Three Plead Guilty in Email Scam; Wire and Mail Fraud

Three people have pleaded guilty to charges related to spam e-mail that promised U.S. victims millions of dollars from an estate and a lottery; in one scenario, it was asserted that the defendants sent e-mails purporting to be from an individual suffering from terminal throat cancer that needed assistance distributing approximately US$55 million to charity.^[1]

The three defendants, two from Nigeria and one from Senegal, sent spam e-mail to thousands of potential victims, in which they falsely claimed to control millions of dollars, located abroad.^[2] The fraud victims lost $1.2 million by giving the defendants advance fees.^[3]

In the throat cancer scheme, the defendants offered to give a 20 percent commission to the victim, or a charity of his or her choice, in exchange for the victim's help; the defendants would send a variety of fraudulent documents, including a "letter of authority" or a "certificate of deposit," making it appear that the promised funds were available, as well as pictures of an individual claiming to suffer from throat cancer.^[4] Defendant Anisiobi allegedly telephoned victims, disguising his voice to give the impression that he was suffering from throat cancer.^[5]

After obtaining their victims’ trust, the defendants asked them to wire-transfer payment for a variety of advance fees for legal representation, taxes and additional documentation. The victims then received nothing back.^[6]

Nnamdi Chizuba Anisiobi pled guilty to one count of conspiracy, eight counts of wire fraud and one count of mail fraud. Anthony Friday Ehis pled guilty to one count of conspiracy and five counts of wire fraud. Kesandu Egwuonwu pled guilty to one count of conspiracy, three counts of wire fraud and one count of mail fraud.

The maximum penalty for mail and wire fraud is 20 years in prison. The conspiracy charge carries a maximum penalty of five years in prison.

Mail Fraud
Mail fraud is a crime under 18 U.S.C. § 1341. Under this section, it is illegal to devise a scheme to defraud and then use the mail to carry out the scheme. The punishment for committing mail fraud is a fine, imprisonment for up to 20 years, or both. If convicted, money laundering carries a maximum 20-year prison sentence and a $500,000 fine, and mail fraud carries a maximum 20-year sentence and a $250,000 fine.

Wire Fraud
Wire fraud is covered under 18 U.S.C. §1343 whereunder it states that whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.^[7]

Federal criminal attorney Douglas McNabb has previously discussed mail fraud in his blog, which can be found here; he has also discussed the federal crime of wire fraud which can be found here.

---

^[1] Grant Gross, Three Plead Guilty in Nigerian Spam Scheme, The New York Times, January 30, 2008, available at http://www.nytimes.com/idg/IDG_002570DE00740E18852573E000750D52.html?ref=technology (last visited January 30, 2008).
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] 18 U.S.C. §1343 (2007).

"Smiling Bob" Enhancement Company Set for Fraud Trial

Executives of a company known for the "Smiling Bob" ads that promote "natural male enhancement" are set to go on trial in an 111-count indictment that accuses them of defrauding consumers out of over $100 million.^[1]

Government lawyers have assert that they expect to call about 90 witnesses in a trial anticipated to take about a month in which company president Steven Warshak, his mother and four other employees of Berkeley Premium Nutraceuticals are accused of conspiracy to commit money laundering plus mail, wire and bank fraud.^[2]

Products made by Berkeley Nutraceuticals include vitamins, nutrients and Enzyte, a products whose television pitchman was a character called "Smiling Bob." The company claims Enzyte has 2 million users worldwide.^[3]

Federal criminal attorney Douglas McNabb has previously discussed mail fraud in his blog, which can be found here; he has also discussed the federal crime of wire fraud which can be found here; money laundering can be found here.

---

^[1] Associated Press Staff, Enzyte Fraud Trial Set to Start, Associated Press Newswire, January 8, 2008, available at LEXIS, News Library, Wire News Services.
^[2] Id.
^[3] Id.

Federal Honest Services Fraud Crackdown Yields More Arrests

Roberto Ruiz, former managing director for the Bear Stearns Dallas office, and Christopher Chol-Su Pak, former vice president of the Bear Stearns Dallas office, pleaded guilty to charges related to an ongoing federal public corruption scandal in El Paso County.^[1]

Ruiz pleaded guilty to four counts of conspiracy to commit mail and wire fraud and a scheme to defraud the citizens of their right to the honest services of elected officials at the El Paso Independent School District, the El Paso Community College District, the city of El Paso and members of the El Paso County Commissioners Court.^[2]

Ruiz tried to bribe elected officials from those offices to win votes for particular vendors trying to do business with the city, according to his guilty plea.^[3] Pak pleaded guilty to engaging in a scheme to bribe county commissioners to win votes for a specific vendor.^[4]

The two are the latest officials accused of wrongdoing in a massive corruption investigation that became public earlier this year when federal agents raided the officials of County Judge Anthony Cobos, two commissioners and a local hospital board member.^[5]

Honest Services Fraud
When a person is convicted of some type of “honest services” fraud, it really means that 18 U.S.C. § 1346 is being used, which it is in Bryant’s case. Under section 1346, the term “scheme or artifice to defraud,” as found in the mail fraud statute, is understood to include a scheme or artifice to deprive another of the intangible right of honest services.

Mail fraud
Mail Fraud is criminalized by 18 U.S.C. § 1341. Section 1341 is a rather dense and convoluted statute. Under this section, it is a crime for a person who has devised or intends to devise any scheme or artifice, to defraud, or to obtain money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice, to place in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or to deposit or cause to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or to take or receive therefrom, any such matter or thing, or to knowingly cause to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing.

Federal criminal defense attorney Douglas McNabb has previously discussed the federal crime of mail fraud in his blog; these posts can be found here. His discussions on wire fraud can be found here.

---

^[1] AP Staff, Former execs plead guilty in El Paso corruption case, Associated Press Newswire, December 22, 2007, available at LEXIS, News Library, Wire News Services File.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.

Radler Sentenced for Fraud

U.S. District Judge Amy St. Eve sentenced former Chicago Sun-Times publisher F. David Radler to 29 months in prison for taking millions of dollars in unauthorized payments from the tabloid's parent company.^[1]

St. Eve accepted the plea agreement between Radler and federal prosecutors that gave him a reduced sentence in exchange for pleading guilty and cooperating with government's investigation of a mail fraud scheme at Hollinger International Inc; in addition e was fined $250,000.^[2] Radler has paid $53 million to Hollinger International in restitution and as part of settlements with the Securities and Exchange Commission and civil lawsuits.^[3]

St. Eve acknowledged Radler's attempts to right things by cooperating with prosecutors and paying back $61 million.^[4] For his cooperation, Radler cut his possible jail term in half. Under the plea agreement, Radler can also request to serve his time in his native Canada, in which case he could serve as little as six months.^[5]

Radler testified against his former colleagues during a nearly four-month trial that ended in July with their fraud convictions; a jury also found Black guilty of obstructing justice for removing 13 boxes from his Toronto office during the investigation, an infraction that was caught on tape.^[6]

Radler was the only senior executive charged by the government who pleaded guilty.^[7] His long-time business partner Conrad Black received 78 months in prison last week for his role in the scheme.^[8] Co-defendants John Boultbee and Peter Atkinson received 27 months and 24 months, respectively.^[9] The fifth executive, Mark Kipnis, received five years of probation and will not go to prison.[10]

Radler's affiliation with Black began nearly 40 years ago when he was 27 and Black was 25. Since then the two men built a massive media empire that at its peak had more than 300 papers, including the Chicago Sun-Times, the London Daily Telegraph and the Jerusalem Post.^[11] But allegations of fraud arose after shareholders questioned payments made to Black, Radler and others in connection with the sale of Hollinger newspapers.^[12] In September 2005, Radler pleaded guilty to helping loot the company of more than $32 million.^[13]

Radler asserted that the payments were disguised as compensation for Hollinger International's promise not to open rival newspapers to compete with the papers that were being sold; furthermore he admitted there was no legitimate business reason for the payments other than to steer money to himself and others.^[14]

He was on the witness stand for eight days, and testified that Black initiated the payments, while they both deliberately kept the company's audit committee in the dark about the transfers.^[15] He also endured punishing attacks to his credibility and character under cross-examination; federal defense attorneys for the defendants called him a serial liar and a turncoat who cut a sweetheart deal to reduce his punishment.

Federal criminal attorney Douglas McNabb has also previously discussed mail fraud in his blog, here; and a further discussion of the Conrad Black case can be found here, and here.

