Toronto: Woman charged in $150K plane ticket fraud

thestar.com

A woman is facing charges after a joint Toronto police-Travel Industry Council of Ontario investigation into a plane ticket fraud that allegedly scammed victims out of an estimated $150,000.

According to Toronto police, people booked airline tickets through a woman they believed was authorized to sell them. The woman, who promised low-fare plane tickets to the Philippines, accepted cash and credit card payments, but victims never received the tickets they paid for and had unauthorized charges on their credit card statements.

Toronto police arrested Lorna Natalie Arcega, 38, from the Philippines on Thursday and charged her with four counts of fraud over $5,000, two counts of fraud under $5,000, two counts of uttering a forged document, two counts of false pretence under $5,000, four counts of false pretence over $5,000, three counts of unauthorized use of credit card data and one count of possessing proceeds of a crime under $5,000.

She is scheduled to appear in court on Sept. 23.

The Travel Industry Council of Ontario also laid charges against Arcega under the Travel Industry Act of Ontario, police said.

Police believe there may be more victims and are asking anyone with information to call police at (416) 808-2433 or Crime Stoppers anonymously at 416-222-TIPS (8477)

8 Ashley Madison users in US and Canada sue cheating website over data release

By Amanda Lee Myers

THE ASSOCIATED PRESS

LOS ANGELES _ Eight people across the U.S. who registered to use Ashley Madison are suing the website for cheaters after hackers released personal and detailed information of millions of users, including financial data and sexual proclivities.

The lawsuits were filed between last month and Monday by Ashley Madison users in California, Texas, Missouri, Georgia, Tennessee and Minnesota. They all seek class-action status to represent the estimated 37 million registered users of Ashley Madison.

The lawsuits, which seek unspecified damages, claim negligence, breach of contract and privacy violations. They say Ashley Madison failed to take reasonable steps to protect the security of its users, including those who paid a special fee to have their information deleted.

Last month, hackers infiltrated Ashley Madison’s website and downloaded private information. The details _ including names, emails, home addresses, financial data and message history _ were posted publicly online last week.

“Needless to say, this dumping of sensitive personal and financial information is bound to have catastrophic effects on the lives of the website’s users,” according to a lawsuit filed Friday on behalf of an anonymous Los Angeles man who created an account with Ashley Madison in March 2012.

“As a result of (Ashley Madison’s) unfair, unreasonable and inadequate data security, its users’ extremely personal and embarrassing information is now accessible to the public,” according to the lawsuit, filed by the Baltimore-based firm of Hammond Law.

Attorney Julian Hammond, who says his firm has litigated class-action lawsuits against companies like Google, Apple and Hulu, said the Ashley Madison breach is unprecedented in his experience.

The website’s users are worried not only about identity theft but about the embarrassment of the release of intimate sexual preferences. Even registering for the site without having an actual affair could put marriages in jeopardy.

“I haven’t seen anything like it,” Hammond said Tuesday.

A spokesman for Avid Life Media, the Toronto-based company that owns Ashley Madison, referred to previously released statements by the company calling the hack malicious and an “act of criminality.”

Avid Life on Monday began offering a $500,000 Canadian (US $378,000) reward for information leading to the arrest of members of a group that hacked the site.

“We will not sit idly by and allow these thieves to force their personal ideology on citizens around the world,” the company said in a statement last week.

The U.S. litigation follows a $578 million lawsuit filed in Canada last week, also seeking class-action status.

The hackers who took responsibility for Ashley Madison’s data breach have said they attacked the website in an effort to close it down as punishment for collecting a $19 fee without actually deleting users’ data.

On Monday, Canadian police said the hack has triggered extortion crimes and led to two unconfirmed reports of suicides.

The credit-card information of U.S. government workers _ some with sensitive jobs in the White House, Congress and the Justice Department _ was revealed in the breach. Hundreds of email addresses in the data release appear to be connected to federal, provincial and municipal workers across Canada.

canada-press

Blatant Insurance Fraud Cases

Compiled by Patricia L. Harman, PropertyCasualty360

Medical Insurance Fraud

Vi Nguyen, Theresa Fisher and Lindsey Hardgraves were indicted on multiple counts of mail fraud by a federal grand jury in Orange County, California, for a scheme that involved billing insurers more than $50 million worth of cosmetic surgery claims. According to a report in the Orange County Register, patients were told they could have “free or discounted cosmetic surgeries” such as “tummy tucks,” “nose jobs,” or liposuction if they agreed to undergo other unnecessary procedures such as endoscopies and colonoscopies, which were then billed back to the insurers.

Workers’ Compensation and Identity Theft

In Naples, Florida, as many as 146 employees of Fruit Dynamics, LLC (also known as Incredible Fresh or Collier County Produce) may have committed workers’ compensation fraud, according to Florida Chief Financial Officer Jeff Atwater. Sixteen employees were arrested during a recent raid on the plant.

