financial statements for R.Y.P. Stiner created a nominee bank account on June 21, 2010 at Bank of America using the name of R.Y.P. and forged the signature of the founder on the R.Y.P. direct deposit authorization form to make sure the payments came to Stiner and not the real owner of R.Y.P. Based on these fictitious invoices, Rusk County paid $702,351 to Stiner’s nominee bank account over a nine-year period.
Stiner admitted she spent the misappropriated funds on various personal expenditures, including $295,000 in credit card payments, $200,000 in cash advances, $20,000 in iTunes charges for a gaming app called Big Fish Casino, $50,000 in retail shopping expenses, over $41,000 on her house mortgage, and over $18,000 in automobile loan payments.
CEO Pleads Guilty To $100 Million Fraud Scheme – August 12, 2020
Michael Mann operated ValueWise Corporation, based in Clifton Park, New York, as well as subsidiary companies including MyPayrollHR.com LLC. In pleading guilty, he admitted that from 2013 to September 2019, he engaged in a fraudulent scheme to deceive banks and financing companies into loaning his companies tens of millions of dollars. Because Mann could not repay the loans with legitimate business revenues, he expanded the fraud, by stealing and diverting millions of dollars that were entrusted to his payroll companies, and engaging in the daily kiting of millions of dollars among bank accounts he controlled.
Mann’s scheme collapsed in early September 2019, when one of his banks froze his accounts, setting off a chain of events that left his payroll companies unable to make payroll for hundreds of small business customers nationwide.
The fraud scheme caused more than $100 million in losses to banks, financing companies, and other businesses.
https://www.justice.gov/usao-ndny/pr/valuewise-ceo-michael-mann-pleads-guilty-100-million-fraud
Administrative Assistant For Non-Profit Organization Arrested For Stealing $100,000+ Of Donor Checks – August 11, 2020
The affidavit in support of the criminal complaint alleges that Maxine Williams was employed as an administrative assistant by a non-profit organization in the District of Columbia between February 2015 and March 2018. Her job included performing clerical tasks, such as opening mail; processing donation checks; and preparing and mailing checks from the organization to vendors, service providers, and individuals. In March 2018, after the non-profit organization became aware that six donation checks totaling approximately $18,000 had been stolen, it confronted Williams, who admitted to depositing four checks into her Bank of America account. A subsequent investigation revealed that approximately 123 checks payable to the non-profit organization were deposited into Williams’ Bank of America account from approximately February 2016 through December 2017. Those checks totaled $110,830. The investigation also revealed that between approximately November 2015 and May 2016, an additional 21 checks payable from the non-profit organization to individuals and/or a vendor in amounts totaling $11,702 were deposited into Williams’ account.
Border Patrol Agent Arrested And Charged With Drug Trafficking – August 10, 2020
Carlos Passapera is a Border Patrol Agent assigned to the Tucson Sector Ajo Border Patrol Station. On August 9, 2020, at approximately 3:15 AM, Passapera left his residence and drove south to a remote area of the border west of the Lukeville Port of Entry. Passapera then drove to Phoenix Sky Harbor International Airport, where he loaded two duffel bags into another vehicle. Law enforcement agents stopped the driver of that vehicle after it left the airport, and searched the duffel bags. The bags contained multiple packages of substances that field tested positive for the characteristics of cocaine, heroin and fentanyl. The bags also contained approximately 350,000 pills. A sample from the pills field tested positive for the characteristics of fentanyl.
Law enforcement agents took Passapera into custody later that day while executing a search warrant at his residence. During the search, agents found approximately $329,000 in U.S. currency in Passapera’s residence, and an additional $40,000 in the vehicle Passapera used to transport the illegal narcotics.
https://www.justice.gov/usao-az/pr/ajo-border-patrol-agent-arrested-and-charged-drug-trafficking
Former Air Force Base Major / Nurse Sentenced To Prison For Prescription Drug Kickback Scheme – August 10, 2020
According to a felony information filed on September 30, 2019, Romeatruis Moss solicited and received $73,823.06 in return for referring prescriptions for members of the U.S. military to compounding pharmacies that were reimbursed by TRICARE, a health insurance program for military members. Because of resulting cost increases and infringement on patient choice, it is a crime to solicit or receive payments for referrals to health care providers for an item or service that could be paid, in whole or in part, by a federal health care program.
Moss pleaded guilty on October 15, 2019, before U.S. District Judge Patrick R. Wyrick. She admitted that while she was employed in the medical unit at Vance AFB, she gave military members pre-printed prescription pads and induced them to ask their doctors for specific compounded drugs. Moss admitted she then sent the prescriptions or caused them to be sent to specific pharmacies. Moss admitted she was paid a kickback that was a percentage of the gross reimbursement the pharmacies received from TRICARE for filling the prescriptions.
