Former Controller Of Oil & Gas Company Sentenced To Prison For $65 Million Bank Fraud Scheme Over 21 Years / 275 Employees Lost Jobs – February 4, 2021
In September 2020, Judith Avilez, the former Controller of Worley & Obetz, pleaded guilty to her role in a scheme that defrauded Fulton Bank of over $65 million. Avilez admitted that from 2016 through May 2018, she helped Worley & Obetz’s CEO, Jeffrey Lyons, defraud Fulton Bank by creating fraudulent financial statements that grossly inflated accounts receivable for Worley & Obetz’s largest customer, Giant Food. Worley & Obetz was an oil and gas company in Manheim, PA, that provided home heating oil, gasoline, diesel, and propane to its customers.
Lyons initiated the fraud shortly after he became CEO in 1999. In order to make Worley & Obetz appear more profitable and himself appear successful as the CEO, Lyons asked the previous Worley & Obetz Controller, Karen Connelly, to falsify the company’s financial statements to make it appear to have millions more in revenue and accounts receivable than it did.
Lyons and Connelly continued the fraud scheme from 2003 until 2016, when Connelly retired and Avilez became the Controller and joined the fraud. Avilez and Lyons continued the scheme in the same manner that Lyons and Connelly had. Each month, Avilez created false Worley & Obetz financial statements that Lyons presented to Fulton Bank in support of his request for additional loans or extensions on existing lines of credit. In total, Lyons, Connelly, and Avilez defrauded Fulton Bank out of $65,000,000 in loans.
After the scheme was discovered, Worley & Obetz and its related companies did not have the assets to repay the massive amount of Fulton loans Lyons had accumulated. In June 2018, Worley & Obetz declared bankruptcy and notified its approximately 275 employees that they no longer had jobs. After 72 years, the Obetz’s family-owned company closed its doors forever. The fraud Lyons committed with the help of Avilez and Connelly caused many families in the Manheim community to suffer financially and emotionally. Fulton Bank received some repayments from the bankruptcy proceedings but is still owed over $50,000,000.
Former Employee Pleads Guilty For Sending Threatening Cards Containing Toxic Pesticide To Former Coworkers – February 8, 2021
On December 19, 2019, Kelly Burns mailed 4 Christmas cards to former coworkers containing a pesticide identified as carbaryl, which is toxic to humans. The cards were addressed to the victims’ workplace and contained violent threats. 3 people at Burns’ former workplace were exposed to the carbaryl, and were forced to undergo an extensive physical decontamination process. One of the victims exposed was 10 weeks pregnant. As a result of the contamination, law enforcement ordered company employees out of the building and the company was closed for further decontamination.
On February 13, 2020, Burns again mailed cards containing carbaryl to the same 4 victims, with violent statements with added threats directed at the victims’ families.
In March 2020, FBI agents executed a search warrant at Burns’ residence. They found handwritten notes in which Burns threatened to kill a former coworker, sabotage his former workplace, and conduct a drive-by shooting.
https://www.justice.gov/usao-or/pr/klamath-falls-man-pleads-guilty-sending-threatening-cards-containing-white-powder-former
#insider #threat #threats #insiderthreat #insiderthreats #workplace #violence
Iowa Town’s Mayor, Police Chief, Others Linked To Embezzlement Scheme – February 13, 2021
3 current officials of an Iowa town, the mayor, police chief and city clerk and one former official were arrested for allegations of wrongdoing.
Armstrong Mayor Greg Buum, Police Chief Craig Merrill, City Clerk Tracie Lang and former City Clerk Connie Thackery face charges related to the misappropriation of city funds, concealing embezzlement through the falsification of public records, and using a stun gun on a civilian,
https://www.foxnews.com/us/iowa-towns-mayor-police-chief-others-linked-to-embezzlement-scheme-report
Former Employee Pleads Guilty To Stealing $400,000+ From Employer – February 12, 2021
David West carried out two schemes against Petco Petroleum, an Illinois oil and gas company where he was employed for nearly 30 years.
In one scheme, West produced and submitted to Petco Petroleum fraudulent invoices for services that were never rendered, totaling $129,038, which his employer paid in full and West pocketed.
In a second scheme, West hired trucks to haul oil stolen from his employer’s oil leases to a reclaimer who then paid him $266,802 for the oil. Then West charged Petco Petroleum for the transport costs of their own stolen oil.
Walgreens Pharmacy Employee And Others Charged After Drug Ring Busted – February 10, 2021
An employee of a Walgreens pharmacy in Tennessee has been charged after investigators said she helped organize the theft of about 1,300 opiate-based pills from customers, selling some of the medication through social media.
