OHIO STATE HOUSE SPEAKER ARRESTED

  The United States Attorney for the Southern District of Ohio announced today that Larry Householder, the Speaker of the Ohio State House of Representatives, has been charged along with four others with helping to pass a nuclear bailout bill in exchange for nearly $61 million in bribes.  The bill added a surcharge for energy consumers to help raise $150 to bail out two unprofitable nuclear plants.  This is reportedly the largest bribery case in Ohio history.

As a former federal prosecutor in the Southern District of Georgia, I once prosecuted Georgia's former Senate Majority leader in a fraud and public corruption case.  So, I know how tough such complex criminal cases can be!

Of course, all defendants are entitled to a presumption of innocence unless and until convicted beyond a reasonable doubt.

A Goolsby "War Story:" More Examples of Kickbacks in Fraud Cases

[Depiction of Cash from wikipedia]

Recently, I started a series of posts in which I describe examples of kickbacks which were paid in major fraud cases I saw as a former federal prosecutor. Currently, I am a criminal defense lawyer in Augusta, Georgia, where I practice law with my sons, but I handled a number of significant white collar criminal cases as an Assistant U.S. Attorney for over 20 years.

In one major "honest services" mail fraud case, the defendant construction company paid a total of $2.7 million in kickback payments to an employee of another company, in exchange for being awarded profitable construction contracts by the other company's employee. 

One example of the many kickbacks, or rewards, paid in this case included payments for the other company's employee to purchase TWO vacation homes. In short, the construction company paid money toward his purchase of an $800,000 log cabin at a Minnesota lake and another $150,000 for the employee to purchase a condo at an exclusive winter ski resort in Whistler, British Columbia.

Of course, in return, the employee of the other company "scratched the back" of the construction company president by approving millions of dollars in construction projects.

As you can see, sometimes white collar crime pays pretty good; that is, until, like these defendants, you get caught!  

Job Losses: Another Cost of White Collar Crime

Depiction from foreclosure.org]

We have discussed some of the serious costs of white collar crime before in this blog. Costs of fraud and corruption include not only the economic or financial costs, but also the social costs, including increased cynicism, or lack of trust, in our basic social institutions. But have you ever also considered that white collar crime can also, in some cases, cost jobs? Consider the following case.

According to the Atlanta Journal-Constitution, Peter DeSantis, of Engineered Architectural Systems in Alpharetta, Georgia, explained yesterday that he had to lay off employees during this recession due to recent thefts allegedly committed by a former employee. According to the news report, the former employee, Karalee Sciukas, was indicted this past month by a Forsyth County grand jury for allegedly stealing about $250,000.00, over several years, while employed as comptroller with the architectural company. According to the report, she allegedly wrote checks to herself and to other businesses which she reportedly controlled, and which were allegedly disguised as vendor payments.

Of course, Ms. Sciukas is presumed innocent and is entitled to her day in court. And the facts of that particular case are not the point of this post, anyway. The point is that white collar crime can have many serious costs and consequences, including lay-offs of employees during a bad economy.

As a former federal prosecutor, (and currently, as an Augusta, GA criminal defense lawyer), I have seen the devastating losses caused by fraud and corruption. I believe we can all agree that job losses are a serious problem and a serious cost of white collar crime.

A Goolsby "War Story:" More Examples of Kickbacks in Fraud Cases

[Stacks of Cash Depiction from wikipedia]

Recently, I started a series of posts in which I describe examples of kickbacks which were paid in major fraud cases I saw as a former federal prosecutor. Currently, I am a criminal defense lawyer in Augusta, Georgia, where I practice law with my sons, but I handled a number of significant white collar criminal cases as an Assistant U.S. Attorney for over 20 years.

In one major "honest services" mail fraud case, the defendant construction company paid a total of $2.7 million in kickback payments to an employee of another company, in exchange for being awarded profitable construction contracts by the other company's employee. One of the many kickbacks, or rewards, paid in this case included a total of $13,945.00 paid to two dating services, (for the employee's benefit and enjoyment), including one dating service located in Atlanta and another one located in San Diego. In addition, the defendant construction company actually paid for the (other company's) employee's travel costs to fly around the country to date all the women he met through the dating services!

