Category Archives: Mail Fraud

Paving Company Executive Pleads Guilty in Fraud Scheme

Kevin Hicks, 43, the former Chief Financial Officer for Boggs Paving Inc., has pleaded guilty to his participation in an $87 million fraud scheme involving government funded construction projects.  Hick is one of six participants who have been indicted in the “massive” government fraud that involved a decade of state and federal road projects.

According to court documents, Boggs Paving received 37 federally funded projects worth an estimated $87.6 million dating back as far as 2004. The company wouldn’t have received these contracts without falsely claiming that minority sub-contractors, disadvantaged business enterprises (DBEs), would receive a required percentage of the work. To conceal the fraud and make it appear as if Styx Cuthbertson Trucking Company, Inc. was doing and being paid for the necessary work, the conspirators ran payments through a nominee bank account in Styx’s name, and then funneled the money back to Boggs Paving and its affiliates.  Prosecutors also believe that the owner of Styx, John Cuthbertson, received kickbacks for allowing his company’s name and DBE status to be used by Boggs Paving.

Hicks has been released on bond and will be sentenced at a later date.  He faces penalties that include up to 25 years in prison and fines up to $750,000. Arnold Mann, a former project manager for the company, pleaded guilty to conspiracy to commit wire fraud and mail fraud charges last month.  Prosecutors expect the former company vice president, Greg Tucker, to plead guilty today to one count of conspiracy to defraud the highway department.  All three men are expected to cooperate in the ongoing investigation against their company.

This case was investigated by the United States Department of Transportation-Office of Inspector General, the Federal Bureau of Investigation, and the Internal Revenue Service. Assistant United States Attorneys Jenny G. Sugar and Michael E. Savage handled the prosecution.

Owner of Paragon Technology Group Indicted for Fraud

James LeDonne, the owner of Paragon Technology Group, was arrested on Monday after a federal grand jury indicted him of fraud last week.  Ledonne, 59, faces eleven counts of wire fraud, three counts of mail fraud, one count of conspiracy to commit fraud, one count of bankruptcy fraud and one count of interstate transportation of stolen goods.  He is scheduled to be arraigned on Thursday at 2:00 p.m.

The indictment alleges that LeDonne accepted down payments for fiber-optic splicing vehicles ordered by contractors living outside of the Elkhart area.  He most often never delivered these units to the customers despite promising various delivery dates.  As part of the scheme, LeDonne used a series of fraudulent bankruptcies to avoid refunding money to the victims.  He would then create a new company and victimize other prospective customers through the new company.

The charges of transporting stolen goods stem from an incident in 2012 when LeDonne obtained a built trailer from a customer by alleging that the vehicle had been recalled.  He then took the same trailer and delivered it to a customer in Georgia after altering the vehicle identification number number.

The investigation of this case is being conducted by the Federal Bureau of Investigation, the United States Postal Inspector Police, and the Indiana State Police.

Court records show that LeDonne also received a five year prison sentence in 1993 after pleading guilty to orchestrating fraudulent check and check kiting schemes in Elkhart.

Bank Manager charged with Federal Mail Fraud

Tiffany K. Look, 39, of Harrisburg, has been charged with mail fraud in connection with schemes that federal investigators say conned four customers out of thousands of dollars. If convicted of these charges, Look faces a maximum penalty of 20 years in federal prison, a term of supervised release, and a $250,000 fine.

Look was the branch manager at two area financial institutions, Mid Penn Bank and Members First Federal Credit Union, from 2007 to 2013.  According to United States Attorney Peter Smith, Look allegedly carried out a scheme to obtain money from four customers of the institutions by taking out fraudulent loans in their names.  To conceal the alleged fraud, she had Mid Penn Bank mail the loan statements to a post office box that she controlled.  The United States Attorney’s Office for the Middle District of Pennsylvania estimates the total loss was nearly $140,000.

Look is also accused of transferring $43,000 from a certificate of deposit belonging to a customer with Members 1st.  Investigators believe Look defrauded two other Members 1st customers out of over $68,000 but the details of this particular scam have not been released.

The government has filed a tentative plea agreement with Look in the case, which is subject to approval by the court.

The investigation of this case involved Mid Penn Bank, Members 1st Federal Credit Union, the United States Postal Service Inspectors, and police in the Swatar and Hampden townships.  The case is being prosecuted by Assistant United States Attorney Joseph J. Terz.

Former Basketball Coach Sentenced for Wire Fraud

Thomas Patric Boggs, a former AAU basketball coach and mentor to a local college basketball star, received a 57 month prison sentence on Tuesday in United States District.  Boggs, 60, must also serve three years of supervised release and pay over $380,000 in restitution for the one count of wire fraud that he pleaded guilty to in December

Boggs admitted to meeting Travis Watson while he was a freshman attending high school in Texas.  The two became close and Boggs’ was able to help Watson attend Oak Hill Academy where he continued developing his basketball skills.  Watson’s basketball career would lead him to play collegiate basketball at the University of Virginia and professionally in Greece.

According to evidence, Boggs approached Watson while he was playing professional basketball in Europe and offered to invest a portion of Watson’ earnings to ensure his financial security after the conclusion his basketball career.  Boggs instructed Watson on how to wire money into two bank accounts and also educated Watson on how he would invest the money. Between 2009 and 2011, Watson wired $357,965 to bank accounts controlled by Boggs.  Nearly all of the money sent by Watson was used to pay the personal expenses of Boggs or pay family members.  Throughout the process Boggs continued to assure Watson that he was making sound investments and that Watson would become a “millionaire.”

The investigation of the case was conducted by the Federal Bureau of Investigation.  Assistant United States Attorneys Anthony Giorno and Laura Rottenborn prosecuted the case on behalf of the United States.

