The following examples of financial institution fraud investigations are excerpts from public record documents on file in the court records in the judicial district in which the cases were prosecuted.

Corporate Chairman/CEO Sentenced to 240 Months in Prison for Stock Scheme that Swindled over $15 Million from Investors

On September 24, 2007, in Camden, NJ, TeleServices Internet Group, Inc. (TSIG) Chairman and CEO Robert P. Gordon was sentenced to 240 months in prison for operating a stock fraud and money laundering scheme. In April 2007, a jury convicted the St. Petersburg, Fla. man in a two-count superseding indictment. Gordon and eight other individuals used deceptive and manipulative practices in connection with the fraudulent issuance, purchase and resale of TSIG stock from 1996 through 2001. TSIG stock was publicly traded on the Over the Counter Electronic Bulletin Board System.  Gordon and other insiders secretly gained control of nearly 100 million free-trading shares of TSIG stock and sold those shares in the public marketplace to unsuspecting investors who were left with worthless or near worthless stock.  Gordon and several of his co-conspirators executed fraudulent agreements between TSIG and offshore entities, which they secretly controlled.  Typically, the offshore entities were located in the Cayman Islands.  Gordon and his co-conspirators also entered into fraudulent consulting agreements with other entities, falsely claiming that the entities provided a service to TSIG and in lieu of monetary payment, they issued millions of TSIG stock shares in the name of the entities. The fraudulent consulting agreements allowed the co-conspirators to bypass federal securities registration requirements, including, among other things, full and complete disclosure of insider transactions.  The fraudulently received shares were then laundered through brokerage accounts that were controlled by co-conspirators and maintained in Canada and the United States.  Over time, those shares were systematically sold utilizing the services of the co-conspiring licensed securities brokers, who sustained the stock’s per share price through orchestrated transactions using prearranged sale and purchase prices.  Often, brokers purchased the TSIG shares for their retail customers’ portfolios without the customer’s authorization.  Afterward, the ill-gotten proceeds were often laundered by wire transferring those funds from the brokerage accounts to an attorney trust account located in Denver and then dispersed to the co-conspirators.  In total, the co-conspirators received approximately $15 million through their fraud scheme.

Organizer of Massive Mortgage Fraud Scheme Sentenced to 28 Years in Prison

On September 21, 2007, in Atlanta, GA, Phillip E. Hill, of Sumatra, Florida, was sentenced to 28 years in prison, to be followed by five years of supervised release, and ordered to pay $41,764,244 in restitution.  Hill was sentenced for perpetrating a massive mortgage fraud scheme that targeted the metro Atlanta housing and condo market from 2000 through 2003.  According to evidence at trial, Hill was the owner and operator of “We Build Atlanta, Inc.,” “The Estate Firm, Inc.,” “Estate Artistians of Georgia, Inc.,” “Estates Atlanta, Inc.,” and numerous other Georgia corporations.  Hill held himself out to be a real estate developer and either individually or through one or more of the corporations he controlled, purchased and sold numerous residential properties in the Atlanta area.  Hill oversaw the conspiracy, loan fraud, wire and mail fraud and money laundering activity related to mortgages obtained in the sale of over 50 homes and over 250 condominiums in eight Atlanta-area condominium complexes. These properties were all owned at one time by one of the Hill's entities.  Each property was sold at an inflated price to a “straw purchaser” who applied for a mortgage loan based upon the inflated price.  Such a fraudulent transaction is called a mortgage “flip.”  The straw purchasers who participated in these mortgage flips were paid a kick-back out of the excess loan proceeds for the use of their name and credit.  The victim-lenders granted the loans based upon numerous false representations and documents regarding the credit qualifications of the straw purchaser, as well as false representations that the straw purchaser had paid a down payment, would reside in the home, and would be responsible for the loan payment.  In addition, the lenders were induced to make the loans based on fraudulently inflated appraisals.  Some of the properties were “flipped” more than one time.  Evidence showed that Hill generated in excess of $112 million in fraudulent loans during the time of the scheme.  Hill alone received over $14 million in profits from the scheme.  In addition to Hill, at least 20 other individuals have been convicted or pleaded guilty to charges associated with this multi-million dollar mortgage fraud scheme. 

