Chagrin Falls Woman Charged with Conspiracy to Commit Wire Fraud for Acts That Resulted in Losses of More Than $300,000

A criminal information was filed charging Leslie Apisdorf, age 51, of Chagrin Falls, Ohio, with conspiracy to commit wire fraud for acts that resulted in loss of more than $300,000, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.

From on or about October 24, 2005 through on or about February 1, 2009, Apisdorf conspired to defraud financial institutions in connection with the financing of trucks and trailers which were purported to be owned by Mark’s Akron Medina Truck Sales Inc., according to the information.

Apisdorf owned and operated Hazel Financial Ltd., which provided financing through Hazel on vehicles sold and purchased by Mark’s. Both Hazel and Mark’s were located at 2636 Brecksville Road in Richfield, Ohio, according to the information.

It was part of the scheme that between 2005 and 2009, Apisdorf and others submitted false documents to financial institutions which purported to show transactions for the sales of trucks and trailers, according to the information.

In fact, the trucks and trailers submitted for financing were inflated above their market rate, were already collateralized or did not exist, according to the information.

Apisdorf and others received loan proceeds and fees in connection with the financing of trucks and trailers based on false documents, according to the information. As a result of the acts committed by Apisdorf during the time period of the conspiracy, financial institutions suffered total losses of approximately $308,474.

The information is a result of an investigation conducted by Special Agent Jeffrey P. Kassouf with the Federal Bureau of Investigation. This case is being prosecuted by Assistant United States Attorney Henry F. DeBaggis.

If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal records, if any, the defendant’s role in the offense and the characteristics of the violation.

In all cases the sentence will not exceed the statutory maximum, and, in most cases, it will be less than the maximum.

An information is only a charge and is not evidence of guilt.

A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Brothers Who Defrauded Nordstrom with Online Reward Scheme Sentenced to Two Years in Prison for Wire Fraud

Two brothers were sentenced in U.S. District Court in Seattle to two years in prison for wire fraud in connection with their scheme to defraud Nordstrom of more than $1.4 million in commissions and rebates, announced U.S. Attorney Jenny A. Durkan. ANDREW S. CHIU, 29, of Anaheim, California, and ALLEN J. CHIU, 37, of Dallas, Texas, pleaded guilty in April 2012. The brothers devised a scheme to defraud Nordstrom after they had already been barred for purchasing any goods from the Nordstrom.com website. Because Nordstrom quickly notified law enforcement, the U.S. Attorney’s Office was able to seize more than $970,000 in illegally derived assets which will be applied toward the restitution owed to Nordstrom. U.S. District Judge Ricardo S. Martinez imposed the sentence.
According to records filed in the case, in 2008 the CHIU brothers were barred from ordering merchandise from Nordstrom.com because of excessive claims for refunds based on representations that merchandise had never been delivered. However, both brothers continued to try to place orders with Nordstrom.com. Both men belonged to FatWallet, Inc., a membership-based shopping community website that promotes various online retailers by providing coupons and cash back incentives for purchases. FatWallet paid cash back rewards to the CHIU brothers for purchases made at various online retailers, including Nordstrom.com. In January 2010, the brothers discovered they could exploit a computer programming error in Nordstrom’s ordering system by placing orders that would ultimately be blocked by Nordstrom. No merchandise would ship and nothing would be charged to their credit card. However, Nordstrom would unknowingly continue to compensate FatWallet for the order, and the brothers would still receive the cash back credit from FatWallet. Between January 2010 and continuing through October 2011, the CHIU brothers collectively placed more than $23 million in fraudulent orders through Nordstrom.com. The fraudulent ordering resulted in Nordstrom paying $1.4 million in rebates and commissions, with more than $650,000 in fraudulent cash back payments going directly to the brothers. The error that permitted the continued payment of rebates in the ordering system has since been fixed.
In asking for the two-year prison term, prosecutors wrote to the court, “The actions of the Chiu brothers are equivalent to someone discovering that a back door to a Nordstrom store had been accidentally left open, and then walking in through that door to steal $1.4 million from the till... This was not a quick and hasty crime, done with any agonizing guilty conscience. The Chius methodically submitted orders, day after day, for nearly two years until they had ordered an eye-popping $24 million worth of merchandise. In order to try and avoid detection and suspicion, they had to constantly create new user names at FatWallet, and make sure not to order too much merchandise at once on any one user name. This was a crime committed in a calculating, careful manner over a long period of time.”
The case was investigated by the FBI. The case was prosecuted by Assistant United States Attorneys Katheryn Kim Frierson and Francis Franze-Nakamura.

