It’s not unusual to see a conviction for wire fraud or mail fraud in corporate fraud cases. Mailing a check or electronically transferring money is common in schemes and tends to be an easier conviction. Today we have a different kind of mail fraud. Ephrem D. Nguyen was a postmaster for the Danbury, Connecticut post office. Part of Nguyen’s responsibilities included supervising maintenance and repair for USPS equipment, facilities and vehicles. Late in 2020, Nguyen required that all postal vehicles go to a specific shop for repairs, despite that shop not being the contract by the postal servi ..read more

Humans are rarely as creative as when they are committing fraud. I never thought I’d be talking about chicken frames when I started this series, but here we are. William Hickman and Brian Whiteman worked for Raeford Farms in Louisiana as the sales manager and assistant sales manager respectively. As reported in Meat+Poultry of all places, the two were convicted of concocting a scheme to extract money from Raeford Farms by inserting fake intermediaries into the sales process. Essentially they created a wholesaler that would purchase chicken frames from Raeford and sell them to places like Heri ..read more

I wasn’t going to cover this. I usually don’t cover tax fraud, but this is closer to garden variety fraud committed as part of a tax case. The irony of the IRS committing fraud in a tax case is simply too good to pass up. This gets technical so hang on, it’s worth it. Congress created “syndicated conservation easements” in the 1980’s. Essentially land owners could donate development rights on a piece of land to a qualified charity in exchange for a tax deduction. Essentially this is a tax break for not covering every piece of land in concrete. Unsurprisingly, the easements have become big bus ..read more

Occasionally there are scenarios where all the players are villains and you hope everyone loses. This isn’t quite that…but for some people it’s going to be close. Many, many people hate their Homeowner’s Association (HOA). It’s not unusual for this hatred to come from petty tyrants on the board or petty snitches reporting their neighbors. As a simple example, a lot of years ago we put up our Christmas tree early. Like the first of November early. We were going to be traveling a lot during the holidays and options were early or late, so we put it up early. This was the Christmas tree INSIDE ou ..read more

We head to northern Pennsylvania this week. From North Penn News comes the story of Judith Butt, age 73. Butt is accused of embezzling $375k from the Gwynedd Office Condominium Association (GOCA). From the article: “GOCA is a group of tenants that occupy suites at 311 Sumneytown Pike, and they hired Butt as their accountant in 2009 to maintain their account and pay bills for sewer, electric, landscaping, cleaning, and other expenses.” So we have an office building made up of condos. They have an association to manage shared costs. Butt was hired as the bookkeeper. Simple enough. Butt was paid ..read more

Buckle up everyone. Previously we looked at an individual who stole to pay back a previous employer he had stolen from. Today we have Mandy Deann Urban, 47. According to the indictment, Mandy was a senior staff accountant for an unnamed company in Charlotte, NC. She is accused of stealing $1.1 million. Urban was responsible for general ledger entries and financial statement preparation, along with reconciling AP, AR, and bank accounts. From 2019 to 2022 Urban pulled the unsophisticated, but reliable ploy of transferring data to bank accounts she controlled and making fraudulent entries to cov ..read more

In this fraud series, I’ve tried to avoid companies that are complete frauds from the beginning. If someone just creates a pump-and-dump stock scheme, it doesn’t make this list because there are no lessons to learn there, other than don’t do fraud. FTX and Celcius both seem to have started as more or less legitimate enterprises that devolved into significant frauds through hubris or laziness. My take for now is that those organizations were so poorly run that they became fraudulent, but they didn’t start that way nor did they intentionally turn fraudulent. The Bigmotor case is similar, but so ..read more

Just a little bonus today from the Wall Street Journal: A researcher at Two Sigma Investments adjusted the hedge fund’s investing models without authorization, the firm has told clients, leading to losses in some funds, big gains in others and fresh regulatory scrutiny. The researcher, Jian Wu, a senior vice president at New York-based Two Sigma, was trying to boost his compensation, Two Sigma has told clients, without identifying Wu. He made changes over the past year that resulted in a total of $620 million in unexpected gains and losses, according to people close to the matter and investor ..read more

Today’s fraud is a little sad. People have lots of motivations for committing fraud. Common ones include simple greed, a desire for nice things, consumer debt, gambling debt/losses, investment losses, living beyond one’s means, and feelings of being unappreciated/underpaid. We’ve seen plenty of these motivations this year. The story of Manjit Singh is different. Singh, 60, fell victim to a romance fraud. She stole from her employer to give money to a boyfriend, Ravi Jani, who didn’t exist. In 2019 Singh went to work for Lei Dat and Baig Solicitors. By 2019 she was trusted enough to work on ca ..read more

We’re going to stay in the UK for this next fraud. It goes back a little bit. Carillon, PLC was a construction giant in the UK that collapsed suddenly in 2018. In 2017 Carillon issued a profit warning indicating a decrease in the value of its contracts by £845 million. Later that year, the decrease stretched to more than a billion pounds. By the next year, Carillon was done with liabilities of £7 billion, but only £29 million in the bank. More than 3,000 people lost their jobs and hundreds of projects were impacted. This was classic fraud at the top, but also in the middle and all the way dow ..read more