Now, you must admit, while fraud is wrong, those are nice kickbacks!

The GBI's Latest Probe of a GA State Senator

[Photo of Scales of Justice from ehow.com]

According to the Atlanta Journal-Constitution, the Georgia Bureau of Investigation has reportedly been requested by the State Attorney General to investigate false expense reports allegedly submitted by State Senator Don Balfour of Snellville.  Of course, Senator Balfour is presumed to be innocent of any wrongdoing, and his criminal defense lawyer has essentially indicated simply that mistakes were made and that there was no intentional wrongdoing.

The newspaper also pointed out that this is the first GBI investigation of a State Senator since a case which I handled as a (former) federal prosecutor against former Georgia Senate Majority Leader Charles Walker, here in Augusta, back in 2007. The GBI has some really talented agents. My case against Senator Walker also involved other law enforcement agencies and a number of other more complex criminal charges. It will be interesting to see what, if anything, happens in this latest investigation.

  

Internet Fraud and a Letter to Good Old Igor

Sadly, we are all potential victims of fraud on the internet.  It is everywhere! And even though I am a former federal prosecutor for over 20 years, (and currently, a criminal defense lawyer with my sons in Augusta, Georgia), I receive unsolicited emails from con artists all the time!  Here is a sample which I just received at the Goolsby Law Firm:

Hello, 

Greetings of the day. My name is Igor Iv__, I represent Mr. Mikhail 

K., he is the former CEO of Y. Oil Company here in 

Russia. A briefing on Y. Oil Company can be checked via this link:

(omitted)

I have a very sensitive and confidential briefing from the top 

(Oligarch) to ask for your partnership in re-profiling some fund 

running into several millions of United States Dollars. This will be 

done in barges to ensure a smooth business venture. I suggest that 

this business deal be kept discreet as my client is not in favor of 

the current Russian government. See link for more details:

(omitted)

Note that this transaction is a Bank to Bank transaction and all 

documents backing this transaction will be sent to you for subsequent 

confirmation.

I look forward to your soonest and positive response.

Regards,

Igor

Wouldn't it be nice if we could all stop such phony email solicitations? Although I won't reply to "Igor," because it would probably just cause me to receive even more such emails, I wish I could send ole' Igor the following:

Dear Igor,

Greetings of the day to you, too.  However, please be advised that your pathetic, phony email solicitation has erroneously been sent by you to a former U.S. federal prosecutor who once enjoyed prosecuting con artists for ripping off innocent victims, and that I am still sick and tired of people who attempt to prey on others over the internet.

Accordingly, please be advised that your fraudulent email solicitation has been forwarded to the Federal Bureau of Investigation, along with INTERPOL, and that, if and when you are caught, you will face prosecution to the fullest extent of the law! So, please do not send me any more emails and please consider trying to make an honest living, before you are arrested!

No Regards,

Richard

Food Stamp Fraud in a Food Stamp Nation

[Food Stamp SNAP Logo Depiction from wikipedia]

Times are tough.  Some people claim that the United States has become a food stamp nation.  According to the latest government statistics, over 46 million Americans now receive food stamp assistance.  Most store owners and food stamp recipients are honest.  But, as to every government program, including the food stamp program, there will always be some fraud and cheating.

For instance, according to various news reports, a St. Paul, Minnesota Iraqi immigrant and market owner, Khaffak Ansari, was sentenced this week to serve 41 months in federal prison for food stamp fraud.  According to reports, Ansari was also ordered to pay $2.4 million in restitution.

Food stamp recipients are generally required to use their government-issued debit cards to purchase food, but sometimes, with a wink and a nod from cheating store owners, they purchase alcohol or cigarettes, or trade their debt card credits for cash.

In Ansari's case, the government claimed that he cheated the government food stamp program, (also known as the Supplemental Nutrition and Assistance Program, or "SNAP"), out of $2.5 million by trading cash for food stamp benefits for which the government then reimbursed him.