New York Investment Banker Sentenced to 50 Months Prison Term in Multi-Million Dollar Scheme to Evade Taxes Owed from Tax Shelter Transactions

On September 5, 2007, in White Plains, NY, investment banker Richard Josephberg was sentenced to 50 months in prison for his involvement in a tax shelter scheme to evade paying a multi-million dollar federal tax debt.  Josephberg was convicted in April 2007 of 17 counts of tax evasion, conspiracy, filing false income tax returns, failure to file tax returns, failure to pay taxes, obstructing the IRS and health care fraud.  The former securities analyst at Goldman Sachs, was a founding partner of J.R Cralin & Co., a company that promoted and sold various tax shelter transactions between 1977 and 1985. Those tax shelter transactions — which were carried on with tax shelter promoters such as Bernard “Fred” Manko and Charles Atkins, both of whom were convicted for selling fraudulent tax shelter losses — resulted in hundreds of millions of dollars of bogus losses claimed by investors in the Cralin tax shelters. Josephberg and his Cralin partners also claimed the bogus losses on their own tax returns.  The IRS issued notices to Josephberg for more than $1.5 million in taxes that he owed for the period 1977-1985.  But, Josephberg evaded paying his tax debt stemming from 1977-1985, which, by 1995, had grown, with interest and penalties, to approximately $17 million.

Pennsylvania Man Given 16 Years in Prison for Fraud, Money Laundering

On September 5, 2007, in Pittsburgh, PA, Christopher Fekos was sentenced to 16 years in prison and ordered to pay $7.5 million in restitution to his victims.  Fekos pleaded guilty in May 2007 to bank fraud, money laundering and mail fraud.  He owned several restaurants and a painting business that failed.  According to the indictment, Fekos engaged in schemes to defraud lending entities, in connection with loan applications, making misrepresentations and submitting false documents that overstated assets and income, understated liabilities and were otherwise designed to overstate the borrowers’ ability to repay the loans.  He used proceeds from fraudulent loans and fraud schemes to finance a lavish lifestyle.

Alabama Bookkeeper Sentenced for Tax Evasion and Bank Fraud

On July 26, 2007, in Birmingham, AL, Carrie Lynn Couch was sentenced to 41 months in prison and ordered to pay restitution to her victims for bank fraud and tax evasion.  Couch was employed as a bookkeeper for Amy Uptain, a certified public accountant (CPA), and performed various bookkeeping duties for Uptain’s clients, some of which provided signature stamps and checks to facilitate the paying of bills and taxes.  Couch had access to clients’ bank statements, cancelled checks as well as accounts receivable and payable checks.  She used her position and access to those accounts to steal money from these clients.  Couch opened a fictitious business bank account and used the account to deposit stolen money while carrying out the embezzlement scheme.  Couch admitted to embezzling $587,128 from clients of Amy Uptain, CPA, over a three year period from 2001 through 2003. Court testimony revealed that Couch had used some of the funds for internet gambling.  Couch was charged in a Criminal Information and pleaded guilty on December 29, 2006, to bank fraud and income tax evasion.

Former Owners of Armored Car Company and Check Cashing Company Sentenced on Filing False Tax Returns and Bank Fraud Charges

On July 19, 2007, in New York, NY, Dominick Colasuonno was sentenced to 40 months imprisonment and Philip Colasuonno was sentenced to 46 months home confinement for tax and bank fraud.  The two men were also ordered to pay $781,000 in restitution to the Internal Revenue Service.  The Colasuonno’s, former owners of Prima Checking Cashing, Inc., and American Armored Car, Ltd., pleaded guilty to tax fraud charges in June 2007.  Dominick and Philip Colasuonno paid their employees in cash and failed to withhold taxes that employers are required to withhold from employee paychecks.  They also failed to pay over those taxes as required to the IRS.  To cover up the cash payroll and their failure to withhold and pay various employment-related taxes, Dominick Colasuonno and Philip Colasuonno wrote and caused to be written, weekly checks from American Armored Car made payable to a security company even though American Armored Car had no ongoing business relationship with the security company.  The sole purpose for the checks to the security company was to disguise the payment of cash payroll to employees of American Armored Car. The defendants cashed the security company checks at Prima, their check-cashing establishment, without the knowledge or involvement of the security company or any representative of the security company.  American Armored Car would then fraudulently account for cash payroll to its employees in its books and records as payments for "outside services."

