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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:

Page 4 of 37

November 29, 2022

William Sadleir, the founder, owner, and operator of a defunct film distribution company accused of defrauding a publicly traded fund, has been ordered to spend 6 years in prison and pay $31.6 million in restitution to resolve a criminal case against him.  A separate SEC order to pay $13.8 million in disgorgement and nearly $4 million in prejudgment interest was deemed satisfied by the restitution order in the criminal case.  According to the press release, Sadleir’s Aviron Group LLC received a $75 million investment by BlackRock Multi-Sector Income Trust (BIT).  Rather than use the funds to support its film distribution activities, however, Sadleir misappropriated them for his personal use, including buying, renovating, and furnishing a mansion.  SEC

Tagged in: Criminal Proceedings, Financial and Investment Fraud,

November 21, 2022

Ruixue “Serena” Shi will spend 20 years in federal prison and has been ordered to pay nearly $36 million in restitution for defrauding investors out of tens of millions of dollars. Shi, convicted on one count of wire fraud, was the general manager of Global House Buyer LLC, a China-based real estate company with an office in Los Angeles. Shi inked a deal with Dakota Development, a subsidiary of SBE Entertainment, to build a real estate development in the City of Coachella consisting of luxury condos, a hotel complex, and conference facilities. Shi solicited investments from mostly Chinese investors, preying on their ignorance of English and trust in the American economy, and led them to believe their investment would help them obtain an American visa. USAO CDCA

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Securities Fraud, Visa Fraud,

October 18, 2022

Building materials manufacturer Lafarge S.A., together with its Syrian subsidiary, pleaded guilty to conspiring to provide material support and resources to U.S.-designated foreign terrorist organizations, paying penalties, fines, and forfeitures totaling $778 million.  According to the plea, during the civil war in Syria, Lafarge negotiated to pay armed factions to ensure continued operation of a cement plant it operated in Syria.  Defendants effectively entered into a revenue-sharing agreement with ISIS, paying the terrorist organization based on the amount of cement that defendants were able to sell.  DOJ; USAO EDNY

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Money Laundering,

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

Tagged in: Criminal Proceedings, Employment Tax Fraud, Tax Fraud,

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

Tagged in: Criminal Proceedings, Employment Tax Fraud, Tax Fraud,

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

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Misrepresentations,

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 Sisk.  USAO MDAL

Tagged in: Criminal Proceedings, Education Fraud, Government Programs Fraud,

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

Tagged in: Accounting Fraud, Criminal Proceedings, Financial and Investment Fraud, Ponzi Schemes, Regulatory Violations, Securities Fraud,

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

Tagged in: Criminal Proceedings, Tax Fraud,

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

Tagged in: Criminal Proceedings, Healthcare Fraud, Laboratory and IDTF, Lack of Medical Necessity, Medicare, Tax Fraud,

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