As a former federal prosecutor, I sometimes prosecuted fraud cases like this one.  I also sometimes saw the same problem occur which apparently happened in this Minnesota case.  Specifically, sometimes when the government agents make such cases, they estimate the amount of fraud, but they don't always have clear cut proof to back up their estimates.

Yes, times are tough.  But here's hoping that the government will do a better job of cracking down on the cheaters, so that there will be something left to help the honest folks.  Don't you agree?

Atlanta Woman Sentenced in Telemarketing Scam

Telemarketing scams and advanced fee schemes are particularly pernicious in their impact on crime victims.  As a former federal prosecutor, I prosecuted a number of both types of these scams.  You can find reports of such crimes all over the place!

For example, according to various news reports, last week, a Marietta, Georgia woman, Kara Singleton Adams, was sentenced to more than 17 years in prison following her conviction in federal court for operating a telemarketing scam which falsely promised customers to reduce their interest rates and credit debt.  Naturally, according to the news reports, she never delivered on the promises, but still collected millions of dollars in fees from hapless victims.

One thing I learned about such scams is that they frequently target people, including the elderly and those in debt, who can least afford the losses which they ultimately suffer. 

But now, at least for this defendant, unless she prevails on appeal, she must serve much of the next 17 years in prison.  And don't forget, in federal court, there is no parole!  What you see is generally what you get!

Have you, or anyone you know, ever been the victim of a fraudulent scam?

White Collar Crime: Location Doesn't Matter!

[Photo of Sioux Falls, S.D. from wikipedia]

One of the common themes of this blog, (which is written by a former federal prosecutor and current Augusta, Georgia criminal defense lawyer), is that white collar crime can be found everywhere and in virtually every facet of our lives!  For example, today, I did a quick internet search of the State of South Dakota, (which is about as far away from Augusta, Georgia as one might need for this experiment!), on the topic of "fraud."  Would you guess that there might be fraud, and other white collar crime, even in South Dakota!?  The answer is "yes!"

One of the news reports which I found during this internet search involves a Sioux Falls, S.D. deputy sheriff.  According to the reports, the South Dakota deputy has recently entered a guilty plea to a charge of theft by deception.  The charge relates to an alleged fraudulent insurance application which appears to have no relationship to his duties as a law enforcement officer.

Of course, this simple exercise is not meant to demonstrate anything at all negative about the fine State of South Dakota!  Naturally, anyone searching the internet for "fraud" in Georgia, or in any other state, for that matter, would also quickly find plenty of examples! 

Again, the simple point is that fraud, (like other types of white collar crime), can be found everywhere and in just about every aspect of our lives.  But you already knew that, didn't you?

Fraud Against the Elderly: The Tire Repair Scam

As you know, I am a former federal prosecutor for over 20 years.  Presently, I am a criminal defense lawyer in Augusta, Georgia where I practice law with my son.  I have focused on handling white collar crime cases for much of my career as a Georgia attorney.

As we have often discussed in this blog, the elderly are frequently targeted by white collar criminals.  The number and types of scams appear to be endless!  I recently read about yet another fraudulent scheme focused on senior citizens which allegedly occurred in a nearby town.  Here is how it works:

The perpetrator drives around and looks for a potential target:  a senior citizen who is driving an automobile alone.  Then, the bad guy somehow gets the senior citizen's attention and gets them to pull over.  The bad guy then informs the elderly target that he has noticed something is wrong with the elderly target's tire.  Naturally, there really is nothing wrong with the tire.  The bad guy also offers to repair the tire for them.  Of course, the bad guy then demands an exhorbitant payment for supposedly fixing the tire.

In the case I recently read about, the bad guy was arrested and awaits trial.  Of course, no one disputes the fact that he is entitled to a fair trial.  But if a person is convicted of such a crime, then he should be thrown under the jailhouse!  Don't you agree?

Congress and Insider Trading -- Should We Just "Throw Them All Out?"