Alaska Defendant Sentenced to 46 Months in Bank Fraud Case

On June 21, 2007, in Anchorage, Alaska, William E. Allen was sentenced to 46 months in prison, to be followed by five years of supervised release and ordered to pay $149,523 in restitution and to pay a $200 special assessment.  Allen pleaded guilty in March 2007 to one count each of bank fraud and engaging in monetary transactions in criminally derived property.  According to court documents, Allen engaged in a scheme to defraud a number of Alaskan financial institutions by passing and attempting to pass counterfeit corporate checks.  He deposited the checks and then arranged to immediately withdraw money and, in some instances, wire it to contacts in Nigeria.  Allen obtained further funds by depositing a series of 23 counterfeit money orders into various branches of Credit Union One and then withdrawing the funds before the counterfeit nature of the instruments could be discovered.  As a result of his criminal actions, the indictment alleges that Allen fraudulently obtained approximately $190,000.

Owner of Avon Financial Firm Sentenced to 7 Years in Federal Prison for Stealing $4.5 Million from Investors

On May 3, 2007, in New Haven, CT, David M. Faubert was sentenced to 84 months imprisonment for stealing millions from clients of his investments company.  On November 14, 2006, Faubert pleaded guilty to mail fraud, embezzlement from an employee benefit plan and filing false tax returns.  Faubert, a registered agent for certain broker dealers and investment advisors, owned and controlled a company called Faubert Investment Group, Inc. (FFG).  Through FFG, Faubert provided insurance and other financial services to approximately 225 clients.  Between January 2000 and April 2005, Faubert guaranteed existing clients an 8 percent rate of return if they invested money in a fixed investment account controlled by him.  Twenty-one clients provided Faubert with approximately $5.5 million.  However, the fixed investment account did not exist and the money was deposited into Faubert’s business and personal accounts.  Faubert spent $4.5 million on gambling, lavish vacations and expensive cars.  In order to lull investors into believing that the investments were earning the promised rate of return, he mailed false monthly financial statements to his clients.  Faubert also filed false income tax returns for the years 2000 through 2003 by failing to report the funds he embezzled, resulting in a tax loss to the government of $946,155.

Bookkeeper Sentenced on Bank Fraud and Money Laundering Charges

On April 20, 2007, in Macon, GA, Shirley Lord Patel, bookkeeper at Betty J. Lord Trucking, Inc., was sentenced to 33 months in prison, to be followed by five years of supervised release and ordered to pay $31,148 in restitution.  Patel pleaded guilty in January 2007 to one count of bank fraud and one count of money laundering.  According to court document, as bookkeeper, Patel had access and control over various check registers, journals and computers.  In addition, Patel had access to an operating account for the benefit of employees maintained at the Bank of Perry.  From April 2005 through September 2005, Patel made 18 transfers totaling $10,400 from the Bank of Perry to an account maintained with Wachovia Bank in a branch located in Sarasota, Florida.  Also, using a computer, Patel surreptitiously acquired personal information from individuals and created and manufactured counterfeit checks and false identification cards.  With stolen and fraudulently obtained personal information she acquired, Patel transferred, or attempted to transfer, funds from legitimate credit cards and bank and retirement accounts to various bank accounts in the names of actual and fictitious persons, which resulted in an attempt to embezzle and steal approximately $91,200.

Defendant Sentenced to 46 Months in Mortgage Fraud Scheme

On April 11, 2007, in Charlotte, NC, Charles M. Gabriel, Jr., was sentenced to 46 months in prison and ordered to pay $278,367 in restitution.  Gabriel pleaded guilty in December 2004 to one charge of conspiracy to defraud the United States.  According to the Bill of Information, Gabriel created and used entities known as Southern Investment Properties, JW Settlement Services, SB Homes Carolina, DRE Settlement Services and NVG Carolina to induce prospective real property buyers to provide them with credit information in order to purchase real properties.  Gabriel and his co-conspirators used a variety of methods to defraud mortgage lenders and real estate investors, including inflating the purchase price purportedly paid by buyers in obtaining mortgage loans in the name of those buyers.  As part of this scheme, lenders lost approximately $2.4 million. 

Husband and Wife Sentenced in Money Laundering Conspiracy

On March 29, 2006, in Chattanooga, TN, Lincoln A. Simmons and his wife, Crystal Charmaine Simmons, were sentenced to 44 months and 41 months in prison, respectively, followed by five years of supervised release and ordered to pay $2,265,542 in restitution to AmSouth Bank.  The Simmonses pleaded guilty in December 2006 to one count of money laundering conspiracy and one count of wire fraud.  According to court documents, Lincoln Simmons was the chairman of the board of directors and the chief financial officer of Environmental Services & Technologies, Inc. (ESTI), a business engaged in environmental consulting.  Crystal Simmons served as an office manager.  The defendants used the services of Alpha Financial Services, which was engaged in the business of obtaining money for companies in need of short-term financing and had a line of credit with AmSouth Bank.  In order to obtain money, ESTI submitted to Alpha invoices for work allegedly performed.  Alpha then summarized the total dollar value of those invoices from ESTI and faxed a summary sheet to AmSouth.  AmSouth wired funds totaling 80 percent of the invoices directly to ESTI, who was obligated to repay the funds.  The Simmonses prepared and submitted false and fraudulent invoices to Alpha and AmSouth Bank for the purpose of obtaining funds under false pretenses.

