Articles Posted in White Collar Crime

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“OPERATION SPINAL CAP”

Many people think of crimes as acts of violence that causes harm to others, but there is probably just as much harm done by white-collar criminals—and sometimes these criminals are even wearing a white coat. Consider the scheme involving numerous doctors, hospital administrators (including a hospital CEO and CFO), chiropractors, and other healthcare professionals at Long Beach Pacific Hospital.

So far, at least nine healthcare workers and administrators have pleaded guilty to charges related to this healthcare scheme that ran into the hundreds of millions of dollars wherein doctors and other health professionals were paid illegal kickbacks to refer patients to Pacific Hospital in Long Beach. Even ex- state Senator Ron Calderon is implicated by the former CEO of Pacific Hospital, Michael Drobot Sr., an Orange County resident, who told authorities that he paid bribes to the senator while he was still in office to support legislation that would have directly affected the scheme.

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WHITE-COLLAR CRIME: MISREPORTING IN ORDER TO AVOID TAXES OR INSURANCE PREMIUMS

Sometimes the cost of doing business in California gives a business owner reason to consider whether it’s worth it at all. Between taxes, insurance costs and various fees, the cost of doing business in some professions can be exorbitant. Consider this: the cost of workers compensation insurance for roofing companies is around 90% of payroll. That’s right, for every $100 of payroll a roofing company pays to its roofing employees, it pays another $90 toward its workers compensation premium. While roofing companies have the highest workers compensation rates, other business classifications pay nearly as much. And then there are of course the aforementioned taxes and other fees that businesses pay.

So, what does this have to do with a criminal law blog? Plenty. The high cost of doing business in California has led some business owners to “get creative.” Sometimes this creativity becomes criminal.

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What is Embezzlement?

Embezzlement is what is considered a “White Collar Crime” which occurs when someone steals property or money from another who has entrusted that person to manage or monitor his or her money or property. One element of the crime is that the defendant had legal access but not legal ownership for someone’s money or property.

When you combine the taking of money or property for one’s personal gain with the fact that the individual had been placed in a position of trust, this amounts to the crime of embezzlement.

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White collar crime involves illegal activity that is done for the sole purpose of financial gain to the individual being accused and typically takes place in a businesses or corporation. It doesn’t matter whether the business is a small, “mom and pop” business or a large corporation.   Any theft of funds, fraud, etc., is a crime and falls under the category of “White Collar Crime”.   Here are some examples and explanations of white-collar crimes:

Embezzlement: Embezzlement is one of the most common, and most often charged, white-collar crimes. Basically it is a theft involving an employee stealing from their employer. The accused is typically a person who has been placed in a position of trust, has access to money coming into and going out of the business and, has a certain amount of control. It is a premeditated act, which requires a degree of sophistication, planning and covering up. It usually involves the theft of money, taken in small amounts, over a period of time. Embezzlement can also involve the taking of property or services. It may involve only one person or, there may be many employees involved. Regardless, embezzlement is a very serious crime and, can involve the FBI, depending upon the circumstances. Penalties, punishment and fines are determined based upon the amount of the theft itself.

Money Laundering and Extortion: Money laundering is the act to conceal money, which was illegally obtained and then “laundered” through a business with the intent to hide where the money has come from. Extorting money from someone involves intimidation or threats. This may involve money or property.

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White Collar crimes are crimes that usually occur in a business setting. They are non-violent crimes that involve money, fraud and dishonesty. The deliberate deception for unlawful gain. Usually, someone who has been charged with this type of crime does not have a criminal history. They are doctors, CEO’s of corporations, bookkeepers, accounts, and payroll clerks, people working in the business world. They are our friends and family members who, for a variety of reasons, make a bad decision to commit a crime. Often, these people don’t view what they are doing as a serious crime. They often are able to justify their actions based on feelings of unfair treatment in their working environment. Or, in some situations, feel that they have not been compensated fairly and without thinking it through, decide to compensate themselves because they believe it is due them.

The Federal Government, District Attorney’s Office and The City Prosecutor’s Office take these types of crimes very seriously. The punishments can be very severe, depending upon the amount of money involved, the number of felony charges and prior “like felonies”. If convicted, you could be looking at up to five years in State Prison and $150,000.00 in fines and restitution. However, if you have prior felony convictions for the same type of crime, both the prison time exposure and the amount of the fine can be increased. This is called an enhancement and is explained in more detail below.

White Collar Crime Enhancements: Also referred to as “Aggravated White Collar Crime enhancements” may be imposed if you are convicted of two or more felonies in the same criminal proceeding. This can mean that there were two or more separate victims or two or more felonies against the same victim on two or more occasions. The enhancement may also be imposed if you have two or more prior convictions for the same or similar crime. This is referred to as “a pattern of like felonies”. The enhancement can increase your prison time by two to five years.

An “enhancement” may be imposed whenever the value of the crime is $100,000.00 or more. If the value is determined to be $500,000.00 or more, an additional term of 2, 3 or 5 years may be added and, the amount of the fine may be doubled.