Buffalo Man Sentenced on Fraud Charges

U.S. Attorney William J. Hochul, Jr. announced that Dwayne Ferguson, 33, of Buffalo, New York, who was convicted of wire fraud, was sentenced to four years in prison by Chief U.S. District Judge William M. Skretny. The defendant was also ordered to pay $630,000 in restitution.

Assistant U.S. Attorney Russell T. Ippolito, Jr., who handled the case, stated that the defendant is the former owner and operator of Intihar Recovery of New York, an automobile rental, repossession, storage, and towing services business. Ferguson fraudulently obtained money from Nissan Motor Acceptance Corporation, Toyota Financial Services, BMW Financial Services, GMAC Financial Services, and Ford Motor Credit to finance the purchase of motor vehicles for his business. The defendant submitted false and misleading documentation to those lending institutions indicating that his business was credit worthy when, in fact, the business had very few assets and had significant liabilities. The total loss to all the victim businesses was $1,110,937.
The sentence imposed by Judge Skretny will be served following the three-and-a-half- to seven-year New York State sentence Ferguson is currently serving following his conviction on charges of possession of a forged instrument and attempted grand larceny.
The sentencing is the result of an investigation by the Buffalo Police Department, under the direction of Commissioner Daniel Derenda; the New York State Department of Motor Vehicles, under the direction of Director Owen McShane; the New York State Department of Taxation and Finance, Criminal Investigations Division, under the direction of Commissioner Thomas Mattox; the New York State Department of Financial Services, Criminal Investigations Division, under the direction of Superintendent Benjamin Lawsky; and the Federal Bureau of Investigation, under the direction of Special Agent in Charge Christopher M. Piehota.

Painesville Woman Indicted for Identity Theft and Wire Fraud

A grand jury returned an indictment charging Marcia A. Sweeney, age 44, of Painesville, Ohio, with one count of conspiracy to commit wire fraud and one count of aggravated identity theft, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.

The indictment alleges that between October 7, 2010 through on or about November 24, 2010, Sweeney—with the aid of a prisoner held in the Lake County Jail—devised a scheme to defraud multiple victims by submitting false information and/or making fraudulent representations to open new credit card accounts; add individuals as authorized users to pre-existing credit card accounts; and purchase goods and services from victim retailers including, but not limited to, J.C. Penney, AT&T Wireless, Capital One Bank, and First Premier Bank.

The indictment further alleges that on or about October 12, 2010, Sweeney knowingly transferred, possessed, and used the identification of another individual without lawful authority.

If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any; the defendant’s role in the offense; and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum, and in most cases, it will be less than the maximum.

The case is being prosecuted by Assistant U.S. Attorney Matthew B. Kall, following investigation by the Postal Inspection Service and the Federal Bureau of Investigation.

An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Catonsville Real Estate Appraiser Pleads Guilty in Scheme to Obtain Over $4.3 Million in Fraudulent Mortgage Loans

Real estate appraiser David C. Christian, age 62, of Catonsville, Maryland pleaded guilty today to conspiracy to commit wire fraud.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; Inspector General Steve A. Linick of the Federal Housing Finance Agency; Acting Postal Inspector in Charge Peter R. Rendina of the U.S. Postal Inspection Service—Washington Division.

According to his guilty plea, Christian appraised a number of properties on behalf of purchasers who were seeking financing through a mortgage brokerage company operating out of an office on Gough Street in Baltimore. From April 2004 to April 2008, at the request of a co-conspirator who controlled the mortgage brokerage company, Christian prepared at least 17 fraudulent appraisals for $4,306,950 in loans originated at the mortgage company. Christian falsified the appraisals by using fake photos and descriptions of the properties, misrepresenting the condition of the properties, and used inappropriate comparable properties. The total loss for the 17 loans amounted to $2,661,366.

