December 21, 2019

Hedge Fund Manager Sentenced to More Than 7 Years in Federal Prison in Connection with Multi-Million

Hedge Fund Manager Sentenced to More Than 7 Years in Federal Prison in Connection with Multi-Million Dollar Swindle


CHICAGO — A Connecticut investment manager has been sentenced to more than seven years in federal prison for operating a multi-million dollar fraud scheme that swindled his friends and family members, including victims in the Chicago area.

ALVIN WILKINSON, the founder of Chicago Index Partners LP and Wilkinson Financial Opportunity Fund LP, both based in Sharon, Conn., persuaded at least 30 individuals, many of whom were his friends, family members and colleagues, to invest approximately $13.5 million in his funds. Wilkinson, who previously served as a director at the Chicago Board Options Exchange, claimed he would trade a portfolio of financial instruments on their behalf, including options and futures, and that his trading strategy made money regardless of market conditions.

In reality, Wilkinson did not maintain trading accounts for the funds, and he did not use investor funds to trade in options and futures. Wilkinson often used investor funds to cover personal expenses, and he later used the money to pay earlier investors through Ponzi-type payments. His fraud scheme began no later than 1999 and continued until 2016.

Wilkinson, 61, of Sharon, Conn., pleaded guilty earlier this year to one count of wire fraud. U.S. District Judge Sharon Johnson Coleman on Thursday sentenced Wilkinson to seven years and four months in prison and ordered him to pay $8.032 million in restitution to the victims.

Read more: https://www.justice.gov/usao-ndil/pr/hedge-fund-manager-sentenced-more-7-years-federal-prison-connection-multi-million

December 21, 2019

United States obtains $3.1 million in judgments against Darien Pharmacy and its pharmacist

SAVANNAH, GA: A pharmacy and pharmacist owe $3.1 million in civil judgments to resolve claims that they violated the Controlled Substances Act.

The settlement, a result of the first-ever Controlled Substances Act lawsuit filed by the United States against a pharmacy in the history of the Southern District of Georgia, is among substantive results in the ongoing efforts of the U.S. Attorney’s Office for the Southern District of Georgia to fight the prescription opioid crisis.

Darien Pharmacy, located in Darien, Ga., and its former pharmacist-in-charge, Janice Ann Colter, have agreed to judgments totaling $3.1 million to resolve a civil lawsuit alleging they filled thousands of prescriptions that they knew or should have known were not issued for legitimate medical reasons, including prescriptions for extremely high quantities of opioids, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia.

“Our office is serious about combatting the opioid crisis, and will fight for penalties to underline that message when medical professionals and businesses fail to follow the law,” said U.S. Attorney Christine. “Pharmacies have a critical role in preventing drug abuse and diversion.”

Read more: https://www.justice.gov/usao-sdga/pr/united-states-obtains-31-million-judgments-against-darien-pharmacy-and-its-pharmacist

December 21, 2019

Hialeah Check Casher Sentenced to 13 Years in Prison for Laundering Over $100 million in Healthcare,

Hialeah Check Casher Sentenced to 13 Years in Prison for Laundering Over $100 million in Healthcare, Mortgage and Identity Theft Tax Refund Fraud Proceeds


Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and George L. Piro, Special Agent in Charge, FBI’s Miami Field Office announced that Evelio Suarez, a Hialeah check casher, was sentenced to prison today for laundering over $100 million in proceeds of healthcare, mortgage and identity theft tax refund fraud.

Suarez, 53, of Miramar, Florida, previously pled guilty to one count of money laundering (Case No. 18cr20669). He was sentenced by U.S. District Judge Robert N. Scola, Jr. to 156 months of prison, to be followed by 3 years of supervised release. He was also ordered to forfeit $149,048,366.

According to the agreed upon factual proffer and court documents, from 2013 through 2015, Suarez controlled a number of check-cashing stores located in Hialeah, Florida (the “Suarez Stores”). During this period, the defendant caused the cashing of checks at the Suarez Stores that were the proceeds of fraudulent activity, including identity-theft tax refund fraud, health care fraud, and mortgage fraud. On numerous occasions, Suarez cashed individual fraudulent Medicare checks exceeding $200,000 and individual U.S. Treasury tax refund checks exceeding $150,000. Suarez knew that the checks had been obtained from fraudulent activity and, on occasion, knowingly accepted fake identification documents.

According to the factual proffer, because Suarez knew the funds came from illegal sources, the defendant charged an additional fee on top of the standard fee charged by the check-cashing stores. Suarez charged this as a personal fee that he took in cash from the stores. Suarez also often withheld money from the checks and falsely claimed to the scammers that the money from their checks had been frozen by the banks or the authorities.

