Tag Archives: fraud

Orange County: Newport Beach Man Sentenced For $16 Million Fraud

STAFF REPORTS

Santa Ana – On Fri., Oct. 17, Dinesh Valjeebhai Shah, 65, of Newport Beach, was sentenced to seven years in prison for conspiring to commit real estate fraud, including 13 felony counts of forgery, five counts of conspiracy to commit a crime, identity theft, and grand theft.

According to the Orange County District Attorney’s office, Shah and family members, recruited friends and family to become pretend, or “straw buyers,” by forging loan applications with false information in order to procure loans on a number of properties in Orange County, to the tune of more than $16 million.

Through the falsification of deeds and loan documents from 2006 to 2009, funding for 15 properties – all approved by Washington Mutual Bank – was obtained, with those straw buyers never planning on controlling the properties.

The Shah’s businesses, New Age Realty, First Property Escrow, City First Realty, and Associates Investments Group, located in Tustin, came under scrutiny following a complaint by a realtor. Three other family members involved in these crimes were previously convicted and sentenced.

 

Glendale: Man Sentenced For Medicare Fraud

STAFF REPORTS

 

Glendale – A Glendale man was found guilty as part of a health care fraud scheme that submitted in excess of $13 million in fraudulent claims to Medicare, and caused more than $3 million of losses to the program.

The United States Attorney’s Office has issued a statement that Hovakim David Mkhitarian, 31, was sentenced on Wed., Sept. 3, to serve seven months in prison, and seven months of electronic home monitoring, for conspiracy to commit health care fraud. Mkhitarian was also ordered to pay $2,000 in restitution and a $100 special assessment to the Crime Victims Fund.

Mkhitarian was found to be a mid-level participant in a sophisticated scheme that was based out of Los Angeles. Foreign students traveling in the United States on summer work visas were recruited for the fraud. They were encouraged to open bank accounts and commercial mail boxes for dozens of phantom medical clinics. After the students returned home, conspirators submitted fictitious claims to Medicare using wrongfully obtained physician billing numbers and thousands of Medicare numbers. Medicare deposited payments into the accounts opened by the foreign students, who pre-signed checks so that conspirators could withdraw the deposited funds. Money from the scheme was laundered through check cashing businesses, real estate, and gold dealers.

Two additional co-conspirators – Tigran Yusufyan and Hovakim John Mkhitarian – also plead guilty to commit health care fraud. Sentencing for Yusufyan will be held on Dec. 8, 2014, and sentencing for John Mkhitarian will be held on Feb. 23, 2015. A fourth member in this Medicare fraud scheme, Levon Gevorgyan, will be sentenced this November.

Orange County: Man Pleads Guilty To Swindling Doctors

STAFF REPORTS

Santa Ana – An Orange County man plead guilty to defrauding dozens of doctors and others of more than $2 million in separate schemes that promised large returns on investments in the medical and dental fields.

David Rose, 57, of Coto de Caza, appeared in U.S. District Court on Mon., July 21, to face charges of one count of wire fraud and one count of mail fraud, according to a news release from the United States Attorney’s Office.

According to court documents, during a period of over six years that ran through May 2011, Rose solicited physicians to invest in an Irvine company he called M.D. Venture Partners (MDVP) and falsely promised lucrative returns on investments in emerging medical technologies.

In a subsequent scheme, Rose used Technology Innovation Partners (TIP) to solicit dentists and orthodontists to invest, claiming funds would be pooled and invested in a company developing ablation technology that would be used to remove wisdom teeth in children without surgery.

Throughout both schemes, investor funds were misused, with Rose using victims’ money for personal expenses. According to a plea agreement filed in court, Rose used investor funds to pay $7,500-a-month rent for a house in Coto de Caza, college tuition, luxury vehicles, an $80,000 Sea Ray boat and shares in the Green Bay Packers. The investigation revealed that no money was invested by either MDVP or TIP.

In the MDVP scheme, Rose caused approximately 32 victims to lose more than $900,000, according to court documents. In the TIP scheme, 45 victims lost more than $1.4 million.

