Robert M. MacLafferty, age 46, of Portland, Tennessee was sentenced January 29th to serve 5 months in prison, followed by 3 years of supervised release. His sentence also included the requirement to pay restitution to the IRS of $37 plus thousand.
According to the US Attorney's news release:
MacLafferty pled guilty on October 12, 2007, to five counts of income tax evasion. During his plea hearing, MacLafferty admitted that he earned income which required him to file federal income tax returns for years 1996 through 2003, however, he failed to file such a return in each of those years. MacLafferty also admitted that he had adjusted gross income totaling $227,993 from 2000 to 2003. During this period of time, MacLafferty provided false documents to his employer claiming he was not a citizen of the United States and therefore not liable to pay federal income taxes. MacLafferty also admitted that after the Internal Revenue Service filed a federal tax lien against his residence in Sumner County, he quitclaimed his interest in this property and another property to his wife.
Similarities? Let's see - Snipes claimed that he was not a citizen of the US and not liable to pay federal income taxes. Likewise, Snipes filed to file tax returns for a number of years during which he had approximately $37 million in earnings.
Possible Outcome! Snipes, due to "star power" avoids prison and makes right with the IRS and federal government. Or, Snipes gets a "hand slap" prison sentence like MacLafferty and is told to pay up for his misdeeds.
Since it will take time to see what the outcome is...want to weigh in with your thoughts.
Prison (light sentence) or freedom - which will the judge order?
Business ethics speaker, Chuck Gallagher, off for now...
Sunday, February 3, 2008
White Collar Crime - Week In Review From South Carolina to California to Florida - Comments by Ethics Speaker Chuck Gallagher
After reviewing the verdict in the Wesley Snipes case - both guilty and innocent - it makes sense to consider what else is taking place on the white collar crime front.
South Carolina: Christina J. Williams, age 32, of Conway, South Carolina, was sentenced in federal court for aggravated identity theft and credit card fraud.
Williams worked as the office manager in a doctor’s office in Surfside Beach, South Carolina. From August 2003 to July 2004, Williams made unauthorized charges using the doctor’s personal and business credit cards, and used his personal information to secure a card for herself. Williams also embezzled money from the doctor’s office and had her name added to his cellular phone account. Investigators determined that Williams stole more than$104,000.00 during the course of the scheme.
Rhode Island: Cory Johnson, the former president of Mixitforme, a company that sold electronic devices over the Internet and by telephone, pleaded guilty today to fraud and money laundering. Johnson admitted that he defrauded a credit card processing firm out of about $2.2 million worth of customer orders that Mixitforme failed to fulfill.
Between November 2005 and March 2006, NOVA processed millions of dollars worth of credit card transactions on behalf of Mixitforme for orders the company received over the Internet and by telephone. In March 2006, Mixitforme ceased operations, and hundreds of customers subsequently complained to NOVA that their credit card accounts had been charged for orders to Mixitforme but the merchandise had not been delivered.
NOVA refunded customers a total of $3,178,347 in charges for unfulfilled orders. NOVA was able to recoup $954,460 from a bank, but was left with a net loss of $2,223,887.
Johnson, 29, of Morrisville, Pennsylvania, pleaded guilty to one count of conspiracy to commit wire fraud and one count of money laundering. He is free on bond pending sentencing, which Judge Smith scheduled for June 20. The maximum prison sentences are: conspiracy -- five years, and money laundering -- ten years. Each offense also carries a maximum fine of $250,000.
Pennsylvania: William D. Edgar, a resident of Verona, Pennsylvania, has been sentenced in federal court in Pittsburgh, Pennsylvania to 37 months of incarceration and five years supervised release on his conviction of Conspiracy, Bank Fraud, and Wire Fraud.
Edgar, who was a mortgage broker licensed by the Pennsylvania Department of Banking, operated a mortgage brokerage business known as America's Mortgage Outlet in Monroeville, Pennsylvania. Between May 2001, and October 2003, Edgar participated with loan officers at America's Mortgage Outlet in a scheme to defraud banks and private lenders by making false representations in more than seventy mortgage loan applications submitted on behalf of his customers.
Two types of fraudulent schemes were used. One form was to falsely represent to the lenders that mortgage loan applications presented to the lenders were for refinance loans, when in actuality the applications were for purchase loans. The refinance scheme deceived the lenders into approving and funding loans on terms and conditions they would not have otherwise approved or funded.
Another form of the scheme was to accurately represent loans as purchase loans, but to falsely inflate the sale prices and values of real properties being purchased in order to cause the lenders to approve larger loans than they would have otherwise approved. This scheme deceived lenders into financing down payments and other cash disbursements from mortgage loan proceeds. In total, more than $3,000,000 worth of loans were issued in connection with this scheme.
