Fairfax Man Pleads Guilty in $33 Million Mortgage Fraud Case
- everett
- Thu 13th November 2008, 5:34 pm
November 13, 2008
Alexandria, VA - Vijay K. Taneja, age 47, of Fairfax, Virginia, pleaded guilty to one count of conspiracy to commit money laundering in connection with a mortgage fraud scheme involving his company, Financial Mortgage, Inc., (�FMI�), which originated and sold mortgages on residential properties in the Washington, D.C., metropolitan area. Dana Boente, Acting United States Attorney for the Eastern District of Virginia, Joseph Persichini, Jr., Assistant Director in Charge of the FBI Washington Field Office, and C. Andre Martin, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service, Criminal Investigation Division, made the announcement today following the plea before Judge Claude M. Hilton. Sentencing is set for January 30, 2009. The maximum potential penalty for conspiracy to commit money laundering is 20 years incarceration and a fine of $500,000.
According to court documents in support of the guilty plea, before FMI sold its mortgages to financial institutions as long term investors, FMI utilized another group of financial institutions (referred to as �warehouse lenders�) to temporarily fund the mortgages before they were sold. Beginning in 2001, FMI began defrauding a series of warehouse lenders and eventually two other financial institutions serving as long term investors, causing an accumulated loss of at least $33 million to four financial institutions by the time FMI filed for bankruptcy in June 2008. The financial institutions were First Tennessee Bank, Franklin Bank, Wells Fargo Bank, and EMC Mortgage Corporation, a wholly owned subsidiary of JP Morgan Chase & Co. Taneja accomplished the scheme by (i) creating fictitious loans with bogus loan closings, (ii) selling the same legitimate loan to multiple investors, and (iii) pocketing the proceeds generated from refinancing loans, when the bulk of those proceeds were intended to payoff prior mortgages on the same properties. Court documents state that for at least part of the scheme Taneja conspired with the owner of TitlePro, a Fairfax title company. The company went out of business in May of 2008.
The investigation involving Financial Mortgage, Inc., was conducted by Special Agents of the FBI and the Internal Revenue Service. The prosecution of the case is being handled by Assistant United States Attorney Stephen Learned.
Michael E. Dotson: The Dotson Project
- everett
- Thu 13th November 2008, 5:20 pm
October 10, 2008
Location: East St. Louis, IL
On October 10, 2008, Michael E. Dotson pled guilty in federal court in East St. Louis, Illinois, to one count of conspiracy to commit wire fraud and nine counts of wire fraud for his role in a gold mine investment scheme which operated under the name "The Dotson Project." According to prosecutors, Dotson convinced investors across the country that he and his father discovered 18 tons of gold in New Mexico and needed financing to mine and recover it. The scheme operated for 14 years. Investors were initially promised $20,000 for every $100 invested, which rose later to millions for every $500. Gold scams are often promoted using the internet and persistent e-mails. Other gold investment schemes in recent years include Quantum Gold, Freedom Gold, Global Gold and E-Gold and Alluvian Gold Dust. Like prime-bank schemes, investors are often told that the government wants to keep this investment opportunity a secret. Also, large minimum returns are "guaranteed." In many schemes, investors receive regular statements, showing significant increases in their original investments, but investors` attempts to withdraw any of their funds are unsuccessful.
Tom Brown: Regency Insurance Scam
- everett
- Thu 13th November 2008, 5:08 pm
Action Date: November 12, 2008
Location: Jacksonville, FL
On November 11, 2008, Tom Brown was found dead of a suspected suicide hanging near a freeway interchange in Anaheim, California. The Orange County coroner placed the date of death at November 8, 2008. Brown had pled guilty to selling fraudulent workers` compensation insurance, using the name Regency Insurance. The scheme was a major nationwide multi-million dollar fraud that was prosecuted in Jacksonville, Florida. Brown was a key witness for the federal government in related criminal cases against Tom King, Don Touchet, Dr. Richard Standridge and Robert Jennings who were convicted and sentenced to 14 years, 22 years, 18 years and 15 years, respectively. A forfeiture allegation in the indictment sought more than $100 million as proceeds of the scheme, making Regency the largest case of its kind ever prosecuted. Hundreds of injured employees were ultimately the victims of the scheme, as they discovered there was no valid workers` compensation insurance in place to pay their wage-loss and medical benefits. Brown`s testimony was key to the prosecutions. He was scheduled to be sentenced on November 5, 2008, but failed to appear. Brown was 55 years old.
