Tag Archives: mail fraud

Detroit Area Medical Biller Sentenced to 50 Months in Prison for Her Role in a $7.3 Million Dollar Healthcare Fraud Scheme

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Friday, June 30, 2017

A Detroit-area medical biller was sentenced today to 50 months in prison for  her role in a $7.3 million Medicare and Medicaid fraud scheme involving medical services that were billed to Medicare and Medicaid but not rendered as billed.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division, and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office, made the announcement.

Dawn Bentley, 56, of Oakland County, Michigan, was sentenced by U.S. District Judge Sean F. Cox of the Eastern District of Michigan, who also ordered Bentley to pay $3,253,107 in restitution jointly and severally with her co-defendants. After a one-week jury trial in January 2017, Bentley was convicted of one count of conspiracy to commit health care fraud, wire fraud and mail fraud, as well as one count of mail fraud. Bentley was sentenced to 50 months in prison on each of the two counts, to run concurrently, followed by one year of supervised release.

According to the evidence presented at trial, from June 2014 through June 2015, Bentley knowingly submitted fraudulent bills on behalf of a co-conspirator physician for services she knew could not have been rendered, and for services she knew had not been rendered as billed. In exchange, Bentley was paid 6% of the total billings paid to the physician from Medicare, the evidence showed. Bentley’s largest client was Waseem Alam, who pleaded guilty to a $33 million Medicare fraud scheme in March 2016. Bentley billed $1.9 million of this fraud from June 2014 to June 2015, and was paid 6% of Alam’s receipts for the fraudulent billings, the evidence showed. Bentley’s company received over $100,000 from Alam’s practices between June 2014 and June 2015, the evidence showed.

The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. Fraud Section Trial Attorneys Tom Tynan and Jessica Collins prosecuted the case.

The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,000 defendants who have collectively billed the Medicare program for more than $11 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Georgia Real Estate Investors Plead Guilty to Bid Rigging and Fraud at Public Foreclosure Auctions

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Two Georgia real estate investors pleaded guilty today for their roles in a conspiracy to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia, the Department of Justice announced.

Separate felony charges were filed against Mohammad Adeel Yoonas and Kevin Shin on Dec. 23, 2014, in the U.S. District Court for the Northern District of Georgia in Atlanta.  According to court documents, from at least as early as April 2008 until at least March 2012, Yoonas conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Gwinnett County, Georgia.  Yoonas was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire titles to selected Gwinnett County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders, homeowners and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.

Shin, according to court documents, conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Gwinnett County from at least as early as March 2009 until at least March 2012.  Shin was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Gwinnett County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders, homeowners and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.

“These six guilty pleas result from the Antitrust Division’s ongoing investigation into schemes to rig public real estate foreclosure auctions in Georgia,” said Assistant Attorney General Bill Baer for the Department of Justice’s Antitrust Division.  “The division will continue working with its law enforcement partners to expose cartels that harm distressed homeowners and lenders.”

The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Gwinnett County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage, and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.

“The criminal actions of the defendants in this case provide a clear example of why enforcement of the Sherman Act remains necessary in maintaining a level and competitive field within commerce,” said Special Agent in Charge J. Britt Johnson for the FBI Atlanta Field Office.  “The FBI will continue to work with the U.S. Department of Justice’s Antitrust Division in identifying such financial schemes that attempt to take unfair advantage, to include those targeting the foreclosure auction process.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.  A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.

The investigation is being conducted by Antitrust Division’s Washington Criminal II Section and the FBI’s Atlanta Division, with the assistance of the Atlanta Field Office of the Housing and Urban Development Office of Inspector General and the U.S. Attorney’s Office for the Northern District of Georgia.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Georgia should contact Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, or visit www.justice.gov/atr/contact/newcase.htm.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.

ELEVEN NORTHERN CALIFORNIA REAL ESTATE INVESTORS INDICTED FOR

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WASHINGTON — A federal grand jury in San Francisco returned three multi-count indictments against eleven real estate investors for their role in bid rigging and fraud schemes at foreclosure auctions in Northern California, the Department of Justice announced.