[Photo of U.S. Capital from fws.gov]

In the book, Throw Them All Out, author Peter Schweizer recently exposed, among other things, the problem involving various members of Congress using insider information to profit in the stock market.  C.B.S. News also did a follow-up story on 60 Minutes in which they exposed that former House Speaker Nancy Pelosi allegedly profited from such insider information available only to members of Congress.

It is no wonder that Congress is rated below lawyers and used car dealers in the public eye! This practice is outrageous and should be illegal!  Part of the problem is that Congress had exempted itself, (its own members), from application of insider trading laws!  Now, Senator Lieberman and others are reportedly leading the way in Congress to change the insider trading law and make it applicable to members of Congress, too!

This legislation is long overdue.  But is it enough?  Do you believe the new legislation will solve the problem?  Maybe, Schweizer had it right!  Maybe, instead, we should just "throw them all out" and start over!  What do you think?

A White Collar Crime Haiku

A WHITE COLLAR CRIME HAIKU

Fraud, greed, everywhere.

No one hears the victims' cries.

Some things never change.

White Collar Crime: Size Doesn't Matter!

[Photo of White House from valdosta.edu]

Hey, are you looking for a cheap house to rent in Washington, D.C.?  Then, a guy from Atlanta, Georgia may have a real "bargain" for you!  But you may have to look him up in an Atlanta area jail!

According to news reports, the man has been charged with leasing homes in the Atlanta area which did not belong to him to various tenants.  According to reports, the man allegedly broke into one house, changed the locks, prepared a bogus lease, and rented the house to a poor victim for $1,000 per month, (with a $3,000 security deposit, up front)!  Later, the actual owner of the home discovered that someone was living in his house and apparently reported it to police! 

Of course, these are only the charges and the alleged perpetrator is presumed innocent unless proven guilty in a court of law.

Look, I realize that this case is not the biggest case of white collar crime "out there."  But that is the point of this post.  Occasionally, I like to include such posts to illustrate the point that most white collar crime is, in fact, just relatively small thefts or fraud committed by relatively ordinary folks.

Now, does anybody "out there" really need a good deal on a house in D.C.!?

A Goolsby "War Story" About My Investigation of Corruption in a South Georgia Prison Work Camp

[Photo from electis.blogs.wm.edu]

One of my proudest career accomplishments happened early in my career when I was a young Assistant D.A. in south Georgia.  It involved my investigation of fraud and corruption at one of the county prison camps, or "work farms."  The abuses--including thefts by guards and prisoner abuse--are too numerous to list here. 

For instance, prisoners told me about witnessing guards loading meat from the work camp kitchen into their car trunks.  Also, although money was budgeted for recreational items, there wasn't a single ball of any kind anywhere in the camp!  Where did all the money go?  Another abuse involved the camp's deplorable solitary confinement cell, which was called "the hole."  It was literally a hole dug into the ground, into which rain water, snakes and rats would venture and keep company with the unlucky prisoner confined there. 

What could I do?  Look, I was a tough young prosecutor.  I was no "bleeding heart!"  But, in my heart, I knew that the horrendous prison conditions and crimes were unconstitutional and flat wrong! 

Although I was just out of law school, and new on the job at the D.A.'s Office, I knew I must do something.  But I also soon learned that the local politicians were part of the problem and would not help.  Therefore, I decided that the best disinfectant would be to focus the news media spotlight and public scrutiny on the prison problems. 

So, with help from a cooperative criminal defense lawyer friend, we essentially utilized a preliminary hearing about a prisoner's escape case to expose the work camp abuses to the news media and public.  Over the course of several days, we produced witness after witness who testified about all the fraud and corruption at the work camp!  The lawyer for the local sheriff and county commissioners tried to intervene and stop the hearing.  But the magistrate judge, who seemed to enjoy the media attention, sustained my objection that the county's attorney had no standing to object!  The hearing continued until the public airing was complete.  The news media also helped with headline after headline about the prison problems.