California: BARRY HOLLAND, age 60, of Carmichael, entered a guilty plea to accepting unlawful bribes while serving as Superintendent for the City of Sacramento’s Water Distribution Branch. HOLLAND pled guilty to a one count information charging him with bribery in connection with a municipality that receives federal funds.
From at least 1999 through 2005, one Sheldon M. had an oral agreement with the Water Distribution Branch under which he would retrieve used meters from the Water Distribution Branch, transport the same to a recycler, and sell the same for profit. Sheldon M. would then keep a portion of the meter sale proceeds for himself as a fee and would maintain a separate portion of the meter sale proceeds in a “slush fund” which he later would disburse to certain employees of the Water Distribution Branch, including HOLLAND, or utilize to make purchases for the benefit of the Water Distribution Branch. Between October, 1999 and November, 2005, defendant HOLLAND accepted approximately 16 checks and cash totaling approximately $10,371 as rewards from Sheldon M. for allowing Sheldon M. to sell the water meters. HOLLAND also accepted various machinery (then retained by the Water Distribution Branch), including two air motors with a combined value of approximately $7,200, and a tapping machine with an approximate value of $8,000 to $9,000 from Sheldon M., also as rewards from Sheldon M. for allowing Sheldon M. to sell the water meters.
Florida: It was announced that owners of nine separate Miami-based health care corporations have been sentenced to prison terms within the past two weeks. Collectively, the nine defendants filed fraudulent claims with Medicare for $56,599,832 worth of unnecessary durable medical equipment (DME) and infusion therapy.
The nine defendants sentenced in Miami are: (1) Luis Soto, 41, sentenced to 87 months in prison; (2) Noel Rodriguez, 50, sentenced to 51 months in prison; (3) Rosabel Gonzalez, 32, sentenced to 30 months in prison; (4) Christian Vasquez, 22, sentenced to 41 months in prison; (5) Maria De La Serna, 55, sentenced to 19 months in prison; (6) Ariel Betancourt, 35, sentenced to 24 months in prison; (7) Jose Prieto, 58, sentenced to 41 months in prison; (8) Armando Jorge Herrera, 27, sentenced to 36 months in prison; and (9) Reinaldo Lopez, 40, sentenced to 46 months in prison.
Comments: First, as a business ethics speaker (http://www.chuckgallagher.com/) I often speak to groups about the Truth About Consequences. My workshops on white collar crime and fraud are well attended as it appears that anyone can get caught up in criminal activity - and I speak from experience - the consequences can be devastating.
The Florida issue clearly is one of pure greed and seemingly opportunity. Time after time people (especially in dealing with the government) think that the customer - US Government - is too big and would never catch their "slick" illegal scheme. And, more times than not - they do and the consequences are less than pleasant. Prison terms no matter their length are unpleasant.
In California we see an example of someone being found guilty for participating in a scheme. I would be that this person would have felt that it must be O.K., someone else is making the choice - he was just a recipient. Wrong! Illegal is illegal.
Pennsylvania, Rhode Island and South Carolina - well that was just fraud pure and simple. Most of the time when a fraud is committed there are three components: (1) Need; (2) Opportunity and (3) Rationalization. While I don't know how the three came together in there cases...you can bet they did.
But, this week has past - Snipes has been found innocent and guilty - and we face another week. Perhaps, it would help if people understood two simple facts:
Every choice has a consequence! and You reap what you sow!
Your thoughts and comments are welcome!
South Carolina: Christina J. Williams, age 32, of Conway, South Carolina, was sentenced in federal court for aggravated identity theft and credit card fraud.
Williams worked as the office manager in a doctor’s office in Surfside Beach, South Carolina. From August 2003 to July 2004, Williams made unauthorized charges using the doctor’s personal and business credit cards, and used his personal information to secure a card for herself. Williams also embezzled money from the doctor’s office and had her name added to his cellular phone account. Investigators determined that Williams stole more than$104,000.00 during the course of the scheme.
Rhode Island: Cory Johnson, the former president of Mixitforme, a company that sold electronic devices over the Internet and by telephone, pleaded guilty today to fraud and money laundering. Johnson admitted that he defrauded a credit card processing firm out of about $2.2 million worth of customer orders that Mixitforme failed to fulfill.
Between November 2005 and March 2006, NOVA processed millions of dollars worth of credit card transactions on behalf of Mixitforme for orders the company received over the Internet and by telephone. In March 2006, Mixitforme ceased operations, and hundreds of customers subsequently complained to NOVA that their credit card accounts had been charged for orders to Mixitforme but the merchandise had not been delivered.
NOVA refunded customers a total of $3,178,347 in charges for unfulfilled orders. NOVA was able to recoup $954,460 from a bank, but was left with a net loss of $2,223,887.
Johnson, 29, of Morrisville, Pennsylvania, pleaded guilty to one count of conspiracy to commit wire fraud and one count of money laundering. He is free on bond pending sentencing, which Judge Smith scheduled for June 20. The maximum prison sentences are: conspiracy -- five years, and money laundering -- ten years. Each offense also carries a maximum fine of $250,000.
