BLAW 348 Case Studies PDF

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Olivia Foster August 20, 2020 BLAW 348-001 WHITE COLLAR CRIME

United States v. Lee Bentley Farkas

Court Docket Number: 1:10-cr-200 (E.D. Virginia) WIRE FRAUD

WHO: Lee Bentley Farkas, the former chairman of a private mortgage lending company of Taylor, Bean & Whitaker (TBW), WHAT: Charged with 16 counts of indictment for his role in a more than $1.9 billion fraud scheme that contributed to the failures of Colonial Bank. The indictment charges Farkas with one count of conspiracy to commit bank, wire and securities fraud; six counts of bank fraud; six counts of wire fraud; and three counts of securities fraud. According to court documents, Farkas also personally misappropriated over $20 million from TBW and Colonial Bank. WHEN: On June 15, 2010. Court documents allege that the scheme began in 2002. WHY: Beginning early 2002, TBW began to experience significant cash flow problems and was unable to cover properly, among other things, its operating expenses. In an effort to cover the shortfalls, FARKAS and co-conspirators devised a scheme to misappropriate funds from Colonial Bank, Ocala Funding accounts, and eventually the United States government. WHERE: U.S. District Court for the Middle District of Florida HOW: In December 2003, Lee Bentley Farkas and co-conspirators caused the deficit in TBW's master account at Colonial Bank to be transferred to "COLB"—a mortgage loan purchase facility at MWLD.In this part of the scheme, which the conspirators called "Plan B," the conspirators began to disguise the tens of millions of dollars of overdrafts as payments related to Colonial Bank's purchase through the COLB facility of legitimate TBW mortgage loans.

Department of Justice U.S. Attorney’s Office Southern District of Texas

PERJURY

WHO: Former Weslaco city commissioner (David Fox) and economic development corporation board member admitted lying under oath WHAT: David Fox lied under oath during a grand jury proceeding. Assistant US Attorney Robert Lopez asked Fox if he had received any money or any benefit from any individual or entity in connection with casting a vote as a member of the Weslaco City Commission. He responded “no.” WHEN: November 20, 2018 during grand jury proceeding. WHERE: Southern District of Texas WHY: Fox later admitted that he had received over $2,000 in bribes. He believed the money was intended to influence his votes as a commissioner relating to the Weslaco water and wastewater treatment plants and facilities. HOW: During the time of December 2012-November 2015 Fox served as a board member and continuously received bribes.

Department of Justice U.S. Attorney’s Office Central District of California

MAIL FRAUD

WHO: Jeffrey Silhanek, 39 of Santa Ana, California WHAT: Jeffrey Silhanek used more than 200 stolen ID’s to fraudulently collect more than $600,000 in unemployment benefits from the California Employment Development Department. Silhanek was charged with 2 counts of mail fraud for his acts. WHEN: Scheduled arraignment was for July 8, 2019 WHERE: Santa Ana, California HOW: Silhanek collected stolen ID’s and used the names to open PO boxes. He allegedly used the stolen identities and addresses to file for unemployment benefits through the state of California. To make sure he received the benefits, he instructed that the Employment Development Department to send checks as well as debit cards to the PO boxes he had set up.

Department of Justice U.S. Attorney’s Office Eastern District of New York E.D.N.Y. Docket No. 19-MJ-883 SECURITIES FRAUD

WHO: Vytautas Parfionovas, 32, Kiev, Ukraine WHAT: The defendant was charged with computer intrusion, securities fraud, money laundering, bank fraud and wire fraud, among other offenses. WHEN: Parfionovas was arrested in the Ukraine on October 24, 2019. The charged crimes were between 2011 and 2018. WHERE: Parfionovas and his conspirators were based in the Ukraine and were hacking and stealing from United States citizens HOW: The defendant and conspirators gained access to US based computers (including email servers, and computers belonging to financial institutions) to steal money from online banking accounts and brokerage accounts. Millions of dollars had been stolen as well as confidential information being compromised. After financial institutions began to block those unauthorized transfers, Parfionovas and his co-conspirators accessed other victim brokerage accounts without authorization, and placed unauthorized stock trades within those accounts while also trading profitably in the same stocks from accounts that they controlled. Over $5.5 million were lost due to Parifonovas and his co-conspirators.