The 27 year old employee of the pharmacy would observe narcotics prescriptions being filled, then call a man and provide the patient information required to pick-up the pills, which included Hydrocodone and Oxycodone.
The thefts began shortly after McKinney started working at the Walgreens.
New York City Buildings Inspector Charged In $25,000 Bribery Scheme – February 10, 2021
A criminal complaint was filed today in federal court in Brooklyn charging New York City Department of Buildings (DOB) Inspector Francesco Ginestri with solicitation and receipt of a bribe in exchange for his agreement to ensure that DOB would not issue a fine in connection with a stop work order.
According to the complaint, on July 31, 2020, Ginestri re-inspected a construction site in Flushing, New York, after a stop work order was issued for safety violations earlier in the month. After learning that construction had continued during the stop work order, Ginestri solicited a $1,200 cash bribe from an employee of the construction company in exchange for the defendant’s agreement to ensure that DOB would not issue a $25,000 fine to the company. In August 2020, an employee of the construction company met Ginestri at a bakery and provided him with the $1,200 bribe payment.
Former Investment Adviser Charged With Stealing $400,000+ Of Client Funds To Pay Gambling Debts / Credit Card Bills – February 10, 2021
In approximately 2009, Apostolos Pitsironis who worked in the offices of a financial services firm, began managing the investments of Victim-1 and Victim-2, a married couple.
Between May 2, 2019 and June 11, 2019, Pitsironis initiated 22 transfers totaling approximately $411,000 from one of the Victims’ investment accounts at the financial services firm to a bank account in the defendant’s own name at another financial institution. Pitsironis falsely told the financial services firm that Victim-2 owned the bank account receiving the funds and that Victim-2 had authorized the transfer of funds to that account.
Pitsironis then transferred the stolen funds to other bank accounts that he controlled and used the stolen money to pay for his family’s personal expenses, including casino gambling debts, credit card bills and the lease for a luxury car.
https://www.justice.gov/usao-edny/pr/former-investment-adviser-charged-stealing-client-funds
Former Medical Center Employee Pleads Guilty To Embezzling More Than $500,000 For Personal Gain Over 6 Years – February 9, 2021
Michael Ahlers was the Administrative Officer for the Occupational Therapy Education Department (OTED) at the Kansas Medical Center (KUMC) in Kansas City. As the Administrative Officer, Ahlers was responsible for all administrative tasks and financial transactions for the OTED, including budget management, purchasing, billing of external entities, and grant management. From at least 2009 and continuing to 2015, Ahlers used that position to steal more than $500,000 to pay for his personal expenses.
To conceal the fraud, instead of forwarding certain KUMC funds to the Institutional Finance and Administration Department, Ahlers deposited the funds into a KUMC Credit Union account. Using the KUMC Credit Union account allowed Ahlers to avoid oversight that would have happened in the normal course, by which funds are deposited into a state-controlled bank account, revenue recorded in the university financial system, and funds allocated to department accounts that are reconciled on a monthly basis. Ahlers also created invoices outside of the normal system, which prevented others within KUMC from learning about the KUMC Credit Union account and Ahlers’ use of it for his personal gain.
Former Bank Employee Pleads Guilty To Stealing Social Security Benefits And Bank Embezzlement Of $27,000+ – February 9, 2021
While an employee of Eastern Bank, Jose Materesa stole approximately $27,605 from the bank, some of which consisted of Social Security benefits, from September 2017 through July 2018. The account from which she stole the money belonged to an individual who had died in 2015.
Intel Slaps Former Employee With Lawsuit Alleging Trade Secret Theft For Microsoft Leverage – February 8, 2021
Dr. Varun Gupta spent nearly a decade at the chip maker as its product marketing engineer before leaving in January of last year.
In a recently filed lawsuit, Intel alleges Dr. Gupta stole “highly confidential, proprietary, and trade secret information” before his “voluntary resignation and departure from Intel,” and attempted to use that information to negotiate more favorable terms for Xeon hardware in his new position at Microsoft.
Following his departure from Intel, Dr. Gupta landed a gig at Microsoft, where he currently serves as a principal for strategic planning in the company’s cloud and artificial intelligence department. It is in that role that the lawsuit alleges Dr. Gupta leveraged confidential information in “negotiations against Intel,” and furthermore “lied to Intel in course of Intel’s attempts to locate, recover, and protect” its trade secrets.”
