Articles Posted in White Collar Criminal Defense

PillsOwner and president of a New Port Richey pharmacy, Nicholas A. Borgesano, plead guilty to two counts of conspiracy in the Middle District of Florida on October 30th, 2017, for being at the center of a multi-million-dollar mediation fraud scheme.  Mr. Borgesano is 45 and his sentencing will be scheduled in federal court before United States District Judge James S. Moody Jr. and is facing a maximum of 15 years in prison.  Count one is for conspiracy to commit health care fraud and count two is for conspiracy to engage in monetary transactions involving criminally derived property.

According to the Department of Justice, the fraud ran from October 2012 to December 2015 and it impacted private insurance compaies, Medicare, and Tricare a health care program for the military.  Before him, seven others had plead guilty in connection to the scheme.  As part of his testimony, Mr. Borgesano explained that him and his co-conspirators owned and operated numerous pharmacies and shell companies to execute a fraud scheme involving prescription compounded medications. Per the Tampa bay Business Journal, compounding is when pharmacists or physicians combine drug ingredients to create another medication in order to attend to individual needs.

With this scheme they generated more than $100 million in fraudulent proceeds.  Mr. Borgesani owned and controlled A to Z Pharmacy, Havana Pharmacy, Medplus/Newlife Pharmacy, and Metropolitan Pharmacy, Jaimy Pharmacy, and Prestige Pharmacy.  It was in these pharmacies where he created the submission of false and fraudulent reimbursement claims for prescription compounded medications, pain creams, scar creams, and private insurances.  They all manipulated billing codes, paid for kick backs and bribes to further the exchanging and signing of prescriptions for patients he never saw.   The disbursement of all the money was done through wire transfer to the co-conspirators, by assets, or checks.

CrashThe State of Florida continues with its operations to crack down on Personal Injury Protection (PIP) fraud and it has encountered two more cases in the past two weeks. One of the PIP kickback schemes discovered totaled in $2 million and the other one totaled in $23 million dollars.  Attorneys, chiropractors, and clinic owners are all being charged with auto insurance fraud, mail fraud, wire fraud, and health care fraud.

According to the court papers filed with U.S. District court in Miami, they are accused of orchestrating a kickback scheme to take advantage of the state’s mandatory personal injury protection car insurance program.   They are also accused of using chiropractors and tow truck drivers to solicit patients and clients.

The Florida Office of Insurance Regulation explains that the intent of the PIP program was to provide injured drivers up to $10,000 in immediate medical coverage in lieu of establishing fault through the court system.  Their goal was to reduce payment delay for injured drivers, as well as limit the utilization of the court system.  In the State of Florida, PIP coverage is required to be purchased by everyone who owns a motor vehicle that is registered in the state.

OpioidsThe opioid crisis continues to worsen throughout the entire county, but in certain states more than others because the drug has become more accessible.  To makes matters worse, insurance companies are taking advantage of this situation by overcharging for the drug treatment needed by those who suffer from all types of drug addictions. One of the rehab capitals of the United States is Palm Beach County, Florida.  The state of Florida has a billion-dollar drug treatment industry that, according to an NBC investigation, is overwhelmed by clients who continue to overdose and increase in insurance fraud.

According to the National Institute of Drug Abuse, opioids are a class of drugs that include the illegal drug heroin, synthetic opioids such as fentanyl, and pain relievers available legally by prescription, such as oxycodone (OxyContin®), hydrocodone (Vicodin®), codeine, morphine, and many others. The reason why people are abusing the use of the drug is because not only does it relieve pain but it produces euphoria that many become dependent on. Overdoses on opioids have continued to severely increase since 2007, especially because the drug is now being mixed with other drugs to produce other addictive effects.  Family members of the drug abusers rely on drug treatment centers to save their loved ones but the outcome is the complete opposite.

Dave Aronberg, Palm Beach County’s top prosecutor and State Attorney, stated to the NBC News investigator that the entire drug treatment industry has been corrupted by the accessibility of easy money.  Mr. Aronberg also explains that, the actors of this industry have taken advantage of well-intended federal law, and a lack of any good law at the state level, to profit off people at the lowest stages of their lives.

