Former Bankrate CFO Sentenced to 10 Years for Accounting Fraud

The former chief financial officer of Bankrate Inc., the financial services and marketing company, was sentenced to 10 years in prison for securities and accounting fraud that resulted in $25 million in shareholder losses, the U.S. Justice Department said Tuesday.

Edward DiMaria, 53 years old, was also ordered to pay restitution of $21.2 million to Bankrate’s shareholders. Mr. DiMaria pleaded guilty in June to one count of conspiracy to make false statements to the company’s accountants, falsify the company’s books, records and accounts, and commit securities fraud, as well as one count of making false statements to the Securities and Exchange Commission.

“The significant sentence handed down today underscores the serious nature of corporate fraud and the damage it causes to shareholders and to the public’s trust in our financial markets,” Assistant Attorney General Brian A. Benczkowski said in a statement.

Mr. DiMaria’s attorneys didn’t immediately respond to a request for comment.

Mr. DiMaria admitted to conspiring and directing a scheme to artificially inflate Bankrate’s earnings through “cookie jar” or “cushion” accounting, a practice in which a company keeps a large quantity of reserves from an economically successful year on its books to boost its earnings results, while incurring them against losses during weaker quarters.

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ICM PRESS RELEASE

Washington, D.C. 8-8-2018

ICM PRESS RELEASE

An investigation of the U.S. Government intelligence community reports that the National Security Agency (NSA) in league with other Federal agencies are bypassing the Foreign Intelligence Surveillance or FISA Court to conduct intelligence gathering operations against U.S. citizens.

The FISA Act strictly prohibits the NSA, FBI and other Federal agencies from targeting ordinary American citizens residing in the U.S. to gather intelligence. “The actions of the intelligence community violate the Constitutional principles upon which our nation was founded. No matter what your political persuasion, these reports are extremely troubling,” said John Hnatio. Hnatio is the Executive Director of the Institute for Complexity Management, or ICM, that provides pro bono help to small businesses that become the victims of unfair U.S. Government competition.

ICM is investigating reports that various U.S. intelligence agencies have been conducting so-called “black” programs to misappropriate advanced technologies from small companies for secret use in highly classified military and intelligence programs. “The U.S. intelligence apparatus is wantonly violating the very Constitutional principles upon which our nation was built by stealing from America’s best and brightest entrepreneurs,” Hnatio declared.

Hnatio ought to know. For thirty years he worked for the secretive National Nuclear Security Administration (NNSA) conducting security and nuclear proliferation investigations, doing intelligence work and identifying and working with small businesses to commercialize their advanced technologies. He was even a loaned executive from the Department of Energy (DOE) working for Senator Pete Domenici. Hnatio helped to draft technology transfer legislation and the rules the ten DOE national labs are supposed to be using as they work with industry.

Hnatio and ICM have been conducting a multi-year investigation into the matter of a small New Jersey-based company called Demodulation. Demodulation developed highly advanced products that use microwire radio-frequency (MWRF) integrated technology. MWRF products are thinner than a human hair and give off a burst of energy every time they are moved in the earth’s magnetic field. They need no batteries to operate and their signals can be detected at both near and far distances—even by satellites in space. These characteristics make the Demodulation technology ideal for military, intelligence and counterterrorism uses.

“We have found incontrovertible evidence of three unconstitutional intelligence operations mounted by the U.S. Government specifically targeting Demodulation all in a misplaced effort to steal their technology,” Hnatio reported.  ICM reports that Demodulation was the victim of the U.S. Navy as part of a massive “pay-to-play” grant fraud scheme being orchestrated by Federal and State of New York officials.

The Federal and New York State Governments invest nearly a billion dollars of taxpayer funds every year to bring small business entrepreneurs together with large industry at economic development centers across New York State. The purpose of these programs is to spur economic development to produce high paying jobs for workers in New York. But the results of a recent study published by New York’s Empire Development Corporation show that after investing tens of millions of dollars over the last two years only 408 jobs have been created.

“Way back in 2014, we reported that New York State’s economic development programs are riddled with corruption to the FBI—we gave Preet Bharra and the FBI the irrefutable proof but they did nothing because they succumbed to the politicization of the justice system. It wasn’t until years later that the indictments, prosecutions and guilty verdicts we see rolling out of Albany lately started happening,” Hnatio told us.