The indictments, filed late yesterday in U.S. District Court for the Northern District of California in Oakland, California, charge Northern California real estate investors Michael Marr; Javier Sanchez; Gregory Casorso; Victor Marr; John Shiells; Miguel De Sanz; Alvin Florida Jr.; Robert A. Rasheed; John L. Berry III; Refugio Diaz; and Stephan A. Florida with participating in conspiracies to rig bids and schemes to defraud mortgage holders and others.  The indictments allege that the defendants agreed not to compete at public auctions in return for payoffs and diverted money to themselves and others that should have gone to mortgage holders and other beneficiaries.  All defendants were charged with bid rigging and fraud in Alameda County, California.  Marr, Sanchez, Shiells, and De Sanz were also charged with bid rigging and fraud in Contra Costa County, California.  Additionally, Shiells and De Sanz were charged with bid rigging and fraud in San Francisco County, California.

To date, 47 individuals have pleaded guilty to criminal charges as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public foreclosure auctions in Northern California.  On Oct. 22, 2014, a federal grand jury in San Francisco returned an eight-count indictment against five additional real estate investors for their role in bid rigging and fraud schemes at foreclosure auctions in San Mateo and San Francisco Counties, California.

“Collusion at the foreclosure auctions created an unfair playing field where conspirators pocketed illegal payoffs at the expense of lenders and distressed homeowners,” said Brent Snyder, Deputy Assistant Attorney for the Antitrust Division’s criminal enforcement program.  “The division will continue to investigate and prosecute local cartels that harm the competitive process.”

The indictments allege, among other things, that at various times between June 2007 and January 2011, the defendants conspired to rig bids to obtain numerous properties sold at foreclosure auctions in Alameda, Contra Costa, and San Francisco counties, negotiated payoffs for agreeing not to compete, held second, private auctions known as “rounds,” concealed those rounds and payoffs, and, in the process, defrauded mortgage holders and other beneficiaries.

“These charges demonstrate our continued commitment to investigate and prosecute individuals and organizations responsible for the corruption of the public foreclosure auction process,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office.  “The FBI is committed to work these important cases and remains unwavering in our dedication to bring the members of these illegal conspiracies to justice.”

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  Each count of mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine.  The government can also seek to forfeit the proceeds earned from participating in the mail fraud schemes.  The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million.

These indictments are the latest charges filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties, California.  These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.

Alabama Real Estate Investor Pleads Guilty to Conspiracy to Commit Mail Fraud

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An Alabama real estate investor pleaded guilty yesterday for his role in a conspiracy to commit mail fraud related to public real estate foreclosure auctions held in southern Alabama, the Department of Justice announced today.  To date, 10 individuals and two companies have pleaded guilty in connection with the department’s ongoing investigation into bid rigging and fraudulent schemes in the Alabama real estate foreclosure auction industry.

Chad E. Foster, a resident of Theodore, Alabama, pleaded guilty yesterday to an indictment filed in the U.S. District Court for the Southern District of Alabama, charging him with one count of conspiracy to commit mail fraud affecting a financial institution.  According to court documents, Foster knowingly joined a conspiracy with others to, among other things, fraudulently acquire title to selected properties at artificially suppressed prices, to conduct secret, second auctions open only to members of the conspiracy, to make payoffs to and receive payoffs from co-conspirators, and to divert money away from financial institutions, homeowners and others with a legal interest in selected properties.

“This guilty plea demonstrates the Antitrust Division’s resolve to pursue those who conspire to defraud distressed homeowners and financial institutions,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division.  “The division will continue to hold accountable individuals who subvert the competitive process for their own gains.”

“We are committed to partnering with the Antitrust Division,” said FBI Special Agent in Charge Robert F. Lasky of the Mobile Field Office.  “And we will hold accountable those individuals who profited illegally at the expense of financial institutions and struggling homeowners.”

The charge of conspiracy to commit mail fraud affecting a financial institution carries a maximum penalty of 30 years in prison and a $1 million fine.

Yesterday’s charge stems from an ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section and the FBI’s Mobile Field Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Alabama should call the Antitrust Division at 202-598-4000, or visit www.justice.gov/atr/contact/newcase.htm.

Yesterday’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.

Georgia Real Estate Investor Pleads Guilty to Bid Rigging and Fraud at Public Real Estate Foreclosure Auctions

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A Georgia real estate investor pleaded guilty today for her role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia, the Department of Justice announced.