---

^[1] Ameet Sachdev, Former Sun-Times publisher Radler sentenced to 29 months for fraud, Chicagotribune.com, December 17, 2007, available at http://www.chicagotribune.com/business/chi-071217radler-sentencing,0,5990462.story?coll=chi-newslocal-utl (last visited December 17, 2007).
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Id.
^[10] Id.
^[11] Id.
^[12] Id.
^[13] Id.
^[14] Id.
^[15] Id.

Woman Arrested for Selling Fake Art on Ebay

Angela Hamblin, a Massachusetts woman, was arrested Oct. 10 on charges she sold fake works of art on the Internet.[1] She was charged with one count of mail fraud, and was arrested in Boston on a criminal complaint brought in U.S. District Court in Manhattan.[2]

Authorities are accusing her of claiming that the works she was selling on Ebay were created by accomplished artists such as Joseph Mallord, William Turner, or Milton Avery, an American abstract expressionist painter.[3] The Government asserts that the paintings actually were not authentic, despite her claims that she acquired the pieces from long-dead relatives or through other family connections.[4]

She has been charged with mail fraud which is covered under 18 U.S.C. § 1341.[5] In that statute it states that whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both.[6] If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.[7]

If convicted, Hamblin could face up to 20 years in prison the mail fraud count brought against her.[8] Federal criminal defense attorney Douglas McNabb has previously discussed the federal crime of mail fraud, at length, here.

---

[1] AP Staff, Woman accused of selling fake art work, Associated Press Newswire, October 10, 2007, available at LEXIS, News Library, Wire News Services File.
[2] Id.
[3] Staff and wire reports, The Ticker, Boston Globe, October 11, 2007, available at http://www.bostonherald.com/business/general/view.bg?articleid=1037366 (last visited October 18, 2007).
[4] AP Staff, supra note 1.
[5] Id.
[6] 18 U.S.C. § 1341(2007).
[7] Id.
[8] AP Staff, supra note 1.

U.S. Post Office to Crack Down on International Email Fraud

The e-mails arrive from Nigeria, Russia, Holland or other countries. They assert inheritances, political strife, long lost loves, and some have resorted to death threats. The common theme, however, is that they all need to get money out of whatever country they are in and if you help, they promise to let you share the bounty.^[1] It would seem easy to write this off as a bogus piece of spam, but thousands of people believe these are real and lose, on average, $3,000 to $4,000 each.^[2]

Hoping to stem the losses, the U.S. Postal Inspection Service announced a massive international crackdown in which more than 540,000 fake checks with a face value of $2.1 billion have been seized.^[3] There have been 60 arrests in the Netherlands, 16 in Nigeria and one in Canada, the Postal Inspection Service said, and the effort is continuing.^[4]

Most of the cons start with e-mails telling of an inheritance or lottery win and ask the victim to help bring the money to the United States.^[5] The victim is asked to cash a check that comes in the mail and to send part of the money back to the person sending it, then that person disappears with the money and the original check bounces, leaving the victim with a loss.^[6]

Many of the cases originate in the Netherlands, where West African con artists operate from Internet cafes, said Johan Van Hartskamp, commissioner of the Amsterdam police. In what he called ''Operation Dutch Treat,'' police have arrested 60 people there, with three extradited to the United States and four more facing extradition.^[7]

This crime could possibly fall under email fraud, mail fraud, or wire fraud because it uses all those mediums to commit the fraud. Specifically mail fraud is an act of fraud using the U.S. Postal Service, such as making false representations through the mail to obtain an economic advantage. As actually defined by 18 U.S.C. § 1341, it is illegal to devise a scheme to defraud and then use the mail to carry out the scheme. The punishment for committing mail fraud is a fine, imprisonment for up to 20 years, or both.^[8]

Similarly wire fraud would also cover the aforementioned crimes because wire fraud, which is covered under 18 U.S.C. §1343, is the act of having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.^[9]

Federal criminal defense attorney Douglas McNabb has previously written about the federal crime of Email fraud in his blog, here

---

^[1] Randolph E. Schimd, Post Office Cracks Down On Fake Check Scam, Associated Press Newswire, October 3, 2007, available at LEXIS, News Library, Wire News Services.
^[2] Id., So far this year, averages of 800+ people a month have filed complaints about such scams.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] 18 U.S.C. § 1341(2007).
^[9] 18 U.S.C. §1343 (2007).

Le-Nature's Inc. Officials To Be Investigated for Fraud

Federal prosecutors are seeking the forfeiture of more than $20 million in jewelry allegedly bought by former officials of bankrupt drinks maker Le-Nature's Inc.^[1] Le-Nature’s is also being investigated in an alleged money laundering and fraud scheme.^[2]Company officials are being investigated on possible counts of mail, wire and bank fraud, laundering of monetary instruments, and engaging in unlawful monetary transactions.^[3]

Le-Nature's was forced into bankruptcy in October last year amid allegations of accounting fraud.^[4] The company, which made bottled waters, teas, juices and nutritional drinks, is believed to have accumulated more than $820 million in debt.^[5]

Federal agents seized gems, diamond-encrusted watches, pearls and gold, silver and platinum jewelry worth more than $20 million from safes in a secret room at the company's Latrobe facility, the filing said. ^[6]

Authorities alleged in court documents that the company's annual revenues were substantially overstated and financial statements doctored for 2005 to show revenues of more than $287 million when it was actually about one-tenth of that amount.^[7] Prosecutors are also alleging that two sets of books were kept; one reflecting true business activity; the other fictitious but allegedly used to prepare financial statements.^[8]

Mail Fraud
Mail fraud is a crime under 18 U.S.C. § 1341. Under this section, it is illegal to devise a scheme to defraud and then use the mail to carry out the scheme. The punishment for committing mail fraud is a fine, imprisonment for up to 20 years, or both. If convicted, money laundering carries a maximum 20-year prison sentence and a $500,000 fine, and mail fraud carries a maximum 20-year sentence and a $250,000 fine.

Wire Fraud
Wire fraud is covered under 18 U.S.C. §1343 whereunder it states that whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.^[9]

Federal criminal attorney Douglas McNabb has also previously discussed mail fraud in his blog, which can be found here; he has also discussed the federal crime of wire fraud which can be found here.

---

^[1] Daniel Lovering, Feds seek forfeiture of $20M in jewelry seized from Le-Nature's, Associated Press Newswire, September 26, 2007, available at LEXIS, News Library, Wire News Services.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] 18 U.S.C. §1343 (2007).

Grand Jury Indicts Mortgage Brokers for Fraud

A federal grand jury has indicted four mortgage brokers and real estate agents for allegedly running a mortgage fraud scheme that allegedly netted them $277,000 in illegal commissions and payments for 19 homes.^[1] The four men are accused of recruiting buyers to purchase homes in Elk Grove last year with no money down.^[2] The buyers were told that renters would make the mortgage payments and buy the homes from them after two years. But after the mortgages were processed and the defendants collected loan commissions and real estate fees, none of the renters materialized.^[3] The four also allegedly inflated the buyers' incomes in loan applications to subprime lenders.^[4]

Assistant U.S. Attorney Matt Stegman said the case is one of several mortgage fraud cases his office is investigating in the wake of a fallout in housing prices that experts have partially attributed to subprime mortgage loans and inflated housing prices.^[5]

James Martin, Mario Fellini III, Gabriel Viramontes, and Joseph Gallo were all indicted on charges of bank fraud and conspiracy to launder money for their alleged roles in the fraud in question.^[6] Martin, Fellini and Gallo also were indicted on charges of making false statements on loan applications, while Martin, Fellini and Viramontes were indicted on mail fraud charges.^[7] Martin, Fellini and Gallo pleaded not guilty to the charges in federal court Tuesday, and Viramontes was scheduled to appear next week.^[8]

Mortgage Fraud is covered under 18 U.S.C. § 225 which is also called continuing financial crimes enterprise and it states that whoever organizes, manages, or supervises a continuing financial crimes enterprise; and receives $5,000,000 or more in gross receipts from such enterprise during any 24-month period, shall be fined not more than $10,000,000 if an individual, or $20,000,000 if an organization, and imprisoned for a term of not less than 10 years and which may be up to life.^[9] For purposes of subsection (a), the term “continuing financial crimes enterprise” means a series of violations under section 215, 656, 657, 1005, 1006, 1007, 1014, 1032, or 1344 of this title, or section 1341 or 1343 affecting a financial institution, committed by at least 4 persons acting in concert.^[10]

Federal criminal attorney Douglas McNabb has also previously discussed all of the federal crimes discussed in this blog previously, these can be found here. Specifically, mail fraud can be found, here; money laundering can be found here; and mail fraud can be found here.

