Articles Posted in White Collar Crimes

In early June, 48-year-old Steven Thomas Keene, a sheriff’s deputy with the Cass County Sheriff’s Department for 25 years, was charged with several counts related to the alleged staging of an accident so that a friend could collect insurance money to purchase a new car. Kalamazoo County Chief Assistant Prosecutor Carrie Klein stated in a news article at Mlive.com that Keene is charged with one count each of insurance fraud, tampering with evidence, conspiracy to commit insurance fraud, and obstruction of justice.

Michigan fraud defense attorneys know that if convicted, Keene will face fines of up to $50,000 and/or up to 10 years in prison. The charges against Keene stem from an investigation performed by an auto theft team, Southwest Commercial Auto Recovery Unit, who work multiple jurisdictions.

Allegedly, Keene and a friend staged a one-vehicle accident so that the female friend could get a new car. The idea was to make it appear as though the car had been involved in an accident with a deer, so that she could collect insurance money. After staging the crash, Keene lied about it on the police report.

In a separate incident, Keene allegedly provided information to police in connection to a February 5 motor vehicle crash that was described as “inaccurate, incomplete, and misleading.” News articles say that Keene knew someone had committed a crime, and was attempting to help that person out by obscuring evidence.

Additionally, prosecutors in the case say that some of the charges Keene faces stem from incidents which allegedly took place while on duty as a police officer for Silver Creek Township, where he worked part-time.

Keene was to have appeared on June 19 for an evidentiary hearing, but has waived that hearing. He will stand trial on felony charges.

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On Tuesday June 4 Michael Grundy pleaded guilty to wire fraud involving the transfer of $400,000 to Medtrix, Grundy’s company, from Wayne County’s health insurance agency. Grundy is a former Assistant Wayne County Executive; he was fired by Robert Ficano in late 2011 when news of the FBI investigation involving Grundy came to light.

According to a news article at Mlive.com, Grundy allegedly arranged the transfer of the money to his company to be used for implementing an electronic medical records system. However, it was revealed that another company was already providing this service. Grundy was initially charged with obstruction of justice, extortion, and accepting kickbacks involving another $1.7 million that was allegedly transferred to companies he owned.

In March of 2012 a press release revealed that Grundy and Keith Griffin, a longtime friend, had worked together to bilk Wayne County HealthChoice in order to enrich their own lives. Griffin allegedly invoiced HealthChoice for advertisement and other services rendered by Advertise Me for more than $1 million. The press release indicates that Grundy received a kickback from payments made on the inflated invoices to Advertise Me from HealthChoice.

Ultimately, Grundy is alleged to have abused his powers as Assistant Wayne County Executive to discreetly engage in illegal activities and obtain kickbacks, according to a statement made by Erick Martinez, IRS Criminal Investigation Special Agent in Charge. Martinez said that IRS Criminal Investigation is committed to ensuring that public officials who line their pockets with money gained through their positions are deprived of the financial gains illegally obtained, and brought to justice.

In 2012, Grundy’s vehicles, Detroit home, and approximately $7,700 were seized by the government.

Michigan fraud lawyers know that individuals who are convicted of theft-related crimes on a federal level face extremely serious consequences. Wire fraud is a federal crime; individuals may face prison time of up to 20 years and fines of up to $1 million depending on the circumstances.

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Last week two men were sentenced to federal prison in connection with a tax scheme after they were found to be filing false tax returns on behalf of clients, then sharing the proceeds. Chad Anthony Chertos, a 37-year-old Ada resident, and Gregory Edward VanDyke, a 39-year-old Newaygo man, were both sentenced to federal prison. Chertos was sentenced to 2 1/2 years for his role in the scheme; VanDyke was sentenced to five years, three months.

Both men were ordered by U.S. District Judge Robert Jonker to pay restitution to the U.S. Treasury in an amount exceeding $240,000. In December of last year, Chertos pleaded guilty to conspiracy to defraud the U.S. by filing false claims on clients’ tax returns. VanDyke pleaded not guilty to the charges in November of 2012.

Federal authorities determined that the two men, who were business partners, went door-to-door claiming that even if the individuals they were soliciting made little or no income, they (Chertos and VanDyke) could obtain significant tax refunds for them. In exchange for this service, Chertos and VanDyke would deduct substantial fees from the refund checks clients received. The two men will be barred in the future from assisting clients in filing federal tax returns, according to U.S. Attorney Patrick Miles in a news article at Mlive.com.

Assistant U.S. Attorney Christopher O’Connor stated that Chertos and VanDyke attempted to conduct a legitimate business, but could not earn enough income to pay bills.

U.S. Attorney Miles also commented that the two took advantage of both hard working taxpayers in the U.S. and their clients by inflating or fabricating income and abusing tax credits designed for the working poor.

Michigan federal crime attorneys understand the seriousness of being convicted of a federal crime such as tax fraud, Medicare or social security fraud, or any theft-related offense. In most cases individuals who are charged at the federal level will face harsher penalties than at the state level.