Read more: https://www.justice.gov/usao-sdfl/pr/hialeah-check-casher-sentenced-13-years-prison-laundering-over-100-million-healthcare

December 21, 2019

Fort Lauderdale Father and Daughter Convicted at Trial for Involvement in $100 Million Fraudulent

Fort Lauderdale Father and Daughter Convicted at Trial for Involvement in $100 Million Fraudulent Tax Refund Scheme


Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida; Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI); Anthony Ramirez, Assistant Special Agent-in-Charge, U.S. Department of State Diplomatic Security Service (DSS), Miami Field Office; George L. Piro, Special Agent in Charge of the FBI’s Miami Field Office; and James S. Jackson, Deputy Inspector General for Investigations, Treasury Inspector General for Tax Administration (TIGTA) announced that a West Palm Beach federal jury convicted Danielle Takeila Edmonson, 35, and Kenneth Roger Edmonson, 51, both of Fort Lauderdale, Florida for their involvement in a scheme that involved the filing of false and fraudulent tax returns seeking large-dollar tax refunds.

According to the evidence presented at trial, from 2015 through 2018, D. Edmonson and K. Edmonson filed large-dollar tax refund claims with the IRS totaling over $100 million, including individual refund claims ranging from hundreds of thousands of dollars to as high as eighty million dollars. Despite the false nature of the claims, the Department of Treasury paid out approximately $3.4 million in refunds through the issuance of U.S. Treasury checks.

In addition, D. Edmonson filed a fraudulent tax return seeking a large refund for tax year 2014, falsely indicating on handwritten forms that she had paid taxes of over $300,000. The IRS did not receive any corresponding forms to support the payment of any of these taxes. Despite the false nature of the tax return, the Department of Treasury issued a tax refund check for $239,700 in 2015. D. Edmonson deposited this tax refund check into her bank account and used the funds to purchase a luxury vehicle.

D. Edmonson also filed fraudulent tax returns for each of tax years 2015, 2016, and 2017, seeking refunds of approximately $80 million, $2.4 million, and $9 million, respectively. These tax returns contained forms falsely claiming that she had paid over $145 million in taxes during this period. The IRS did not receive any corresponding forms to support the payment of any of these taxes. Despite the false nature of the tax returns, the Department of Treasury issued a tax refund check to K. Edmonson in the amount of $2,405,703 on September 4, 2017. D. Edmonson subsequently deposited this tax refund check into her bank account.

Read more: https://www.justice.gov/usao-sdfl/pr/fort-lauderdale-father-and-daughter-convicted-trial-involvement-100-million-fraudulent

December 21, 2019

Husband and Wife Sentenced to Prison for Roles in $38 Million Health Care Fraud & Wire Fraud Scheme

Rodolfo Pichardo, 71, of Hialeah, Florida was sentenced to more than 15 years in prison for masterminding a $38 million health care fraud and wire fraud scheme. His wife Marta Pichardo, 66, was sentenced to 8 years in prison for her role in the scheme.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Omar Pérez Aybar, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office, and George L. Piro, Special Agent in Charge, FBI’s Miami Field Office made the announcement.

Rodolfo Pichardo and Marta Pichardo previously pled guilty to conspiracy to commit health care fraud and wire fraud. On December 4, 2019, Rodolfo Pichardo, was sentenced by U.S. District Judge Rodolfo A. Ruiz to 188 months in prison, to be followed by 3 years of supervised release. He was ordered to pay $33,841,576 in restitution. Today, Marta Pichardo was sentenced by Judge Ruiz to 96 months in prison, to be followed by 3 years of supervised release. She was ordered to pay $10,482,178 in restitution.

According to court documents, after arriving in the United States from Cuba on a raft seeking refuge and a better life, the Rodolfo Pichardo and his wife Marta Pichardo settled in Miami-Dade County, Florida where they proceeded to build a vast empire of fraud, consisting of at least six fraudulent home health agencies, three fraudulent therapy staffing companies, and two fraudulent pharmacies. Each of these entities purportedly provided home health services, therapy services, and prescription drugs, respectively, to qualified Medicare beneficiaries, though in fact and as both Rodolfo and Marta Pichardo knew, they did not.