Dr. Gupta had direct access to confidential documents outlining Intel’s pricing structure and strategies, while employed there. Part of the lawsuit contends that the information he had access to is “commercially sensitive,” and disclosing it “would cause significant harm to Intel.”
https://hothardware.com/news/intel-sues-former-employee-stealing-xeon-info-aid-microsoft
Chief Financial Officer Sentenced To Prison For Bribing Amtrak Official With $20,000 And Trips – February 8, 2021
In February 2019, the defendant pleaded guilty to one count of federal program bribery.
For a roughly two-year period from 2015 through 2017, John Gonzales, an Executive Vice President and Chief Financial Officer for a small Delaware-based manufacturing firm, bribed Timothy Miller, a Lead Contract Administrator working in procurement for the Amtrak. Miller awarded more than $7.6 million in contracts to the defendant’s firm in exchange for bribes of approximately $20,000 and other things of value, including trips to Rehoboth Beach arranged by Gonzales and another executive at the firm.
Former Department of Veterans Affairs Procurement Supervisor Charged With Pocketing $36,000+ In Kickbacks Over 7 Years – February 5, 2021
A procurement supervisor at the Jesse Brown Veterans Affairs Medical Center in Chicago pocketed kickbacks from the president of a medical supply company to steer the company at least $1.7 million in product orders, many of which were never fulfilled, according to an indictment returned in federal court in Chicago.
The indictment accuses THOMAS E. DUNCAN, a supervisor in the medical center’s Central Supply department, of receiving approximately $36,250 in kickbacks paid by checks, as well as an additional amount in cash, from DANIEL DINGLE, the president of a medical supply company based in south suburban Dolton. The checks were made payable to Helping Hands Properties LLC – a third-party entity managed by Duncan – and contained false and misleading memo entries in order to conceal and disguise the existence and purpose of the kickbacks, the indictment states. In exchange for the kickbacks, Duncan used his official position at the VA to fraudulently initiate and approve purchases of products from Dingle’s company, knowing that many of the products would not be delivered to the VA, the indictment states.
The alleged fraud scheme began in 2012 and continued until 2019.
Former Employee Charged In Scheme To Divert $540,000+ Owed To Employers To Her PayPal Account – February 5, 2021
From February 2013 through July 2019, Melissa Corso misappropriated approximately $540,000 in customer payments owed to her former employers, by directing their customers to submit their payments to a PayPal account linked to Corso’s work email address, which Corso had access to and control over. Corso sent one-time payment links to certain customers via her work email account with instructions to submit payment to her PayPal account, which was not authorized to receive these payments.
In total, Corso caused the victim companies’ customers to pay over approximately $3.1 million of funds due to the companies into her PayPal account through approximately 1,150 transactions.
Using her work email address, Corso made multiple withdrawals from the PayPal account and diverted the funds to other PayPal accounts linked to personal email accounts of Corso and two other individuals, as well as to various commercial retailers, including eBay; Bloomingdale’s; Best Buy; Dick’s Sporting Goods; GrubHub; Forever 21; Louis Vuitton; MAC Cosmetics; and Target. A number of purchases from these commercial retailers were shipped to the home or work addresses of Corso and the two individuals.
https://www.justice.gov/usao-nj/pr/connecticut-woman-charged-defrauding-former-employers-new-jersey
Former Holiday Inn Employee Sentenced To Prison For Attempting To Steal $840,000+ – February 5, 2021
Henry Williams was on supervised release following a 2016 conviction for bank fraud in the Western District of New York, when he began working at the front desk of the Holiday Inn. In January 2020, Williams began using the hotel’s Point of Sale machine fraudulently to load and attempt to load hundreds of thousands of dollars onto credit / debit cards that he controlled.
The defendant impersonated various hotel managers while making phone calls to the hotel’s card payment processor in furtherance of his scheme. Williams also attempted to cover his tracks and conceal his involvement in the fraud by impersonating a hotel employee and making false complaints of criminal activity by another hotel employee.
The defendant successfully stole approximately $4,871.58 in fraudulent refunds. He also attempted over a period of time to obtain more than $840,000 in additional fraudulent refunds.
https://www.justice.gov/usao-wdny/pr/rochester-man-going-prison-4-12-years-defrauding-holiday-inn
Former Nike Marketing Manager Charged In $1.5 Million Wire Fraud / Money Laundering Scheme – February 4, 2021
According to the information, from 2001 until his termination in 2018, Errol Andam was employed by Nike at its headquarters in Beaverton. Most recently, Andam worked as a manager in the company’s North American Retail Brand Marketing division wherein he managed the design, build-out, and operation of “pop-up” retail venues, temporary Nike shops situated near and tailored to sports competitions and other special events around the U.S.