FORMER NATIONAL CENTURY FINANCIAL ENTERPRISES CEO CONVICTED OF CONSPIRACY, FRAUD, AND MONEY LAUNDERI
- everett
- Tue 4th November 2008, 12:44 pm
Fraud Cost Investors More Than $2 Billion
November 4, 2008. WASHINGTON —A federal jury today convicted Lance K. Poulsen, former president, owner and chief executive officer of National Century Financial Enterprises (NCFE) of conspiracy, fraud, and money laundering, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and U.S. Attorney Gregory G. Lockhart for the Southern District of Ohio announced. The charges stemmed from a scheme to deceive investors about the financial health of NCFE that cost investors more than $2 billion. The company, which was based in Dublin, Ohio, was one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002.
The Columbus, Ohio, jury convicted Poulsen, 65, after a four-week trial on all 12 charged counts contained in a July 2007 superseding indictment, including one count of conspiracy, six counts of securities fraud, one count of wire fraud, one count of money laundering conspiracy, and three counts of concealment money laundering.
At trial, witnesses testified that Poulsen engaged in a scheme from 1995 until the collapse of the company to deceive investors and rating agencies about the financial health of NCFE and how investors’ money would be used. NCFE bought accounts receivable from healthcare providers using money NCFE obtained through the sale of asset-backed notes to institutional investors, including pension funds, insurance companies and churches.
Evidence at trial showed that NCFE misused investors’ money and made unsecured loans to health care providers, including those owned in whole or in part by Poulsen and other owners. Former employees testified that Poulsen and other NCFE executives covered up the fraud by lying to investors and ratings agencies. The government presented evidence that Poulsen and others created investor reports containing fabricated data, and moved money back and forth between programs, in order to make it appear that NCFE was in compliance with its own governing documents. Evidence showed that Poulsen knew the business model NCFE presented to the investing public differed drastically from the way NCFE did business within its own walls.
“Today’s conviction closes another chapter in the long effort to bring former NCFE executives to justice for deceiving investors,” said Acting Assistant Attorney General Matthew Friedrich of the Criminal Division. “The Department will continue to hold accountable those corporate executives who misrepresent a company’s financial health and then leave the public to pick up the pieces.”
“Poulsen and others made millions of dollars in unsecured loans to companies they owned,” U.S. Attorney Lockhart said. “Their actions were designed to hide a financial house of cards from investors, eventually costing investors $2 billion.”
“The IRS, along with our law enforcement partners, will vigorously pursue corporate officers who victimize their investors and violate the public trust,” said Internal Revenue Service (IRS) Criminal Investigation Special Agent in Charge Jose A. Gonzalez. “Today`s verdict demonstrates the government`s determination to restore and ensure that trust.”
FBI Cincinnati Special Agent in Charge Keith L. Bennett stated, “The FBI notes that today`s convictions are the culmination of a six year investigation which included the review of millions of pages of financial documents by federal investigators. The resolve of this cooperative effort demonstrates that the FBI and other law enforcement will not permit a few corporate executives to hijack our financial system for personal gain.”
The maximum penalty for each count of concealment money laundering, money laundering conspiracy and wire fraud is 20 years in prison and a $500,000 fine. The securities fraud and conspiracy charges are each punishable by up to five years in prison and a $250,000 fine. A sentencing date has not been set.
Poulsen, the sixth NCFE executive convicted in connection with the fraud, has been in custody since he was arrested on Oct. 17, 2007, on charges of witness tampering. A jury convicted him of conspiracy, witness tampering and obstruction on March 26, 2008, and Poulsen was sentenced to ten years in prison on those charges.
On March 13, 2008, five former NCFE executives were found guilty for their roles in the scheme to defraud investors. Donald H. Ayers, of Fort Myers, Fla., an NCFE vice chairman, chief operating officer, director, and an owner of the company, was found guilty on charges of conspiracy, securities fraud, and money laundering. Rebecca S. Parrett, of Carefree, Ariz., an NCFE vice chairman, secretary, treasurer, director, and an owner of the company, was found guilty on charges of conspiracy, securities fraud, wire fraud, and money laundering. Randolph H. Speer, of Peachtree City, Ga., NCFE’s chief financial officer, was found guilty on charges of conspiracy, securities fraud, wire fraud, and money laundering. Roger S. Faulkenberry, of Dublin, Ohio, a senior executive responsible for raising money from investors, was found guilty on charges of conspiracy, securities fraud, wire fraud, and money laundering. James E. Dierker, of Powell, Ohio, associate director of marketing and vice president of client development, was found guilty on charges of conspiracy and money laundering.
The case was prosecuted by Assistant U.S. Attorney Douglas Squires of the Southern District of Ohio, Senior Litigation Counsel Kathleen McGovern and Trial Attorneys Leo Wise and N. Nathan Dimock of the Criminal Division’s Fraud Section, with assistance from Fraud Section Paralegal Specialist Sarah Marberg, FBI Agents Matt Daly, Ingrid Schmidt and Tad Morris, IRS Special Agents Greg Ruwe and Mark Bailey, U.S. Postal Inspector Dave Mooney and Immigration and Customs Enforcement Agent Celeste Koszut.
