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Criminal Proceedings

This archive displays posts tagged as involving criminal law proceedings relevant to whistleblowers. You may also be interested in our pages:

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August 10, 2022

Melissa Lynne Horner, co-owner of H & H Earthworks, Inc., will spend 30 months in prison and pay over $2.8 million in restitution for failing to pay employee and employer taxes to the IRS, as well as Earthworks’ portion of the FICA taxes. Rather than paying taxes, Horner used the money for her personal gain, spending over $100,000 on motor sport vehicles, $90,000 to a real estate title company, and at least $50,000 on home renovations and $20,000 for a motorhome. USAO MT

August 10, 2022

Thomas Valdez Rodriguez will spend 24 months in prison and will pay over $12.7 million in restitution to the IRS. As owner of Tom-E-Lee Trucking and Tom-E-Lee Industries, Rodriguez failed to withhold employment taxes from his employees. In addition to his failures to meet his businesses’ tax obligations, Rodriguez has not paid personal income taxes since 2011. Rather than paying his taxes, Rodriguez lived extravagantly and enjoyed flying his friends on private jets to Dallas Cowboys games, where Rodriguez was a season ticket holder on the 50-yard line. All told, the harm to the government equated $12,714,214.42, of which Rodriguez paid $1 million immediately prior to his sentencing. USAO WDTX

August 3, 2022

Arthur Merson will spend 15 months in prison and will pay over $3.4 million in restitution for his scheme to defraud investors by conspiring to commit wire fraud. Merson acted as an intermediary between investors and the principal co-conspirators, representing to investors they could receive a portion of the value of multi-million-dollar Standby Letters of Credit with a minimal investment, and would reap multiples of their investment in a matter of weeks. In 2017 and 2018, Merson lied to investors, calling himself an independent consultant who would receive only a small finder’s fee for his efforts, when in reality he had significant financial interest in the investments and affirmatively misled investors when responding to their inquiries. USAO ME

August 3, 2022

William Richard “Rick” Carter, Jr. will spend 66 months in prison and pay over $1.3 million in restitution for his scheme to defraud the Alabama State Department of Education, in a conspiracy to commit wire fraud, wire fraud, and aggravated identity theft. Carter and his co-conspirators fraudulently enrolled students in public virtual schools to receive payments from Alabama’s Education Trust Fund, and then took portions of the money for their own use through direct cash payments and payments to third-party contractors owned by the various co-conspirators—William L. (“Trey”) Holladay, III, Gregory (“Greg”) Earl Corkren, David Webb Tutt, and Thomas Michael SiskUSAO MDAL

July 28, 2022

Jaeson Birnbaum, disbarred attorney and owner of now-bankrupt litigation finance firm, Cash4Cases, will spend 3 years in prison for defrauding investors, in addition to paying over $2.6 million in restitution, and forfeiting another $2.6 million in fraud proceeds. Birnbaum offered sham “Investor Security Agreements,” allowing investors to share in recoveries from lawsuits supposedly purchased by Cash4Cases. Birnbaum netted over $3 million in investors’ funds through his fraud, misappropriated client funds for personal use, and directed his employee to falsify the company’s books and records to show already-paid-out funds as still available to be pledged as collateral to new investors. USAO SDNY

July 13, 2022

The owner and operator of North Carolina-based Kapital Financial Services, Joseph Octave, has been sentenced to over 3 years in prison after being convicted of orchestrating a criminal conspiracy that caused a $2.5 million loss to the IRS.  Between 2014 and 2019, under Octave’s direction, employees at the tax preparation business’s two offices falsified clients’ tax returns by claiming false deductions, business losses, and credits.  DOJ

June 16, 2022

A Florida man who was convicted of defrauding Medicare of over $20 million and evading taxes has been sentenced to 14 years in prison and ordered to pay $4 million in restitution to the IRS.  As the owner and operator of multiple telemarking and telemedicine companies, Marc Sporn marketed and sold signed prescription orders for medically unnecessary genetic tests, in exchange for illegal kickbacks from pharmacies and laboratories.  USAO SDFL

May 24, 2022

Switzerland-based mining and commodity trading firm Glencore International A.G. and an affiliate have agreed to pay over $1.1 billion in criminal penalties and forfeitures, and will plead guilty to violations of the Foreign Corrupt Practices Act and conspiracy to engage in commodity price manipulation.  In addition, the companies will pay over $1.186 billion in civil penalties and disgorgement in settlement with the CFTC.  As part of the criminal plea agreement, Glencore admitted that between 2007 and 2018, it corruptly provided more than $100 million in payments and other things of value to intermediaries for the payment of bribes to officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, Venezuela, and the Democratic Republic of the Congo.  With respect to the commodity price manipulation scheme, the CFTC found that from as early as 2007 through at least 2018, Glencore sought to increase profits from its physical and derivatives oil products trading by manipulating or attempting to manipulate four U.S. based S&P Global Platts physical oil benchmarks and related futures and swaps.  Criminal fines and forfeitures total over $700 million for the FCPA violations and nearly $486 million for the for the market manipulation violations, which amounts are subject to credits for amounts paid to the CFTC and foreign authorities including the United Kingdom.  The $1.186 billion CFTC resolution will also be reduced, with Glencore receiving credit for payments in the criminal resolutions.  DOJ; USAO SDNY; CFTC

May 23, 2022

Art dealer Inigo Philbrick will spend 7 years in prison and forfeit over $86 million for defrauding investors to finance his art business. Over a 3-year period, from 2016 through 2019, Philbrick misrepresented the ownership of certain artworks, selling multiple ownership interests in an artwork totaling more than 100%; created fraudulent contracts and records to further the scheme; made material misrepresentations and omissions to collectors, investors, and lenders; and sold or used artworks as collateral on loans without the knowledge of the artworks’ co-owners. The fraud was eventually exposed when investors learned of the fraudulent records and material misrepresentations Philbrick had made, and a lender notified Philbrick that he was in default on a $14 million loan. USAO SDNY

May 18, 2022

Pat Truglia will spend 120 months in prison, forfeit over $9.4 million, and will pay restitution of $33.7 million for conspiring to defraud Medicare, TRICARE, and CHAMPVA, among others, of approximately $50 million through their fraudulent billing scheme. The scheme involved offering, paying, soliciting, and receiving kickback for durable medical equipment—in this case, braces. Truglia and his conspirators obtained DME orders for Medicare and other federal healthcare program beneficiaries by running multiple call centers, which paid kickbacks and bribes to telemedicine companies, who then paid doctors to write medically unnecessary orders. The orders were filled by Truglia’s companies, who then fraudulently billed the healthcare programs. USAO NJ
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