In the summer of 2016, Andam recruited a childhood friend to establish a company to design and build the pop-up venues as an independent contractor for Nike. Andam used his authority as a manager at Nike to ensure that his friend’s company was consistently awarded the contracts for these jobs. Though he had no formal role in his friend’s company, Andam assumed control of much of the company’s financial operations, managing financial accounts and issuing invoices to Nike.
To conceal his role in the scheme, Andam used an alter ego, “Frank Little,” to invoice Nike and manage the contract company’s account with Square, Inc., a California-based provider of mobile credit-card-processing services. In 2016, Andam also renewed the lapsed registration of an Oregon-based limited liability corporation (LLC) he owned so that he could use the defunct entity as a shell company to funnel the proceeds diverted from Nike and his friend’s company to accounts under his personal control.
Beginning in September 2016, Andam caused credit-card sales at various pop-up venues around the U.S. to be run through card readers associated with a Square account owned by his friend’s company. These proceeds were transferred to Square in California and then to Andam’s LLC bank account in Oregon. Andam represented to both Nike and his friend that the proceeds of these sales were credited against the total amount Nike owed to his friend’s company. In truth, Andam simply pocketed the proceeds and, as “Frank Little,” invoiced Nike for the full cost of the contracted services.
From September 2016 through December 2018, Andam diverted and embezzled nearly $1.5 million in Nike proceeds for his own use. In July 2018, Andam submitted a fake financial statement from his LLC in support of a residential mortgage loan application. The financial statement falsely reflected as revenue checks for $194,000 drawn on a bank account owned by his friend’s business. Andam forged his friend’s signature on the check and withdrew much of that money without his friend’s knowledge.
https://www.justice.gov/usao-or/pr/former-nike-marketing-manager-charged-scheme-defraud-company
Former Oil Services Company Vice President Sentenced To Prison For Embezzling $2 Million+ Over 6 Years – February 4, 2021
Robert Bishop was the Vice President of Resource Management at International Professional Management (IPM), an oil services company located in Houston. As part of his duties, he was in charge of securing short term loans to cover IPM’s monthly operating capital.
Bishop admitted he would inflate the loan amount needed and then divert the excess money to fake vendor accounts he controlled. Over the span of approximately six years, Bishop diverted roughly $2.1 million from the company’s operating expenses.
https://www.justice.gov/usao-sdtx/pr/ex-oil-exec-who-stole-more-2-million-sent-prison
Former Employee Of Pharmaceutical Company Admits To Defrauding His Employer Of $1 Million+ – February 3, 2021
Ovais Mayet was a biological engineer with a biopharmaceutical company located in Summit, New Jersey. He was permitted to use the employer’s business account to make authorized purchases of materials and equipment for work-related purposes. Instead, Mayet used the employer’s account to purchase substantial quantities of electronic devices, which he did not and would not use in the course of his employment.
Between January 2019 and March 2020, Mayet executed online purchase orders and disguised these purchases as business expenses, when, in fact, they were for his own personal gain. Mayet resold the items on after-market websites and used the proceeds to pay for personal expenses. Mayet obtained nearly $1.1 million worth of electronic devices from the fraudulent scheme.
https://www.justice.gov/usao-nj/pr/somerset-county-man-admits-defrauding-former-employer-more-1-million
Former University of Florida Researcher Charged With $1.75 Million Scheme To Defraud National Institutes Of Health And University of Florida – February 3, 2021
Lin Yang obtained a $1.75 million grant from NIH to develop and disseminate an imaging informatics tool for muscles known as “MuscleMiner.”
Between September 2014 and July 2019, Yang served as the principal investigator for the NIH grant at UF. As the principal investigator, Yang was responsible for conducting and administering the grant in compliance with applicable federal law and institutional policies. Among other things, Yang was required to disclose his foreign research support and financial conflicts of interest, including his ownership of, or interest in, a foreign company.
During that same period, in 2016, Yang established a business in China known as “Deep Informatics.” The indictment further alleges that Yang promoted his business in China by relating that its products were the result of years of research supported by millions of dollars of U.S. government funding. Simultaneously, Yang applied for and was accepted into the People’s Republic of China’s Thousand Talents Program (TTP) in connection with Northwestern Polytechnic University, located in Xi’an, China. The TTP was a talent plan established by the Chinese government to encourage the transfer of original ideas, technology, and intellectual property from foreign institutions, such as American universities.
Former Employee Sentenced To Prison For Submitting $1.8 Million+ In Fake Work Orders To His Employer So He Could Receive Gifts And Payments From Outside Vendors – February 2, 2021
Robert Munguia knowingly submitted false work orders to his company in order to receive gifts and payments from outside vendors. He also admitted he knew the work would never be completed.