Former Shipping Manager Charged with Mail Fraud

Reva K. Vera, the former shipping manager for American Extrusion International (AEI), was charged with two counts of federal mail fraud in a Rockford federal court on December 17th.  According to the indictment, Vera defrauded AEI out of over $350,000 in a scheme that ran from May 4, 2012 through October 9, 2013.  While acting as the shipping manager for AEI, Vera allegedly created and submitted fictitious invoices from Val Tech Inc. and TQL for shipping services that the companies never performed.  AEI’s accounts payable department then generated checks for the fictitious invoices and sent them to addresses associated with the two companies.

The indictment alleges that a check for $85,993 was made payable to Val Tech, Inc. and sent to an address belonging to Vera’s relative in Beloi.  It is also alleged that $266,810.23 in checks were made payable to TQL and sent to a Loves Park post office box that Vera controlled.  All of these checks were either cashed or deposited into her personal bank accounts.

Reva Vera was released on bond and is scheduled to appear for a status hearing at 11:00 a.m. on January 27, 2014 before United States Magistrate Judge P. Michael Mahoney.  Each count of mail fraud is punishable with a maximum sentence of 20 years in prison, fines up to $250,000, and a restitution amount to be determined.

This case is being prosecuted by Assistant United States Attorney Joseph C. Pederson.

Six Million Dollar Restitution Order in White-Collar Case Overturned on Appeal by Eleventh Circuit

In white-collar federal criminal cases, such as wire fraud or money laundering, the United States government often seeks an order from a court to require a defendant who is found guilty to pay restitution. This general policy is codified in the Mandatory Victims Restitution Act (MVRA), passed in 1996. Similar provisions exist in federal criminal prosecutions for seizures of vehicle or aircraft involved in an alcohol-related federal proceeding.

It is important to note, as suggested by the title, that the MVRA makes restitution mandatory for certain white collar criminal defendants. The Act requires that restitution be made to victims of the charged criminal activity. However, courts in the Eleventh Circuit have interpreted the term “victim” broadly, to include persons who are injured by criminal activity that is related to, but not identical with, activity charged by the federal government. In this way restitution orders under the MVRA can quickly grow.

The MVRA contains certain limits on restitution orders, however. Once a court has determined the monetary value of harm suffered by victims in the case, it is then required to consider a defendant’s financial ability to pay restitution. This was the issue in the recent case of U.S. v. Edwards, decided by the Eleventh Circuit Court of Appeals on September 6, 2013.

In Edwards, the Defendant was convicted of wire fraud, mail fraud, and money laundering as a result of an investment scheme where the Defendant encouraged parties to send him money for supposedly protected investments. In reality, the Defendant never invested the funds and instead spent the money on personal travel and luxury items. As a result of the scheme, the trial court ordered Edwards to pay approximately $6.8 million in restitution to both parties that he directly dealt with as well as victims who did not testify at his criminal trial. The order also required Edwards to pay restitution to persons who had not dealt with him but only a co-defendant, Reece.

The trial court did not specifically identify how Edwards had harmed the individuals who had only dealt with Reece. As a result, the restitution order was overturned and the case remanded to the district court in order to determine whether these individuals were entitled to restitution from Edwards.

Although the Order was overturned, it serves as an example of how mandatory restitution under the MVRA is often an issue in white collar criminal defense cases. The attorneys at Parkman and White, LLC are very familiar with orders of restitution, civil forfeiture efforts, and other proceedings associated with white collar criminal prosecutions. If you or someone you know is facing such charges please contact the firm at (855) 569-1678.

South Carolina Attorney to Plead Guilty to Mail Fraud

Richard Breibart, who was accused of extorting $1 million from his clients, has agreed to plead guilty to mail fraud charges according to court documents.  The plea agreement was signed by Breibart and federal prosecutors before being filed in federal court in Columbia on Tuesday.

Prosecutors say that Breibart presented clients with false stories about potential penalties from the Internal Revenue Service and insisted they pay money into his law firm’s trust account to avoid criminal charges.  Breibart then took the money out of his trust fund and used it to pay for personal and business expenses.  The Indictment lists three victims who cleaned out their bank accounts, investments, and retirement savings to give to Breibart.

As part of the plea deal, Breibart’s attorneys and the government agreed that the number of victims in the case is at least 10 and that the total losses were less than $2.5 million.

Richard Breibart faces a maximum sentence of 20 years in federal prison and fines up to $250,000, although prosecutors have agreed to recommend a lower sentence. He will also be required to make restitution payments.

Breibart was arrested last September and had been scheduled for trial later this year on charges of extortion, mail fraud, and wire fraud.  He is now scheduled to formally enter his plea on August 28, 2013.

Second Person Charged in University Medical Center Mail Fraud Case

Federal prosecutors charged Rodolfo Reyes Mata with mail fraud on Friday July 5th for his involvement in the theft of over $700,000 from the University Medical Center. Mata was identified in court documents as a conspirator with Robert Gregory Bruce in a scam that included the submitting of false invoices to the hospital as payment.

According to the charging document, “Rudy” Mata submitted a fraudulent invoice in August of 2011 to the hospital seeking a payment of $3,250 to a business in San Antonio called ATAM Technology Services.

The UMC’s former Vice President, Greg Bruce, pled guilty to the same charges last month

According to court documents, Bruce confessed that he conspired with Mata in the mail fraud scheme that billed the University Medical Center out of nearly $682,000 between June of 2007 and December of 2011.  In addition, Bruce admitted to running up over $50,000 in personal charges on a hospital issued credit card during the same time period.  Prosecutors allege that Bruce used some of the money to pay for Mata’s living and educational expenses.

Robert Gregory Bruce is currently free on bond and awaiting a sentencing hearing.  He faces a  maximum penalty of 20 years in prison and a $250,000 fine.