The investigation into the fraud began when a former employee sought medical attention using a fake identity and mentioned that some other workers had done the same thing. At least 27 employees were believed to have stolen the identities of individuals from as many as 25 different states. The owners of the identities said they had not given permission for them to be used by anyone. The investigation is ongoing.

No Charity Here

In Texas, according to the Texas Department of Insurance (TDI), more than $10.3 million in insurance fraud was referred for prosecution in 2013. Two of their top fraud cases involved frauds perpetrated against elderly residents.

Leon “Randy” Sinclair, III, was a former insurance agent who successfully convinced more than 30 of his elderly clients to liquidate their assets and place them into charitable gift annuity accounts. It turns out that the only beneficiary of the charity was Sinclair himself, to the tune of $16 million which was misappropriated from the accounts. He was convicted following a 16-month TDI Fraud Unit Investigation and sentenced to 20 years in prison.

In a multi-jurisdictional case that involved the TDI Fraud Unit, the Internal Revenue Service and the Federal Bureau of Investigation, Christopher Purser and Robert S. Mills sold Shoreline Cruises of Lake George, N.Y., fictitious marine insurance. When the Ethan Allen, a cruise ship, sank killing 20 elderly tourists, the company found out it actually had no valid insurance coverage. Both plead guilty to federal charges. Purser was sentenced to more than 15 years in prison. Mills was sentenced to 10 years in prison and ordered to pay $2.45 million in restitution.

Operation Running Man

A Bridgeport, Conn.-based personal injury attorney, Joseph P. Haddad, perpetrated a large-scale conspiracy involving Francisco R. Carbone, a physician whose license was eventually revoked, and Dr. Marc Kirshner, a chiropractor. Haddad used “runners” to find clients for his legal practice, paying them in cash since using runners for personal injury cases is illegal in Connecticut. He regularly sent clients to Carbone, who fabricated injuries and provided prescriptions, bills and medical reports for Haddad and the patients’ insurance companies, frequently without even doing an examination. Haddad also sent clients to Dr. Kirshner, influencing Kirshner to prescribe more diagnostic tests and treatment than the patients required. After six months of treatment, the patient would receive a false permanent partial disability rating. Others in Kirshner’s office were involved in the fraud, which eventually involved 10 carriers and a total loss of $2.5 million.

Carbone and his cohorts were caught in a 14-month undercover fraud investigation headed by the FBI called Operation Running Man. Other agencies involved in the operation included the National Insurance Crime Bureau, Metropolitan Property and Casualty Insurance’s Special Investigation Unit, and the Travelers Insurance Company. Haddad pleaded guilty to one count of conspiracy to commit mail fraud and one count of mail fraud, and faces a maximum term of 20 years in prison for each count and a fine of up to $3.5 million. He also agreed to pay restitution of $1,758,368. Carbone, Kirshner, three other chiropractors and a licensed doctor of osteopathic medicine have pleaded guilty and are still awaiting sentencing.

At Haddad’s sentencing, John Sargent, director of the special investigation unit for MetLife made a victim impact statement to the court, summarizing the extent of the damage done by Haddad and his associates to the insurers, the patients and consumers in general.

BP Oil Spill Restitution

In a highly unusual ruling, a federal judge in New Orleans has ordered the attorneys and accountants who represented a claimant in a shrimping claim following the BP Oil spill in Lake Pontchartrain in New Orleans, to repay nearly a quarter of the $357,000 payment he received.

In 2012, BP and a group of plaintiffs lawyers who represented thousands of residents impacted by the spill, reached a settlement and the company began paying the claims. BP maintained that there were a number of fraudulent payments made and began investigating. Now individuals who made fraudulent claims are getting tough sentences for those actions. Casey C. Thonn and his attorneys are repaying a portion of what they received because the payment was based on phony tax returns. The judge rescinded the $357,000 payment and said attorney Lionel “Tiger” Sutton, III is responsible for repaying $35,700 plus interest from the date of judgment until paid, attorneys Jonathan Andry and Glen Lerner are required to pay the same amount, and an accounting firm retained by the law firm is responsible for repaying $14,280 plus interest. The court has given all parties one month to return the full $357,000 payment.

Calgary man faces charges in $20M fraud investigation

Colleen Schmidt, CTV News

A 42-year-old Calgary man is facing charges in connection to a multi-million dollar fraud investigation that alleged bilked $20M from investors over an eight year period.

The Calgary RCMP Serious & Organized Crime Unit launched an investigation into commercial real estate ventures operated by Platinum Equities Ltd., which is controlled by Srinivasan “Sharif” Chandran of Calgary.

