A Florida man has been convicted of lying to get a low-interest COVID-19 relief loan, the Associated Press reported. Willie Curry pleaded guilty Monday in Miami federal court to wire fraud in connection with his fraudulent application to the U.S. Small Business Administration, according to court records. He faces up to 20 years in prison at his Nov. 17 sentencing. According to a plea agreement, Curry applied for an Economic Injury Disaster Loan with the SBA in June 2020. He falsely claimed that Will Curry Computers was established in 2015 and had annual gross revenues of approximately $755,416, a cost of goods sold of approximately $170,664, and 10 employees. Prosecutors said Curry actually established the business in 2020, and it had minimal revenues or costs of goods sold and no employees. Curry actually worked full-time as a network manager for Miami-Dade County and suffered no loss of salary from the COVID-19 pandemic, investigator said.
The Supreme Court’s Grupo Mexicano decision doesn’t bar a bankruptcy court from freezing a defendant’s assets prior to judgment in a fraud action, Judge Sontchi says.
A U.S. appeals court said that Citigroup Inc. must face a lawsuit over Bernie Madoff’s Ponzi scheme that seeks to recover $343 million the bank allegedly received after it became aware the funds might have suspicious origins, WSJ Pro Bankruptcy reported. The appellate ruling resurrected a lawsuit by Irving Picard, the trustee tasked with recovering money for Ponzi scheme victims, alleging that Citi accepted money from Mr. Madoff’s phantom investment firm despite knowing facts suggesting it was engaged in fraudulent activity. Picard’s case against Citi was dismissed by the bankruptcy court overseeing his liquidation of Bernard L. Madoff Investment Securities LLC and by the federal district court in New York, which found that the trustee was required to prove that Citi lacked good faith by being “willfully blind” to “red flags” of fraudulent activity. The Second Circuit Court of Appeals ruled Monday that this wasn’t the correct standard, and that Picard only had to demonstrate that Citi lacked good faith because it was aware of suspicious facts that would have led a reasonable person to investigate further. In addition to Citi, Picard also won a ruling from the appeals court allowing it to proceed with similar lawsuits against two other financial institutions that did business with Madoff, Legacy Capital Ltd. and Khronos LLC. Read more.
According to further analysis of the decision by ABI Editor-at-Large Bill Rochelle in today's Rochelle's Daily Wire, the Second Circuit's ruling represents a major victory for the trustee and victims of the Bernard Madoff Ponzi scheme. Together, the rulings revive about 90 lawsuits against global financial institutions, hedge funds and other participants in the global financial markets. The decision allows Irving Picard, the Madoff trustee, to pursue the recovery of an additional $3.75 billion in stolen customer property, the trustee said in a statement. The resurrected lawsuits will bring defrauded customers “as close as possible to recovering 100% of their losses,” the trustee said. Click here to read the full RDW analysis.
The IRS's criminal investigation division said this week that the agency received a record number of reports about stimulus check scams in June and July, The Hill reported. "Even though taxpayers have received multiple rounds of Economic Impact Payments, we saw phishing scams surge this summer," Jim Lee, chief of the criminal investigation division, said in a news release. "The number of reported scam attempts reached levels we haven't seen in more than a decade," Lee continued. "More than ever, it is important for taxpayers to continue to protect their personal information and not fall victim to these scams." Congress has authorized three rounds of stimulus checks since the start of the coronavirus pandemic, with the most recent established by the relief law President Biden signed in March. Scammers have sought to take advantage of the aid payments since they began, seeking to try to trick taxpayers into providing their financial information. The IRS said that recent scams include text messages directing people to click on links to provide their information to get stimulus payments, and phishing emails that claim that recipients are eligible for stimulus payments of specific amounts.
Reversing in favor of the Madoff trustee, the Second Circuit rules that inquiry notice, not willful blindness, governs the good faith defense by recipients of fraudulent transfers.
U.S. Attorney David C. Weiss announced today that Connections Community Support Programs, Inc. (“CCSP”) has agreed to the entry of consent judgments totaling over $15,300,000 to resolve two lawsuits brought by the federal government alleging health care fraud arising under the federal False Claims Act and violations of the Controlled Substances Act, according to a DOJ press release. Prior to the sale of its assets in bankruptcy, CCSP provided a variety of mental health and addiction treatment services at numerous locations throughout Delaware. CCSP has agreed to the entry of a judgment in the amount of $13,757,520.60, plus interest, to resolve claims that CCSP violated the False Claims Act by billing for mental health services performed by individuals whose professional qualifications did not allow them to bill Medicare or Medicaid for reimbursement and by billing Medicaid for mental health services using incorrect procedure codes for the person performing the service, resulting in higher payments than were permitted. CCSP has also agreed to the entry of a judgment in the amount of $1,621,571, plus interest, to resolve claims that it violated the federal Controlled Substances Act by negligently failing to keep proper records of its use of controlled substances, including methadone and buprenorphine, in its treatment of patients with substance use disorders and by transferring controlled substances between locations without proper documentation.
The U.S. Securities and Exchanges Commission has accused a Georgia investment adviser in a $110 million Ponzi scheme that drew money from more tha 400 investors in 20 states, according to a statement on Wednesday, Reuters reported. The SEC obtained a temporary restraining order and asset freeze from the U.S. District Court for the Northern District of Georgia against John Woods and two entities he controls, the commission statement said.
A California judge declared a mistrial Tuesday in the embezzlement trial of attorney Michael Avenatti, who is charged with stealing millions in settlement money from his clients, the Associated Press reported. U.S. District Judge James V. Selna ruled on technical grounds that federal prosecutors failed to turn over relevant financial evidence to Avenatti. Another hearing in the case was set for Sept. 2, and Selna scheduled a tentative new trial date for Oct. 12. It was the second trial in recent months for the 50-year-old lawyer who once represented porn actress Stormy Daniels in her lawsuit against then-President Donald Trump. Avenatti was sentenced in July to 2 1/2 years in prison in a $25 million extortion case in New York. Federal prosecutors in Southern California have accused Avenatti of cheating five of his clients out of nearly $10 million by negotiating and collecting settlements on their behalf and funneling the payments to accounts he controlled while lying to them about what happened to the money.
Federal authorities announced yesterday that men from Massachusetts and New Hampshire have been charged in connection with their alleged roles in a scheme that used stolen identities to fraudulently obtain more than $450,000 in disaster loans from the Small Business Administration, the Associated Press reported. About $250,000 of that money was used to purchase iPhones that were then resold, according to a statement from the U.S. attorney’s office in Boston. Edwin Acevedo of Acton, Mass., and Hector Garcia of Manchester, N.H. were arrested last week and charged with conspiracy to commit wire fraud. Garcia was also charged with aggravated identity theft. Acevedo is being held pending a detention hearing. Garcia is scheduled to make an initial court appearance on Sept. 3. Garcia used the stolen identity of a U.S. citizen to open a fraudulent bank account, which was linked to other fraudulent bank accounts set up to receive the loans, prosecutors alleged. Acevedo then distributed debit cards associated with those accounts to other alleged accomplices, which were used to launder the loans through the purchase of iPhones for resale, prosecutors said. Garcia also wired a portion of the funds to the Dominican Republic, according to authorities.