Earlier this month, The International Consortium of Investigative Journalists (ICIJ), published reports on their ongoing investigation into the 2.6 terabytes of data leaked from Mossack Fonseca, a Panamanian international law firm.  The ICIJ, a global network of over 190 journalists from more than 65 countries, came in contact with the leaked data through a German newspaper, Süddeutsche Zeitung, who iSource: www.worldpropertyjournal.comn turn received the data early last year from an anonymous source.  The leak was far too big for the German newspaper to handle on its own and enlisted the ICIJ to aid in the investigation of the leaked documents.

What is so important about The Panama Papers?  The leak, in what is now considered the biggest data leak in history, was dubbed the “Panama Papers” and applies to the 11.5 million documents with detailed information on more than 214,000 offshore companies listed in the firm’s files.

Offshore companies are entities incorporated in offshore jurisdictions, usually in places with: 1) Little to no local taxation; 2) Stable banking centers; and 3) Strict banking secrecy laws.  The offshore companies are then used to establish offshore bank accounts, and although they are not illegal, the accounts are used by non-residents to move wealth without any disclosure to the nation of origin, the source of the money, or the business or transactional history whereby the funds came under the control of individuals seeking a “tax haven” for the money acquired.  The main issue with these dealings is that the obscure and secretive nature of these accounts easily lends itself to illegal activities, such as money laundering and tax avoidance.

Most U.S. taxpayers do not run afoul of the Internal Revenue Service’s Criminal Investigation Division.   Known as the CID, it has special agents who work either with other criminal prosecution agencies, in or with inter-agency task forces, or are assigned on a case by case basis to a U.S. Attorney office.  Understand that the Internal Revenue Service does not commonly begin a taxpayer collection action with a Criminal Investigation Division special agent.  The most common I.R.S. taxpayer recovery begins with a telephone call to the target.  The caller is an I.R.S. collection agent, not a C.I.D. agent.

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Source: bragertaxlaw.com

If your first contact from the I.R.S. is a C.I.D. agent call you know that the ultimate outcome is most likely a criminal prosecution.  It is best to retain a criminal defense attorney if you are called by a C.I.D. special agent.  All customary investigations begin with a request for production.  The request is either by letter or by verbal communication from an I.R.S. agent.  Compliance is not voluntary but is mandatory so do not disregard an IRS request for production of records.  You can negotiate the time and delay factor but you cannot fail to comply.  Additionally, be very aware that your response must include all records requested.  Any selective response by you, or any omission of records is an open door to a criminal prosecution.  When we look over our law office records of criminal prosecutions for tax evasion it is common that the prosecutor includes several counts of obstruction of justice for failure to provide complete tax records.  If the first contact  you have with an IRS agent is a subpoena then you can conclude for certain that you are the subject of a criminal investigation.  Anyone whose first contact from the IRS is from a CID special agent would be well advised to retain a criminal defense lawyer at the outset.  The investigatory phase can last as long as six months.  As the subject of an IRS review you are entitled to be represented by an attorney, but it is not always needed.  Most if not all IRS inquiries resolve with an agreed resolution requiring payment of back taxes, fines and interest.  Very few IRS contacts resolve with a criminal prosecution.

This week the Security and Exchange Commission (SEC) announced that E.S. Financial Services, a Miami based brokerage firm, settled what could have been a major criminal case with an agreed $ 1 million penalty payment to settle the charges and possibly avoid criminal prosecution.

The SEC issued a press release which suggested that the E.S. Financial, now known as Brickell Global Markets, Inc., committed acts that substantially violate anti-money laundering statutes and related rules.  The agreed allegations are that the brokerage firm allowed non-U.S. individuals to sell and buy securities without revealing the people who are the beneficial owners.

The SEC’s continued investigation led to their issuance of an order, which instituted a settled administrative proceeding, in lieu of a criminal indictment.  And while no fraud occurred in this case, the SEC investigation concluded that there were significant “holes” or shortcomings in the framework and implementation of the firm’s customer identification program (CIP), which required brokers to, “…at a minimum…, implement reasonable procedures to verify the identity of any person seeking to open an account.”

A fund manager in Sarasota, Florida was charged with defrauding investors of $3.8 million. The fund manager, Gaeton Della Penna, faces federal criminal charges in the Middle District of Florida for defrauding investors. Criminal charges, filed in federal court, are in addition to the SEC charges. SEC%20logo.jpg

The allegations are that he raised $3.8 million from his “clients” to trade securities and to invest in some small companies of which he personally approved. In fact, the SEC alleges that over $1.1 million was diverted to pay his mortgage on a 10,000 square-foot home. 
The SEC alleged that he also paid an inflated income salary to his girlfriend who lived with him. The SEC and FINRA issued statements urging private investors to be very mindful of whom they are dealing with.