Fortunately, this story has a happy ending!  After this public exposure, the politicians could no longer hide! The politicians scurried like roaches under an overturned woodpile!  Several county commissioners finally got behind an effort to clean up the work camp.  A number of prison employees either retired or were fired.  Several more were prosecuted by me for theft.  The prison kitchen now had meat to serve!  Also "the hole" was eliminated!

So, now, I hope you can see why this investigation of public corruption is one of my proudest early career accomplishments! 

Internet Fraud: More Scams Than Quaker's Got Oats!



[Photo from savingeveryday.com]

No one needs to educate you about the fact that the internet is overrun with countless con artists whose sole desire is to lure your money away from you with countless types of fraudulent schemes!  You already know that!  Indeed, there are more investment fraud scams, telemarketing schemes, fake sweepstakes scams, and bogus lotteries -- more fraudulent internet scams of all kinds -- than Quaker's got oats!  And that's a lot of oats!

But did you know that lawyers, like the elderly, are also frequent targets of internet con artists on the prowl?  While I haven't seen any statistics, I can attest that, quite often, we at The Goolsby Law Firm, LLC, located in Augusta, Georgia, receive email containing offers that are "too good to be true" from  criminals around the world.  For example, today, I received an urgent inquiry from a man, (who claimed to be from Malaysia), who alleged he desperately needs an American law firm to collect hundreds of thousands of dollars owed to his company.  On other occasions, we have received similar email requests to help collect large sums supposedly owed to parties who have divorced and whose husbands remain in this country.  In each case, the hook might be a little bit different, but the goal is the same.  Of course, in each case, the con artist simply wants to obtain our bank account information -- that is, if we ever bite down on their tempting hook!

How should we respond?  Part of me wants to respond by telling them what I really think of them!  I also want to scare them about the fact that I am a former federal prosecutor and that I have turned them in to the F.B.I.  But then, I realize that the best course of action, in this situation, is probably to simply ignore and delete the fraudulent emails.  I realize that the F.B.I. is too busy to investigate so many internet fraud scams.  After all, as I have concluded, there are more internet scams "out there" than Quaker's got oats!

What do you think?



White Collar Crime, Problems of Proof, and the Meat We Eat!

                                                           [Photo from Healthsignal.net]

An article in today's New York Post illustrates an interesting problem in white collar crime prosecutions. The article deals with the problem of the presence of drug-resistant staph bacteria reportably being found in nearly one-half of sampled meats found in grocery stores.  Laying aside the merits of this story, the issue which this situation illustrates, for me, as a former federal prosecutor, is that, often, it is difficult, in many white collar crime cases, to know who to go after and who to try to prosecute when fraud or corruption occur. 

For instance, in this type of case, assuming that misconduct appears to exist, involving allegedly tainted meat, who would you investigate or try to lock up?  The rancher?  The meat processor?  The butcher?  Someone else in the food distribution chain?  Or, none of the above, because it would be too difficult, if not impossible, to hold any particular party responsible, criminally, for harm done to consumers.  In some criminal cases, it takes a whistleblower, such as a meatpacking plant employee, to come forward and "blow the whistle" on alleged improper practices, in order to jump start a criminal investigation. 

Of course, other potential problems also exist in developing such cases, too.  For example, generally, the government would be required to prove that the tainted product caused the harm, or injury.  Also, in many cases, just as in environmental pollution cases, the harm to consumers might not be discovered until many months, or even years, later.  By then, the "bad guys," and the proof, are long gone!

Again, let me emphasize that no one has suggested any criminal wrongdoing on anyone's part in this particular story.  It is offered here only as an illustration.  But I hope that you can see some of the difficulties inherent in proving some white collar crime cases.  Unlike homicides or robberies, which are releatively easy to prove, in contrast, white collar crime can often be difficult to ferret out.

Hamburger, anyone!?

Whistleblower Nets $4.5 Million Award From The I.R.S.

[Photo from the examiner.com]

Did you know that you could make alot of money by blowing the whistle on fraud or corruption?  According to various news reports, a Cincinnati accountant has just been awarded a whopping $4.5 million by the I.R.S. for his role in blowing the whistle on alleged tax cheating by a financial services company.