Pennsylvania: William D. Edgar, a resident of Verona, Pennsylvania, has been sentenced in federal court in Pittsburgh, Pennsylvania to 37 months of incarceration and five years supervised release on his conviction of Conspiracy, Bank Fraud, and Wire Fraud.
Edgar, who was a mortgage broker licensed by the Pennsylvania Department of Banking, operated a mortgage brokerage business known as America's Mortgage Outlet in Monroeville, Pennsylvania. Between May 2001, and October 2003, Edgar participated with loan officers at America's Mortgage Outlet in a scheme to defraud banks and private lenders by making false representations in more than seventy mortgage loan applications submitted on behalf of his customers.
Two types of fraudulent schemes were used. One form was to falsely represent to the lenders that mortgage loan applications presented to the lenders were for refinance loans, when in actuality the applications were for purchase loans. The refinance scheme deceived the lenders into approving and funding loans on terms and conditions they would not have otherwise approved or funded.
Another form of the scheme was to accurately represent loans as purchase loans, but to falsely inflate the sale prices and values of real properties being purchased in order to cause the lenders to approve larger loans than they would have otherwise approved. This scheme deceived lenders into financing down payments and other cash disbursements from mortgage loan proceeds. In total, more than $3,000,000 worth of loans were issued in connection with this scheme.
California: BARRY HOLLAND, age 60, of Carmichael, entered a guilty plea to accepting unlawful bribes while serving as Superintendent for the City of Sacramento’s Water Distribution Branch. HOLLAND pled guilty to a one count information charging him with bribery in connection with a municipality that receives federal funds.
From at least 1999 through 2005, one Sheldon M. had an oral agreement with the Water Distribution Branch under which he would retrieve used meters from the Water Distribution Branch, transport the same to a recycler, and sell the same for profit. Sheldon M. would then keep a portion of the meter sale proceeds for himself as a fee and would maintain a separate portion of the meter sale proceeds in a “slush fund” which he later would disburse to certain employees of the Water Distribution Branch, including HOLLAND, or utilize to make purchases for the benefit of the Water Distribution Branch. Between October, 1999 and November, 2005, defendant HOLLAND accepted approximately 16 checks and cash totaling approximately $10,371 as rewards from Sheldon M. for allowing Sheldon M. to sell the water meters. HOLLAND also accepted various machinery (then retained by the Water Distribution Branch), including two air motors with a combined value of approximately $7,200, and a tapping machine with an approximate value of $8,000 to $9,000 from Sheldon M., also as rewards from Sheldon M. for allowing Sheldon M. to sell the water meters.
Florida: It was announced that owners of nine separate Miami-based health care corporations have been sentenced to prison terms within the past two weeks. Collectively, the nine defendants filed fraudulent claims with Medicare for $56,599,832 worth of unnecessary durable medical equipment (DME) and infusion therapy.
The nine defendants sentenced in Miami are: (1) Luis Soto, 41, sentenced to 87 months in prison; (2) Noel Rodriguez, 50, sentenced to 51 months in prison; (3) Rosabel Gonzalez, 32, sentenced to 30 months in prison; (4) Christian Vasquez, 22, sentenced to 41 months in prison; (5) Maria De La Serna, 55, sentenced to 19 months in prison; (6) Ariel Betancourt, 35, sentenced to 24 months in prison; (7) Jose Prieto, 58, sentenced to 41 months in prison; (8) Armando Jorge Herrera, 27, sentenced to 36 months in prison; and (9) Reinaldo Lopez, 40, sentenced to 46 months in prison.
Comments: First, as a business ethics speaker (http://www.chuckgallagher.com/) I often speak to groups about the Truth About Consequences. My workshops on white collar crime and fraud are well attended as it appears that anyone can get caught up in criminal activity - and I speak from experience - the consequences can be devastating.
The Florida issue clearly is one of pure greed and seemingly opportunity. Time after time people (especially in dealing with the government) think that the customer - US Government - is too big and would never catch their "slick" illegal scheme. And, more times than not - they do and the consequences are less than pleasant. Prison terms no matter their length are unpleasant.
In California we see an example of someone being found guilty for participating in a scheme. I would be that this person would have felt that it must be O.K., someone else is making the choice - he was just a recipient. Wrong! Illegal is illegal.
Pennsylvania, Rhode Island and South Carolina - well that was just fraud pure and simple. Most of the time when a fraud is committed there are three components: (1) Need; (2) Opportunity and (3) Rationalization. While I don't know how the three came together in there cases...you can bet they did.
But, this week has past - Snipes has been found innocent and guilty - and we face another week. Perhaps, it would help if people understood two simple facts:
Every choice has a consequence! and You reap what you sow!
Your thoughts and comments are welcome!
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