Articles Posted in Fraud

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.

2204277278_cbf43f4146_b-300x200Federal agents are accusing Illinois state representative, Luis Arroyo, of paying a $2,500/month in kickbacks to a state senator for his vote to support legislation involving video gambling sweepstakes that would benefit one of his lobbying clients. I know what you are thinking: That is illegal? Does that not happen every day in politics? Is that not how American politics works?

Yes and no. Suffice it to say, there is a correct way of going about it, but directly paying bribes to state senators is not it. 

Senator Not Named in Complaint

maarten-van-den-heuvel-KSQgzzn3dW0-unsplash-copy-300x200Chicago police have arrested and charged Alicia Newby who allegedly stole the identities of several people, purchased thousands of dollars of merchandise online, and had the merchandise mailed to dummy addresses. One of the people whose identities she stole was Taraji P. Henson, who is a star in the hit television series Empire. 

Alicia Newby is also the mother of six and has another child on the way. Newby is being represented by a court-appointed attorney. She is being charged with one count of continuing a financial crime enterprise. She has been released on $10,000 signature bail but is being monitored electronically and has been forbidden from contacting either victims of her alleged crimes or witnesses whom the prosecution intends to call.

Prosecutors Say Newby Managed to Hack Henson’s Email

robert-hickerson-38585-copy-200x300Yet another Chicago Alderman is headed to prison after being handed a one-year sentence for defrauding a personal charity. According to prosecutors, Willie Cochran used his charitable fund to pay for gambling trips, expensive meals, and accessories for his Mercedes. Cochran pleaded guilty to one count of wire fraud, which ended his City Council position. 

Cochran’s lawyers hoped to secure probation for their client with six months of house arrest. Instead, Cochran will spend the next year behind bars. 

Since 1972, 30 Chicago Aldermen have been convicted of crimes and several more have been charged. Cochrane, who was charged by federal authorities, will spend the next year in federal prison along with several other Chicago Aldermen who were convicted in a federal sting aimed at uprooting corruption in the Chicago City Council. These include “Fast Eddie” Vrdolyak and William Beavers who were both convicted after leaving the City Council and most recently, Edward Burke who is accused of using his position to force prospective developers to use his tax law firm to secure building permits. Another Alderman, Carrie Austin, is under investigation for the suspicious purchase and construction of a Chicago home. 

rawpixel-1055781-unsplash-1-300x201While charges of fraud are not exactly rare when it comes to political candidates, Chicago Alderman Proco “Joe” Moreno stands accused of filing a false police report to defraud his insurance company. This is generally not the kind of fraud charges that politicians face. Nonetheless, it is still illegal.

Authorities have charged Moreno with fraud and obstruction of justice after reporting his Audi A6 stolen. After Moreno had reported the car stolen, his girlfriend, Liliya Hrabar was pulled over by police while driving it. Hrabar herself was charged with criminal trespass. During the interrogation, Hrabar produced text messages indicating that Moreno had willingly lent her the car one day prior to filing the police report. The charges against Hrabar were subsequently dropped and Moreno was charged with filing a false police report, obstruction of justice, disorderly conduct, and insurance fraud.

According to police, Moreno attempted to file a $30,000 claim with his insurance company to replace the car. The police contacted the insurance company and found that he had given differing accounts of the theft. After Hrabar was caught, Moreno claimed that he had loaned the vehicle to her but could not get it back. Moreno then claimed that because she was a single mom, he just wanted to help her out and that the road to Hell is often paved with good intentions. For that reason, he reported it stolen.

filios-sazeides-540219-unsplash-copy-200x300Did Governor Pritzker remove toilets from an unoccupied mansion next door to his own personal residence in order to defraud taxpayers of over $300,000? Federal authorities sure seem to think so. Pritzker has been under federal investigation since October for the toilet-removal scheme, but did not initially appear to be implicated in the scandal. Adding to the intrigue is the question of whether or not the report was leaked to weaken Pritzker’s position during a critical time in his office. Here, we will discuss the actual crime of which Pritzker is being accused.

Was Pritzker Involved in the Toilet Removal?

The IRS does not necessarily care if you went out of your way to commit a crime. Indeed, many folks who never committed a crime in their lives are held accountable for text debts that are owed to the IRS. How? The IRS is not going to look for what you did or did not do. The IRS is going to look at whether or not you benefited from what was done.

ales-nesetril-1070103-unsplash-copy-300x199On January 17, a man from Winnetka was given a five-year federal prison sentence for fraud.

50-year-old Thomas Lindstrom led a scheme that cost his customers almost $14 million dollars in losses. As a result, the Northfield-based company that employed him was forced to close its doors.

The former options trader at the Chicago Board of Trade was given a prison term that was approximately half the recommended federal guideline. His lawyer argued that Lindstrom committed fraud because of his fear of failure and to maintain the lavish lifestyle he was living in the North Shore.

hush-naidoo-382152-copy-300x200The government is trying to review and reform the healthcare system, but there are still some people in Chicago who are committing Medicaid fraud. There are many fraud prevention measures that have been put in place. Yet, there are people who work to see how they can deceive the government.

This is a serious offense that can lead to serious jail time. Recently, Santila Terry, a 45-year-old woman who lives in Chicago, was facing charges for committing both identity and Medicaid fraud. The total estimated loss in the case was almost $1 million. This case is typical in terms of how frauds of that nature are committed.

A service provider bills the government for services that were never delivered right up until they are discovered. According to reports from the Attorney General, Santila was claiming to provide speech therapy to people who did not exist. Another part of the case was identity fraud. Special Therapy Care Chartered used the personal information and Medicaid service provider ID of a previous employee to falsely bill the government.

aaron-burden-149693-copy-300x225Although Chicago would like to make itself a friendly place for businesses, there are some types of businesses that will never be welcomed here. One of them is telemarketing fraud, an infringement on consumer protection laws. This offense has gotten the attention of legislative bodies and the wider legal community because it affects communities in a big way. A particularly resourceful criminal can defraud a whole segment of the community and leave them in difficult circumstances. It is for this reason that the offense is recognized as being serious and attracts prosecutorial interest whenever the facts are proven. Underpinning the law is the expectation that businesses will follow a code of ethics. Unfortunately, there are some industries that do not abide by such a code.

The self-regulation model has failed in a world of cutthroat competition. Those who play by the rules end up being priced out of the market whilst those who are taking consumers for a ride are given an expressway to seemingly insurmountable success. The law is clear about the obligations to sell in an honest manner, regardless of the temptation to take competition to its zenith. The victims are typically trusting and vulnerable. These have always been aggravating features in virtually any crime that you can think of in Chicago. The courts have continued the tradition of punishing those offenders who target the most vulnerable.

Reporting and Gathering Evidence