White Collar Crime

Criminal Prosecutions of Mortgage Fraud on the Increase

Published on: January 27, 2009 | by Lasnetski Gihon Law

In Florida and across the country, prosecutors are bringing more criminal cases against people suspected of committing mortgage fraud. Mortgage fraud can be committed in a number of ways. Some examples include: buyers using fake identities to obtain loans and purchases houses, using fraudulent appraisals to inflate the price of a house so it can be resold at an artificially high price, paying bribes or kickbacks to get mortgages approved and forging mortgage documents (i.e. falsifying a buyer’s income to make it appear that he/she is able to afford a higher mortgage) to get a mortgage approved.

When mortgage fraud is committed, houses are sold to people who would not be able to afford them under normal circumstances, and housing prices become artificially inflated. The result is that ultimately mortgages are not paid and there are numerous foreclosures which can crash the housing market. A crashing housing market affects most homeowners, not just the ones who obtained their home by fraudulent means. Another result is that mortgages become much harder to get for everyone, which of course negatively affects the sale of homes and further drags down the housing market.

The United States Justice Department has formed more than 40 mortgage fraud task forces across the country, and federal mortgage fraud cases have more than doubled over the last few years, according to an article at www.Sfgate.com. In that time period, it is estimated that mortgage lenders have lost approximately $4 billion. Florida and Georgia are among the states with the highest foreclosure rates. Florida and two other states have half of the country’s mortgage fraud complaints over the last few years.

Jacksonville, Florida Supervisor at DCF Arrested on Theft Charges

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

A woman who held the position of supervisor at the Department of Children and Family Services (“DCF”) was arrested for allegedly stealing money that was intended for recipients of government assistance, according to an article on www.News4Jax.com. She was arrested on charges of grand theft, criminal use of personal information and scheming to defraud according to the article. The total amount of money that was reportedly stolen was approximately $24,000.

This type of theft, which is often categorized as a white collar crime, is committed in Florida when a person takes the property of another for his/her own use without authorization. The penalties for the crime of theft in Florida depend on a variety of factors, including the value of that which is stolen. Where money has been stolen in an amount equal to or greater than $20,000 but less than $100,000, the crime is grand theft which is a second degree felony that carries a maximum prison sentence of 15 years.

As criminal defense lawyers representing a person who has been accused of such a theft or white collar crime, in addition to evaluating the evidence to determine if there is sufficient evidence to prove the defendant committed the crime, it is always important to evaluate the evidence to make sure the amount the state alleges was stolen is accurate and not based on any presumptions or speculation. This could mean the difference between a first degree, second degree or third degree felony or even a misdemeanor and potentially many years in prison and/or on probation.

Florida Law Focuses on Mortgage Fraud

Published on: November 27, 2008 | by Lasnetski Gihon Law

In the second quarter of 2008, Florida ranked 4th in the nation in percentage of home foreclosures. As a result of the increase in foreclosures in Florida, the Florida legislature and law enforcement officials are cracking down on what they consider mortgage fraud. This year, Florida passed into law the Foreclosure Rescue Fraud Prevention Act, which specifically deals with what is referred to as “rescue foreclosure” schemes to defraud. In such cases, the government alleges that companies target individuals who are headed towards foreclosure, offer them a loan to avoid foreclosure and deceive them into signing over the title to the property which is then sold by the company, often after collecting fees, refinancing and stripping the home of equity. The law allows homeowners a five day period to cancel any such contract and provides for significant financial penalties for any company that violates the law. The Florida Attorney General’s Office is currently pursuing a lawsuit against National Foreclosure Management claiming they defrauded Florida homeowners out of approximately $1.7 million in home equity.