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Celeste Foster, a 39-year-old Lansing woman, was charged with numerous counts of writing bad checks and embezzling more than $1,000 from a nonprofit recently. Foster allegedly embezzled more than $17,000 from the Waverly Junior Warriors Football program during a one-year period spanning from October 2011 to October 2012; she was treasurer of the program at that time. Now, her court hearing has been delayed by officials according to a news article at Mlive.com.

Foster’s preliminary examination had been scheduled for Thursday April 25 in Eaton County District Court. A new court date had not been determined as of the time of news reports.

The Waverly Junior Warriors Football program is an organization designed for fourth through eighth grade students in the school district.

County District Judge Julie Reinke set Foster’s bond at 10 percent of $2,000. She was released from the Eaton County Jail after posting bond.

Michigan embezzlement attorneys know that individuals convicted of embezzling face serious criminal penalties. The consequences an individual may face depend on a number of factors including the value of the money or property embezzled, and whether the individual has a prior conviction. In this situation, Foster may face prison time of up to 5 years, and fines which amount to three times the amount she allegedly embezzled, which would equate to more than $50,000 in this case.

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Michael Winans, son of famed gospel quartet member Michael Winans Sr. of The Winans, was sentenced in a federal courtroom to 14 years in prison on Wednesday, February 27 for his role in a multimillion-dollar Ponzi scheme. Prosecutors recommended Winans be sentenced to at least 12 1/2 years; Judge Sean Cox exceeded that time when handing down Winans’ sentence. The defendant was also ordered to pay nearly $4.8 million in restitution to more than 1,000 victims along with a fine of $175,000.

News reports state that Winans will spend time in federal prison after it was found that he was defrauding investors while operating an $8 million Ponzi scheme through the Winans Foundation Trust. Winans pleaded guilty of the offense in October of 2012. While he lives in Jessup, Md, Winans allegedly had recruited 11 investors in the beginning days of the Ponzi scheme, those investors eventually recruiting hundreds more across many states. Ultimately, more than $8 million was collected from investors, who were led to believe they were investing in crude oil bonds in Saudi Arabia.

According to The Detroit News, Winans took money from investors during the time period from 2007 and 2008, although he was aware that the bonds were not legitimate. The defendant promised a two-month turn around on their investments, saying they would get 100% of it back in that time frame; however, Winans was allegedly using that money to pay off initial investors and for his own personal use.

Winans told the judge, “There was zero malicious intent on my part. This investment was presented as a good thing to me, and I wanted people to have a better life.” Wayne County Prosecutor Kym Worthy stated that Michael Winans will be spending his time in federal prison, and that the “many” victims of his scheme can rest easier with the knowledge that he has been convicted.

Michigan fraud defense lawyers understand the serious criminal penalties individuals face when convicted on charges related to money laundering, including Ponzi schemes. Even in this case, the defendant is 30 years old; he will likely be middle age by the time he is released from prison – and the monetary fines are tremendous.

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Kenneth Hoesch, a former Zeeland attorney and city Board of Public Works chair, recently pleaded guilty to mail fraud; he will now face 6 1/2 years in prison after being sentenced by U.S. District Judge Robert Jonker. Federal sentencing guidelines, which are only a baseline designed to assist judges in handing out a fair sentence, called for a minimum sentence of 63 to 78 months. Hoesch was sentenced to 78 months in prison and three years supervised release, according to the Holland Sentinel.

Hoesch allegedly stole approximately $800,000 from clients’ estate trusts in a mail fraud scheme. Edwin Vander Ploeg, one of Hoesch’s former business partners, told the judge that Hoesch betrayed the confidence of his own family, workers, and his clients. News reports claim that Hoesch left his role at the law firm and resigned his law license, leaving his partners stunned and left to deal with clients who were “devastated.”

While Hoesch admitted stealing the money from clients’ trust funds, the government also believes that the former attorney obtained more than $700,000 additionally in loans by providing misleading and false information, according to court documents. Hoesch’s victims claimed that while he supposedly assisted with helping dying family members put their estates in order, he was actually taking the money for his own personal use.

Vander Ploeg alleged that it was determined by investigators that Hoesch, who was thought of as a “pillar of the community,” began stealing money from clients in 1995. He ultimately became a suspect and investigations began in 2010 after he allegedly stole money that was to go to the American Cancer Society.

Hoesch was genuinely remorseful according to defense attorney Richard Zambon; he also apologized to his victims as he addressed the court, saying “I’m sorry for all that I have done. The stealing, the lies, and most of all, the betrayal of your trust.”

Several organizations participated in the investigation, including the U.S. Secret Service, the Criminal Investigation Division of the IRS, Ottawa County Sheriff’s Department and the U.S. Postal Inspection Service.

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Babubhai “Bob” Patel, a 50-year-old Canton man who owned 26 pharmacies in the Detroit area, was sentenced on February 1 to 17 years in prison for what federal investigators called an “elaborate scheme” to defraud Blue Cross Blue Shield, Medicaid, and Medicare. Patel was also ordered to pay restitution of $18.8 million.

