White Collar Crime

Financial Identity Theft Becoming More Widespread

Published on: October 9, 2009 | by Lasnetski Gihon Law

I read a good article on identify theft from the Miami paper. The article discusses how the crime of identity theft is not only becoming much more prevalent, but is also becoming harder to detect. This is the case in Florida and throughout the country.

The following are some of the more interesting points made in the article. Only 1 out of every 700 people who commit identity theft is ever arrested. When you consider that identity theft is often a difficult charge for prosecutors to prove, the percentage of people who are actually convicted of identity theft is quite a bit lower than the 1 in 700 figure. Additionally, the effects of identity theft can be extremely onerous on a person. However, those effects are not always immediately apparent like with other crimes. The article noted that on average, a person victimized by identity theft does not realize he/she is a victim of identity theft until a year after the actual theft. One of the best ways to stay diligent and reduce this lag time is to check your credit reports at the three major credit reporting agencies (Equifax, Experian and Transunion) at least once a quarter. Finally, the author of the article illustrates how easy it is for skilled hackers to gain access to other people’s information. However, most people and businesses fail to appreciate the risk of a compromised network and do not take adequate security measures. This only exacerbates the problem of more identity thefts and fewer detections of identity thefts.

Federal Government Cracking Down on Medicare Fraud Crimes

Published on: August 19, 2009 | by Lasnetski Gihon Law

Federal agents raided dozens of doctors’ offices and homes during investigations into alleged Medicare fraud. As part of the government’s effort to reform health care and save money, the federal government is focusing on Medicare fraud and what they say are millions of dollars that are fraudulently taken from the government pursuant to the Medicare laws. The recent raids occurred in Houston, New York, Boston and Louisiana. In Houston alone, thirty-two indictments were recently unsealed charging $16 million in Medicare fraud claims.

Medicare fraud can be committed in various ways, but it often involves a doctor or someone in a doctor’s office billing Medicare for supplies that were not medically necessary and/or never provided to the patient. Under the Medicare laws, when a doctor prescribes a medical product, such as a wheelchair, to a patient, the doctor has a right to reimbursement from the government. In this case and other cases of Medicare fraud, the government alleges that the medical supplies were unnecessary and/or the medical supplies were never given to the patient and the doctor pocketed the reimbursement money. In this case, wheelchairs, arthritis kits and tube feeding supplies were the most common supplies that were the subjects of the alleged Medicare fraud.

Due to its relatively large elderly population, Medicare fraud is a significant issue in Florida. With the publicity surrounding health care reform, wasted money in the health care industry and the enormous tax burden on the public, it is likely that the federal government and state law enforcement in Florida will continue to investigate doctors for Medicare fraud.

Are Men and Women Equally Affected by Identity Theft Crimes?

Published on: June 13, 2009 | by Lasnetski Gihon Law

Not according to a recent survey. Those survey results indicated that women are more negatively affected by identity theft crimes than men. Affinion Security Center surveyed 808 households and found that women are 26% more likely to be victims of identity theft than men. Additionally, on average, women lose more money than men when they are victims of identity theft.

If you have been the victim of identity theft or suspect that your identity and/or financial information have been compromised, there are steps you can take to prevent the theft or limit the damage. Many people who have been victimized by identity theft will not know it until much later unless they actively check their credit status. You can learn more about the steps you can take to detect identity theft and limit your exposure here.

Federal Government Devoting More Resources to White Collar Crime Cases

Published on: June 6, 2009 | by Lasnetski Gihon Law

Under the Obama Administration, the Department of Justice has indicated an increased focus on mortgage fraud and other white collar crimes. We have discussed this marked increase in investigations and prosecutions of various white collar crimes in previous blogs here , here and here. However, a recent press release from the U.S. Department of Justice further emphasizes the point that mortgage fraud and other white collar crimes remain high on the government’s list of priorities.

According to the press release, the government is currently investigating more than 2100 mortgage fraud cases, which is an increase of 400% from five years ago, and the government has doubled the number of agents investigating such crimes.

Federal Prosecutors Say Florida is “Ground Zero” for Mortgage Fraud Crimes

Published on: May 17, 2009 | by Lasnetski Gihon Law

On the Lasnetski Gihon Law criminal law blog, we have discussed on several occasions the trends we have noticed with federal investigations and prosecutions of various crimes depending on what seems to be the prevailing issues of the day. One trend we have noticed recently is the increased focus by federal law enforcement officials on mortgage fraud crimes. This is obviously due to the massive collapse of the housing market and the number of foreclosures that resulted.

To further underscore this point, federal prosecutors in Florida have called Florida “ground zero” for mortgage fraud cases in the United States and are organizing their resources accordingly, according to a recent article on the Tampa, Florida news website. The Tampa, Florida article indicates that federal law enforcement officials in that area expect to have approximately 100 mortgage fraud cases charged or under investigation by the end of 2009. Because of the long time it takes to investigate and prosecute mortgage fraud cases in federal court, the U.S. Attorney for the Middle District of Florida said he expects each of his 105 assistant U.S. attorneys to handle the added workload.

We have seen similar articles and other evidence of an increase in mortgage fraud investigations and arrests in Jacksonville and other areas of Florida. We wonder if casting such a wide net for these cases and employing the efforts of law enforcement officials and prosecutors who may not have the experience handling mortgage fraud cases will result in a number of innocent people being caught up in this effort. We also wonder if the line between aggressive but legitimate business decision-making and criminal conduct will get blurred by such large scale investigative methods.

FBI Stepping Up Investigations Into Mortgage Fraud

Published on: May 11, 2009 | by Lasnetski Gihon Law

The FBI is increasing its efforts to fight mortgage fraud, according to an article on Foxnews.com. The article indicates that the FBI is employing agents to work undercover and using wiretaps to investigate mortgage fraud activity.