Federal Law Enforcement Officials Struggle to Handle White Collar Crime Cases

Published on: November 5, 2008 | by Lasnetski Gihon Law

The FBI and other federal law enforcement officials are having a difficult time keeping up with white collar cases, according to a recent article on the NY Times website. At a time when white collar crimes involving fraudulent lending practices and mortgage fraud have increased due to the nature of the current economic climate, federal law enforcement officials are struggling to investigate these crimes due to limited resources and the continuing effects of a shift in personnel and priorities after 9/11. According to the article, the FBI just does not have the resources to devote to white collar crimes related to the current financial crisis. After 9/11, the FBI shifted approximately 1800, or 1/3rd, of its agents to terrorism and intelligence related departments. As a result, white collar criminal cases have seen a decrease in the number of cases investigated and charged. Although one would expect that mortgage fraud cases would increase the last year or so given the nature of the housing crisis, the article indicates that mortgage fraud cases are down 36% since 2001.

Protect Against Identity Theft

Published on: October 23, 2008 | by Lasnetski Gihon Law

According to the Florida Attorney General’s Office, this week is Identity Theft Week in Florida and throughout the country. The purpose of Identity Theft Week is to raise awareness as to the various ways people are at risk of having their identities and financial information stolen. As the Internet and other technology have become more popular, thieves have come up with numerous ways to try to learn identification and financial information from unsuspecting victims.

For instance, as the Florida Attorney General’s website notes, “phishing” is a common way thieves try to get people to provide their identification and financial information. Phishing is the process by which a thief will send out mass emails to people that appear to come from legitimate entities like a bank, credit card company or retailer. The email may say that there is a problem with the person’s bank account or credit card and request certain information that would allow the thief to access financial information.

Banks and credit card companies do not request such information via email. If you have received an email asking for any information that could lead to access to your financial information (such as a social security number, date of birth, credit card number, PIN), you can call the Florida Attorney General’s Office at 1.866.966.7226 to report the incident and help determine if a communication is valid.

New Low Tech Credit Card Theft on the Rise in Florida

Published on: September 18, 2008 | by Lasnetski Gihon Law

Credit card theft/fraud is a crime that is increasing throughout Jacksonville, Florida and the entire country. As people become more proficient with computers and the Internet, those with criminal intentions are finding ways to misappropriate credit card numbers and other financial accounts. As high tech credit card thefts is increasing, so are more low tech attempts to commit credit card theft.

For instance, one type of credit card theft called shaving is becoming increasingly popular. This type of credit card theft involves a thief trying different combinations of 16 digit numbers until he/she finds one that matches a valid credit card account. The match can be verified by initiating a credit card purchase on the Internet or over the phone. Once the thief finds a valid credit card number, he/she will obtain an old, expired credit card and shave off the numbers. The new, valid numbers are then glued on to the card. The thief then damages the magnetic strip on the credit card so the store clerk has to manually enter the new credit card numbers into the credit card machine, and the purchase goes through.

This is not the smoothest way to commit credit card theft, but it is apparently working, particularly in stores that have a high volume of customers with young store clerks who do not take the time to inspect a credit card when it is presented. Surely, most of us could identify one of these altered cards if we took the time to look at it, but consider that many store clerks do not pay attention to a credit card other than to briefly determine whether it has a signature.

Pervasive Medicare Fraud in Florida

Published on: August 26, 2008 | by Lasnetski Gihon Law

Millions of dollars in Medicare reimbursements are being distributed based on fraudulent claims, according to an article at News4Jax.com. According to the article, the Center for Medicare and Medicaid Services (CMS) has allowed alleged businesses who claim to be medical equipment suppliers to sign up for Medicare reimbursement eligibility when they were in fact sham businesses that never provided medical supplies to patients. The Medicare reimbursement process is supposed to work by legitimate medical equipment companies providing medical supplies to Medicare eligible patients pursuant to a legitimate doctor’s prescription. The medical equipment supplier then bills Medicare for the cost of the medical supplies given to the patient. In one example from the article, a business used a utility closet as the address it provided Medicare and no one found out until after $77,000 in Medicare reimbursements were paid out.

What often happens is that sham companies enroll in the Medicare reimbursement program and submit reimbursement claims for supplies that were never provided or for amounts much greater than the value of the supplies provided. The CMS has indicated an intention to change the enrollment procedures for Medicare reimbursement eligible companies to try and prevent fraudulent claims. The idea is to make sure medical supply companies meet certain standards before they become eligible to bill Medicare for supplies they provide patients.