Felony charges were filed on Dec. 19, 2013, in the U.S. District Court for the Northern District of Georgia in Atlanta, against Amy James. According to court documents, from as early as Dec. 6, 2005, until at least Jan. 23, 2009, James conspired with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in DeKalb County, Ga.  James was also charged with a conspiracy to commit mail fraud by fraudulently acquiring title to selected DeKalb County properties sold at public auctions and making and receiving payoffs and diverting money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.

“Today’s guilty plea is the third in the Antitrust Division’s ongoing investigation into anticompetitive behavior at real estate foreclosure auctions in the state of Georgia,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “The Antitrust Division remains committed to holding accountable individuals who conspire to defraud distressed homeowners and lenders in Georgia and elsewhere.”

The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain real estate offered at DeKalb County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, the conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.

“Today’s guilty plea reflects the FBI’s commitment toward enforcement of federal antitrust laws that are designed to provide a level playing field among businesses and individuals as they engage in competition for commerce,” said Ricky Maxwell, Acting Special Agent in Charge of the FBI’s Atlanta Field Office.  “The FBI will continue to work with its various law enforcement partners regarding these enforcement matters and asks that the public contact their nearest FBI field office regarding such unfair and illegal business practices.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.  A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine of $250,000 for individuals.  The fine may be increased to twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime.

The investigation is being conducted by Antitrust Division attorneys in Atlanta and the FBI’s Atlanta Division, with the assistance of the Atlanta Field Office of the Housing and Urban Development Office of Inspector General and the U.S. Attorney’s Office for the Northern District of Georgia.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Georgia should contact Antitrust Division prosecutors in Atlanta at 404-331-7113, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258  or visit www.justice.gov/atr/contact/newcase.htm.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit  www.StopFraud.gov.

Two Alabama Real Estate Investors and Their Company Sentenced for Their Roles in Bid-Rigging and Mail Fraud Conspiracies Involving Real Estate Purchased at Public Foreclosure Auctions

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Two Alabama real estate investors and their company were sentenced today in U.S. District Court for the Southern District of Alabama in Mobile, for their participation in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama, the Department of Justice announced.

Robert M. Brannon, of Laurel, Miss., and his son, Jason R. Brannon, of Mobile, Ala., were each sentenced to serve 20 months in prison for their participation in the conspiracies. The Brannons and their Mobile-based company, J&R Properties LLC, were ordered to pay $21,983 in restitution to the victims of the crime.

“Today’s sentences send a strong message that the Antitrust Division will continue to hold individuals and companies accountable for their anticompetitive conduct,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Whether on a local, national or international scale, bid rigging and fraud subvert the competitive process and the division will remain vigilant in vigorously pursuing those who violate the antitrust laws for their own financial enrichment.”

On Dec. 12, 2012, the Brannons and their company, pleaded guilty to an indictment originally returned on June 28, 2012, in the U.S. District Court for the Southern District of Alabama, charging each of them with one count of bid rigging and one count of conspiracy to commit mail fraud. According to court documents, the Brannons and their company conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama. After a designated bidder bought a property at a public auction, which typically takes place at the county courthouse, the conspirators would generally hold a secret, second auction, at which each participant would bid the amount above the public auction price he or she was willing to pay. The highest bidder at the secret, second auction won the property. The indictment also charged the Brannons and their company with conspiring to use the U.S. mail to carry out a fraudulent scheme to acquire title to rigged foreclosure properties sold at public auctions at artificially suppressed prices; to make payoffs to and to receive payoffs from co-conspirators; and to cause financial institutions, homeowners and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties. The indictment charged the Brannons and their company with participating in the bid-rigging and mail fraud conspiracies from as early as October 2004 until at least August 2007.

“The success of this investigation represents the FBI’s staunch commitment to target and investigate those who are willing to abuse and exploit illegal advantages during this legal process for personal gain at the expense of suffering citizens and businesses,” said Stephen E. Richardson, Special Agent in Charge of the FBI’s Mobile Division.

A total of eight individuals and two companies have pleaded guilty in the U.S. District Court for the Southern District of Alabama, in connection with this investigation. The sentences announced today resulted from an ongoing investigation conducted by the Antitrust Division and the FBI’s Mobile Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html¬.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.