Department of Justice U.S. Attorney’s Office Eastern District of Arkansas Racketeer Influenced and Corrupt Organization WHO: Members of an alt-right white supremacist gang; New Aryan Empire (NAE) WHAT: The indictment claims the white supremacist group was a racketering enterprise responsible for acts such as attempted murder, kidnapping, and drug tafficking. 17 of the 54 defendants were charged

under RICO and the Violent Crimes in Aid of Racketeering statue. WHEN: Beginning in 2014, the New Aryan Empire operated as a racketeering enterprise committing numerous violent acts until members arrest in 2017 WHERE: Arkansas HOW: Two members of the NAE in 2016 attempted to murder a confidential informant but were unsuccessful. Between May 18- June 6, 2017, members committed kidnapping and assaulted individuals responsible for providing information on the group to local law enforcement. Along with committing acts under RICO, the group was investigated for methamphetamine trafficking. During the investigation, the FBI seized 25 pounds of methamphetamine, $70,000 cash and illegal firearms.

Department of Justice Office of Public Affairs OBSTRUCTION OF JUSTICE

WHO: Nikolaos Vastardis, Evridiki Navigation Inc., and Linquimar Management Services Inc. The defendants were convicted of four felony counts. WHAT: The defendants were convicted by a federal jury for falsifying documents, obstructing a US Coast Guard inspection, and making false statements to inspectors. During an inspection done by the US

Coast Guard of the M/T Evirdiki; an oil tanker owned by the defendant and operated by Liqumar Management Services, the owner and operators of the ship tried to deceive the Coast Guard regarding the use of the ship’s required pollution prevention device. WHEN: December 2019 WHERE: Convicted by federal jury in Wilmington, Delaware WHY: These crimes were committed in order for the defendants to conceal not abiding by required pollution prevention practices. They were illegally discharging oil contaminated waste overboard from the oil tanker which was owned by Nikolaos Vistardis. HOW: During the inspection conducted by the US Coast Guard, Vistardis purposely operated the equipment improperly so the oil sensors in the vessel registered as zero and would pass the inspection.

Department of Justice U.S. Attorney’s Office Southern District of Mississippi BRIBERY

WHO: Former Jacksonville Police Officer, Melvin Williams WHAT: In February 2017, Williams pleaded guilty for bribery against a local business owner. Williams threatened a local business owner to pay him a sum of money, or else he would execute an arrest warrant. Throughout the investigation, it was discovered that the warrant was fake. Williams was paid $6000. WHEN: Williams threatened to order an arrest warrant in February 2016

WHERE: Southern Mississippi HOW: Being that Williams was a police officer, he was able to draft up a fake arrest warrant in order to threaten the local business owner and collect money from him. As a result, Williams was sent to prison May 25, 2017 and is facing a maximum sentence of ten years and over $250,000 in fines WHY: Former Officer Williams was able to use his positions as a law enforcement officer to scare the business into paying him. Threatening them with a fake arrest warrant was an abuse of power.

Department of Justice U.S. Attorney’s Office Central District of Illinois CONSPIRACY

WHO: Jeremy L. VanScyoc of EMI Environmental Consulting Firm WHAT: Pleaded guilty for participating in a conspiracy to defraud the Illinois Environmental Protection Agency. VanScyoc submitted false claims for reimbursement to IEPA for services not received. He also admitted to falsifying invoices, exaggerating the cost of the work done. WHEN: On multiple occasions between October 29, 2001 and November 27, 2012, VanScyoc agreed to submit fraudulent invoices to the Illinois Environmental Protection Agency.

WHERE: Springfield, Illinois HOW: VanScyoc submitted these clams through the Leaking Underground Storage Tank fund (LUST), administered by IEPA. The invoices represented to be the “actual” sum of money, when they were actually fraudulent numbers. WHY: EMI took advantage of the IEPA reimbursement program to submit false claims and collect more money for the work that was performed....