Among the changes that have been suggested to change the Medicare enrollment process are: requiring suppliers to maintain supporting records from doctors, limiting the use of cell phones or pagers as a business’s primary contact number and setting up a competitive bidding process for medical equipment.

Dangerous Drugs Sold Over the Intenet Without Prescriptions

Published on: July 22, 2008 | by Lasnetski Gihon Law

Federal law prohibits dispensing dangerous drugs without a prescription from a doctor who has a legitimate medical relationship with the patient. However, there are hundreds of Internet websites that offer prescription medications to anyone without the prescription, including dangerous and/or addictive drugs like Oxycontin, Vicodin, Methadone and Xanax.

A recent study located 365 websites that sell controlled medications over the Internet by mail. Most of them sell their drugs without requiring a prescription. Other websites offer to sell the required prescription after a person provides some basic information over the Internet. Officials believe that the ease with which people can get dangerous, and other, drugs over the Internet is increasing drug abuse, particularly among younger people such as college students. The study showed that 85% of all drug sales over the Internet involved controlled drugs versus 11% of drug sales from pharmacies. This statistic obviously suggests that people are taking advantage of the ease and anonymity of the Internet to obtain certain drugs they could not get by walking into a pharmacy.

Law enforcement officials have been trying to put a stop to the illegal sale of drugs over the Internet. While the recent study found 365 websites selling drugs over the Internet without requiring a prescription, a similar search last year found 581 such websites. However, many of these Internet sites are based outside of the country. (This, of course, raises an issue as to how safe it is to take a medication when it is unclear where it came from, who prepared it and who dispensed it.) Additionally, these websites can come and go and avoid detection much easier than a traditional business. Congress is currently considering a law entitled the Ryan Haight Online Pharmacy Consumer Protection Act which would require online pharmacies to be certified and also require a person to actually see a doctor prior to obtaining a prescription for a controlled medication. It is unclear how and to what extent those requirements will truly address the problem and how offenders would be caught.

Florida Medicare Fraud is Significant According to Study

Published on: July 17, 2008 | by Lasnetski Gihon Law

One form of Medicare fraud occurs when a doctor or provider of medical supplies seeks reimbursement from Medicare for medical services or equipment that was never provided or for an amount greater than the service or equipment was worth. When the system works, a doctor or medical supply company will provide a service or piece of medical equipment to a patient covered by Medicare and then submit a proper reimbursement form to Medicare for payment. However, because of the bureaucratic and wasteful nature of the Medicare program, this system is wrought with fraud.

There were approximately $93 million in fraudulent Medicare claims in the United States from 2000 to 2007, according to a recent congressional study which was reported at Sfgate.com. The study found that millions of dollars were being paid to medical supply companies via reimbursement forms based on prescriptions that were over ten years old and/or that were from dead doctors. Florida, which has a high number of Medicare claims due to the age of its population, had more than $2 million in Medicare claims paid to medical supply companies based on prescriptions from 114 dead doctors; over $500,000 was paid for prescriptions from a single doctor who died in 1999.

An amazing 27% of dead doctors in Florida still had an active Medicare ID number that could be used to seek payment through Medicare.

Hackers Steal PIN Codes From ATM Machines

Published on: July 12, 2008 | by Lasnetski Gihon Law

For every ATM card or debit card that is issued by a bank or other financial institution to a customer, there is a PIN code that allows the customer to access the funds in the account. The PIN codes are supposed to be among the most heavily secured elements of the banking transactions. However, according to court documents and a report on Sfgate.com, thieves have been able to access numerous PIN codes and millions of dollars of bank customers’ money by breaking into the computer network of automated teller machines (ATM”s) at various 7-Eleven convenience stores.

Customers’ PIN codes are supposed to be protected by the banks and other financial institutions with the highest level of encryption (the use of secret coding to prevent others from reading information). However, some operators of ATM’s are not using the recommended strong encryption methods allowing hackers to access the PIN data that goes from the ATM’s to the computer systems that process the transactions.

Law enforcement officials do not know exactly how the thieves accessed the PIN codes, but believe it was done remotely via a server. As a result, customers and potential victims would not notice anything different about an ATM, the use of which could potentially result in the theft of their PIN code.