Capital One To Pay $80 Million Fine After Insider Threat Data Breach – August 5, 2020
In July 2019, the bank disclosed that personal information including names and addresses of about 100 million individuals in the United States and 6 million people in Canada were obtained by a hacker. The suspected hacker was a former employee of Amazon Web Services, a cloud provider where the bank had moved some of its data.
The fine, announced by the Office of the Comptroller of the Currency (OCC), punishes the bank for failing to adequately identify and manage risk as it moved significant portions of its technological operations to the cloud.
The OCC said in its consent order that the bank failed to identify and manage risks leading up to the move to cloud storage, and lacked sufficient network security and data loss prevention controls. The regulator also said that when internal auditing did identify issues, the bank’s board failed to hold management accountable.
Former Financial Controller Arrested On Fraud Charge For Allegedly Stealing $5 Million In Company Funds – August 7, 2020
From approximately October 2018 to June 2020, Kevin Mix initiated and authorized approximately 35 wire transfers from the insurance company to his bank accounts and the accounts of shell companies that he created. Mix attempted to conceal the scheme by making false entries in the company’s records, creating fake emails, and making false statements to representatives of the insurance company and the company’s bank, the complaint states.
Mix allegedly used the stolen money to purchase a Lexus RX sport-utility vehicle, a Mercedes-Benz automobile, and real estate.
Former Bookkeeper Sentenced To Prison For $321,000 Fraud Of Employer – August 7, 2020
Nicole Gray began doing financial work for Sutherland Physical Therapy, Inc. (SPT), in Valdosta, Georgia in September 2014 as an employee of Quick Consulting. In her capacity as bookkeeper, Gray also had access to the financials for Sutherland Yoga Studio, LLC (SYS). Ms. Gray was hired directly by SPT three years later, in September 2017. Very shortly after beginning work with SPT, in December 2014, Ms. Gray began to make automated clearinghouse (ACH) payments via the internet and mobile access from two bank accounts belonging to SPT without authorization, to pay-off credits cards that she and her ex-husband used. In August 2017, her scheme intensified when she began creating fraudulent checks without authorization, using SPT bank accounts, payable to herself or her ex-husband. She used several methods to hide her scheme, including removing pages of the monthly bank account statement that showed unauthorized checks written to her from the office and changing the “payee” field in the QuickBooks system from her name to a named legitimate expense to hide the true payee, herself. Gray made a total of 317 fraudulent payments enriching herself or her ex-husband from SPT and SYS accounts until her fraud was discovered in April 2018. In all, the fraud totaled $321,854, including $4,971.62 lost by SYS and $316,882.38 lost by SPT.
Former IT Manager Sentenced To Prison For Embezzling $1 Million Through Shell Company Fraud Scheme – August 7, 2020
Evidence presented in court established that, as IT manager of Big Red Box, William Grisel was responsible for hiring and overseeing the work of several search engine optimization (SEO) companies, which generate internet-search leads for the company. Not long after assuming this role, Grisel created his own fictitious SEO, which he then used to siphon money from the company. Through his criminal scheme, Grisel was able to embezzle $1,049,996.97 from Big Red Box. Because this money went to a fictitious company that provided no customer leads, Big Red Box suffered substantial additional losses in revenue. While Big Red Box was forced to lay off employees, Grisel spent much of the money he stole from the company on lavish trips, cars, and an airplane.
Family Member Steals Trade Secrets From Family Business – August 5, 2020
Bob Hagler and his brother David filed the suit on Feb. 19 against Hagler Group Global and its principal – their brother, Benjamin Hagler Sr. – after discovering the sibling had taken Hagler Systems’ proprietary design files while a separation agreement was being negotiated in 2019.
“For some time there had been disagreements between Bob Hagler, David Hagler, and Ben Hagler, Sr. about the management and strategic direction of the company,” according to court filings. “Ultimately, Bob Hagler and David Hagler came to the conclusion in the summer of 2019 that it would be best for (Hagler Systems) to part ways with Ben Hagler, Sr.”
Benjamin Hagler Sr. was terminated June 14, 2019. His nearly $2.5 million buyout agreement was reached on Sept. 30, 2019, with the understanding the only proprietary information he possessed was “a small amount of information on a personal laptop.”
The lawsuit contends Benjamin Hagler recruited his son, Benjamin Jr., and another former Hagler Systems employee to download 58,430 confidential plans, designs, drawings, specifications and manufacturing instructions from the company’s project-management server.
https://www.augustachronicle.com/news/20200805/federal-court-resolves-augusta-trade-secret-case
A Place for Mom Wins Preliminary Injunction Against Former Employee In Trade Secrets Case – August 5, 2020
Senior living and care referral service provider A Place for Mom (APFM) has won a preliminary injunction against a former employee who allegedly stole trade secrets and used proprietary information to solicit customers for a direct competitor.