In a prior blog post, I noted how federal law enforcement officials seem to shuffle their resources into different areas depending on the recent trends and media coverage. For instance, after 9/11 the FBI took a significant number of federal agents from various departments and redirected them to address immigration and terrorism related issues. More recently, after the economy began its downward spiral, the FBI has focused more on white collar crimes such as securities fraud and mortgage fraud. This article seems to confirm that the FBI remains focused on mortgage fraud activity, which is consistent with current events and news stories which are also focusing on the housing market, foreclosures and related financial crimes.

Watch Out for This Scheme to Defraud Corporations

Published on: May 5, 2009 | by Lasnetski Gihon Law

This article was posted at elamb.org to help expose a scam to get corporations to pay $150 for nothing. The scam involves a letter that is sent to corporations across the country that seems to indicate that corporations are required to file the minutes of their annual corporate meetings with the relevant state department, and the company sending the letter, Corporate Compliance, will file the minutes for the $150 fee. The letter makes it seem like a company is violating the law if they do not file their corporate minutes with the state.

In fact, in Florida, corporate minutes do not need to be filed with the state. The company maintains them. You can go to the Florida Department of State website to learn more about what companies are required to do and what documents are filed by Florida companies. So, in effect, this Corporate Compliance scam is asking for money for nothing with a letter that appears official. I would guess that a lot of people who would receive such a letter on behalf of companies throughout Florida are not clear as to the filing obligations of their company. As a result, they may assume this letter is legitimate or just request a check from their company to comply with the letter out of an abundance of caution.

However, if you receive such a letter, the better practice is to do some research to see if what they are asking is legitimate. Sometimes, it is just a matter of doing a google search for the company. In this case, this would reveal that Corporate Compliance is a shady company and that others have been the victim of this scam.

Tips for Small Businesses to Protect Themselves From Data Breaches and Identity Theft

Published on: March 31, 2009 | by Lasnetski Gihon Law

The Identity Theft Resource Center (ITRC) recently reported that data breaches increased by 47% from 2007 to 2008. Data breaches commonly involve unauthorized access to identification and/or financial information that is stored on a company’s computer or network. It can result in severe financial penalties and irreparable damage to a company’s reputation.

The ITRC has also put together a guide for small and mid-sized businesses that contains steps they can take to reduce their exposure to data breaches and identity theft. The guide can be found here. Some of the highlights include: determining the data the company needs and eliminating all other data from the company’s files/network, storing paper files and disks with sensitive information in a locked room and limiting access to that room, implementing proper shredding procedures, minimizing the number of places or computers where financial information is stored, encrypting all sensitive information that is sent over the Internet, ensuring that employees use responsible computer passwords that are not easy to detect and limit access to those passwords, discontinuing the storage of sensitive information on laptops to the extent possible and establishing confidentiality and security procedures and training employees accordingly.

Florida is Third Highest in Identity Theft Complaints

Published on: March 8, 2009 | by Lasnetski Gihon Law

The Federal Trade Commission (FTC) keeps a database of the various business and fraud-related complaints made by people in the U.S. to various entities. In a recent report, the FTC indicated from where those complaints came and the nature of those complaints. There were over 1.2 million complaints documented by the FTC in 2008, and 52% of them were related to fraud. Of those fraud-related complaints, identity theft was clearly the most complained of activity. Specifically, credit card theft was at the top of the list for identity theft-related activity.

Florida ranks third in the U.S. among the states in per capita rate of identity theft complaints and ninth in total overall complaints. This comes as no surprise as Florida has a high population of senior citizens who are often targets of fraud. However, it was notable that email is now by far the preferred method of initial contact for those who are attempting to defraud someone. The fraud complaints revealed that the victims were initially contacted by email 52% of the time and by phone only 7% of the time.

Those of us who have been working in criminal law since the 1990’s (or earlier), before the Internet was popular and widespread, recall boiler rooms and telemarketing schemes that were implemented to defraud the elderly and others. Now, it seems as if people have leveraged the relative ease of use and access and anonymity of email and the Internet to attempt schemes to defraud.

Who Makes Federal Criminal Policy?

Published on: February 9, 2009 | by Lasnetski Gihon Law

In the wake of the highly publicized scandal and alleged Ponzi scheme involving Bernie Madoff, U.S. lawmakers announced a proposed bill that would provide for an additional $110 million, 50 FBI agents, 100 SEC Enforcement Officials and 50 Assistant U.S. Attorneys to deal with federal securities fraud cases. The bill is called the Supplemental Anti-Fraud Enforcement Markets Act (“SAFE Markets Act”).

It is interesting how reactive our lawmakers and law enforcers are to major stories and so-called trends in criminal law. Not long ago, I wrote a post about how federal law enforcement authorities were prosecuting fewer white collar crimes and allocating their resources more towards immigration and terrorist-related issues. This was a reaction not only to 9/11 but also to the fact that illegal immigrants were coming over the border in droves to take advantage of the thriving U.S. economy and the numerous jobs made available by companies looking for cheap labor. At the time I wrote that post in May of 2008, prosecution of all federal white collar crimes was down 27% since President Bush took over in 2000.

More recently, the federal government’s focus shifted to mortgage fraud cases. The economy, and in particular, the housing markets, crashed, and several things happened. Immigration was still a concern, but those jobs that enticed illegal immigrants dried up to a large degree. Falling housing prices, untenable mortgages that were no longer supported by housing values and foreclosures captured the headlines. As a result, federal law enforcement officials increased their efforts to address mortgage fraud cases. As of late 2008, federal mortgage fraud cases more than doubled over the prior few years.