---

^[1] AP Staff, Four Indicted In Alleged Scheme To Get Mortgages, Associated Press Newswire, September 26, 2007, available at LEXIS, News Library, Wire News Services.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] 18 U.S.C. § 225(a)(2007).
^[10] Id., at §225(b).

San Francisco City Supervisor Charged with Mail Fraud

Ed Jew, a San Francisco supervisor who has been accused of attempting to extort $80,000 from a group of fast-food business owners has pleaded not guilty and was released on $1 million bail.^[1]

Jew was charged Thursday with one federal count of mail fraud after an accustations stemming from an FBI sting where it is asserted that operators of a group of tapioca drink shops gave Jew $40,000 in cash and said they would pay him another $40,000 later.^[2]

Jew has acknowledged taking the money, but asserts that he did so at the businessmen's insistence and on behalf of a consultant he recommended they hire to help with their permit problem.^[3]

Jew was already facing felony charges of perjury and election code violations for allegedly lying about where he lived so he could run for office in San Francisco; he has pleaded not guilty to those charges as well. Jew's federal criminal defense attorney, Steven Gruel, called the mail fraud count a "throwaway charge because you can't get something else…[what kind of influence could Jew possibly have had over the issuing of city permits]….He doesn't control the planning commission, and he certainly doesn't control what types of permits are necessary for retailers."^[4]

Jew's trial on the perjury and election code allegations is to begin late next month.^[5] Gruel questioned the timing of the "media-friendly" federal charge, claiming that the surrounding publicity will taint the jury pool in the other case.^[6] "I have grave concerns whether or not the supervisor can get a fair trial in San Francisco on those state charges," Gruel asserted.^[7]

Mail Fraud
Mail fraud is a crime under 18 U.S.C. § 1341. Under this section, it is illegal to devise a scheme to defraud and then use the mail to carry out the scheme. The punishment for committing mail fraud is a fine, imprisonment for up to 20 years, or both.If convicted, money laundering carries a maximum 20-year prison sentence and a $500,000 fine, and mail fraud carries a maximum 20-year sentence and a $250,000 fine.

Federal criminal attorney Douglas McNabb has also previously discussed mail fraud in his blog, here; and the federal crime of perjury has been discussed here.

---

^[1] Marcus Wohlsen, SF Supervisor Pleads Not Guilty to Fraud, Associated Press Newswire, September 21, 2007, available at LEXIS, News Library, Wire News
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.

Kopiloff Accused of Using Limewire to Steal Identitys

Gregory Thomas Kopiloff, who hails from Seattle, has been arrested in what may be the first identity theft case against someone whose medium may have been file-sharing computer programs such as Limewire or KaZaa.^[1]

Kopiloff used "peer-to-peer" file-sharing programs to scan other people's computers for financial information that he then used to open credit cards which he used to shop online.^[2] He purportedly bought more than $73,000 worth of goods such as iPods and laptop computers online, and then resold those items at half-price; investigators asserted that spent most of the money supporting a gambling habit.^[3]

Authorities said they have identified at least 83 victims — most of whom have teenage children and did not know the file-sharing software was on their computer.^[4] But investigators also said they believe the number of people affected was in the hundreds — and that in all they lost hundreds of thousands of dollars.^[5]

Kopiloff was arrested Wednesday and is charged with mail fraud, accessing a protected computer, and two counts of aggravated identity theft; he did not enter a plea during an appearance in U.S. District Court on Thursday.^[6] A detention hearing was set for Monday.^[7]

Though people have been prosecuted for using peer-to-peer networks to share copyrighted music, movies and software, the Justice Department called this case the first in what experts say is an equally — if not more — troubling matter.^[8] Each day, computer users inadvertently share sensitive files through such programs, from banking statements to legal documents, says Robert Boback, chief executive of Tiversa Inc., a Pennsylvania firm that monitors file-sharing.^[9] Typically it occurs when a user downloads the file-sharing software and accidentally allows it to share all files on a computer, rather than just the music files, in some cases this is the default setting for these programs and only the computer savvy user can find a way to turn off that option.

"If you are running file-sharing software, you are giving criminals the keys to your computer, [c]riminals are getting access to incredibly valuable information," said assistant U.S. attorney Kathryn Warma.^[10]

According to the indictment, Kopiloff began using Limewire and Soulseek about 2 1/2 years ago to search for people who had inadvertently allowed access to their sensitive files. To get the files he needed Kopiloff would allegedly search for "federal tax return," or for student financial aid forms or other financial information.^[11] It is asserted that he then screened the names before opening accounts in their name to ensure that they earned at least $150,000 a year and had good credit.^[12]

He was arrested after one of his alleged victims told his company's security officer — a former Secret Service agent — about how his bank account had been compromised, with someone in western Washington passing bad checks on his account.^[13] The agent forwarded the information to Secret Service agents and police in Seattle.^[14]

Aggravated Identity Theft
Aggravated identity theft occurs when the crime of identity theft is coupled with another felony, here it is mail fraud. Under 18 U.S.C. § 1028A, if a person knowingly and unlawfully transfers, possesses, or uses a means of identification of another person in conjunction with the commission of a set list of felonies, that person will be punished as those felonies provide and that person will additionally be imprisoned for 2 years. If the felony happens to be a terrorism offense, that person will receive an additional 5 years of imprisonment.^[15] Furthermore, that person will not be placed on probation, nor will the term of imprisonment run concurrently, unless the court has been given discretion to do by the Sentencing commission.^[16]

Federal criminal attorney Douglas McNabb has also previously discussed identity theft in his blog, here; and the federal crime of mail fraud has been discussed, here.

---

^[1] Gene Johnson, Man Arrested in Online ID Theft Scheme, Associated Press Newswire, September 7, 2007, available at available at LEXIS, News Library, Wire News Services File.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Id.
^[10] Id.
^[11] Id.
^[12] Id.
^[13] Id.
^[14] Id.
^[15] 18 U.S.C. § 1028A (2007).
^[16] Id.

Ahmad and Singh Indicted for Mail Fraud

A federal grand jury has indicted Iftikhar Ahmad, and Manpreet Singh for allegedly engaging in a subprime mortgage fraud scheme during the recent California housing boom.^[1]

Ahmad and Singh were charged with multiple counts of mail fraud Thursday in U.S. District Court in Sacramento.^[2] They are accused of using rapid, inflated sales of homes in the Stockton area to steal from a subprime lender.^[3] Ahmad is also charged with multiple counts of money laundering, and Singh faces additional mail fraud charges.^[4]

Prosecutors allege Ahmad bought homes and sold them at inflated prices to buyers he created through identity theft or false documents, and that Singh acted as his straw buyer.^[5]

Ahmad’s federal criminal defense attorney asserted that his client denies federal prosecutors' claims that he earned $1.5 million from fraudulent loans taken from 2003 to 2005.^[6] "My client is adamant that he's not guilty of any of these charges the government is coming at him with," said federal criminal defense attorney Charles Pacheco.^[7]

Mail Fraud Mail fraud is a crime under 18 U.S.C. § 1341. Under this section, it is illegal to devise a scheme to defraud and then use the mail to carry out the scheme. The punishment for committing mail fraud is a fine, imprisonment for up to 20 years, or both.

If convicted, money laundering carries a maximum 20-year prison sentence and a $500,000 fine, and mail fraud carries a maximum 20-year sentence and a $250,000 fine.

Federal criminal attorney Douglas McNabb has also previously discussed mail fraud in his blog, here; and the federal crime of money laundering has been discussed here.

---

^[1] AP Staff, Two indicted in San Joaquin Valley mortgage fraud, Associated Press Newswire, August 31, 2007, available at available at LEXIS, News Library, Wire News Services File.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.