Whistleblowers have received awards in the past from various state and federal agencies, usually for reporting fraud in the healthcare or defense industries.  But this is reportedly the first case in which the Internal Revenue Service has made an award through its new I.R.S. Whistleblowers Office.

Of course, please don't get the incorrect impression that whistleblowing is easy, or that there are no negative consequences.  Sometimes, whistleblowers lose their jobs, their good names, and, in some cases, even their lives.  If you work in a situation in which you are aware of fraud or coruption, then I would recommend that you contact an attorney before blowing the whistle.  Not only can a lawyer advise you about your legal rights, but also about how to properly inform the authorities and how to handle a whistleblower's lawsuit, so that you will be in a position to potentially reap your just reward!

Atlanta Attorney Pleads Guilty in Federal Court

Did you hear the news? An Atlanta area attorney, Michael Shaw, (not pictured above), just entered a guilty plea in federal court to fraud charges involving fraudulent invoices which he submitted to his old law firm between 2003 and 2009. And get this: the fraudulent invoices from fictitious vendors which he submitted to his employer totalled up to more than a whopping half-million dollars over the six year period! Shaw now reportedly faces up to thirty years in a federal prison, although his federal sentencing guidelines score will likely net him a much lower sentence.

Don't you agree that it is incredible that he got away with it for as long as he did? How often do you believe such crimes go undetected? Once again, this criminal case illustrates the importance of each business having adequate checks and balances concerning payments of invoices.

The S.E.C. and Government Fraud

This blog, by a former federal prosecutor, (and currently, an Augusta, Georgia criminal defense lawyer), focuses primarily on issues involving fraud, corruption, and other federal and state white collar crimes. But news reports of a civil fraud complaint filed by the Securities and Exchange Commission have also caught my eye.

Various news reports indicate that the SEC has filed a fraud complaint against two Texas billionaire brothers, Sam and Charles Wyly. The complaint accuses them of concealing $550 million in gains from the sales of stock. Allegedly, the brothers tried to hide stock ownership and trades through the use of off-shore, (Cayman Island), trusts and other entitities.

Now, I realize that not many of you will feel sorry for anyone who is a billionaire, particularly one who is accused of fraud! However, it is important to point out the lawyer for the Wyly brothers has maintained his clients' innocence. The attorney has also indicated that this complaint filing by the SEC comes only after years and years of endless, fruitless investigations by the government.

The Wyly brothers are well known both for their innovative skills in technology, energy, and investment, and for their incredible philanthropic work. Sam Wyly is also author of the book, 1,000 Dollars & An Idea, depicted above, which is an inspirational account of his achievements.

Look, I have no clue about the efficacy of this particular case. But frankly, it wouldn't surprise me to see that the Wylys' attorney is correct. As a former federal prosecutor, I know how government agents and agencies work. If they investigate somebody, and expend significant resources over a long period of time, then the bureaucratic tendency is for them to want to charge "somebody with something," even if it is not always justified.

It will be interesting to see what happens next in this case!

Fraudulent Auto Injury Claims: Watch Out For That Other Guy!

Have you ever been driving down the road and it appears that the driver in front of you has slammed on his brakes simply to try to get you to hit him? Maybe there was a good reason for him to "stop short." But then again, maybe not.

As a former federal prosecutor, I prosecuted a number of defendants who engaged in the fraudulent practice of staging, or causing, automobile accidents. I will never forget one criminal case in which the despicable couple actually put their own baby in their car, while they drove around looking for other drivers to plow into them. They hoped to submit false injury claims for their baby, too, (whether he lived or died)!

Trust me, these are not isolated cases, either! For instance, according to the Coalition Against Insurance Fraud, fraudulent auto injury claims added another $4.6 billion to $6.8 billion to auto injury claims submitted to insurance companies in 2007.

So, please be sure to "watch out for the other guy!" Not only are there unsafe drivers out there, but also some con artists on the prowl who want to sue you!