News reports indicate that Patel was never released from custody after being arrested in August of 2011. Patel’s trial was approximately one year later; jurors found him guilty following the six-week trial, according to federal court records which indicated he was convicted of distributing controlled substances and conspiracy charges in addition to health care fraud.

It was found that between 2006 and 2011, the pharmacies owned by Patel billed more than $57 million to Medicaid and Medicare; an investigation by DEA, FBI and Health and Human Services agents allegedly revealed that at least 25% of the billings were for drugs which were never dispensed, or medically unnecessary. The U.S. Attorney’s office also claimed that Blue Cross Blue Shield of Michigan was billed for prescription drug transactions which were fraudulent.

Patel was ordered by U.S. District Judge Arthur J. Tarnow to pay $1.5 million to Blue Cross Blue Shield, and $17.3 million to Medicare and Medicaid. News reports state that paid patients, patient recruiters, pharmacists and doctors were involved in the network scheme, and that 25 other individuals have been charged by the federal government. Six of those 25 are scheduled for trial in June, and 19 have already pleaded guilty or been convicted.

Three pharmacists were also sentenced to 5 years, 8 months in prison by Tarnow last week, including Ashwini Sharma of Novi, Brijesh Rawal of Canton, and Lokesh Tayal of Northville. According to the U.S. Attorney’s office, all three will be deported following their release from prison, as they were working under a visa program in the U.S. and were non-citizens.

Defrauding Medicare, Medicaid and other government run programs will lead to serious criminal penalties, as evidenced in this case. Michigan fraud defense attorneys are skilled in this area of the law, and will fight aggressively to minimize the damage to those accused of these types of crimes.

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William Edward Lowder of Williamsburg has pleaded guilty to one count of filing a false federal income tax return and one count of wire fraud, after it was determined by investigators that the 57-year-old insurance agent was bilking his elderly clients out of their investments. Lowder allegedly stole more than $1 million from elderly clients from 2001 to 2009.

Lowder sold health, disability, and life insurance at his company, Lowder Insurance and Ash Brokerage; he also sold other annuity investment products to clients, according to news reports. Ronald Stella, Assistant U.S. Attorney, wrote in a plea agreement that Lowder began stealing from clients in 2001. The announcement that Lowder had pleaded guilty to the charges was made by U.S. Attorney Patrick A. Miles, Jr., along with Erick Martinez, Internal Revenue Service Criminal Investigation Division Special Agent in Charge, Grand Traverse Sheriff Thomas Bensley, and Robert D. Foley III of the FBI. If convicted of wire fraud, Lowder faces up to 20 years in prison.

Stella wrote that under the scheme, Lowder encouraged elderly clients to liquidate their existing investments and buy new annuities through him, convincing them that doing so would improve returns on their investments. Ultimately, Lowder allegedly used the checks written to him by the clients for his own personal use, depositing them into his bank account rather than purchasing new investments. News reports state that Lowder convinced the elderly clients he was investing their money by preparing false account statements. Allegedly, Lowder used the money to cover his own personal and business expenses, to fund his own trust accounts, and as cash gifts to his wife.

Michigan federal crime attorneys understand that individuals who have been arrested for wire fraud will likely face a substantial number of years behind bars if convicted. Federal crimes are prosecuted vigorously, and the penalties typically more severe than what is handed out at the state level.

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A Hamtramck doctor has been put out of business, for now, after being accused of conspiracy to distribute a controlled substance and Medicare fraud. Dr. Qandil Basil, along with eight other people, was arrested according to Hamtramck police records.

Prosecutors claim that Qandil issued more prescriptions in the month of April 2012 than most hospitals do, at an average rate of 140 per day, or a total of more than 4,100 prescriptions during that month. In fact, news reports indicate that he wrote more prescriptions then Henry Ford Hospital Health System for controlled substances such as Oxycodone, Hydrocodone, Alprazolam and Carisoprodol. After reviewing MAPS (Michigan Automated Prescription System), it was determined by investigators that Qandil wrote almost 80,000 prescriptions for controlled substances in the one year time span between August of 2011 and August of 2012.

The doctor claimed that he took care of 60 to 70 patients each day. An agent investigating the case stated that after consulting with Dr. Basil for one minute and 50 seconds, he obtained prescriptions for Daypro, Lipoderm ointment, Vicodin, Pro-Air and an unknown muscle relaxant – without previous doctor records.

According to Hamtramck police, Basil said that in a time span of 30 minutes, he could generally take care of 40 to 50 patients. When questioned how it was possible to see more than one patient per minute, Basil did not respond.

Hamtramck police were allegedly told by one woman that the doctor’s office only sees Medicare patients after 3 p.m., and that prior to that time Basil only takes cash payments. She alleged that the doctor tried numerous times to sell her Opana, Oxycodone and other pain medications that were unnecessary.

Authorities believe that Basil billed Medicare for medications that were not necessary, and for various services that they felt he could not have performed due to the unusually high number of patients he saw on a daily basis.

Individuals who are charged with distributing controlled substances or Medicare fraud face serious penalties if convicted. As experienced Michigan drug crime defense attorneys, we know the importance of obtaining skilled legal counsel to protect your career, legal rights, and freedom.

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