Police arrested and charged Chandran on Monday and allege that he:

  • Used Platinum Equities Ltd. to raise millionsof dollars from Canadian investors through a variety of investment funds and that one of the funds, the Qualia Real Estate Investment V Limited Partnership (Qualia V), issued an Offering Memorandum to raise capital for the purchase of a commercial building known as Dominion Place in Calgary Alberta.
  • After purchasing the Dominion Place building in 2006 using funds belonging to the Qualia V limited partnership, he fraudulently sold the Dominion Place building in 2011 in a non-arm’s length transaction to another company he controlled and operated without the knowledge or consent of the limited partners.   Qualia V investors were instantly deprived of their asset on this date.
  • Committed theft of the secured equity of the Qualia V Limited Partnership when he sold the Dominion Place Building to a company he controlled and operated.
  • Provided false information to investors, diverted funds to other business ventures outside of the investment agreement and stole about $20M in investor’s funds, between September 28, 2005 and October 21st, 2013

Chandran is charged with fraud over $5,000 and theft over $5,000.

Former Merrill Lynch Broker Tom Buck Barred Permanently From Industry

By MICHAEL WURSTHORN | www.wsj.com

The Financial Industry Regulatory Authority permanently barred former Merrill Lynch financial adviser Tom Buck from the brokerage industry, accusing him of fraudulently causing clients to overpay for services and for engaging in unauthorized trading, according to documents published on Finra’s website on Tuesday.

Mr. Buck, who once oversaw $1.3 billion of client assets and spent nearly all his career at Merrill Lynch in Indianapolis until he was fired in April, neither admitted nor denied the allegations made by Finra, but he agreed to be barred from the industry, according to the order dated July 24.

A message left on Mr. Buck’s home telephone wasn’t immediately returned. His attorney,David Robbins, of Kaufmann Gildin & Robbins LLP, didn’t respond to telephone calls seeking comment.

A Merrill spokesman said the firm has “cooperated fully with Finra and will continue to do so.”

Mr. Buck, a broker for 33 years, had been employed by RBC Wealth Management, the wealth arm of the Royal Bank of Canada, since his departure from Merrill Lynch. An RBC spokeswoman on Tuesday said the firm was “greatly disappointed to learn” of Finra’s findings about Mr. Buck’s actions and said he no longer worked there.

Since at least 2009, Mr. Buck had steered clients into commission-based brokerage accounts, which charge customers for each transaction made, instead of accounts that carry a flat annual fee regardless of activity, Finra said. “In some instances, clients paid substantially more in commissions than they would have paid in fee-based accounts,” Finra said in the order.

Mr. Buck also “misled clients about the potential advantages of using fee-based accounts in order to keep the clients in higher-cost commission-based accounts,” Finra said. Roughly 80% of Mr. Buck’s accounts were commission-based, while about 70% of the accounts in Merrill’s Indiana branches were fee-based.

Mr. Buck also conducted trading in some client accounts without authorization beginning in or before 2011, Finra said.

Mr. Buck had been a well-known broker at Merrill Lynch due to his long tenure and high level of production. He managed more than a dozen employees. The team, known as the Buck Group, generated $6 million to $10 million in revenue annually, said Finra, of which at least 85% was attributable to Mr. Buck.

In March, Mr. Buck walked into what he thought to be a routine meeting with his managers, but instead he was escorted from the building and eventually fired, Mr. Buck previously told The Wall Street Journal in an interview.

Merrill Lynch dismissed Mr. Buck for reasons including “failing to discuss service level and pricing alternatives with a customer,” the brokerage said in a so-called U5 filing viewed by the Journal. A U5 is a confidential document that typically explains a broker’s departure or dismissal.

At the time, Mr. Buck described the firing as a “kick in the gut” and said he was unaware of the issues raised by Merrill.

Since his dismissal, nearly a dozen complaints have been filed against Mr. Buck, alleging unauthorized or excessive trading had taken place in client accounts, according to his record on BrokerCheck, Finra’s database on brokers and financial advisers. Some complaints have been dismissed, while others are pending, but five have been settled for damages totaling about $784,000.

Typically, the brokerage firm pays the settlements to clients.

RBC, which also hired two of Mr. Buck’s daughters, including Indianapolis Colts cheerleader and former Merrill Lynch adviser Ann Buck, said Mr. Buck’s “actions are entirely inconsistent with the representations he made to us during the hiring process and stem from conduct that occurred while Mr. Buck was employed with another firm.”

Both of Mr. Buck’s daughters continue to be employed by RBC, the spokeswoman said, adding that Ann Buck will now lead her father’s practice.

www.wsj.com

Man convicted in Texas for $10M timeshare fraud in US, Canada

Source: The Associated Press

DALLAS – A Florida man could be sentenced to more than 500 years in prison for leading a $10-million timeshare scam in the U.S. and Canada.

Fabian Fleifel of Winter Springs, Fla., was convicted in Texas of conspiracy to commit mail fraud, wire fraud and bank fraud.

A federal jury in Dallas on Monday also convicted Fleifel of 19 counts of mail fraud telemarketing and six counts of wire fraud telemarketing.

Investigators say the 45-year-old Fleifel hired telemarketers to call timeshare owners to solicit fees in a bogus promise of buyers.

Prosecutors say more than 5,000 people, including many over age 55, were victims.

Fleifel, who was convicted on all 26 counts in the 2012 indictment, remains in custody pending sentencing.

Eleven other people earlier pleaded guilty and await sentencing.

canada-press

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