The ICM investigation also reveals that the NSA and the U.S. Army stole military munitions off the Picatinny Arsenal to test Demodulation’s MWRF products as part of a so-called “black” intelligence operation for testing by the NSA and the Navy at the Patuxent Naval Air Station. The FBI refused to investigate the theft. Finally, the intelligence community “baited” Demodulation into a cooperative research contract with promises to help the small company commercialize their MWRF technology. The DOE at its Y-12 National Security Complex then broke their contract by stealing Demodulation’s MWRF technology and secretly reverse engineering their MWRF products to use them in nuclear weapons. The DOE is an important member of the intelligence community. “Again, the FBI did nothing when we reported what was going on to them,” Hnatio said.

“All of our reports to congressional oversight committees were either ignored and any opportunities for investigation were intentionally shut down by the politicians.  When we tried to report that Federal Judges and the lawyers involved with the Demodulation case were intentionally scuttling Demodulation’s legal cases and obstructing justice as the result of improper Department of Justice (DOJ) and FBI influence, DOJ, another member of the intelligence community, covered everything up. Our investigation provides the irrefutable proof of what really happened—all you have to do is read the facts,” Hnatio concluded.

Revelations that intelligence agencies are bypassing the FISA Court to conduct espionage against U.S. citizens take on special significance with respect to the FBI’s recent use of a bogus “dossier” that they knew was not factual to improperly convince the FISA Court to grant the U.S. Government’s request to surveil U.S. citizens.

ICM recently sent a letter to President Trump, Attorney General Sessions, leaders of Congress and the Supreme Court sharing the results of ICM’s investigative findings. We will keep you informed of developments in this breaking story.

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Teens are recruited to work for international fraud rings

NASHVILLE, Tenn. (WKRN) – Young teens are being recruited by international criminals to get cash from ATMs using fraudulent cards, according to Nashville law enforcement officials.

Three teens were charged in Mt. Juliet for allegedly using encoded cards at two ATMs. Some of the cards were sewn into the females’ clothing.

According to local law enforcement, the teens were likely recruited.

“The criminals are looking for people in desperate circumstances,” said Matthew Preston, Assistant to the Special Agent in Charge for the Secret Service. “They’ll say ‘Hey, here’s an easy way for you to make a little cash.’ They’re taking advantage of them.”

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7 indicted for massive $8.5 million food stamp fraud scheme in Massillon

CLEVELAND – Seven people have been indicted in connection with a large-scale food stamp scheme in which they allegedly defrauded millions from the SNAP program.

Authorities said the seven people had a conspiracy to commit money laundering. Some face other charges of wire fraud and more.

The indictment handed down in U.S. District Court names Kaitlin Koher, owner of Ohio Direct Distributors, which used to be housed on Lincoln Way in Massillon.

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Rachel Dolezal Faces Felony Charges of Welfare Fraud in Washington State

Rachel Dolezal is facing a felony theft charge related to alleged welfare fraud.

The former NAACP local chapter leader, who is white but posed as a black woman, has been accused of first-degree theft by welfare fraud, second-degree perjury and false verification for public assistance by authorities in Washington state.

Dolezal could face up to 15 years in prison if convicted, according to KHQ.

Court documents allege Dolezal, who has legally changed her name to Nkechi Diallo, illegally received $8,747 in food assistance and $100 in child care assistance starting in August 2015 up until November 2017.

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7 arrested in Travis Co. Tax-Assessor Collector’s office fraud scheme

“This is something we don’t tolerate.  This is taxpayer money.  We’re government employees.  This is a priority for us at the department,” said DPS Regional Commander Freeman Martin.

Seven arrests: charges like forgery, organized crime, bribery.

“There’s a lot of things about this investigation we can’t talk about.  This is an ongoing investigation that still has to be prosecuted,” Freeman said.

Martin joined DMV Executive Director Whitney Brewster and Travis County District Attorney Margaret Moore at a press conference Monday morning about the multi-agency fraud investigation called “Operation Even Trade.”

Martin says the investigation launched in March at the request of the D.A.

“Say somebody purchases a vehicle.  When you go to the Tax-Assessor Collector’s office, you pay taxes on the amount of that vehicle.  So there’s a potential there for corruption,” Martin said.

According to court paperwork, 43-year-old Shell Kenneth Prieto-Reese and 57-year-old Cathy Lynn Wilson worked together at the Precinct 1 tax office on Hefflin Lane.  43-year-old Susie Alvarez Araujo and 35-year-old Steven Hernandez worked at Precinct 2 in Pflugerville.

The employees are accused of entering false values on title form applications, resulting in the reduction of sales tax sent to the state.

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College President Pleads Guilty Before Arkansas Fraud Trial

The president of a Christian college in Springdale pleaded guilty to a fraud charge Wednesday, admitting he took part in what prosecutors called a kickback scheme involving his school.

Oren Paris III had faced a trial Monday with former state Sen. Jon Woods and consultant Randell Shelton. Instead, the president of Ecclesia College pleaded guilty in federal court.