Conrad Black Asks Judge to Overturn Jury Verdict

Press baron Conrad Black has filed a formal request for his trial judge to overturn his convictions, claiming that there was insufficient evidence for jurors to find him guilty of mail fraud and obstruction of justice.^[1] In a series of motions to Chicago's federal court, Black's federal criminal defense lawyers demand either immediate acquittal or a fresh trial, arguing that "no rational jury could find beyond a reasonable doubt" that the former Telegraph owner deliberately stole $6.5m from his Hollinger media empire.^[2]

The instant motion will represent the last chance for Judge Amy St. Eve to throw out the jury verdict before Black's sentencing hearing, which is scheduled to happen in November.^[3]

"It is a pretty rare case when a trial judge reverses herself, so I suspect that the chances of Lord Black prevailing at this stage are less than one in ten….He probably has a better shot on appeal," asserted Hugh Totten, a Chicago federal attorney.^[4]

Federal criminal defense lawyer Marc Martin says Judge St Eve was wrong to give the jury a so-called "ostrich instruction" which allowed a conviction if they felt that Black had displayed willful blindness to the asserted wrongdoing.^[5]

"An ostrich, or conscious avoidance, instruction is warranted only in rare circumstances where a defendant suspected wrongdoing or deliberately avoided the truth," argued Martin, who says the government failed to produce evidence that Black took deliberate steps to avoid knowledge of any crimes.^[6]

The defense went on to say that the only evidence linking Black to the theft of phony "non-compete" payments from Hollinger was the word of his former business partner, David Radler.^[7] Additionally, Radler's evidence was given under a plea agreement, and it should have been allowed to call sentencing experts as witnesses to explain to jurors how his co-operation was reducing his punishment.^[8]

The US government is pushing for the 62-year-old peer to serve between 15 and 20 years in jail, although legal commentators believe a more likely sentence is between five and 10 years' imprisonment.^[9]

Federal criminal attorney Douglas McNabb has also previously discussed mail fraud in his blog, here; and a further discussion of the Conrad Black case can be found here.

---

^[1] Andrew Clark, Conrad Black asks judge to quash convictions, Guardian Unlimited, August 28, 2007, available at http://business.guardian.co.uk/story/0,,2157624,00.html (last visited August 29, 2007).
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Id.

Judge Overturns Jury Verdict in Public Corruption Case

Former Mayor Ted LeBlanc was found guilty last April as a result of a probe that also netted convictions of former Norristown administrator Anthony Biondi and contractor Thomas Carbo.^[1]

LeBlanc was also found guilty of honest services fraud, bribery, bank fraud, and tax charges.^[2] LeBlanc, a republican, allegedly accepted a $10,000 bribe from borough insurance agent Herbert Bagley in exchange for LeBlanc insuring that Bagley (who is charged with paying a bribe to LeBlanc) continued to be appointed the borough’s insurance broker.^[3] Bagley was in danger of losing his contract because his business partner had been charged in state court with stealing hundreds of thousands of dollars of borough insurance payments in late 2002.^[4]

Carbo, who owned Tommy's Paving & Excavating and was involved in the contracting with the other men, was convicted of mail fraud and conspiracy in June 2006 and was facing 24 to 30 months in prison. ^[5] The jury deliberated for a little more than four hours following a six-day trial.^[6]

However now a federal judge has taken the rare action of overturning the jury’s verdict, saying no "rational" jury would have found a suburban contractor guilty in a public corruption case.^[7] According to testimony, Biondi paid Carbo for use of a truck that Biondi needed to do moonlighting jobs, and then awarded Carbo borough work without disclosing their financial relationship.^[8]

Federal criminal defense lawyer Dino Privitera had argued that Carbo should not be held criminally responsible for Biondi's lapse.

In a 75-page ruling issued Friday, Aug 10, U.S. District Judge Mary McLaughlin agreed.^[9] "The evidence presented is insufficient to allow a rational jury to find beyond a reasonable doubt that Mr. Carbo knew that Mr. Biondi was required to disclose their relationship to the state," she wrote.^[10]

Honest Services Fraud
When a person is convicted of some type of “honest services” fraud, it really means that 18 U.S.C. § 1346 is being used. Under section 1346, the term “scheme or artifice to defraud,” as found in the mail fraud statute, is understood to include a scheme or artifice to deprive another of the intangible right of honest services.

Mail Fraud
Under 18 U.S.C. § 1341, it is a crime for a person to devise a scheme or artifice to defraud, and then use the nation’s mail system to carry out that scheme. The punishment for a violation of section 1341 is a fine, imprisonment for up to 20 years or both. If a financial institution is harmed in the scheme, the fine can be as high as $1,000,000, and the prison sentence can be as long as 30 years.

Federal criminal defense attorney Douglas McNabb has previously discussed the federal crime of bank fraud in his blog, here.

---

^[1] AP Staff, U.S. judge overturns contractor's guilt in Norristown corruption, Associated Press Newswire, August 13, 2007, available at available at LEXIS, News Library, Wire News Services File.
^[2] Rich Manieri, U.S. Attorneys Office Press Release, Former Norristown, PA, Mayor Found Guilty, April 17, 2007, available at http://www.usdoj.gov/usao/pae/News/Pr/2006/apr/LeBlanc.html (last visited August 13, 2007).
^[3] Id
^[4] Id.
^[5] AP Staff, supra note 1.
^[6] Manieri, supra note 2.
^[7] AP Staff, supra note 1.
^[8] Id.
^[9] Id.
^[10] Id.

Black's Federal Criminal Defense Attorneys To Investigate Juror Comments

Former media mogul Conrad Black was convicted Friday, July 13, of defrauding newspaper empire Hollinger International out of millions of dollars.^[1] He was found guilty by a federal jury of three counts of mail fraud and one count of obstruction of justice for removing documents out of his Toronto office in defiance of a court order.^[2]

However federal criminal defense attorneys are "looking into" a conversation among jurors in the Conrad Black fraud trial about a news story related to the case, that may have taken place despite the fact that juries in civil and criminal cases are repeatedly instructed not to discuss the case outside of deliberations, and not to read media reports about it.^[3]

The Chicago Sun-Times reported Monday, July 16, that, during deliberations, a juror told her colleagues that she had been told some foreign press suggested the jury was too stupid to understand the complex case which "It didn't settle well with anyone," said Margaret Williams, a juror on the case.^[4] Williams said she had reassured her fellow jurors that they were all smart people and "let's do this," but she asserts that the comment didn't affect the jury's verdict one way or the other.^[5]

Ron Safer, an attorney for former Hollinger corporate counsel Mark Kipnis, said he may file a motion this week regarding the juror's remark.^[6] "Generally, you can't look behind the jury's deliberations….There are limited exceptions. This might be one of them," Safer said.^[7] Federal criminal defense attorneys for Black and former Hollinger executive Peter Atkinson also confirmed that they were looking into the Sun-Times report.^[8]

"I honestly don't think it's a big deal…….We had 18 weeks of trial, and we're going to have to do a do-over because someone's brother-in-law said something? That would be silly….[the comment would have to have had a prejudicial impact, but it is] a regular occurrence in lengthy trials where people would hear from their relatives about the case," said DePaul University law professor Stephan Landsman.^[9]

Obstruction of Justice
Under 18 U.S.C. § 1503(a), it is a crime for a person to corruptly influence, obstruct, or impede the due administration of justice. The punishment for a violation of section 1503(a) is a fine, imprisonment for up to 10 years, or both.

Federal criminal attorney Douglas McNabb has also previously discussed mail fraud in his blog, here.

---

^[1] Mike Robinson, Black Convicted of Swindling Millions, Associated Press Newswire, July 14, 2007, available at LEXIS, News Library, Wire News Services File
^[2] Id.
^[3] Mary Wisniewski, Defense in Black case looks into juror's remark, Chicago Sun-Times, July 17, 2007, available at http://www.suntimes.com/business/hollinger/470995,CST-NWS-conrad17.article (last visited July 18, 2007).
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Id.

El Paso Public Corruption Investigation Goes Further Than Expected

Elizabeth “Betti” Flores, a former El Paso County commissioner pleaded guilty to conspiracy to commit mail fraud and wire fraud for accepting bribes in exchange for votes, the latest plea in an ongoing public corruption investigation.^[1]

In recent months, the FBI has raided the offices of El Paso County Judge Anthony Cobos, two county commissioners and other local officials, including Cobos’ former chief of staff. The latest plea came from former County Commissioner Flores, who admitted in her plea to taking bribes in exchange for votes on county contracts and other issues.^[2] According to one count, she was paid $10,000 to vote in favor of a contract for the $20 million El Paso County Parking Garage Annex and to advocate change orders to that contract. The contract was awarded in 2004.^[3]

Flores pleaded guilty Friday to four charges of conspiracy to commit mail fraud and the deprivation of honest services and two charges of conspiracy to commit wire fraud. Each count could bring her 20 years in prison.^[4]

Cobos’ former chief of staff, John Travis Ketner, pleaded guilty last month to corruption charges and claimed he was hired specifically to solicit bribes from vendors looking for county contracts.^[5] He filed an 18-page document in federal court implicating others and describing how a campaign donation, cash or trip could secure a lucrative taxpayer-funded contract.^[6]

We have previously blogged at length about the following crimes: Mail Fraud, Wire Fraud, and Public Corruption

---

^[1] AP Staff, Ex-El Paso Official Pleads to Corruption, Associated Press Newswire, July 9, 2007, available at LEXIS, News Library, Wire News Services File.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.