Lisa Perkins was hired as a healthcare account executive in 2015, signing confidentiality, non-solicitation and non-competition contracts. She left the company in April, however, saying she was going to “care for her aging mother,” APFM said. The company said it later learned that Perkins left to work for Senior Living Specialists in Addison, TX, a direct competitor.
When APFM reviewed her work email, the company reportedly discovered that six weeks before she resigned, Perkins sent to her personal email account “highly sensitive company records and trade secrets” related to APFM’s customers, referral sources, training materials, and sales and marketing strategies.
Perkins, who was involved in an ongoing dispute with the company over commission payments, according to the court document, said the emails contained non-proprietary and non-confidential information to verify whether the company had paid her all wages due.
APFM filed suit on June 16 in King County Superior Court in Seattle. Discovery revealed that Perkins accessed the company’s sales database 11 times after leaving the company and forwarded one of the company’s lead sourcing reports with “extensive information” about its referral sources, customers and marketing efforts, to her new employer on June 19 after being served with a copy of the summons and complaint.
The complaint also states that Perkins contacted two or more of APFM’s referral sources after leaving the company, communicated with at least one employee about joining a competitor before she resigned, and “stole hard copy documents and copied documents to a jump drive.”
Company Managers, Supervisors, Human Resource Personnel Charged For Immigration Crimes – Largest State Worksite Enforcement Action In Nation’s History – August 6, 2020
These 4 individuals worked at companies where criminal and administrative search warrants were executed, and were 680 illegal aliens were detained.
These individuals were charged with Harboring Illegal Aliens, Representing False Citizenship, Obtaining False Social Security Cards, Lying To Law Enforcement, Wire Fraud, Identity Theft.
Former Federal Government Employee And Active Duty Soldier Admit To Stealing Over $1 Million In Military Equipment – August 6, 2020
An active duty soldier and a former federal government employee at Camp Mabry admitted to stealing and unlawfully selling more than $1 million worth of items from the military installation in Austin, Texas.
Texas National Guardsman Cristal Avila pleaded guilty to one count of theft of government property. Joseph Mora, former Program Analyst at the U.S. Property and Fiscal Office warehouse, pleaded guilty to the same charge. Avila and Mora admitted to conducting a scheme to remove large quantities of sensitive military grade equipment, including rifle scopes, infrared laser aiming devices and thermal night vision goggles, from the facility without authorization. Mora later sold many of the stolen items on eBay and by other means.
Former Company Accounting Manager And Other Individual Charged In $1 Million Embezzlement Scheme – August 6, 2020
Between October 2010 and August 2016, Ruby Baroni and Rolando Veloso conspired with others to carry out a large-scale, multifaceted scheme to embezzle funds from an area guided-tour company. In some instances, Baroni, who served as the company’s accounting manager, cut checks drawn against the company’s checking accounts made out to either other company employees or fictitious individuals and then cashed those checks herself. In other instances, Baroni cut checks made out to various shell business entities formed by Veloso, none of which ever performed any services for the company; Veloso then deposited or cashed those checks for his personal use. Veloso also made substantial charges for his shell business entities on a company credit card issued to another conspirator, none of which reflected any actual work performed for the company by any of those entities. In all, Baroni, Veloso, and their conspirators embezzled over $1 million from the company.
https://www.justice.gov/usao-nj/pr/two-charged-1-million-embezzlement-scheme
Former Bank Vice President And Mortgage Broker (Mother & Stepson) Sent To Prison For $6 Million+ Fraud Scheme – August 6, 2020
Leyla Wydler was the owner of several Houston-area businesses including Globan Mortgage Company, Casa Milagro and First Milagro. In the spring 2007, Carlos Wydler went to work at a California bank as a vice-president in charge of the bank’s credit card department. Shortly thereafter, the Wydlers developed a scheme in which Leyla Wydler would send credit card applications to the bank for Carlos Wydler to approve. He approved the applications for high credit lines and then, calling them “balance transfers,” cash advanced the entire credit line to the borrower via wire or check with Leyla Wydler taking a fee from the borrowers’ loan proceeds. During trial, the evidence demonstrated that the Wydlers were also developing a real estate project in Houston at the time and used the “balance transfer” program to finance investors in their project.
For approximately a year, hundreds of loan applications were faxed or emailed from Leyla Wydler’s business in Houston to Carlos Wydler at the bank in California. Many of these contained falsified income information and falsified supporting documents about borrowers’ employment, income and assets. Two eyewitnesses testified they saw Leyla Wydler routinely insert falsified income numbers, sometimes using white-out, on loan applications.
