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Articles Posted in Fraud

Crystal Lundberg told a federal judge that getting charged with wire fraud had changed her life for the better. She said that she found legitimate employment and was growing as a person. But federal authorities have charged Lundberg in another scheme to defraud. This time, the victim was the federal government that disbursed $150,000 in loans to Lundberg’s business to keep her payroll going. 

Federal prosecutors now say Lundberg took the loans that were earmarked for COVID relief and spent the money on vacations, legal bills, and other personal expenditures while simultaneously delaying her surrender date to the Bureau of Prisons.

Other problems for Lundberg include Facebook posts she made indicating that her plan was to spend the federal relief money until the feds came and arrested her. Obviously, federal authorities believe that Lundberg wanted one last hurrah before serving her prison sentence. 

A former Chicago public school staffer has pleaded guilty to lying to the FBI concerning the divulging of information related to a custodial contract to one of the bidders. Pedro Soto is accused of leaking bid information to one of the bidders and then lying about the fact to the FBI.

Soto resigned from his position as one of Janice Jackson’s top aides after it was discovered that he leaked deliberations concerning the $1 billion contract to one of the bidders in exchange for “various benefits.” The prosecution was the cherry on top of an investigation into Alderman Daniel Solis who was recorded trading favors on wiretapped conversations. Soto and Solis are linked together by a political operative known as “Individual B” who helped broker deals between the men. This individual has not been charged with any crime and thus their identity remains a secret.

Soto Reaches a Plea Deal

A Chicago rabbi is facing federal charges alleging that he defrauded at least 75 people out of a reported $23 million. One of the people, federal officials noted, was a survivor of the holocaust. The fraud involved the purchasing of nursing homes and assisted living facilities. 

Zvi Feiner will face charges related to 10 counts of wire fraud, federal officials say. 

The Indictment

The man whose videotaped murder of a defenseless detainee resulted in several months’ worth of protests is now facing felony tax evasion charges. Chauvin will now face charges of second-degree murder and multiple felony counts of tax evasion

Chauvin and his wife are accused of hiding income streams on their taxes including more than $95,000 in income from his side job providing security. 

Is His Wife Also Guilty?

Rahul Shah became the first person in the Chicago area with the dubious distinction of defrauding the federal government for coronavirus relief funds. Shah applied for a $441,000 federal loan earmarked for small business relief during the coronavirus pandemic. 

When confronted concerning the suspicious forms used to apply for the loan, Shah said he had workers in India file the forms for him. Later, however, he reversed course and admitted that the loan was keeping his business afloat. Shah is charged with bank fraud and making false statements to a financial institution.

The Paycheck Protection Program

Yesse Yehuda, the politically-connected head of the FORUM non-profit, has been charged by federal authorities for misappropriating $200,000 in funds earmarked to develop south suburban properties and fund a workplace training program.

Yehuda has been charged with eight counts of bank fraud and seven counts of wire fraud

Where Did the Money Go? 

Barbara Byrd-Bennett, the former Chicago Public School Chief who pleaded guilty to corruption and fraud charges and was sent to federal prison Camp Alderson in West Virginia, has recently been moved to a new facility. The 70-year-old Byrd-Bennett was sent to a residential reentry management facility that oversees halfway houses in Cincinnati.

The Bureau of Prisons confirmed the move but otherwise declined comment on why the move occurred when it did. Camp Alderson had been nicknamed Camp Cupcake after Martha Stewart’s stay there several years ago. 

The Crime

oliver-spencer-7Zc4h74Va8c-unsplash-copy-200x300A Chicago pastor has been charged with fraud after bilking funds earmarked for needy children to purchase a Bentley. Federal authorities allege that Rev. Clarence Smith Jr. stole thousands of dollars from a federal program that helped feed children whose parents could not afford to feed them. Authorities say that Smith used the money to buy a $142,000 Bentley and for other expenses that had nothing to do with starving children. 

Smith’s ministry is geared toward those who had a history of criminal activity. The motto outside of his church reads: “Ministry meaningful to the imperfect man.” Smith was convicted a decade ago of using forged signatures to rob the estate of a dead man of over $100,000. 

Since his release from prison, Smith has had some financial struggles. In 2012, he filed for bankruptcy, claiming that he only had $20 to his name. He was still paying restitution for the theft for which he went to prison. Court records show that he owed the man’s estate an estimated $80,000. He also owed $8,000 in overdue property taxes for his church. 

aidan-bartos-313782-copy-300x200The Chicago City Colleges ex-vice-chancellor has been charged alongside seven others for multiple counts of wire fraud. According to federal authorities, Sharod Gordon awarded contracts to a number of companies that had ties to Gordon’s relatives and other associates. In some cases, police say, no work was ever performed. Gordon’s ex-wife and other associates were charged in the $350,000 scheme to defraud the government. Gordon is accused of awarding the contracts in exchange for kickbacks—a clear violation of basic ethics and corruption statutes

The current chancellor, Juan Salgado, said that new safeguards were to be put in place to avoid future problems. Salgado said the district will hire a procurement director to vet all contracts prior to them being offered. This includes requiring potential vendors to provide an economic disclosure statement and be in business for at least two years.

What was Gordon’s Role?

jay-wennington-N_Y88TWmGwA-unsplash-copy-300x200Attila Gyulai, the owner of a fine dining establishment in the West Loop, has pleaded guilty to one count of wire fraud. Gyulai had returned to Chicago to face four counts of fraud and is scheduled to be sentenced on February 25th of 2020. He and his wife owned and operated Embreya restaurant, a high-end Asian establishment. The restaurant opened in 2012 and received excellent reviews, but shut down only four years later. 

Examining the Plea Agreement

Gyulai’s plea agreement is interesting. Essentially, Gyulai admitted guilt to one allegation of wire fraud but also stated that he did not agree with all the details of the other allegations. The plea agreement essentially states that between 2014 and 2016, Gyulai defrauded minor shareholders in his restaurant and lied about how money generated by the restaurant was used. As part of the scheme, there was a nearly $15,000 money transfer out of the restaurant’s coffers.

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