Jury Deliberates in Black Fraud Trial

The jury has begun deliberating in the fraud and racketeeting trial of former media mogul Conrad Black.^[1] The panel has been in court for three months of testimony, more than 40 witnesses about 30 hours of closing statements and the presentation of hundreds of documents in the trial of Black and three other Hollinger executives.^[2]

The jury will be considering all 43 of the charges, which include mail and wire fraud, obstruction of justice, racketeering and tax fraud; there are 13 counts against Black, 11 against each of former Hollinger International executives Jack Boultbee and Peter Atkinson and eight against former company lawyer Mark Kipnis.^[3]

The key issue in this case rests on non-compete payments from sales of Hollinger newspapers which were made in exchange for promises not to compete in the same markets where the papers circulated.^[4] Such agreements are not unusual in the publishing industry, but prosecutors say the money should have gone to Hollinger's shareholders, not the executives.^[5]

As they deliberate, the mostly female jury was instructed that it must decide whether prosecutors have proven beyond a reasonable doubt that Black and the others intentionally lied to enrich themselves at the expense of Hollinger International shareholders.^[6]

Obstruction of Justice
Under 18 U.S.C. § 1519, any person who falsifies documents with the intent to impede, obstruct, or influence the investigation of any matter within the jurisdiction of a department of the United State can be fined, imprisoned for 20 years, or both.

Racketeering
Racketeering is generally covered by 18 U.S.C. § 1951 wherein it states that interference with commerce by threats or violence is a crime that occurs when a person, in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in commerce, by robbery or extortion or attempts or conspires so to do, or commits or threatens physical violence to any person or property in furtherance of a plan or purpose to do anything in violation of this section shall be fined under this title or imprisoned not more than twenty years, or both.

Racketeering charges should be differentiated from RICO charges. Racketeering is the interference of commerce through threats of violence.^[7] RICO charges,^[8] on the other hand, concern organized crime and systematic racketeering activity infiltration into legitimate organizations. However, because the statutes are written loosely enough to be applied to drug traffickers, it would not surprise us to find out that the individuals in question in this case had been charged under the RICO statutes, rather than solely under the racketeering statutes.

---

^[1] Romina Maurino, In the jury’s hands, The Canadian Press, June 28, 2007, available at http://thechronicleherald.ca/Canada/851159.html (last visited June 28, 2007)
^[2] Id.
^[3] Id.; AP Staff, A look at the Conrad Black trial, Associated Press Newswire, June 27, 2007, available at LEXIS, News Library, Wire News Services File.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] See 18 U.S.C. §§ 1951 et seq.; see also Id. § 1961(a) (“racketeering activity” defined).
^[8] Id. §§ 1961 et seq.

Phipps Pleads Guilty to Mail Fraud

Steven Phipps, a former longtime business partner of ex-state Sen. Gene Stipe, pleaded guilty Wednesday to a mail fraud charge and admitted paying kickbacks to three state legislators.^[1] The Legislators, who have since left office, received the money for their help in funneling taxpayer money to private businesses.^[2]

He has been cooperating with federal prosecutors; the charge carries a maximum penalty of five years in prison.^[3]Phipps was released on $20,000 bond by U.S. Magistrate Kimberly West; he became the second person to plead guilty to a felony charge linked to alleged kickbacks to legislators.^[4] Former Rep. Mike Mass pleaded guilty to a similar charge in April and also is cooperating with federal authorities.^[5]

"I agreed with Mike Mass and others on a plan to have state funds appropriated by the legislature and steered to an entity known as the Rural Development Foundation……..The RDF then provided funds to National Pet Products and Indian Nation Entertainment, businesses then largely owned and operated by me…..In order to secure state funding for RDF, that would then be provided to INE, I agreed to periodically pay Rep. Mike Mass and two other influential state legislators each a percentage of the gross income from the gaming machines that were manufactured as the result of the state funding." Phipps said.^[6]

His attorney, Dan Webber, said the state money did go to economic development. "This is not a case where taxpayer money ended up in some offshore bank account….Though obtained improperly, the state funds for National Pet Products and Indian Nation Entertainment were put to use by those companies and did help create manufacturing jobs in eastern Oklahoma,” he said.^[7]

Mail fraud
Mail Fraud is criminalized by 18 U.S.C. § 1341. Section 1341 is a rather dense and convoluted statute. Under this section, it is a crime for a person who has devised or intends to devise any scheme or artifice, to defraud, or to obtain money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice, to place in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or to deposit or cause to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or to take or receive therefrom, any such matter or thing, or to knowingly cause to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing.

We have discussed mail fraud at length in this blog, here.

---

^[1] AP Staff, Phipps pleads guilty in federal court, Associated Press Newswire, June 27, 2007, available at LEXIS, News Library, Wire News Services File.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.

Soloway Denied Bail: Update

U.S. Magistrate Judge James P. Donohue said Robert Soloway, of Seattle, should remain in jail until his trial scheduled for Aug. 6 because he has minimal ties to Washington state and has family in Sweden.^[1] "These are allegations of cyber crimes that have no geographical borders......It's just as easy to continue these actions in Sweden as it is in the United States." Donohue said.^[2]

Donohue continued, asserting that Soloway's previous actions demonstrated an unwillingness to abide by court orders, citing a cases in the past where Soloway continued his spamming even after Microsoft Corp. won a $7 million civil judgment against him in 2005 and a small Internet service provider in Oklahoma won a $10 million judgment.^[3]

Soloway's attorney, Richard Troberman, wrote in a court filing that the government's evidence that Soloway would flee was "woefully short on facts," and asserting that, in fact, Soloway has only traveled out of the country with his parents.^[4]

Soloway, who was given the moniker "Spam King" by federal investigators, was arrested May 30 on 35 charges including mail fraud, wire fraud, aggravated identity theft and money laundering.^[5] Mail fraud, wire fraud and money laundering are punishable by up to 20 years in prison; the government is also seeking $773,000 as proceeds of Soloway's activities.^[6]

We have previously discussed Money Laundering, here; Mail Fraud, here; Wire Fraud, here; and Identity Theft here.

We have also previously written on the case of Robert Soloway in this blog, this can be accessed here.

---

^[1] Annie Flanzraich, No Bail for Alleged 'Spam King', The Associated Press Newswire, June 13, 2007, available at LEXIS, News Library, Wire News Services.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.

Tenn. State Sen. Aquitted on All Charges of Fraud

Tennessee State Sen. Jerry Cooper was acquitted by a federal jury on all charges in his fraud case The jury of 10 women and two men returned the verdict on the fourth day of the Democratic lawmaker’s trial on charges of bank fraud, mail fraud and conspiracy.^[1]

The charges stemmed from the 1999 sale of Cooper’s lumber mill to an Alabama businessman.^[2] Cooper did not testify, however his attorney, Jerry Summers of Chattanooga, told jurors in closing arguments that the government should have ended the investigation after the lumber mill buyer, Tony Auyer of Huntsville, pleaded guilty last year to several counts of fraud, conspiracy and money laundering and was sentenced to prison.^[3]

Last year a separate jury acquitted co-defendant James Passons of McMinnville in the borrowing conspiracy case. Passons testified he acted at Cooper’s request when he prepared an inflated appraisal that showed the 13.6 acres in southern Middle Tennessee included a rail spur, even though it did not.^[4] However Rita D. Phillips, the jury foreman, said as jurors left that the 45-minute deliberation was a "good discussion.....I think we feel very good about the agreement we reached....[there just] was not enough evidence [against Cooper.]"^[5]

We have previously discussed bank and mail fraud in this blog, as well as money laundering.

---

^[1] Bill Poovey, Sen. Cooper acquitted on all charges in fraud case, Associated Press Newswire, June 9, 2007, available at LEXIS, News Library, Wire News Services.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.