From Feb. 27, 2015, until April 12, 2018, Munguia worked as an environmental specialist at a Texas-based corporation. During that time, he conspired with outside contractors to bill for 68 false work orders that were never completed. In return, he received various gifts and cash.
As a result of the scheme, the company paid almost $2 million.
https://www.justice.gov/usao-sdtx/pr/corporate-insider-sent-prison
Coast Guard Credentialing Specialist Charged In Coast Guard Test Score Fixing Scheme Involving 16 Individuals – February 2, 2021
16 individuals plead guilty to obtaining Coast Guard licenses by paying for false Coast Guard exam scores. The exams were designed to test their knowledge and training to safely operate under the authority of the licenses.
As alleged in the indictment, these defendants’ false scores were entered by Coast Guard Credentialing Specialist Dorothy Smith. Smith accepted bribes in exchange for entering passing test scores and used a network of intermediaries to connect her to license applicants.
https://www.justice.gov/usao-edla/pr/16-plead-guilty-coast-guard-test-score-fixing-scheme
Former Employee Sentenced To Prison For Embezzling Nearly $350,000 From Employer – February 2, 2021
From April 2013 until the end of 2019, Shearer was employed as the office manager by Cane Business Forms & Systems and later reorganized as Precision Printed Products, a printing company in Triadelphia, West Virginia.
Cindy Shearer admitted to writing checks totaling $276,892.88 from Cane Business Forms & Systems and a total of $67,672.41 from Precision Printed Products to herself, but listing the check as paid to a legitimate vendor. She would then cash or deposit the checks into her own bank account.
Shearer was ordered to pay restitution to both business owners and restitution to the IRS that totals $399,074.29.
https://www.justice.gov/usao-ndwv/pr/wheeling-woman-sentenced-embezzling-nearly-350000
Former Navy Chief Petty Officer And Naval Reservist (Wife) Charged For ID Theft Scheme – February 2, 2021
Selma Hooper was stationed in Japan as a Chief Petty Officer with the Navy’s Seventh Fleet until October 2018. His wife, Renee Chalk, was a Naval Reservist stationed at Naval Air Station Lemoore in California.
Hooper separated from the Navy in October 2018. Shortly before Hooper’s separation was final, Hooper and Chalk fraudulently obtained access to a database containing millions of people’s personal information. The company that operates the database only grants access to legitimate businesses and government agencies and only for business or government purposes, such as police departments attempting to locate suspects or banks confirming the information in account applications.
In late August 2018, Hooper contacted the company, falsely claiming that the Seventh Fleet needed access to the database to run background checks on Navy personnel. Based on that information, the company approved the account. Hooper signed the company’s subscriber agreement, purporting to act on behalf of his fleet. In reality, Hooper was not acting on behalf of his fleet, and Hooper did not access the database for a legitimate government purpose. Instead, he added Chalk, who was not a member of his fleet, and other individuals to the database account. Over the next approximately two and a half months, Hooper and Chalk searched for tens of thousands of individuals on the database and sold the information they obtained on those individuals to third parties in exchange for bitcoin. The third parties used the information to commit identity theft.
Former Hospital Researcher Sentenced To Prison For Conspiring To Steal Trade Secrets And Sell Them in China With Help Of Husband – February 1, 2021
Li Chen admitted in her guilty plea in July 2020 to stealing scientific trade secrets related to exosomes and exosome isolation from Nationwide Children’s Hospital’s Research Institute for her own personal financial gain.
Chen and her husband, co-conspirator Yu Zhou worked in separate medical research labs at the research institute for 10 years each (Zhou from 2007 until 2017 and Chen from 2008 until 2018).
Court documents detail that Chen conspired to steal and then monetize one of the trade secrets by creating and selling exosome “isolation kits.” Chen started a company in China to sell the kits.
Chen received benefits from the Chinese government, including the State Administration of Foreign Expert Affairs and the National Natural Science Foundation of China. She also applied to multiple Chinese government talent plans, a method used by China to transfer foreign research and technology to the Chinese government.
Former Accounting Department Employee Pleads Guilty To Embezzling $1 Million+ From Employer – February 1, 2021
From 2011 to 2018, Sandra Roberto used her position in the accounting department for Mesilla Valley Transportation (MVT) to embezzle over a million dollars. As MVT’s primary contact with two third-party payment processors, Roberto deposited checks ranging from $400 to $975 into her personal bank account. Upon discovering her embezzlement scheme, MVT terminated her employment in 2018.