Articles Tagged with wire fraud

Two FTX associates have pleaded guilty to charges including wire fraud, commodities fraud, and securities fraud amid the crypto collapse that temporarily destabilized the U.S. economy. Amid the allegations leveled at the company are accusations that they kept no discernable ledger for transactions, did most of their bookkeeping with QuickBooks, and cut themselves loans with their own names as both borrower and recipient.

The largest player, Sam Bankman-Fried, was still in the Bahamas as he was supposed to be testifying before Congress. He was flown back to the U.S. and is currently in FBI custody. A deal was reached with the two associates in exchange for testimony against Bankman-Fried. Bankman-Fried appears poised to be the fall guy for whom the FBI has been waiting. Collectively, the two associates faced 110 years in federal prison. However, their cooperation with law enforcement could help them secure much better deals moving forward.

Ultimately, the federal prosecutors want Sam Bankman-Fried. Bankman-Fried recently disbursed $100 million in FTX assets to Bahamian investors even as the crypto-exchange assets were frozen per the bankruptcy court. This amounts to bankruptcy fraud and is yet another charge that will be added to Bankman-Fried’s growing list of charges.

A benefits specialist for the CTA is facing federal fraud and embezzlement charges related to the withdrawal of $350,000 worth of pension benefits related to deceased employees. She has since been charged with five counts of wire fraud. Each count carries a maximum sentence of 20 years in federal prison, but usually, the sentence is tied to the amount of money stolen and not the number of times the fraud was committed. 

According to the prosecution, the defendant made requests to disburse death benefits and pension benefits to purported beneficiaries of CTA pension plans. The funds, however, were later diverted into bank accounts controlled by the defendant. The money was then used for personal expenditures. 

Authorities say that the defendant made 43 death benefit or pension refund requests totaling an estimated $350,000. The defendant worked as a bus driver and later as a retirement plan specialist. 

There are 47 defendants in a federal lawsuit filed against the perpetrators of a $250 million scheme to defraud a pandemic-related relief program that earmarked funds for starving children. The Department of Justice announced that it was the largest pandemic relief fraud to date. The defendants have been charged with wire fraud, conspiracy to commit wire fraud, money laundering, and bribery. Federal prosecutors will push hard for maximum sentences as the federal government tends to take it personally when you deprive needy children of necessary food. 

The fraud targeted the Federal Child Nutrition Program. The program sends federal funds to state governments to ensure that children in need are provided with daily meals. Each state has its own agency that oversees these federal funds. Reimbursements are conducted on a per-meal basis, and providers are allowed to keep 15% of the disbursed funds for administrative costs. Individual sponsors apply for applications through their state government and then coordinate meal plans with children in need. During the COVID pandemic, the federal government waived some of the requirements allowing for-profit businesses to partake in the program. It also allowed off-site food distribution for children. 

The scheme called for the opening of fake food distribution sites to secure federal money from state governments. The fraudsters are accused of opening fake food distribution sites and then lying about how many meals they serve. The defendants created shell companies to take the funds, and then more shell companies to launder the proceeds. They submitted falsified reports to the federal government and fake attendance rosters of children who were served meals. They then used the proceeds to buy luxury items. The defendants used a website that randomly generates fake names and an Excel formula to randomly generate ages between 7 and 17. 

Elizabeth Holmes is accused of lying to investors and committing fraud. The state believes that she told investors that her company’s medical device would be able to replace complex labs that perform bloodwork. However, the device did not work as advertised, cost investors millions, and tanked the company for which she was CEO. The state accuses her of knowingly providing investors with false or overstated information and omitting information concerning the results of her company’s product. 

Analyzing her defense strategy

The biggest problem Holmes faces right now is that the prosecution has produced a cavalcade of witnesses who will testify that Holmes made specific statements concerning the quality of the device for the purpose of getting more money for her company. The witnesses will testify that Holmes overstated the efficacy of the device to get more capital for her company. However, the device never worked. 

Buried behind the headlines of high-profile criminal cases involving pedophile islands, modern lynchings, and public shootings, is another high-profile trial with incredibly high stakes coming out of California. However, because Elizabeth Holmes did not shoot three people, lynch a Black man, or organize the largest sex crime racket in human history, her trial is not nearly as famous as the other three. Luckily for Holmes, her trial just is not as interesting. Yet the stakes are incredibly high for the founder of Theranos who is accused of defrauding investors by overstating the functionality of a blood-testing device.

The device was believed to be a revolutionary step forward in the medical industry, but Holmes is accused of failing to disclose major shortcomings in the device to investors. For the prosecution to successfully convict Holmes, they must prove that Holmes knew the device was defective and still overstated what it could do. If true, they could convict Holmes on charges of wire fraud which carries a potential sentence of 20 years. Holmes would also be required to make restitution to investors. There is a lot of money in play, and stakeholders will be closely watching the criminal case to see how strong their civil cases are.

Understanding the Charges

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 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

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.

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.

Contact Information