North Carolina Commodities Firm Owner Sentenced to 36 Months in Prison for Multimillion-dollar Fraud

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The principal and co-owner of North Carolina-based Integra Capital Management LLC, was sentenced today to serve 36 months in prison for his role in a scheme to defraud commodities trading investors of more than $3.2 million, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney of the Western District of North Carolina Anne M. Tompkins.
Nicholas Cox, 35, of Lexington, N.C., was sentenced by U.S. District Judge Max O. Cogburn Jr., in the Western District of North Carolina. In addition to his prison term, Cox was sentenced to serve three years of supervised release and ordered to pay $1,981,477 in restitution.
On Dec. 22, 2012, Cox pleaded guilty in the Western District of North Carolina to one count of conspiracy to commit mail fraud, five counts of mail fraud and one count of conspiracy to commit money laundering.
According to court documents, between September 2006 and January 2009, Cox and his co-conspirator, Rodney Whitney, 50, of Archdale, N.C., the co-owner of Integra, engaged in a scheme to defraud investors in commodity trading pools operated by the firm. Integra was established purportedly for the purpose of pooling investors’ funds in commodity pools, and investing in commodity futures and foreign currency exchange trading. According to court documents, Cox and Whitney obtained and misappropriated more than $3.2 million in investor funds and fabricated account statements and tax forms to conceal their fraud.
According to court documents, Cox and Whitney falsely represented, among other things, that Integra’s managers had more than 30 years of combined market experience; that Integra paid dividends of two to five percent of the investor’s initial investment, which was derived from Integra’s trading profits; and investors could remove their principal investments within five days upon giving notice to Integra. According to court documents, Cox and Whitney used the money invested by later investors to pay the monthly investment returns they had promised to earlier investors, to purchase real estate, to fund other business ventures and to purchase automobiles and other personal goods and services.
On March 21, 2011, Whitney pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of conspiracy to commit money laundering. He was sentenced on Jan. 7, 2013, to 60 months in prison for his role in the scheme.
The case was prosecuted by Trial Attorney Luke Marsh of the Criminal Division’ s Fraud Section and Benjamin Bain-Creed and Kenny Smith of the U.S. Attorney’s Office for the Western District of North Carolina. The case was investigated by the U.S. Postal Inspection Service.
This prosecution was done in coordination with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov .

North Carolina Commodities Firm Owner Sentenced to 36 Months in Prison for Multimillion-dollar Fraud

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The principal and co-owner of North Carolina-based Integra Capital Management LLC, was sentenced today to serve 36 months in prison for his role in a scheme to defraud commodities trading investors of more than $3.2 million, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney of the Western District of North Carolina Anne M. Tompkins.

 Nicholas Cox, 35, of Lexington, N.C., was sentenced by U.S. District Judge Max O. Cogburn Jr., in the Western District of North Carolina. In addition to his prison term, Cox was sentenced to serve three years of supervised release and ordered to pay $1,981,477 in restitution.

On Dec. 22, 2012, Cox pleaded guilty in the Western District of North Carolina to one count of conspiracy to commit mail fraud, five counts of mail fraud and one count of conspiracy to commit money laundering.

According to court documents, between September 2006 and January 2009, Cox and his co-conspirator, Rodney Whitney, 50, of Archdale, N.C., the co-owner of Integra, engaged in a scheme to defraud investors in commodity trading pools operated by the firm.  Integra was established purportedly for the purpose of pooling investors’ funds in commodity pools, and investing in commodity futures and foreign currency exchange trading.  According to court documents, Cox and Whitney obtained and misappropriated more than $3.2 million in investor funds and fabricated account statements and tax forms to conceal their fraud.

According to court documents, Cox and Whitney falsely represented, among other things, that Integra’s managers had more than 30 years of combined market experience; that Integra paid dividends of two to five percent of the investor’s initial investment, which was derived from Integra’s trading profits; and investors could remove their principal investments within five days upon giving notice to Integra.  According to court documents, Cox and Whitney used the money invested by later investors to pay the monthly investment returns they had promised to earlier investors, to purchase real estate, to fund other business ventures and to purchase automobiles and other personal goods and services.

On March 21, 2011, Whitney pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of conspiracy to commit money laundering.  He was sentenced on Jan. 7, 2013, to 60 months in prison for his role in the scheme.

The case was prosecuted by Trial Attorney Luke Marsh of the Criminal Division’ s Fraud Section and Benjamin Bain-Creed and Kenny Smith of the U.S. Attorney’s Office for the Western District of North Carolina. The case was investigated by the U.S. Postal Inspection Service.

 

This prosecution was done in coordination with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov .