Charlottesville Insurance Agent Charged with Fraud

Graham Messer Facing 13 Charges

CHARLOTTESVILLE, VA—A local insurance agent is facing a handful of federal charges related to fraud following the unsealing of an indictment returned by a federal grand jury two weeks ago in the United States District Court for the Western District of Virginia in Charlottesville.

Graham Hutson Messer, 32, of Bremo Bluff, Virginia, was charged in a sealed indictment returned September 12, 2012, and unsealed last week following the defendant’s arrest. Messer has been charged with 13 counts of mail fraud.

According to the indictment, Messer operated as an independent agent offering insurance and insurance products for sale to clients in Virginia. Messer purported to sell insurance offered by a number of different insurance companies, including, but not limited to: the Farmers Insurance group of companies, Chartis Inc., Nautilus Insurance Group, Granite State Insurance Company, and Main Street America Group.

It is alleged in the indictment that Messer would instruct his clients to send payments for insurance premiums directly to him. The defendant told his clients that he would then remit the payments to the insurance companies. However, according to the indictment, Messer embezzled those funds for his own, personal use, never sending them to the insurance company, while also deceiving his clients into believing they had insurance coverage.

If convicted, the defendant faces a maximum possible penalty of up to 20 years in prison and/or a fine of up to $250,000 for each mail fraud charge.

The investigation of the case was conducted by the Federal Bureau of Investigation, the Albemarle County Police Department, the Virginia Bureau of Insurance, and the Charlottesville City Police Department. Special Assistant United States Attorney Elliott Casey will prosecute the case for the United States.

Bank Executive Convicted by Federal Jury for Involvement in Mortgage Fraud Scheme

SACRAMENTO, CA—United States Attorney Benjamin B. Wagner announced that a federal jury returned a guilty verdict today convicting Joel Blanford, 44, of San Ramon, on six counts of mail fraud.

This case is the product of an extensive investigation conducted by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorneys Paul A. Hemesath and Michael M. Beckwith prosecuted the case. Former Assistant U.S. Attorney Laurel Rimon also participated in the prosecution.

According to evidence presented at the trial, from approximately April 2003 through October 2005, Blanford, while working as a sales representative for Long Beach Mortgage, a wholesale subprime lender and former subsidiary of Washington Mutual Inc., participated in a scheme to defraud his employer. Blanford earned compensation based on the volume of loans processed by Long Beach Mortgage. The evidence established that he paid a loan coordinator in cash and checks to falsify documents, provide false verification of borrowers’ employment or professional licensing status, and to turn a blind eye to fraudulent representations contained in loan applications and other documents submitted to Long Beach Mortgage.

In each of the years 2003, 2004, and 2005, Blanford received, before taxes and payroll deductions, more than $1 million in commissions and other compensation from Long Beach Mortgage as a result of his scheme. Between April 2003 and October 2005, he paid the loan coordinator more than $50,000 in checks alone.

An earlier trial of Joel Blanford, in May 2012, resulted in a hung jury. The jury verdicts returned today followed a seven-day retrial.

“This verdict reflects the commitment of this office, the FBI and the IRS-CI to follow the facts to wherever they lead us,” said U.S. Attorney Wagner. “We have now convicted seven people, including two bankers, two mortgage brokers, a real estate investor, and two straw purchasers, who participated at different levels of a complex loan origination mortgage fraud scheme involving numerous real estate transactions in the Stockton area.”

Sentencing is scheduled before Judge William B. Shubb on December 10, 2012. The maximum penalties for mail fraud affecting a financial institution is 30 years in prison and a fine of up to $250,000 or twice the value of the gain or loss, whichever is greater.

Six other defendants have been sentenced for crimes arising out of this mortgage fraud scheme. William T. Bridge, 41, of San Francisco, and his brother Paul Bridge were loan brokers who paid illegal kickbacks to a loan coordinator at Long Beach Mortgage between 2003 and 2006. William T. Bridge pleaded guilty to tax evasion charges, admitting that in each of those tax years, he derived more than $10,000 from criminal activity involving fraudulent loans funded by Long Beach Mortgage on houses purchased in Sacramento and Stockton. Paul Bridge pleaded guilty to a violation of the Real Estate Settlement Procedures Act. Both brothers testified at the trial of Joel Blanford.