Manager of Texas Supermarket Sentenced To Prison

On February 22, 2007, in Brownsville, TX, Jaime Miguel Lopez was sentenced to 24 months in prison and ordered to pay $599,191 in restitution for laundering stolen checks through his grocery store.  Lopez managed the family-owned M. A. Lopez supermarket in Brownsville.  He pleaded guilty to bank fraud in June 2004.  At the plea hearing, Lopez admitted that he acquired stolen U.S. Treasury checks from another person in Mexico and imported the checks into the United States.  Lopez fraudulently endorsed the stolen checks, co-mingled the proceeds with the legitimate receipts from the supermarket, periodically made deposits into the supermarket’s account at the Brownsville branch of the Texas State Bank and then withdrew cash from the account and divided the proceeds with the individual in Mexico.  The bank lost $1.2 million dollars as a result of the scheme.  Lopez’s scheme was discovered when the intended recipients of the U.S. Treasury checks, who live in Mexico, filed claims for non-receipt of their checks from government agencies.

Ohio Man Sentenced for his Role in Mortgage Fraud Scheme

On February 21, 2007, in Cincinnati, OH, Troy S. Clements was sentenced to 24 months in prison, three years of supervised release and fined $10,000 for his role in a $2.3 million mortgage fraud scheme.  Clements pleaded guilty to money laundering and conspiracy to commit mail, bank and wire fraud.  Clements and others recruited homebuyers by advertising that they could finance 100 percent of a house with no money down.  When clients found a property that they wanted to buy, Clements reviewed the house for potential value and then bought it, if he determined that it could be refinanced for the final buyer.  After buying the property, Clements would resell the property to the client borrower and have the client sign a note and mortgage due to a company that he owned called American Funding.  The note and mortgage included an additional amount over what he paid for the property, referred to an “investor fee.”  To pay off the note and mortgage, Clements directed employees of his mortgage company to arrange for refinancing loans to be obtained by the borrower from legitimate mortgage lenders.  In order to obtain these loans, false documents were created and false information was supplied to lenders on loan applications.  Clements laundered money by using the money acquired through illegally obtained mortgages and bought other properties with the money, which allowed him to continue the scheme.

Multiple Defendants Sentenced in Mortgage Fraud Scheme

On February 20, 2007, in Hattiesburg, MS, Richard B. Lucas, Kimberly A. Castle, Kenneth Stalnaker, Loretta Joy Champ, Jacquelyne B. Mosley, Kenneth Fairley, Jr., and Michael T. Cox were sentenced for their involvement in a mortgage fraud conspiracy involving wire fraud in violation of federal law. In addition, Richard B. Lucas and Kimberly A. Castle were sentenced for conspiracy to commit money laundering. Lucas, the ringleader of the conspiracy, was sentenced to 168 months in prison, to be followed by five years of supervised release, and ordered to pay $1,326,727 in restitution to Countrywide Home Loans, Inc. Castle, who served as Lucas’s lawyer in handling all of the loan closings involved in the scheme, was sentenced to 48 months in prison, followed by three years of supervised release, and ordered to pay $1,390,250 in restitution. Stalnaker, a real estate appraiser who was charged with preparing inflated appraisals, was sentenced to 28 months in prison, followed by five years of supervised release, and ordered to pay $938,767 in restitution. Champ, who also prepared inflated real estate appraisals, was sentenced to nine months in prison, followed by three years of supervised release, and ordered to pay $152,089 in restitution. Mosley, another real estate appraiser, was sentenced to three years of probation with six months of house arrest. She was ordered to pay $120,000 in restitution. Fairley, who served as a straw buyer of properties for Lucas, was sentenced to five years of probation with six months of home confinement. He was ordered to pay $97,055 in restitution. Cox, who prepared bogus financial documents for Lucas, was sentenced to three years of probation with nine months of house arrest. He was ordered to pay $91,774 in restitution. 