Top Spammer Arrested; Soloway

Robert Alan Soloway has been described as one of the world's top spammers; he is one of the people who fills your email in box with junk everyday.^[1] He was arrested in Seattle, Wednesday, May 30, and federal authorities believe that this will lead to an immediate, perceptible decrease in the amount of junk e-mail flying around the Web.^[2] ''He's one of the top 10 spammers in the world,'' said Tim Cranton, a Microsoft Corp. lawyer who is senior director of the company's Worldwide Internet Safety Programs. ''He's a huge problem for our customers. This is a very good day.''^[3]

Soloway's arrest came a week after a federal grand jury returned a 35-count indictment charging him with mail fraud, wire fraud, e-mail fraud, aggravated identity theft and money laundering.^[4] In court Wednesday afternoon, Soloway pleaded not guilty to all charges; he has been accused of using networks of compromised computers to send out millions upon millions of junk e-mails.^[5] It is alleged that he has been doing this for 4 years, and he continued his activities despite a $7 million civil judgment against him in 2005 won by Microsoft, and another by Robert Brauer, the operator of a small Internet service provider in western Oklahoma, who won a $10 million judgment.^[6]

The case is the first in the country in which federal prosecutors have used identity theft statutes to prosecute a spammer for taking over someone else's Internet domain name, and it would mean at least an extra two years on Soloway's sentence if he is convicted.^[7] He could face decades in prison, though prosecutors said they have not calculated what guideline sentencing range he might face.^[8]

However despite the arrest, junk e-mail continued to land in mailboxes around the world Thursday, May 31.^[9] Even if Soloway is ultimately convicted and his operations shuttered, spam experts say dozens are in line to fill the void. This is mostly a symbolic arrest, and it is unlikely to significantly effect the spam traffic worldwide.^[10]

Soloway, was once on a top 10 list of spammers kept by The Spamhaus Project, an international anti-spam organization.^[11] Others have since topped him, mostly based in Russia and other countries out of reach of U.S. or European law.^[12] "Most of the Russian gangs seem to have a lot more freshly hijacked computers and are able to deliver much more spam into people's inboxes," said Vincent Hanna, a European investigator for Spamhaus.^[13]

Aggravated Identity Theft
Aggravated identity theft occurs when the crime of identity theft is coupled with another felony, here bank fraud. Under 18 U.S.C. § 1028A, if a person knowingly and unlawfully transfers, possesses, or uses a means of identification of another person in conjunction with the commission of a set list of felonies, that person will be punished as those felonies provide and that person will additionally be imprisoned for 2 years. If the felony happens to be a terrorism offense, that person will receive an additional 5 years of imprisonment.^[14]Furthermore, that person will not be placed on probation, nor will the term of imprisonment run concurrently, unless the court has been given discretion to do by the Sentencing commission.^[15]

E-mail Fraud
E-mail fraud is covered under 18 U.S.C. § 1037. This statute makes it illegal for a person to, in or affecting interstate or foreign commerce, knowingly: (1) accesses a protected computer without authorization, and intentionally initiates the transmission of multiple commercial electronic mail messages from or through such computer;^[16] (2) uses a protected computer to relay or retransmit multiple commercial electronic mail messages, with the intent to deceive or mislead recipients, or any Internet access service, as to the origin of such messages; ^[17](3) materially falsifies header information in multiple commercial electronic mail messages and intentionally initiates the transmission of such messages;^[18] (4) registers, using information that materially falsifies the identity of the actual registrant, for five or more electronic mail accounts or online user accounts or two or more domain names, and intentionally initiates the transmission of multiple commercial electronic mail messages from any combination of such accounts or domain names;^[19] or (5) falsely represents oneself to be the registrant or the legitimate successor in interest to the registrant of 5 or more Internet Protocol addresses, and intentionally initiates the transmission of multiple commercial electronic mail messages from such addresses.^[20]

---

^[1] AP Wire, Feds in Seattle arrest man described as one of world's top spammers, Associated Press Newswire, May 30, 2007, available at LEXIS, News Library, Wire News Services.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Anick Jesdanun, Spam Flows Despite High-Profile Arrest , Associated Press Newswire, May 31, 2007, available at LEXIS, News Library, Wire News Services.
^[10] Id.
^[11] Id.
^[12] Id.
^[13] Id.
^[14] 18 U.S.C. § 1028A (2007).
^[15] Id.
^[16] 18 U.S.C. § 1037(a)(1)(2007).
^[17] Id. at §1037(a)(2).
^[18] Id. at §1037(a)(3).
^[19] Id. at §1037(a)(4).
^[20] Id. at §1037(a)(5).

Las Vegas Attorney Indicted for Fraud, Money Laundering, Conspiracy

Noel Gage, a Las Vegas personal injury lawyer, has become the second person charged in what federal prosecutors assert is a extremely wide-ranging fraud scheme to increase courtroom settlements by way of inflating medical costs.^[1] The acting U.S. Attorney for Nevada, Steven Myhre, said more indictments are expected in the case, which became public in March with the arrest of Howard Awand.^[2]

A grand jury indictment unsealed Tuesday, May 22, alleges that Gage swapped referrals with Awand, who posed as a medical consultant and recruited a network of doctors and lawyers to inflate claims by personal injury plaintiffs.^[3]Authorities allege that Awand and Gage persuaded clients to seek medical treatment from health providers who agreed to treat the patients on a medical lien payment basis, meaning patients could pay their bills after their injury claims were settled.^[4]

It is alleged that the medical liens let health care providers charge clients at ''grossly inflated prices.''^[5] It is alleged that Awand would then buy the “grossly inflated” liens at a discount, the clients would be required to pay the full value of the liens, and Awand would pay kickbacks to those involved in the scheme.^[6] In one case, Gage is accused of paying more than $1 million to Awand from settlements in a personal injury case without the knowledge of the plaintiff.^[7] Gage is also accused of paying more than $430,000 in proceeds from the case to an unnamed doctor.^[8]

The obstruction of justice charge against Gage stems from accusations that he failed to produce subpoenaed documents including payments to Awand under the business names Nevada Medical Consultants and Vermont Medical Consultants.^[9]

Attorney Noel Gage pleaded not guilty Tuesday in U.S. District Court in Las Vegas to 18 felony charges including conspiracy, mail fraud, money laundering, aiding and abetting and obstruction of justice. He could face decades in prison and millions of dollars in fines if convicted.^[10]

We have previously discussed the crime of mail fraud, here.
We have previously discussed the crime of money laundering, here.

---

^[1] AP Newswire, Las Vegas lawyer charged in widening personal injury fraud case, Associated Press Newswire, May 23, 2007, available at LEXIS, News Library, Wire News Services File.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Id.
^[10] Id.

Museum President Charged with Mail and Tax Fraud

The former president of the Independence Seaport Museum,^[1] John S. Carter, was charged Monday with mail fraud and tax evasion after federal authorities alleged that he scammed the struggling museum out of $1.5+ million to fund his excessive spending habits.^[2] Carter allgedly submitted false invoices to get the museum to pay for home improvements, artwork, jewelry, electronics, clothing, housewares and a root canal.^[3]

Carter was fired last year after serving as museum president for about 17 years.^[4] The museum filed a civil lawsuit in Massachusetts against him in January accusing him of defrauding the institution of $2.4 million.^[5] "Mr. Carter expects to plead guilty to the charges set forth in the information, although he doesn't necessarily agree with all the details set forth in the information...He is prepared to accept responsibility." said Mark Cedrone, Carter’s attorney, Monday May 21.^[6]

The complaint alleges offenses going back to 1997 including:

• Carter spent more than $335,000 in museum funds to build a carriage house next to his Cape Cod home and make other property improvements.^[7]
• He allegedly used about $50,000 in museum funds to buy a wooden eagle that once decorated an old riverboat and a 19th century narwhal tusk, the information says.
• $900,000 was spent on his boats.^[8]
• In 1997, the museum transferred the title of the Albacore, an antique sailboat, to Carter's personal company for $1, a transaction that was never approved by the museum's board of directors.^[9]
• Between 1998 and 2004, Carter allegedly submitted fraudulent invoices to get the museum to pay for more than $408,000 in renovations to the vessel; he eventually sold the boat for $190,000 and kept the proceeds.^[10]
• In 2005, Carter allegedly commissioned a Maine company to build a $100,000 wooden sailboat for his personal use. The museum paid about $71,000 of the bill after Carter submitted fraudulent invoices.^[11]

Carter is charged with tax evasion because he failed to report any of the museum funds as income. He is also charged in a fraud scheme involving ownership of a life insurance policy.^[12]

Tax Evasion is covered in 26 U.S.C. § 7201 where it states that any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.

We have previously spoken about mail fraud here.