White-collar crimes such as embezzlement, are very complicated due to the amount of paperwork and the time required to trace multiple transactions, often over a period of years. This can result in numerous transactions being attributed to the accused because the detailed investigation required is not done properly. Because each transaction is considered a separate charge, an aggressive criminal defense attorney will pour over every detail, along with the help of his client, to trace each transaction. This will often times result in multiple charges being dismissed. The prosecution has the burden of proving that each transaction being alleged in the Complaint is a result of the defendant’s actions. There are paper trails that must be followed and explained. This is why it is imperative that anyone being charged with a white-collar crime employs the services of an experienced attorney who knows exactly what is involved in defending such charges.

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A Yorba Linda, California man is under fire from the Securities and Exchange Commission after an investigation revealed what appeared to be a Ponzi-like scheme to defraud investors while paying off older investors.

Matthew Jennings, 39, a resident of Yorba Linda, California, a pleasant suburb of Orange County, is looking at having all of his assets frozen by a federal judge while the government takes a look at his records to see how much money was inappropriately diverted from investors.

In one instance, the SEC alleges that Jennings took $300,000 from investment accounts and deposited it into his own accounts. In the SEC’s view, it appears he was enriching himself wrongfully.

White Collar fraud takes many forms. investment fraud is one version, and requires a lot of effort to accomplish. In this case, many companies were created, possibly with a view to divert funds improperly, without being discovered. Whether or not Jennings intended to service these investment accounts will be an issue, in terms of degree of culpability. In any event, he will need an experienced White Collar defense attorney to assist him, to try and head off a criminal filing.

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You can’t steal this much money and be stupid, can you? Apparently, Kathy Chen thought so. Now, not so much. Chen was arrested recently for buying 35 properties using stolen names or likely paying people to use their identity to get loans.

The total amount of fraud? 17.5 million dollars. She had help. Two others, believed to be in Mexico, helped her steal the money. This kind of fraud has become rampant, especially during the credit boom earlier in the decade. Lenders didn’t look too hard at borrowers, instead relying on rising home values to protect them in case of default.

Chen, 49, of Westminster, California, is facing over 100 years in prison on these charges. Most thieves don’t save their money. White collar fraud cases can resolve well if the defendants can pay back the money, but if not, the state prison system awaits.

White Collar fraud takes many forms. Mortgage fraud is one version, and requires a lot of effort to accomplish. Whether or not Chen intended to service these loans will be an issue, in terms of degree of culpability. In any event, she will need an experienced White Collar defense attorney to assist her.

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The Securities and Exchange Commission today charged Irvine-based Brookstreet Securities and it’s CEO, Stanley Brooks with Fraud, alleging they sold risky mortgage-backed securities to investors and failed to inform them properly of the risks.

These types of investment vehicles are at the heart of the collapse of the U.S. and global financial system last fall. Crafty Wall Street investment houses figured out how to bundle together all kinds of mortgages, some solid, many high-risk, and then sell them to investors looking to make money on the interest payments. Investment firms all over the United States, California and Orange County got in on the gold rush and sold them along to others.

Many of the people selling these securitized loans didn’t realize what a time bomb they were pushing on unsuspecting clients. Moody’s Investment Service gave many of the bundled loans a high rating, sending a message to the market that the loans were safe. and AIG made side deals to insure the loans, making them appear even more risk-free. An open question is to what degree the packagers were disclosing the contents of the bundled loans, known as tranches.

Brookstreet allegedly sold $300 million dollars worth of these loans. Many of those loans were used for margin trades by another company, further increasing the risk of default.

The case against Brookstreet is a civil one. There have been no criminal filings to date, though that can’t be ruled out. The U.S. Attorney would have to investigate whether the conduct on the part of Brookstreet rose to the level of criminal fraud, Additionally, there may be a better chance for the SEC to recover money in a civil setting than criminal. Additionally, the level of proof is lower in the civil arena, requiring only a preponderance of evidence to show liability vs. proof beyond a reasonable doubt in the criminal context.

White-collar fraud is on the rise as new, arcane and confusing investment vehicles are cooked up out of the sight of the regulators. If you are charged with any type of securities fraud, you will need help dealing with regulators, the SEC and other investigative agencies, as well as the US attorney’s office. Whether you live in Santa Ana, Laguna Niguel or anywhere else in southern california, if you are charged with fraud, call an experienced criminal defense attorney right away to assist you.

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Margot Jean Strawn was a former accountant and trustee to the Pellissier family. She was in charge of managing trust funds for two children of the family. Over a six year period, Strawn stole more than $500,000 from the fund to buy herself a doll collection. She would write personal checks to herself from the fund and then deposit it into her own checking account. She also failed to file her tax returns and worked as an accountant even after her license expired. She was sentenced to two felony counts of grand theft with enhancements for aggravated white collar crime. This week, she was sentenced to four years in prison and ordered to pay back the money she stole.

A white collar crime is a crime committed by someone in the course of their occupation. Types of white collar crimes include fraud, forgery, embezzlement, etc. Most people think that people charged with white collar crimes get special treatment since they have a lot of money. They are also thought to be sentenced to less time in prison and are sentenced to low security prisons that have many amenities. This is becoming less true as more and more white collar crimes are being recognized and prosecuted. Whether you live in Irvine, Newport Beach or Coto De Caza, if are you charged with white collar crime or grand theft, call an experienced criminal defense attorney right away to assist you.

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