The five other defendants, Phillip N. Weary, William Vaston Fairley, Jafus Jones II, Kristy N. Packer, and Marcy Irby, pleaded guilty to federal charges and were sentenced on February 1, 2007. Weary, who was the nominal purchaser of all of the properties acquired as part of the scheme, was sentenced to 19 months in prison, followed by three years of supervised release and ordered to pay $925,540 in restitution. Fairley, who helped recruit investors, was sentenced to seven months in prison, followed by seven months in a halfway house and three years of supervised release and ordered to pay $355,475 in restitution. Jones, who also served as a recruiter for Lucas, received three years of probation with nine months of home confinement and was ordered to pay $128,120 in restitution. Packer, a straw buyer for Lucas, received five years of probation with six months of home confinement and was ordered to pay $191,888 in restitution.  Irby, a straw buyer who testified about the scheme at trial, received 48 months of probation and was ordered to pay $101,673 in restitution.

Lucas arranged for Clark and Jones to recruit persons to serve as borrowers on mortgage loans for the properties with the understanding that the borrowers would put no money down and would often receive cash payments for use of their names and credit ratings. Where the borrowers’ credit histories did not support the mortgage loans, Lucas arranged for Cox to prepare false income statements and bank account information to be submitted to the lenders. In addition, Lucas arranged for Fairley, Packer, and Irby to acquire properties in their names.

Defendant Convicted in International Pyramid Scheme involving more than 5,000 Victims from 41 Countries who Lost Over $4 Million

On February 22, 2007, in Eugene, OR, Richard J. Dompier, of Vale, NC, was convicted on 29 charges, including mail fraud, money laundering and tax fraud.  According to court documents, Dompier spearheaded a pyramid scheme, which he promoted in 41 countries, causing more than 5,000 victims to lose a total of $4 million. In July 1998, Dompier launched an investment opportunity through his business, The New Millennium Group (NMG), headquartered in Roseburg, OR.  Dompier told potential investors that if they invested $98 with his company, he would provide them with a one-ounce bar of silver and commission checks totaling $15,853.50 over a 14 month period. Dompier utilized the internet, direct mail, and a number of promoters he had in the United States and England to sell the scheme. In reality, the program was a pyramid scheme as NMG had no legitimate business activities, and Dompier paid initial investors with funds obtained from investors who later joined the NMG silver program. In March 1999, Dompier moved to North Carolina and opened an NMG office in Lincolnton, NC, as well as in Park Rapids, MN. In June 1999, Dompier authorized a salesman named Simon Hill in England to promote the scheme overseas. Hill heavily promoted the silver scheme in England and other parts of Europe, generating an additional $1.5 million dollars for Dompier. From July 1998 through about October 2000, Dompier sold 75,920 silver bars to more than 5,000 investors, promising them they would collectively receive approximately $1.2 billion dollars.  The victims were mainly from the United States, England, and Canada, but also involved victims in Africa and Australia. Dompier issued minor commission checks to early investors, making it appear that the NMG silver program was legitimate. This false appearance helped generate additional investors into the program. After not receiving their promised commissions, NMG investors eventually began complaining to Attorney Generals and other regulatory agencies in the United States and in the United Kingdom.  A federal grand jury returned a superseding indictment in May 2006, charging Dompier with mail fraud, illegally transferring funds taken by fraud interstate, money laundering and failure to file corporate income tax returns.

Trustmark National Bank Employee Sentenced for Structuring and Criminal Forfeiture

On January 10, 2007, in Jackson, MS, Kathryn Brasfield, a former employee of Trustmark National Bank, was sentenced to 23 months in prison to be followed by two years of supervised release. According to the Bill of Information, Brasfield worked as a Collection and International Specialist in the main branch of Trustmark National Bank. The Information charges that she participated in a scheme to evade the filing requirements of a financial institution involving more than $100,000 in a 12-month period. Beginning August 2003, and continuing through February 2004, in Brasfield accepted cash from a co-conspirator and disguised the amounts of cash by using the bank general ledger accounts; family members’ accounts; holding the cash in the bank’s safe; and by making false debit and credit entries on various general ledger accounts. In furtherance of the scheme, Brasfield would issue checks made payable to a third party, as directed by the co-conspirator, and was paid a fee for agreeing not to file a Currency Transaction Report (CTR) with regards to those transactions. On October 3, 2006, Brasfield pleaded guilty to causing a financial institution to fail to file a currency transaction report (CTR), structuring and criminal forfeiture. As a result, she was ordered to forfeit any assets that were purchased with any proceeds of the fraud, as well as any proceeds derived from said assets.