John Ngo, 27, of Dublin, pleaded guilty to lying under oath before a federal grand jury. Between September 2001 and May 2006, while working as a senior loan coordinator at Long Beach Mortgage, he received in excess of $100,000 in checks and bank transfers from a mortgage broker in order to ensure that fraudulent loan applications were processed and funded. In September 2007, Ngo testified falsely under oath before a federal grand jury investigating the mortgage fraud scheme in the San Joaquin County area that the broker had not given him any money. Ngo also testified at the Blanford trial.

Iftikhar Ahmad, 36; Manpreet Singh, 24; and Jose Serrano, 44, all of Stockton, were indicted on October 25, 2007, for mail fraud in connection with a property flipping scheme involving inflating home values. Ahmad and Serrano were also charged with money laundering. Between 2003 and 2005, the defendants engaged in a mortgage fraud scheme primarily in the Stockton area. Ahmad, through I & R Investment Properties, fraudulently sold 10 houses to straw buyers, obtaining in excess of $1.5 million. All three pleaded guilty to felony offenses. The mortgage loans on the properties involved in the scheme were arranged by the Bridge brothers, through Long Beach Mortgage.

William Bridge was sentenced in April 2010 to 21 months in prison and was ordered to pay $1,056,700 in restitution. Paul Bridge was sentenced in August 2010 to 36 months of probation. John Ngo was sentenced in September 2010 to nine months in prison. Iftikhar Ahmad was sentenced in February 2011 to 36 months in prison and was ordered to pay $382,750 in restitution. Jose Serrano was sentenced in November 2008 to 15 months in prison and ordered to pay more than $219,000 in restitution. Manpreet Singh was sentenced in February 2009 to 60 months of probation and ordered to pay $163,500 in restitution.

Former Chief Financial Officer of Black River Area Development Corporation Pleads Guilty to Mail Fraud

LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced today the waiver of indictment and plea of guilty to a felony information by Debra Shannon, age 56, of Pocahontas, Arkansas. The information, which was filed in open court today, charges Shannon with one count of mail fraud.

For 37 years, Shannon held the position of chief financial officer at the Black River Area Development Corporation (BRAD) in Pocahontas, Arkansas. BRAD administers programs to assist low-to-moderate income residents of Clay, Lawrence, and Randolph Counties. Part of Shannon’s job duties included writing checks from various payroll accounts to pay employees and vendors as well as reconciling those accounts.

At the plea hearing held before the Honorable J. Leon Holmes, Shannon admitted that she wrote checks to herself from various checking accounts with the majority of the checks being written from the payroll account. She would then obtain the bank statements after they were received through the mail, disguise the payee on the cancelled check, photocopy the disguised checks, and put the altered checks in BRAD’s records. This activity began on or before December 28, 2001, and continued until May 2012. The total amount of checks embezzled was $390,735.65.

Thyer stated, “Embezzlement by a trusted employee is conduct which cannot be tolerated.” He added, “The stolen funds should have been utilized to assist the poor citizens and communities in the Black River area of our state, not to fraudulently increase an employee’s salary.”

The statutory penalty for embezzlement for mail fraud is not more than 20 years’ imprisonment and a fine of up to $250,000. Shannon remains free on her own recognizance pending sentencing, which has not yet been set.

The investigation was conducted by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Karen Whatley.

Homestead Man Indicted in BP Claims Fund Fraud Scheme

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; Michael B. Steinbach, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; Henry Gutierrez, Postal Inspector in Charge, U.S. Postal Inspection Service, Miami Division; Paula Reid, Special Agent in Charge, United States Secret Service; and Richard Walker, Special Agent in Charge, U.S. Department of Labor, Office of Inspector General-Office of Labor Racketeering and Fraud Investigation, announced the indictment of Jean Mari Lindor, 31, of Homestead, Florida, for his participation in filing false claims in connection with the Deepwater Horizon explosion and pollution incident in the Gulf of Mexico. More specifically, the indictment alleges mail fraud, wire fraud, and access device fraud, all in connection with fraudulent claims filed by the defendant for lost income against the Gulf Coast Claims Facility, in violation of Title 18, United States Code, Sections 1341, 1343, 1029(a)(2) and (b)(1), and 2.

Lindor previously appeared in court after his arrest on a criminal complaint related to this conduct, and was ordered detained pending trial as a risk of flight. The case has been assigned to the U.S. District Judge K. Michael Moore. If convicted of the charges in the indictment, Lindor faces possible terms of imprisonment of up to 20 years on each of the five counts of mail fraud and wire fraud and up to 10 years’ imprisonment on the three counts of access device fraud.