Prosecutors say Paris paid kickbacks to Woods and then-Rep. Micah Neal in return for $550,000 in state grants in 2013-14, using Shelton’s consulting firm as a go-between. Neal pleaded guilty last year but has not been sentenced.

Woods, a Republican, faces 15 fraud counts while Paris and Shelton were named in 14 counts. The Northwest Arkansas Democrat-Gazette reported Paris pleaded guilty to a fraud charge Wednesday. All had been charged with conspiracy, and Woods also faces a money-laundering charge.

Paris plead guilty to transferring $50,000 of a $200,000 in grant money from Woods and Neal to Shelton. Shelton sent $40,000 of the money to Woods as a kickback, according to Paris’ plea.

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At war with the Fed: Independent inventor’s story akin to ‘David vs. Goliath’

William Bozeman, an independent inventor with a colorful history, says he used to have a good relationship with the Federal Reserve System and even helped improve its fraud detection efforts.

He thought the Fed was working toward a licensing deal for some of his software, which he said could help spot fraudulent checks earlier than the system it was using.

So he was stunned when the government’s central bank in 2017 went to war with him “out of nowhere” by filing a federal lawsuit and two challenges to his patents with the U.S. Patent and Trademark Office.

The Fed described Mr. Bozeman as an opportunist, trying to demand money for technology he didn’t invent.

Mr. Bozeman said he is being bullied by the secretive central bank and that the Fed is trying to run up his legal bills by filing all the complaints in an effort to make him go away.

“This appears to be a David versus Goliath story,” said Terry Fokas, a lawyer and founder of a Dallas-based patent software company. “The Federal Reserve, with all of its resources, appears to be trying to bury an independent inventor.”

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Volkswagen executive sentenced to 7 years for emissions fraud

A U.S.-based Volkswagen AG executive who oversaw emissions issues was sentenced to seven years in prison and fined $400,000 by a judge on Wednesday for his role in a diesel emissions scandal that has cost the German automaker as much as $30 billion.

The prison sentence and fine for the executive, Oliver Schmidt, were the maximum possible under a plea deal in August the German national made with prosecutors after admitting to charges of conspiring to mislead U.S regulators and violate clean-air laws.

“It is my opinion that you are a key conspirator in this scheme to defraud the United States,” U.S. District Judge Sean Cox of Detroit told Schmidt in court. “You saw this as your opportunity to shine … and climb the corporate ladder at VW.”

Schmidt read a written statement in court acknowledging his guilt and broke down when discussing his family’s sacrifices on his behalf since his arrest in January.

“I made bad decisions and for that I am sorry,” he said.

“Every time he chose to lie,” Singer said.

In March, Volkswagen pleaded guilty to three felony counts under a plea agreement to resolve U.S. charges that it installed secret software in vehicles in order to elude emissions tests.

U.S. prosecutors have charged eight current and former Volkswagen executives. Five of those remain at large.

Volkswagen rebounded from the scandal during the past year. Chief Executive Matthias Mueller last month predicted record deliveries of vehicles for the company this year, and the Volkswagen car brand has said it expects record deliveries for 2017, and raised its midterm profitability outlook.

At the Los Angeles auto show last week, the head of Volkswagen’s U.S. operations declared, “we’re back,” citing improved U.S. vehicle sales.

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Navy commander gets 18 months in massive corruption scandal

A U.S. Navy commander was sentenced Friday to 18 months in prison for his role in a fraud and bribery scheme that cost the government about $35 million.

Cmdr. Bobby Pitts, 48, of Chesapeake, Virginia, was the latest person to be sentenced in connection with a decade-long scam linked to a Singapore defense contractor known as “Fat Leonard” Francis.

Francis bribed Navy officials to help him overbill the Navy for fuel, food and other services his company provided to ships docked in Asian ports, according to prosecutors. The bribes allegedly ranged from cash and prostitutes to Cuban cigars and Spanish suckling pigs.

Pitts pleaded guilty in 2015 to charges that alleged he tried to obstruct a federal investigation while in charge of the Navy’s Fleet Industrial Supply Command in Singapore.

In handing down the sentence against Pitts, U.S. District Judge Janis Sammartino told him that he had “betrayed the Navy and betrayed the country,” prosecutors said in a news release.

“Pitts deliberately and methodically undermined government operations and in doing so, diverted his allegiance from his country and colleagues to a foreign defense contractor, and for that, he is paying a high price,” said Adam Braverman, the U.S. Attorney in San Diego.

In addition to his prison sentence, Pitts was also ordered to pay $22,500 in fines and restitution.

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