FINRA, on its website, has a complaint compiler called Broker Check. On Broker Check, complaints filed against stockbrokers can be reviewed. These charges range with white-collar crimes that include wire fraud, money laundering, and front running and inappropriate risk investments for clients.

White-collar crime covers a lot of legal territory; from security fraud, wire-fraud, money laundering to tax evasion. In this situation the second largest bank in Switzerland, Credit Suisse, has been indicated (charged) and has been adjudicated guilty of a felony. Historically, the United States and the New York State’s Attorney General, have balked at indicting banks. The Securities and Exchange Commission, the Justice Department, and State and Federal banking regulators can either elect civil process or criminal process to rein-in bankers. When the criminal process results in a conviction it can be a death sentence for a banking institution.

What’s important about this headline is that a felony charge was used instead of a gentleman’s agreement pursued under the alternative civil regulatory process. A felony conviction for any bank raises the very real risk of having to close their business. To avoid that very real possibility, Credit Suisse agreed to what are historically important concessions. CreditSuisse.png In return the United States banking authorities have waived, or declined to use, their power to suspend Credit Suisse from conducting investment and banking business within the United States. Swiss banking laws do not permit any bank to reveal the identity of its depositors. Several years ago, U.S. Federal criminal authorities pursuing tax avoidance charges against U.S. citizens, demanded and received assurances from Swiss government officials that the names of U.S. citizens would be revealed. The Swiss never completed the understanding. Banking regulators in New York and the Justice Department and the office of United States Attorney General, in Washington D.C have imposed, and will share, a $2.6 billion fine imposed on Credit Suisse. The big Swiss Bank and its parent company, have pled guilty to one count of conspiracy to aid in tax invasion, a felony.

What is important is that this large bank is now a convicted felon. What is going on here? Federal prosecutors as well as the Federal Reserve and New York State banking regulators are going after top tier tax evasion programs conducted through and by banks in Switzerland. Now, banks in Switzerland have agreed to reveal their offshore banking operations. The agreement does not require the Swiss bank to reveal the false names used in creating trusts holding taxable deposits from US citizens. They will, however (and this is a major thing) have to keep those records within the United States. We expect that indictments and subpoenas will be issued in New York to open those files, reveal names, and begin prosecutions in state and federal courts. What comes next is a long anticipated series of indictments coming out of federal courts in New York and Florida. Within six months Credit Suisse will turn over to their United States operations, the true identities of depositors using offshore Swiss bank offices. Next will come government attempts to get to those lists and begin prosecutions for tax evasion.

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Yvette Scott-Patterson will be charged with mortgage fraud in the purchasing of more than 30 properties by use of fraudulent home loans. The US Attorney’s Office for the Southern District of Florida has said Scott-Patterson will be facing six years in prison, a $110,000 fine and deportation after her sentence. Prosecutors say that she and others in her group used false documentation in order to secure loans. Some of the fake papers were forged bank statements, false or stolen drivers licenses and phony employment verification letters. It is estimated that nearly $10 million in fraud was conducted by Scott-Patterson and her criminal colleagues. She fled the country in 2006 and was arrested 2 years later by the local Fugitve Apprehension Team resulting in her extradition back to the US. Nine individuals, including her husband Delroy Patterson, were charged and have plead guilty. Scott-Patterson’s formal charges were one count of conspiracy to commit mail fraud, wire fraud and aggravated identity theft, as well as another count of aggravated identity theft in association with the scheme.

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Mike Ohana, 39, Ryan Dosen, 30, and Paula Ramos, 52, were among nine people involved in a complex mortgage fraud scheme skyrocketing into the millions of dollars of theft. The group allegedly defrauded $3 million from two banks by use of fraudulent loans. Authorities stated that Ramos verified the loan applications on two properties in Miami in a fraudulent fashion. Washington Mutual was the bank defrauded by Go Expert Mortgage, the group owned by Ramos. Fraud occurred when Ramos vouched for the applications as true. Dosen was the attorney that worked as a title attorney for the deal.

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