According to the allegations in the indictment and statements in court, in June 2010, BP established the Gulf Coast Claims Facility (GCCF) for the purpose of administering, mediating, and settling certain claims of individuals and businesses for costs, damages, and other losses incurred as a result of oil discharges due to the April 20, 2010 explosion and fire on the Deepwater Horizon, an oil rig in the Gulf of Mexico. In August 2010, the GCCF began receiving and processing claims from individuals and businesses for costs, damages, and other losses they had incurred as a result of the Deepwater Horizon incident, paying the claims from a $20 billion Trust Fund established for that purpose.

The indictment alleges that Jean Mari Lindor filed fraudulent claims against the fund, in his own name and in the name of a not-for-profit business he established, called Noula, Incorporated, located in Homestead. According to the indictment, Lindor sought Emergency Assistance Payments of $12,000 and $25,000, respectively, on his personal and business claims.

To execute his scheme to defraud the GCCF, Lindor used the mail and the Internet to open the claims, and to submit required forms and documentation, including employment verification letters and tax return documents. The indictment alleges that the documents Lindor provided in November and December 2010 were materially false in that they represented that Lindor was an employee of an organization in the Florida Keys at the time of the spill and that his hours and income had been curtailed as a result of the Deepwater Horizon incident. Those statements were false.

The indictment further alleges that Lindor used unauthorized access devices during the criminal conduct, consisting of the unique GCCF claim numbers assigned to his fictitious claims, and without which he would have been unable to communicate with the GCCF, or cause payments to be issued to them.

Mr. Ferrer commended the investigative efforts of the FBI, U.S. Postal Inspection Service, the U.S. Secret Service, the Department of Labor Office of Inspector General, and the U.S. Citizenship & Immigration Service, Fraud Detection and National Security Directorate. The case is being prosecuted by Assistant U.S. Attorney Thomas Watts-FitzGerald.

An indictment is only an accusation and a defendant is presumed innocent until and unless proven guilty.

Members of the public can report fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations, including the 2010 Deepwater Horizon oil spill, through the National Center for Disaster Fraud (NCDF) Disaster Fraud Hotline at 877-NCDF-GCF (623-3423), the Disaster Fraud Fax at 225-334-4707, or the Disaster Fraud e-mail at disaster@leo.gov.

Fen-Phen Fraud Doctor Convicted

PHILADELPHIA—Dr. Abdur Razzak Tai, 79, of Kissimmee, Florida, was convicted today of a fraud scheme involving a trust fund set up to compensate victims of the Fen-Phen diet drug. Tai, who practiced cardiology under the name A. Razzak Tai, M.D., and through Tri-County Doctors, Inc. and Medical Legal Consultants, Inc., was indicted on six counts of mail fraud and seven counts of wire fraud.

American Home Products Corporation, later known as Wyeth, entered into a class action settlement, which established a Trust to pay benefits to persons injured by Fen-Phen with money contributed by Wyeth. Between 1997 and 2009, Tai devised a scheme to defraud the Seventh Amendment, the Trust and Wyeth, and to obtain money and property from them by means of false and fraudulent representations. He reviewed the echocardiograms of more than 1,100 patients who filed claims with the American Home Product Settlement Trust in Philadelphia and falsely certified that the patients’ tests showed that they had sustained heart damage. In reality, many of those claimants had not been harmed.

For at least one lawyer, Dr. Tai was paid a set fee of $100 for each echocardiogram that he read. In addition, Tai was to be compensated $1,500 for each claimant who qualified for benefits when that patient’s claim was paid. Dr. Tai wrote reports and signed certifications attesting that claimants had suffered heart damage on some occasions when he knew that the tests showed that they had not and, on other occasions, when he knew that he had not personally reviewed the test results to determine whether they had suffered heart damage. By misreporting measurements from the echocardiogram, the severity of a claimant’s medical condition could be exaggerated, thereby improperly qualifying the claimant for hundreds of thousands of dollars more in benefits. Dr. Tai certified that some patients qualified for the increased settlement benefits when he knew they did not.

At trial, Dr. Tai testified that his medical reports had been forged by the mass-tort lawyer who had hired him and who had paid him on a contingency fee basis. The jury returned a verdict of guilty on all 13 counts after deliberating for less than two hours.

U.S. District Court Judge Juan R. Sanchez scheduled a sentencing hearing for December. Each count of mail and wire fraud carries a statutory maximum sentence of 20 years in prison.

The case was investigated by the FBI and U.S. Postal Inspection Service and is being prosecuted by Assistant United States Attorney Paul Shapiro.