Defendant Sentenced for Structuring Bank Deposits to Evade Reporting Requirements

On December 19, 2006, in Camden, NJ, Kamal S. Elhomsi was sentenced to 37 months in prison and three years of supervised release.  Elhomsi pleaded guilty on August 3, 2006, to one count of structuring transactions to evade reporting requirements and one count of credit card fraud.  According to the indictment, between January 9, 2001, and July 15, 2002, the defendant made 64 structured financial transactions worth a total of more than $600,000 in an attempt to evade currency reporting requirements placed on banking institutions to report transactions in amounts of $10,000 or greater.  Nearly all of Elhomsi’s bank deposits were made in amounts of either $9,500 or $9,900.  Additionally, from March 2002 to November 2002, Elhomsi obtained more than $275,000 in cash advances and merchandise through unauthorized use of credit cards, according to the indictment.  

Bank Loan Officer Sentenced to 37 Months

On December 1, 2006, in Lexington, KY, Robbie S. Adkinson was sentenced to 37 months in prison, five years of supervised release and ordered to pay $532,683 in restitution to the State Bank and Trust Company. Adkinson pleaded guilty on August 25, 2006 to bank fraud and making false statements on tax returns. According to court documents, Adkinson was employed as assistant vice president and loan officer at the State Bank and Trust in Harrodsburg, KY. Adkinson made false computer and accounting entries documenting fictitious loans, as well as made unapproved advances on customer lines of credit. According to the Information, Adkinson took the money from the fictitious loans and unapproved advances. She then made a false statement on her 2002 income tax return by knowingly understating her income.

Participant in $1 Million Mortgage Fraud Scheme Involving South St. Louis Properties is Sentenced to Prison

On November 22, 2006, in St. Louis, MO, James McMullen was sentenced to 38 months in prison for money laundering and conspiracy to commit bank and wire fraud in a mortgage fraud scheme that caused more than $1 million in losses. McMullen and co-defendants Rodney Tate and Reginald Mayes devised a scheme to buy property in St. Louis City for fair market value. The defendants arranged for false appraisals to inflate the property’s value, then paid people known as "straw buyers" who let them use their names and other financial information to “buy” the properties at inflated prices. The defendants prepared false loan applications which misstated the “straw buyers'” salary, employment history and financial assets and usually lied about their intention to occupy the property as a primary residence. Using this false information, financial institutions and mortgage brokers loaned them millions of dollars. Tate was sentenced in October 2006 to 57 months in prison and ordered to pay more than $1 million in restitution. Mays was sentenced to 36 months probation in early November. 

Owner of Avon Financial Firm Admits Stealing More Than $4 Million from Investors

On November 14, 2006, in New Haven, CT, David M. Faubert pleaded guilty to 10 counts of mail fraud, one count of embezzlement from an employee benefit plan and four counts of filing false tax returns.  According to court records, Faubert, a registered agent for certain broker dealers and investment advisors, owned and controlled a company called Faubert Investment Group, Inc. (FFG), of Avon, Connecticut. Through FFG, Faubert provided insurance and other financial services to approximately 225 clients. Between approximately January 2000 and April 2005, Faubert represented to certain existing clients that he would guarantee them an 8 percent rate of return if the clients invested money in a fixed investment account controlled by him. As a result of Faubert’s promises, 21 clients provided Faubert with approximately $5,497,918. However, the fixed investment account did not exist and Faubert deposited the monies directly into his business and personal accounts. As part of the scheme, Faubert spent approximately $4,452,230 for his own personal use. In order to lull the investors into believing that the investments were earning the promised rate of return, Faubert mailed false monthly financial statements to his clients. Additionally, Faubert embezzled $27,079 from FFG’s retirement plan by falsely representing to two employees that the money had been withheld from their paychecks and invested in the retirement plan. Faubert used the $27,079 to cover personal expenses. Finally, Faubert filed false income tax returns for the years 2000 through 2003 because he failed to report the funds he embezzled from the investment clients, resulting in a tax loss to the government of $946,155.

Fiscal Year 2008 - Examples of Financial Institution Fraud Investigations

Fiscal Year 2009 - Examples of Financial Institution Fraud Investigations

Table of Contents - Financial Institution Fraud Investigations

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How to Report Suspected Tax Fraud Activities