Rose was arrested in May 2013 and has remained in custody since that time. He is scheduled to be sentenced November 24, and faces a maximum statutory sentence of 40 years in federal prison.

The case against Rose is the product of an ongoing investigation by the Federal Bureau of Investigation.

 

 

 

Corona Woman Arrested Again For Fraud

Staff Reports

Corona – A Corona woman, who is already charged with a $15 million bank and bankruptcy fraud, was arrested on Tues., July 1, on a new charge.

According to a news release from the United States Attorney’s Office, Carolyn Marie Jones, 51, of Corona, Chief Executive Officer of a high-end denim jean company, was arrested by Special Agents with the United States Secret Service and the Internal Revenue Service pursuant to a criminal complaint issued on June 30 by a federal judge.

According to the criminal complaint, which includes wire fraud, Jones scammed two Georgia men in an investment scheme.  The complaint states that Jones convinced the men to invest with her, but spent the money on her own personal expenses. Jones, who was out on bond pending a September 23 trial in the bank and bankruptcy fraud case, was prohibited from soliciting money from investors while awaiting the trial.

According to the 19-count indictment returned by a grand jury in September 2013, Jones was the Chief Executive Officer of Diamond Decisions, Inc., which sold denim jeans marketed under the labels of Privacywear and PRVCY Premium.  According to the indictment, Jones obtained a $15 million business line of credit from Union Bank, using fake financial statements and fake tax returns, as well as providing the bank with a Social Security number that belonged to someone else.  Jones also hid a previous bankruptcy and felony record from the bank.  The indictment further states that Jones defaulted on the $15 million loan after a year, causing Union Bank to file a lawsuit in state court.  When Union Bank tried to seize the contents of the Diamond Decisions warehouse, Jones caused the company to file for bankruptcy and hid assets from the bankruptcy trustee.

Jones faces a maximum statutory sentence of 489 years in federal prison on the bank and bankruptcy fraud indictment.  Jones also faces a maximum statutory sentence of 20 years on the wire fraud complaint.

The charges in the complaint and indictment are the results of an investigation conducted by the United States Secret Service and the Internal Revenue Service. The U.S. Attorney’s Office states that a complaint and an indictment contain allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.

 

 

 

 

San Gabriel Valley: Women Indicted in Immigrant Scheme

Staff Reports

SGV – An immigration consultant and one of her employees were arrested on Thurs., June 26 after being named in an indictment that alleges they filed fraudulent green card applications on behalf of immigrants who were married to United States citizens, some of whom paid more than $20,000 for their services.

According to a news release from the United States Attorney’s Office, Claudia Arreola, 35, of El Monte, who owns California Immigration Services (CIS), and her business associate, Leticia Gutierrez, 35, of Pico Rivera, were taken into custody by special agents with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI). The two women were charged in a six-count indictment returned on June 24 by a federal grand jury.

“Fraud scams run by so-called notarios threaten the integrity of the immigration process and offer false hope to desperate people,” said United States Attorney André Birotte, Jr. “The two women in this case victimized immigrants for years by giving the false impression that they could fix immigration problems.”

According to the indictment, the defendants submitted paperwork to U.S. Citizenship and Immigration Services (USCIS) on behalf of six foreign nationals who were seeking to obtain green cards – or permanent resident status – based on legitimate marriages to U.S. citizens. The applications filed by the defendants allegedly included fraudulent I-94 cards indicating that the immigrants, who originally came to the U.S. illegally, entered lawfully on visitors’ visas.

The immigrant victims were originally quoted fees of approximately $7,000, but the defendants ultimately charged them as much as $24,000. To pay the debt, some of the couples borrowed against their credit cards or obtained loans from family and friends. Subsequently, investigators say when several of the foreign nationals sought refunds after they failed to receive green cards, the defendants allegedly threatened to contact authorities and have the aliens deported.