---

^[1] The Independence Seaport Museum opened in 1961 as the Philadelphia Maritime Museum. After moving several times and adopting its current name in 1995, the museum now has a waterfront building on the Delaware River. It owns the Spanish-America War cruiser USS Olympia and the World War II-era submarine USS Becuna.
^[2] Kathy Matheson, Former head of Philadelphia maritime museum charged with fraud, Associated Press Newswire, May 21, 2007, available at LEXIS, News Library, Wire News Services File.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Id.
^[10] Id.
^[11] Id.
^[12] Id.

Since 9/11 FBI Priorities Not on Fraud

If it seems like sophisticated fraud and other white-collar crime is on the rise that may be because it is. In the wake of the Sept. 11 terror attacks Bush administration has refocused the FBI on fighting terror and this has left far fewer agents to target the cases the bureau has traditionally pursued.^[1] It adds up to thousands of white-collar criminals nationwide who are no longer prosecuted in federal court, frustrated victims and potentially billions of dollars in fraud and theft losses.^[2]

More than five years after the 2001 attacks, the Justice Department has failed to replace at least 2,400 agents detailed to focus on counterterrorism.^[3] "Politically, this trade-off has been accepted…but do the American people know this trade-off has been made?" said Charles Mandigo, a former FBI congressional liaison.^[4]

While the U.S. Justice Department and the Office of Management and Budget steadfastly deny that traditional criminal enforcement by the FBI hasn't suffered.^[5] The Seattle Post-Intelligencer(P-I) ran a six-month investigation and analyzed more than a quarter-million cases touched by FBI agents and federal prosecutors before and after Sept. 11, 2001.^[6] Among their key findings:

• Overall, the number of criminal cases investigated by the FBI nationally has steadily declined. In 2005, the bureau brought slightly more than 20,000 cases to federal prosecutors, compared with about 31,000 in 2000 - a 34 percent drop.^[7]
• FBI investigations of white-collar crime have also plummeted. In 2005, the FBI sent prosecutors 3,500 cases - a fraction of the more than 10,000 cases assigned to agents in 2000.^[8]
• Had the FBI continued investigating financial crimes at the same rate as it had before the terror attacks, about 2,000 more white-collar criminals would be behind bars, according to the P-I analysis, which was based on Justice Department data from 1996 through June 2006.^[9]

A report in September 2005 by the Justice Department's inspector concluded that the FBI "reduced its investigative efforts related to traditional crimes by more than 2,400 agents."^[10] The report asserted that in addition to the 1,143 agents transferred away from traditional crime programs, the FBI used 1,279 agents on counterterrorism work, even though they were on the books as criminal-program agents.^[11] Over the past eight years, the ranks of FBI agents have increased, from about 11,000 to 12,575, and virtually all of them are assigned to anti-terrorism duties.^[12]

---

^[1] Seattle P-I: FBI's terror focus leaves fewer agents on crime, Associated Press Newswire, Apr. 11, 2007, available at LEXIS, News Library, Wire News Services File.
^[2] Paul Shukovsky, The success of counterterrorism efforts difficult to evaluate, Seattle Post-Intelligencer, Apr. 10, 2007, available at http://seattlepi.nwsource.com/local/311085_terrorside11.html (last visited Apr. 11, 2007).
^[3] Id.
^[4] Id.
^[5] AP, supra note 1 (“The administration strongly disagrees that the FBI has been anything less than effective in the years since 9/11 in combating domestic crime issues…..[w]e have worked to achieve a balance between the FBI's homeland security and criminal investigative missions."said OMB spokesman Sean Kevelighan.)
^[6] Shukovsky, supra note 2.
^[7] Id.
^[8] Id.
^[9] I.d
^[10] AP, supra note 1.
^[11] Id.
^[12] Id.

NJ State Senator in Court Today on Fraud and Bribery Charges: Bryant

New Jersey State Senator Wayne Bryant is expected in federal court this morning, Apr. 9, where he will plead not guilty to fraud, bribery and pension-padding charges.^[1]

He is accused of using his clout as head of the Senate Budget Committee to steer millions in grants to two state schools that gave him no-show jobs.^[2] Bryant was named in a 20-count indictment accusing the senator with tripling his taxpayer-funded pension through jobs at the University of Medicine and Dentistry of New Jersey in Stratford (UMDNJ), Rutgers-Camden Law School and Gloucester County Board of Social Services.^[3]

Former UMDNJ dean R. Michael Gallagher, who was indicted along with Bryant also faces multiple fraud charges; the indictment alleges that Gallagher capitalized on Bryant's influence to become dean, then put Bryant on the school's payroll.^[4] In exchange, the senator, who at one time was one of Trenton's most powerful lawmakers, helped out the school's interests at budget time.^[5]

Bryant and Gallagher face mail and wire fraud charges that could result in lengthy prison terms and large fines if they are convicted.^[6] Bryant also faces bribery charges in connection with salaries he drew from jobs for which he allegedly performed little work.^[7]

Mail fraud
Mail Fraud is criminalized by 18 U.S.C. § 1341. Section 1341 is a rather dense and convoluted statute. Under this section, it is a crime for a person who has devised or intends to devise any scheme or artifice, to defraud, or to obtain money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice, to place in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or to deposit or cause to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or to take or receive therefrom, any such matter or thing, or to knowingly cause to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing.

Honest Services Fraud
When a person is convicted of some type of “honest services” fraud, it really means that 18 U.S.C. § 1346 is being used, which it is in Bryant’s case. Under section 1346, the term “scheme or artifice to defraud,” as found in the mail fraud statute, is understood to include a scheme or artifice to deprive another of the intangible right of honest services.

Bribery Concerning Programs Receiving Federal Funds
Bryant is also being accused of violating 18 U.S.C. § 666(a)(2), which is bribery concerning programs receiving federal funds. A person commits a crime under this statute if they corruptly give, offer, or agree to give anything of value to any person, with intent to influence or reward an agent of an organization or of a State, local or Indian tribal government, or any agency thereof, in connection with any business, transaction, or series of transactions of such organization, government, or agency involving anything of value of $5,000 or more.

A violation of section 1341 alone can result in a fine of up to $1,000,000, imprisonment for up to 30 years, or both.^[8] Bryant, faces a maximum of 20 years on each of the most serious charges, however, he could be exposed to a maximum of 150 years in prison if convicted on all charges and sentenced to consecutive terms, according to federal prosecutor William Fitzpatrick.^[9] Gallagher faces a maximum 220-year term if convicted on all counts and is sentenced to maximum consecutive terms for each.^[10]

Bryant is also accused of violating 18 U.S.C. § 1343 (Wire Fraud) which has been previously discussed here.

---

^[1] Staff, Bryant due in court this morning, Newark Star-Ledger, Apr. 9, 2007, available at http://blog.nj.com/ledgerupdates/2007/04/bryant_due_in_court_this_morni.html (last visited Apr. 9, 2007).
^[2] Id.
^[3] Angela Delli Santi, Bryant, UMDNJ dean to plead not guilty, Associated Press Newswire, Apr. 7, 2007, available at LEXIS, News Library, Wire News Services File.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] 18 U.S.C. § 1341 (2007).
^[9] Santi, supra note 3.
^[10] Id.

Former Reagan Aid Charged in Massive Fraud: Stockman

David Stockman began his assent to prominence whilst he was the budget director from 1981 to 1985 under former President Reagan.^[1] He made headlines early in his tenure when he told an interviewer that he thought Reaganomics was a "Trojan horse" for the rich and (correctly) predicted huge budget deficits.^[2]

His reputation has slipped once again in his slow decent from prominence, as he was charged Monday, March 26, with overseeing a comprehensive fraud at a troubled auto parts supplier that he led before the company collapsed into bankruptcy. Stockman was one of four former top Collins & Aikman Corp(C&A) executives named in a federal indictment unsealed Monday; the other four have already pleaded guilty.^[3] C&A, a firm that makes auto interiors, carpets, acoustics, fabrics and convertible tops, cooperated in the investigation and was rewarded with a deal that calls for the company not to be prosecuted if it continues to help the government.^[4]

The indictment charged Stockman and three others with conspiracy to commit securities fraud,^[5] making false statements in annual and quarterly reports, making false entries in books and records,^[6] and lying to auditors as well as committing bank fraud,^[7] wire fraud^[8] and obstruction of an agency proceeding.^[9]

If convicted, the defendants could face up to 30 years in prison on the most serious charge.^[10]

Bank fraud is committed when a person knowingly executes, or attempts to execute, a scheme or artifice, 1) to defraud a financial institution;^[11] or 2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises; this shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.^[12]

Wire Fraud is a crime that takes place when a person, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.^[13]

Obstruction of justice is defined in pertinent part in18 U.S.C. § 1505 as a crime that occurs when the defendant, “with intent to avoid, evade, prevent, or obstruct compliance, in whole or in part, with any civil investigative demand duly and properly made under the Antitrust Civil Process Act, willfully withholds, misrepresents, removes from any place, conceals, covers up, destroys, mutilates, alters, or by other means falsifies any documentary material, answers to written interrogatories, or oral testimony, which is the subject of such demand; or attempts to do so or solicits another to do so…….Shall be fined under this title, imprisoned not more than 5 years.”