Read more: https://www.justice.gov/usao-sdfl/pr/husband-and-wife-sentenced-prison-roles-38-million-health-care-fraud-and-wire-fraud

December 21, 2019

Placer County Woman Sentenced for an Investment Fraud Scheme That Targeted Investors in Failed

Placer County Woman Sentenced for an Investment Fraud Scheme That Targeted Investors in Failed Folsom Ponzi Scheme


SACRAMENTO, Calif. — Kari Sonovich, 48, of Meadow Vista, was sentenced today to two years and three months in prison for an investment fraud scheme, U.S. Attorney McGregor W. Scott announced.

On Jan. 31, 2014, a federal grand jury returned a three-count indictment, charging Sonovich with mail fraud. According to court documents, between July 2008 and April 2009, Sonovich recruited investors to invest with her Las Vegas company, B&B Consulting Group LLC, by telling them that she could place their funds with an international trader who operated at an extremely high level, promising returns of up to 500% every 90 days. When investors deposited funds with her, Sonovich kept $454,000 of the funds for herself, even though she told the investors that all of their funds would be invested. No investor ever received the promised returns, and in most or all instances, no investor received any of their initial investment back.

Some investors in Sonovich’s scheme became involved at the same time that an earlier investment fraud scheme in which they had invested was collapsing. Anthony Vassallo, 40, and Kenneth Kenitzer, 76, ran that Folsom-based Ponzi scheme through their company Equity Investment Management & Trading (EIMT). Both were convicted for that scheme, Vassallo is serving a 16‑year prison sentence and Kenitzer was sentenced to 6 years in prison was released on July 5, 2019.

“The role of IRS - Criminal Investigation becomes even more important in Ponzi schemes and fraud cases due to the complex financial transactions that can take time to unravel,” said Kareem Carter, IRS - CI Special Agent in Charge, Oakland Field Office. ”The scheme targeted by Sonovich was conducted in a way that her victims suffered substantial financial losses. Today’s sentencing emphasizes the partnership between IRS and the U.S. Attorney’s Office and the pursuit of those who violate these types of federal laws.”

Read more: https://www.justice.gov/usao-edca/pr/placer-county-woman-sentenced-investment-fraud-scheme-targeted-investors-failed-folsom

December 21, 2019

Sonoma County CEO Pleads Guilty To Charges Stemming From $25-65 Million Student Loan Repayment

Sonoma County CEO Pleads Guilty To Charges Stemming From $25-65 Million Student Loan Repayment Services Scam

Brandon Frere Was Arrested At SFO While Attempting to Leave the Country


SAN FRANCISCO – Brandon Frere pleaded guilty today to wire fraud and money laundering charges in connection with a multi-million-dollar scheme to use deceptive sales tactics to convince people to enroll in his companies’ student loan repayment services programs, announced United States Attorney David L. Anderson and Federal Bureau of Investigation, Special Agent in Charge John F. Bennett. The plea was accepted by the Hon. Susan Illston, United States District Judge.

Frere, 42, of Sonoma County, owned and operated three companies—American Financial Benefits Center (AFBC), the Financial Education Benefits Center (FEBC), and Ameritech Financial (Ameritech)—all based in Rohnert Park, Calif. According to his plea agreement, between January of 2014 and November of 2018, Frere used the companies to market student loan document preparation services for borrowers who wished to apply for programs through the Department of Education. Frere targeted potential customers who were seeking federal loan forgiveness, loan consolidation, and reduced-payment programs. When Frere’s companies sold consumers “document preparation” services, they also sold them a purportedly optional membership in a “financial education benefits program.” The so-called benefits program provided the opportunity to customers to sign up for services such as LifeLock identity theft protection and roadside assistance.

Frere admitted he instructed his employees to follow misleading sales scripts and to employ deceptive sales tactics so that people would enroll for services without fully understanding what they were paying for. For example, when initially enrolling consumers in the document preparation service and signing them up for the financial education benefits program, Frere hid the fees for the financial education benefits program and described the benefits program in a way that made it seem like the cost of the program was included in the document preparation services. Further, Frere admitted he instructed enrollment associates not to present the benefits program as an optional or additional service to the document preparation service; this way, consumers would purchase the benefits packages without knowing they were doing so.

In sum, Frere instructed his employees (1) to make false statements concerning the companies’ ability to deliver fixed payments for the life of student loans and loan forgiveness under alternative repayment plans; (2) to engage in enrollment practices that improperly inflated a consumers’ family size to reduce their prospective payments under federal alternative repayment plans (and therefore make it appear to the consumer that their monthly payments would be lower than what they would have been if the family size were not inflated); and (3) to hide the monthly fees that consumers would pay for a purportedly optional financial education benefits program while leading victims to believe that the benefits program was already included in the document preparation service. Frere admitted for the purposes of sentencing that the amount of losses attributable to his scheme was no less than $25,000,000 and up to $65,000,000.