“Tragically, as is often true in such scams, at least some of the victims in this case could have obtained green cards legally,” said Claude Arnold, special agent in charge for HSI Los Angeles. “Instead, they placed their trust and, in many cases, their life savings in the hands of individuals who were focused on enriching themselves, rather than on helping hopeful immigrants realize the American dream.”

Investigators say the similarity between the name and acronym for Arreola’s consulting business and USCIS, the Department of Homeland Security agency that adjudicates applications for immigration benefits, was no coincidence. Evidence developed during the investigation showed that money orders and cashier’s checks made out to USCIS had been deposited in bank accounts controlled by defendants.

The probe targeting Arreola’s CIS began in 2011 after HSI received leads from USCIS’s Fraud Detection and National Security directorate involving several suspicious benefit applications. While only six instances of fraud are charged in the case indictment, authorities believe the scheme is responsible for dozens of fraudulent benefit applications.

“Arreola victimized immigrants for personal gain by pretending to be associated with USCIS,” said USCIS FDNS Western Regional Assistant Director Ken Takeda. “We are committed to upholding the integrity of our immigration system by combating these deceptive practices. USCIS strongly encourages the public to seek legal advice or representation from attorneys or accredited representatives.”

If Arreola and Gutierrez are convicted, both defendants face a statutory maximum penalty of 60 years in federal prison.

In 2003, the Attorney General of the State of California filed suit against Arreola and Gutierrez, among others, alleging that defendants had engaged in an illegal scheme to provide immigration services in violation of California law. Both Arreola and Gutierrez entered into settlement agreements in which they promised not to engage in illegal immigration consulting services in violation of California law, specifically agreeing not to promise certain benefits or results in immigration cases. In 2006, the defendants began operating California Immigration Services and engaging in the conduct alleged in the indictment.

This case is part of an ongoing, nationwide effort by the Department of Justice and the Department of Homeland Security to target unscrupulous immigration practitioners and combat the unauthorized practice of immigration law. The initiative relies on federal, state and local resources to combat the widespread problem of unauthorized practice of immigration law. Other partners involved in the Los Angeles effort include the Federal Trade Commission, the Los Angeles County Department of Consumer Affairs, the State Bar of California, the Los Angeles County District Attorney’s Office, the Los Angeles City Attorney’s Office, and the Attorney General’s Office of the State of California. For more information on the initiative, please visit http://www.uscis.gov/news/national-initiative-combat-immigration-services-scams.

HSI and USCIS believe there are additional victims in this case who have not yet been identified. Call the L.A. County Department of Consumer Affairs at (800) 593-8222 to seek assistance or get information

Orange County: Man Convicted in $3.3 Million Drug Scams

STAFF REPORTS

Santa Ana – An Irvine man was recently convicted of running a fraud scheme that generated approximately $3.3 million from victims investing in products that they believed would treat childhood obesity and Type II Diabetes.

According to the United States Attorney’s Office, Charles “Chuck” Davis, 57, was found guilty on Fri., June 20, of two counts of mail fraud, seven counts of wire fraud and four counts of money laundering. During the trial, Davis was shown to have operated an investment scam involving the Newport Beach firm, LifeRight Holdings, Inc. The company was to develop and use infomercials to market a product to battle childhood obesity. Davis promised his investors a 15 percent return in just 13 months, royalties on products sold, and the option to convert the investment into shares of LifeRight stock when the company began selling the products.

$2.4 million of the funds raised from about 40 victims in 2007 and 2008 were actually used to finance Davis’ personal expenses and legal fees from lawsuits brought against him.

Another scam involved DT2, a company that reportedly offered a product treating Type II Diabetes. Davis raised nearly $1 million from 2009 to 2011 from about 25 DT2 investors. Similar to the LifeRight scam, Davis diverted investor funds to other companies, and rather than spend the money on the business, he enjoyed high-end restaurants, spa treatments, cash withdrawals, the expense of several girlfriends, as well as civil/criminal defense attorneys.

Davis has been in custody since September 2011, and faces a statutory maximum sentence of 240 years in federal prison when he is sentenced on October 20.