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Articles Tagged with fraud

A Chicago-area businessman has been indicted on federal charges for making fraudulent claims to the government in order to bilk COVID relief money from the fund. Carlos Smith, 56, of Park Forest, Illinois is charged with fraudulently obtaining $420,000 in small business loans from the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL). Both programs were created under the CARES Act. Smith has been charged with two counts of wire fraud, one count of making false statements to a financial institution, and one count of money laundering.

The Alleged Fraud

Federal investigators say that Smith applied for a $270,000 loan from the PPP for his company CLS Financial. In the loan application documents, Smith indicated that his company had 61 employees and an average monthly payroll of $108,000. But the company had no employees at all, let alone payroll. Smith also lied about having been convicted of a felony in the past. 

This is America, where everyone has a job and everyone has a dream. The idea is to work the job until you can make the dream come true. That happened for one Illinois woman, but federal prosecutors say that the money she used to fund her dream was embezzled from her place of employment. She is now facing federal charges for the theft of $2.3 million. 

72-year-old Mildred Crowley is accused of embezzling money from her employer to fund her horse farm. She is not the first to be charged with such a crime. In fact, horse farming is rife with companies that have funded their coffers on the ill-gotten gains of fraud and theft. 

Criminal Enterprises: Horse Breeding and Horse Farms

Chicago rapper G Herbo has been charged in Massachusetts for using stolen identities to make illegal purchases. Purchases included trips on personal jets and designer puppies, according to the complaint. While rappers are not known for their white-collar prosecutions, identity theft is a major business in the criminal underworld. The 25-year-old Herbert Wright III is charged with conspiracy to commit fraud and aggravated identity theft. The following will take a look at what prosecutions for these crimes look like.

Who is G Herbo?

G Herbo was recently on The Tonight Show. He grew up in the South Side of Chicago, a neighborhood known as “Terror Town.” His frank lyrics about growing up in Chicago catapulted G Herbo into the forefront of the rap world. Makes you wonder why a guy like that would need to steal identities to fund his purchases of designer puppies and personal jet rides.

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?

While Donald Trump has recently announced that federal authorities will be unleashed in major democratic cities, by now, federal involvement in Chicago has been an ongoing fact of life for major developers and politicians for centuries. Most recently, the feds filed a criminal case against ComEd, and they are also targeting House Speaker Michael Madigan.

The feds have lobbyist Mike McClain speaking to a ComEd executive. He told this executive that he should not put anything in writing and that putting things in writing could “only hurt ya.” The two men then discussed a favor for Mike Madigan that federal authorities believe is part of a larger bribery scheme.

How Did the Bribery Scheme Work?

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?

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