Leyla Wydler skimmed more than $1.4 million from loan proceeds, with Carlos Wydler approving approximately $600,000 more in unauthorized loans to family members. More than half of the Texas borrowers run through the Wydler-family business in Houston defaulted on their loans. The bank sustained a loss of more than $6 million
At the hearings, the court heard from the bank’s president who testified it was the largest fraud loss in the bank’s 113-year history
Former Homeland Security Investigator Sentenced To Prison For Money Laundering – August 5, 2020
While working as a federal agent specializing in the investigation of bulk cash smuggling, Tyrone Duren stole money from individuals smuggling drug proceeds to Mexico. Duren then laundered those funds by depositing them into personal and business accounts, and used the stolen cash for personal purchases. Over several years, Duren used his position as a federal agent to place GPS trackers on vehicles used to transport proceeds from drug sales. Duren then took some of the drug money after it was seized, laundered it into his own accounts, and spent it on real estate and international travel.
Former Philadelphia City Controller’s Office Employee Pleads Guilty To $20,000 In Bribes And Kickbacks – August 5, 2020
Jeffrey Blackwell, a former City of Philadelphia employee in the Office of the City Controller, committed a series of frauds, accepting more than $20,000 in bribes and kickbacks. Between 2013 and 2015, while serving in the Investigations Division of the Controller’s Office, Blackwell misused his official position to enrich himself by soliciting money in exchange for official actions or the promise of official actions, but rarely provided the promised permits or contracts.
Bayer Can Advance Lawsuit Accusing Former Employee Of Stealing Trade Secrets – August 3, 2020
Bayer AG can move forward with a lawsuit alleging a former employee stole trade secrets and confidential business information.
Judge Stephen Clark of the Eastern District of Missouri denied ex-worker Hai Zeng’s motion to dismiss the lawsuit, saying the company sufficiently alleged the existence of trade secrets, the misuse of them and the resulting damages.
Bayer accuses Zeng of violating the Computer Fraud and Abuse Act, the Defend Trade Secrets Act of 2016 and the Missouri Computer Data Access and Fraud Statute.
Bayer filed its complaint in March after an internal review found Zeng allegedly sent hundreds of company files to his personal email and Dropbox accounts. The materials included optimization models and a customer information database for the company’s Monsanto unit, Bayer alleged.
The company is seeking compensatory and punitive damages and the return or deletion of the allegedly stolen documents.
Former Uber Executive Sentenced To Prison For Trade Secret Theft From Google – August 4, 2020
As part of a plea agreement, Anthony Levandowski pleaded guilty to one of the 33 counts of trade secrets theft originally filed against him in 2019. In pleading guilty, Levandowski admitted that from 2009 to 2016 he worked in Google’s self-driving car program, known then as Project Chauffer. Levandowski admitted that during this time, he was aware his employment agreement required him to keep Google’s valuable non-public information confidential. He also admitted knowing that the non-public information related to Project Chauffeur was sensitive and subject to the confidentiality requirement. Nevertheless, Levandowski admitted that in 2016, as he was preparing to leave Google, he downloaded thousands of Project Chauffer files onto his personal laptop. He also admitted downloading a variety of files from a corporate Google Drive repository. Among these files was an internal tracking document entitled “Chauffeur TL weekly updates – Q4 2015.” The update contained a variety of confidential details regarding the status of Project Chauffer. Levandowski admitted he downloaded this file with the intent to use it to benefit himself and Uber Technologies, Inc. As part of his plea agreement, Levandowski admitted that the stolen document was Google’s trade secret, and that a reasonable estimate of the loss attributable to his theft was up to $1,500,000.
Vice President Of Genetics Testing Company Pleads Guilty To Paying Physicians Clinical Research Fees As Part Of $21 Million Medicare Fraud Scheme – August 4, 2020
According to Donald Matthews’ plea agreement, Proove paid doctors at least $3.5 million to induce them to order Proove’s DNA tests—which the company claimed could determine a patient’s risk of abusing certain prescription narcotics. Proove billed approximately $45 million to the Medicare program for the tests, in violation of Medicare’s prohibition against kickbacks, and Proove received approximately $21 million in unlawful payments. Proove concealed the true nature of the kickbacks by falsely characterizing the payments as compensation for participating in a clinical research program sponsored by Proove. In furtherance of the scheme, Proove placed its own employees in doctors’ offices. The Proove employees collected a cheek swab and completed most of the paperwork associated with the “clinical research” program. Without the financial compensation, Matthews admitted that most doctors were not interested in ordering Proove’s tests for their patients.
San Antonio Bank Reports $13.2 Million Ponzi Fraud Scheme By Former Employee – July 29, 2020
The Bank of San Antonio disclosed Wednesday that it uncovered a $13.2 million Ponzi style fraud scheme involving a former employee of a subsidiary who’s accused of inducing the bank to purchase worthless receivables from various businesses.
The bank and its subsidiary, Texas Express Funding LLC, on Tuesday sued the former employee, five other individuals and four entities for fraud, civil conspiracy and other claims.