DOJ ANNOUNCES MAN CHARGED WITH CONSPIRACY RELATED TO WIRE FRAUD, TRADEMEARK COUNTERFEITING USING THE "SILK ROAD"

FROM:  U.S. JUSTICE DEPARTMENT
Thursday, May 28, 2015
New Orleans Man Charged With Conspiracy to Commit Wire Fraud and Conspiracy to Commit Trademark Counterfeiting Using the “Silk Road” Online Marketplace

A Louisiana man was charged in a two-count information with conspiracy to commit wire fraud and conspiracy to commit trademark counterfeiting using the “Silk Road” online marketplace, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Polite Jr. of the Eastern District of Louisiana.

“Anonymous online marketplaces have provided criminals with the ability to conduct illegal operations worldwide while seemingly insulating them from apprehension and prosecution,” said Assistant Attorney General Caldwell.  “The Criminal Division is determined to peel back the veil of anonymity and prosecute criminals of all stripes who attempt to use the ‘dark web’ to cloak their illegal conduct.”

According to allegations in the information, Beau Wattigney, 30, of New Orleans, Louisiana, created counterfeit coupons and used Silk Road to sell them.  Silk Road was a worldwide Internet forum used to anonymously sell illegal drugs, goods and services.  Wattigney allegedly used Silk Road 1.0 until it was dismantled by federal officials in October 2013, and Silk Road 2.0 until it was dismantled in November 2014.

According to the information, Wattigney designed the coupons to look like print-at-home manufacturers’ coupons.  The coupons included counterfeit trademarks for many prominent coupon distribution services, including Hopster, Coupons.com, SmartSource and RedPlum.  Wattigney allegedly sold a selection of counterfeit coupons entitled “The Original S.R. Exclusive Coupon Collection” for approximately $50.00.  Additionally, one counterfeit coupon Wattigney allegedly created and sold allowed users to purchase $50.00 Visa Gift Cards for $.01 each.  The coupons Wattigney allegedly sold on Silk Road 1.0 and 2.0 affected more than 50 manufacturers, retailers and online coupon distributors.  If redeemed, the counterfeit coupons could have resulted in a loss of more than $1,000,000 to the affected businesses.

The charges contained in the information are merely accusations, and a defendant is presumed innocent unless and until proven guilty.

The case is being investigated by the FBI’s Philadelphia Division, with assistance from the FBI’s New Orleans Division.  The case is being prosecuted by Senior Counsel Marie-Flore Johnson, Gavin Corn and Robert Wallace of the Criminal Division’s Computer Crime and Intellectual Property Section, and Assistant U.S. Attorney Jordan Ginsberg of the Eastern District of Louisiana.

TEXAS MAN CHARGED FOR ROLE IN BIOFUELS FRAUD SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, June 19, 2014

Houston Man Charged with Biofuels Fraud Scheme

A federal grand jury in Houston, Texas, today indicted Philip Joseph Rivkin, a/k/a Felipe Poitan Arriaga, for offenses involving a federal renewable fuel program that allegedly netted him more than $29 million, the Justice Department’s Environment and Natural Resources Division announced.   The 68-count indictment against Rivkin, 49, of Houston and most recently, Guatemala City, Guatemala, includes allegations of wire fraud, mail fraud, Clean Air Act false statements, and money laundering.

The indictment was unsealed late Thursday following Rivkin’s initial appearance in federal court in Houston.   He was arrested on Wednesday evening when he arrived in Houston from Guatemala, which had deported him earlier in the day after learning that he had fraudulently secured Guatemalan citizenship.

The Energy Independence and Security Act of 2007 created or extended several federally-funded programs that created monetary incentives for the production of renewable fuels, including biodiesel, and to encourage the use of such fuels in the United States.   Authorized biodiesel producers and importers could generate and attach credits—known as “renewable identification numbers” or “RINs”—to biodiesel they produced or imported.    Because certain companies need RINs to comply with regulatory obligations, RINs have significant market value.