The crime of using Manipulative and deceptive devices, is defined in pertinenet part by 15 U.S.C. § 78j(b) where it state that it shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange; to use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, or any securities-based swap, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.

---

^[1] Larry Neumeister, Ex-Reagan Official Charged in Fraud Case, AP (via PhillyBurbs.com), March 27, 2007.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] 18 U.S.C. § 371(2007).
^[6] 15 U.S.C. § 78j(b); 78ff (2007);17 CFR 240.10b-5; 18 U.S.C § 2 (2007)
^[7] 18 U.S.C. § 1344 (2007).
^[8] 18 U.S.C. § 1343 (2007).
^[9] 18 U.S.C. § 1505 (2007).
^[10] Neumeister, supra note 1.
^[11] Id. § 1344(1).
^[12] Id. § 1344(2).
^[13] Id. at § 1343.

Reimers Pleads Guilty to Money Laundering and Mail Fraud

Frances William "Bill" Reimers pleaded guilty Friday, March 23, in federal court in Oakland to mail fraud and money laundering for accepting millions of dollars from investors but never investing the cash.^[1]

Reimers’ scheme was based on lies he told his potential investors to induce them to give him their money.^[2] He asserted to his investors that he had invented a method for predicting the rise and fall of mutual fund values; he guaranteed his investments would earn at least 9 percent, and that he followed a conservative investment strategy through his company, Advisory Services Group.^[3]

However, instead of investing his clients' money, he diverted their funds to support two other businesses that he controlled, Plan Compliance Group, which handled third-party administration for school employees' retirement accounts, and Univest Capital Management, which handled third-party administration of insurance benefits for employees of federal government entities.^[4] Federal prosecutors alleged Reimers used the money he received to pay monthly dividends to his investment clients and to cash out clients who asked to close their accounts.^[5]

In December 2005, after allegations arose surrounding the crimes, Reimers attempted suicide by shooting himself in the chest in a park, he survived.^[6] Reimers entered guilty pleas to six counts of mail fraud and one count of money laundering before U.S. District Judge D. Lowell Jensen in Oakland.^[7]

We have previously discussed the crime of money laundering, here.

Mail fraud is a crime under 18 U.S.C. § 1341. Under this section, it is illegal to devise a scheme to defraud and then use the mail to carry out the scheme. The punishment for committing mail fraud is a fine, imprisonment for up to 20 years, or both.

---

^[1] Henry K. Lee, Danville man pleads guilty to fraud, money laundering, San Francisco Chronicle, March 23, 2007.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.

Outpateint Facilty Investment Scheme Update: Ongaro, Marshall

Two more men, including a Dallas area radio executive based in the, have been indicted with seven others on charges of mail fraud, conspiracy and money laundering in connection with an outpatient facility business opportunity they championed.^[1] We have previously discussed this case here.

Brian Ongaro of Frisco, executive vice president/Western region for CBS Radio, and Raymond Marshall of Frisco were indicted along with David Goldfarb, Richard Ross; Paul Woodcock; Milton Guenther; James Bonebrake; Colin McHale, and Mike Ibler.^[2] Prosecutors allege that the men used paid referrals to intentionally misrepresent the quality of their company, CORF Licensing Services, by understating the costs and risks involved, including patient activity, potential income and profit.^[3]

Prosecutors asserted that between 2001 and 2003, Goldfarb, Ross, Woodcock and Guenther, contracted with more than 300 licensees to establish outpatient facilities that mainly provided pulmonary respiratory therapy and physical therapy services; the concept was marketed through internet websites, ads and seminars where they grossly misrepresented the financial benefits of owning and operating the facilities.^[4]

If convicted of mail fraud, the individuals could face up to 20 years in prison and a $250,000 fine. A conviction of money laundering carries up to 20 years in prison and a $500,000 fine; conspiracy carries up to five years in prison and a $250,000 fine.^[5]

---

^[1] Local CBS exec indicted in money laundering scheme, Dallas Business Journal, March 22, 2007
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.

Outpateint Facilty Investment Costs Millions: Woodcock, Goldfarb

A federal grand jury in Phoenix on Friday returned a 33-count indictment against nine men, on charges of operating a wide-ranging mail fraud and money-laundering scheme that took in $40 million and defrauded more than 300 people.^[1]

It was described as a “very sophisticated and convincing” investment scheme that defrauded well-educated operators of medical outpatient rehabilitation facilities; the prospective facility licensees paid between $100,000 and $165,000 to enter into contracts with the defendants’ company, CORF Licensing Services.^[2] The outpatient companies startup times, profits, and customer numbers were grossly misrepresented, in fact many of the facilities never opened, allegedly costing the licensees millions of dollars.^[3]

David Goldfarb and Paul Woodcock, among others, are listed as defendants in the indictment, and were arrested Friday, March 9, at their homes in Scottsdale on suspicion of mail fraud, conspiracy, money laundering and aiding and abetting, according to Patricia Armstrong, spokeswoman for the U.S. Postal Inspector’s Office in Phoenix.^[4]

Mail Fraud
Mail fraud is a crime under 18 U.S.C. § 1341. Under this section, it is illegal to devise a scheme to defraud and then use the mail to carry out the scheme.The punishment for committing mail fraud is a fine, imprisonment for up to 20 years, or both.

Conspiracy to Commit Mail or Wire Fraud
Under 18 U.S.C. § 1349, any person who conspires to commit mail or wire fraud will be punished in the same way as if he had committed the offense. There is no overt act requirement in the statute.

We have previously discussed the crime of money laundering, here.

If convicted, money laundering carries a maximum 20-year prison sentence and a $500,000 fine, and mail fraud carries a maximum 20-year sentence and a $250,000 fine, according to information from the U.S. Attorney’s Office.^[5]

---

^[1] Mike Sakal, Five East Valley men accused of fraud, East Valley Tribune, March 10, 2007.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.

Fake Art Auctions Bilks Buyers Out of Millions: Eubanks, Sullivan

Kristine Eubanks, and her husband, Gerald Sullivan, were charged Monday, March 5, with conspiracy to commit mail fraud, wire fraud and interstate transportation of stolen property.^[1] The couple admitted that they manipulated the auctions of art and jewelry by creating inflated bids, and that they purchased fake art, forged art at a print shop, and forged signatures of artists including Picasso, Chagall and Dali, and then sold the bogus works on their show.^[2] Prosecutors said the couple also created false appraisals and certificates of authenticity.^[3]

The couple's operation ran through a satellite television show "Fine Arts Treasures Gallery." The government estimates that the show defrauded more than 10,000 people of more than $20 million for spurious art. Investigators seized around $4 million when Eubanks and Sullivan were arrested during a raid in September.^[4]"The defendants in this case have admitted to profiting by preying on the vulnerabilities of producers and consumers of art through an elaborate criminal enterprise," said J. Stephen Tidwell, assistant director of the FBI in Los Angeles.^[5]

Mail fraud is a crime under 18 U.S.C. § 1341. Under this section, it is illegal to devise a scheme to defraud and then use the mail to carry out the scheme. The punishment for committing mail fraud is a fine, imprisonment for up to 20 years, or both.

Wire fraud, which is a crime under 18 U.S.C. § 1343, makes it a crime for a person to devise a scheme or artifice to defraud and use wire, television, or radio communication technologies to carry out the scheme. Violating section 1343 can be punished by a fine, imprisonment for up to 20 years, or both. If a financial institution is harmed in the commission of the fraud, the fine can be as high as $1,000,000 and the prison sentence can be up to 30 years.

Under 18 U.S.C. § 2314, it is a crime for a person to transport any good in interstate or foreign commerce with a value of at least $5,000, knowing that that good is stolen.

Eubanks could face up to 10 years in federal prison; Sullivan up to six. Eubanks has been in custody since the September raid because she was on probation at the time.^[6]

---

^[1] Brett Zonfker, TV art scam bilked buyers of millions, AP (Via Akron Beacon Journal), March 06, 2007
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.