In March and June 2007, Christian used his co-conspirator as the mortgage broker to refinance property that he and his wife owned in Catonsville. Christian submitted false appraisals that inflated the property value and caused another appraiser to sign the documents to avoid the obvious conflict of performing an appraisal on his own property. With Christian’s knowledge, his co-conspirator processed the loan in Christian’s wife’s name, falsifying her income and employment, as well as the balance in the couple’s bank account and misrepresented other information. The loans were funded by another mortgage company, and Christian and his wife eventually defaulted on the loan, resulting in a loss of nearly $140,000.

Christian faces a maximum sentence of 20 years in prison followed by three years of supervised release. U.S. District Judge James K. Bredar scheduled his sentencing for October 18, 2012, at 1:00 p.m.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available www.justice.gov/usao/md/Mortgage-Fraud/index.html

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

United States Attorney Rod J. Rosenstein commended the FBI, Federal Housing Finance Agency—Office of Inspector General, and U.S. Postal Inspection Service. Mr. Rosenstein thanked Assistant U.S. Attorney Gregory R. Bockin and Special Assistant U.S. Attorney Stephen Learned, assigned from the Federal Housing Finance Agency’s Office of Inspector General, who are prosecuting the case.

Georgia Man Convicted in New Jersey for His Role in ‘Phishing’ Scheme

Osarhieme Uyi Obaygbona, 32, of Atlanta, Ga., was convicted today of conspiracy to commit wire fraud, conspiracy to commit identity theft, and conspiracy to gain unauthorized access to protected computers, U.S. Attorney Paul J. Fishman announced.

The jury returned the guilty verdict against Obaygbona following a one-week trial before U.S. District Judge William J. Martini in Newark federal court.

According to documents filed in this case and the evidence at trial:

“Phishing” attacks use fraudulent web pages that mimic the legitimate web pages of ecommerce companies such as banks and payroll processors. Internet scammers trick unwitting customers of those companies into visiting the fake web pages and providing confidential personal and financial information, including names, dates of birth, Social Security numbers, mother’s maiden names, and online account user names and passwords (“Stolen Identifiers”). The Stolen Identifiers are then used to make unauthorized withdrawals from victim accounts.

Obaygbona, Marvin Hill and Alphonsus Osuala were provided with Stolen Identifiers by Waya Nwaki, who received them from Karlis Karklins, a Latvian national who worked with defendant Charles Umeh Chidi and others to deploy phishing websites across the Internet.

Obaygbona, Nwaki, Hill, Osuala, and others used the Stolen Identifiers to make unauthorized withdrawals from victims’ accounts. Some of the Stolen Identifiers were used to create fake driver’s licenses, with which conspirators could impersonate victims at bank branches. The scheme also used the Stolen Identifiers to gain access to the victims’ online accounts, where Obaygbona, Nwaki, and Hill could view victim signatures on check images and then forge checks and withdrawal slips in furtherance of fraudulent withdrawals.

In a second variation of the scheme, Karklins used Stolen Identifiers to gain access to payroll accounts at ADP, the New Jersey-based payroll processor. Karklins and others added fake employees to victim companies’ payrolls, and then caused paychecks to be issued to those fake employees. Karklins, Nwaki, Hill, and others then withdrew the fraudulent payroll amounts using both Stolen Identifiers and unwitting intermediaries (“Mules”). As part of the scheme, more than $300,000 in fraudulent payroll was wired to defendant Olaniyi Jones, a Nigerian national who impersonated a European woman interested in romantic relationships to dupe Mules into wiring the proceeds of the scheme overseas.

Chase Bank, Bank of America, ADP and Branch Bank & Trust Co. lost a total of $1.5 million to the fraud ring.

Nwaki and Hill have both pleaded guilty and are awaiting sentencing before Judge Martini. Osuala is in custody on unrelated federal charges in Georgia. Jones is detained in Nigeria pending extradition. Karklins and Chidi are at large.

The counts for which Obaygbona was convicted carry a maximum total penalty of 50 years in prison and fines of $1 million, or twice the gross gain or loss from the offense. Sentencing is currently scheduled for Oct. 17, 2012.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark, with the investigation leading to today’s verdict. He also thanked special agents of the FBI’s Atlanta Division, under the direction of Special Agent in Charge Brian D. Lamkin, and the Alpharetta, Ga., Police Department, under the direction of Director of Public Safety Gary George, for their assistance in the investigation.

The government is represented by Assistant U.S. Attorneys Christopher J. Kelly of the Economic Crimes Unit and Andrew S. Pak of the Computer Hacking and Intellectual Property Section.