The indictment alleges that beginning around February of 2009, Rivkin operated and controlled several companies in the fuel and biodiesel industries, including Green Diesel LLC, Fuel Streamers Inc., and Petro Constructors LLC, all based in Houston.  It is alleged that Rivkin claimed to produce millions of gallons of biodiesel at the Green Diesel’s Houston facility and then generated and sold RINs based upon this claim. In reality, no biodiesel was ever produced at the Green Diesel facility.  The indictment alleges that this scheme allowed the defendant to generate approximately 45 million RINs that were fraudulent, which were then sold to companies that needed to obtain them and resulted in millions of dollars in sales.   Rivkin is also alleged to have caused fraudulent tax credit claims based on fictitious biodiesel production.

The indictment goes on to allege that the defendant created false records and made false statements to conceal his fraudulent claims of biodiesel production, importation and RIN generation.   Finally, the indictment alleges that the defendant laundered the proceeds of his crimes, using banking institutions and complex financial transactions to benefit from the illegal funds he received, and to attempt to protect these funds from government enforcement.  The indictment includes a notice of forfeiture to include: cash in excess of $29 million; three vehicles including a Lamborghini, Maserati, and a Bentley; a Canadair LTD airplane; and millions of dollars worth of artwork that was previously seized from Rivkin in 2012 and is now included in  a civil action for forfeiture.

An indictment is only a charge and is not evidence of guilt.   All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

The collaborative investigation that led to today’s indictment and yesterday’s arrest was the result of work by EPA’s Criminal Investigation Division, the United States Secret Service, Internal Revenue Service Criminal Investigation, and Homeland Security Investigations.  The Guatemalan Special Investigations Unit worked with federal investigators to uncover the fraudulent nature of Rivkin’s Guatemalan citizenship, which led to his deportation back to the United States.

The case is being prosecuted by Trial Attorney Leslie E. Lehnert of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.

11 INDICTED FOR ROLES IN ALLEGED SCHEME TO FRAUDULENTLY TAKE OVER HOMEOWNERS' ASSOCIATIONS

FROM: U.S. DEPARTMENT OF DEFENSE

Tuesday, January 15, 2013
Eleven Defendants Indicted for Alleged Roles in Scheme to Fraudulently Control Homeowners’ Associations in Las Vegas

WASHINGTON – A federal grand jury in Nevada today returned an indictment against 11 individuals for their alleged roles in a scheme to fraudulently take control of homeowners’ associations in the Las Vegas area. The indictment was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, Acting FBI Special Agent in Charge William C. Woerner of the Las Vegas Field Office, Sheriff Douglas C. Gillespie of the Las Vegas Metropolitan Police Department and Richard Weber, Chief of IRS-Criminal Investigation (IRS-CI).

The charged defendants, all from the Las Vegas area, include: Jose Luis Alvarez, 45; Rodolfo Alvarez-Rodriguez, 44; Ricky Anderson, 49; David Ball, 44; Leon Benzer, 46; Edith Gillespie, 51; Keith Gregory, 59; Maria Limon, 45; Barry Levinson, 45; Charles McChesney, 47; and Salvatore Ruvolo, 84. Each is indicted on one count of conspiracy to commit mail and wire fraud. Most of the defendants are also variously charged with individual counts of mail fraud and/or wire fraud. Limon is additionally charged with making a false statement to law enforcement.

According to court documents, the fraud scheme operated from approximately August 2003 through February 2009 to direct construction defect litigation and repairs at condominium complexes to a particular, conspiring law firm and Benzer’s construction company, Silver Lining Construction (SLC).

In order to accomplish the scheme, according to the indictment, Benzer and co-conspirators identified homeowners’ associations (HOAs) that could potentially bring construction defect cases. They then allegedly enlisted real estate agents to identify condominium units within the HOA communities for purchase.

According to court documents, Benzer and others, including Gillespie, then enlisted "straw purchasers" to use their names and credit to purchase condos in the complexes. The indictment alleges that Alvarez, Alvarez-Rodriguez, Anderson, Ball, Gillespie, Limon, McChesney and Ruvolo acted as straw purchasers. On at least 37 occasions, Benzer and certain co-conspirators allegedly provided the down payments and monthly payments on behalf of the straw purchasers, including HOA dues and mortgage payments, and various false and misleading statements were made to secure financing for the properties. To manage the properties, Benzer and others allegedly conspired to open at least five bank accounts through which they moved more than $8 million. Eventually, 33 of the 37 units went into foreclosure.