Read more: https://www.justice.gov/usao-ndca/pr/sonoma-county-ceo-pleads-guilty-charges-stemming-25-65-million-student-loan-repayment

December 21, 2019

Former Chairman And Managing Partner Charged For Role In $15 Million Ponzi Scheme

SAN FRANCISCO – A federal grand jury indicted Joey Stanton Dodson, chairman and managing partner of an energy company, charging him with crimes related to an alleged $15 million Ponzi scheme involving approximately 50 victims.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, United States Attorney David L. Anderson of the Northern District of California, and Special Agent in Charge John F. Bennett of the FBI’s San Francisco Field Office made the announcement.

According to the indictment, between November 2012 and May 2015, Dodson, 55, of Indio, Calif., used several related companies and partnerships, collectively known as Citadel Energy, to fraudulently raise $15 million by soliciting investments in three limited partnerships that would purportedly provide water-related services to oil and gas companies in North Dakota. The indictment further alleges that Dodson induced investors by making numerous materially false misrepresentations about these partnerships, including regarding how the investor funds would be used, the amount of his compensation, and the status of a potential acquisition of the partnerships by a private equity firm.

According to the allegations in the indictment, Dodson routinely commingled the monies between the three partnerships, which resulted in investor funds being used to pay the expenses of unrelated projects. Furthermore, the indictment alleges that Dodson misappropriated and diverted more than $1.3 million of investor funds for his own personal benefit, which included repaying former investors in unrelated Dodson-led investments, gambling activity, his wife’s BMW, and other expenses.

Read more: https://www.justice.gov/usao-ndca/pr/former-chairman-and-managing-partner-charged-role-15-million-ponzi-scheme

December 21, 2019

Purdue Pharma CEO bonus opposed by Blumenthal, other senators

By Paul Schott


STAMFORD — Eleven U.S. Senate Democrats, including Richard Blumenthal and presidential candidates Cory Booker, Amy Klobuchar, Bernie Sanders and Elizabeth Warren, are opposing a proposed $1.3 million bonus for bankrupt OxyContin maker Purdue Pharma’s CEO — a move that aligns them with two dozen state attorneys general, including Connecticut’s, who reject the plan.

The senators outlined their position in a letter Tuesday that cited Craig Landau being named as a defendant in a number of lawsuits, including one from Massachusetts, that allege the company fueled the opioid crisis with deceptive OxyContin marketing. They also argued that his payout would be based on performance incentives similar to those used to ramp up opioid sales.

“Instead of taking this opportunity to adjust its priorities, Purdue is fighting to maintain an incentive structure that could result in the unwarranted prescription and irresponsible distribution of drugs,” the senators wrote in the letter to Purdue’s board of directors. “By maintaining the aggressive incentive plan for Mr. Landau, the board is showing it does not recognize the role the incentive program played in accelerating the opioid crisis into a national tragedy.”

Sens. Tammy Baldwin, of Wisconsin; Sherrod Brown, of Ohio; Dianne Feinstein, of California; Maggie Hassan, of New Hampshire; Joe Manchin, of West Virginia; and Ed Markey, of Massachusetts, also signed the letter.

Read more: https://www.nhregister.com/business/article/Purdue-Pharma-CEO-bonus-opposed-by-Blumenthal-14916533.php
(New Haven Register)

December 21, 2019

Connecticut investor sentenced to 7 years in prison after swindling $13.5M from friends, family

By Zach Murdock


A Connecticut investment fund founder has been sentenced to more than 7 years in prison for swindling his own friends, family and others in Chicago out of $13.5 million in phony investments.

Alvin Wilkinson, 61, of Sharon, pleaded guilty this year to one count of wire fraud and was sentenced Thursday to 88 months in prison by U.S. District Judge Sharon Johnson Coleman in Illinois.

Wilkinson, a previous director of the Chicago Board Options Exchange, founded Sharon-based Chicago Index Partners LP and Wilkinson Financial Opportunity Fund LP and convinced at least 30 friends, family and colleagues to invest with him, according to court records.

He told his victims he would trade a portfolio that included options and futures on their behalf that would make money regardless of market conditions.

Read more: https://www.courant.com/breaking-news/hc-br-connecticut-investor-wire-fraud-sentenced-20191220-ws7ps3ztj5b45fp5ti3ykdrhyu-story.html