According to court documents, on several occasions and at the direction of Benzer, co-conspirators transferred a partial interest in particular condominiums to other co-conspirators to make them look like homeowners who could stand for election to the HOA board of directors, which many of these individuals and the straw purchasers agreed to do. To ensure conspirators won the elections, according to the indictment, the defendants employed deceitful tactics, such as submitting fake and forged ballots, some of which were sent through the U.S. mail. Co-conspirators also hired complicit attorneys to run the HOA board elections as "special election masters," to preside over the HOA board elections and supervise the counting of ballots.

Once elected, according to the indictment, the conspiring board members met with Benzer and other co-conspirators in order to manipulate board votes and process, including the selection of property managers, contractors, general counsel and attorneys to represent the HOA – including Benzer’s construction company and the conspiring law firm. Gregory and Levinson, both attorneys licensed in Nevada, allegedly agreed to become the general counsel for the Vistana and Sunset Cliffs; and Park Avenue and Pebble Creek complexes, respectively.

Limon, Benzer and others also allegedly agreed to open a property management company in order to provide services at Chateau Nouveau and other condo complexes in furtherance of the scheme. According to the indictment, Limon falsely told law enforcement officials she did not communicate with Benzer about this and did not know he funded and controlled her company.

At the conclusion of the scheme, millions of dollars of Vistana’s construction defect settlement proceeds were transferred to Benzer and SLC, according to the indictment.
According to court documents, the defendants were each given cash or things of value from Benzer and others for their alleged roles in the conspiracy.

The maximum potential penalty for each count of conspiracy to commit mail fraud and wire fraud, mail fraud, or wire fraud is 30 years in prison and a $1 million fine. The maximum potential penalty for making a false official statement is five years in prison and a $250,000 fine.

The charges and allegations against the indicted defendants are merely accusations, and the defendants are considered innocent unless and until proven guilty. Twenty-six other individuals have entered guilty pleas in this case and await sentencing. The investigation is ongoing.

The case is being prosecuted by Deputy Chief Charles La Bella, Trial Attorneys Thomas B.W. Hall and Mary Ann McCarthy and Senior Deputy Chief Kathleen McGovern of the Criminal Division’s Fraud Section. The case is being investigated by the FBI, the Las Vegas Metropolitan Police Department, Criminal Intelligence Section, and IRS-CI.

This prosecution is part of efforts underway by 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.

ACCOUNTANT INDICTED FOR ALLEGEDLY STEALING MONEY THAT WAS TO GO TO THE IRS

FROM: U.S. DEPARTMENT OF JUSTICE

Thursday, December 13, 2012
Florida Accountant Indicted for Stealing Client Money Intended for IRS
An indictment was unsealed today in Fort Pierce, Fla., charging Joseph Rizzuti with one count of corruptly endeavoring to obstruct the Internal Revenue Service (IRS) and four counts of wire fraud, the Justice Department and the IRS announced. The indictment was returned by a grand jury on Nov. 29, 2012.

According to the indictment, Rizzuti, the owner of Beacon Accounting Services in Palm City, Fla., interfered with the IRS’s ability to collect taxes owed by two clients, stole payments from those clients intended for the IRS, and made misrepresentations to those clients and to the IRS. Rizzuti allegedly stole approximately $265,000 from one client and approximately $23,500 from another client, money that the clients gave him to pay to the IRS.

An indictment merely alleges that crimes have been committed and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Rizzuti faces a maximum potential sentence of 20 years in prison for each of the four wire fraud counts and a maximum potential sentence of 3 years for the obstruction count. He is also subject to fines and mandatory restitution if convicted.

This case was investigated by special agents of IRS - Criminal Investigation and Treasury Inspector General for Tax Administration. Trial Attorneys Justin Gelfand and Rebecca Perlmutter of the Justice Department’s Tax Division are prosecuting the case.