Phillip Smith, Ring Leader of a $1 Million Identity Theft Ring, Faces 22 Years in Prison

Categories: Frauds

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Phillip Smith, a 55-year-old Bronx native, pleaded guilty in Manhattan Federal Court today for his role as ring leader of a large-scale identity theft scam involving customers with credit accounts at big retail stores.

Smith faces a maximum of 22 years in prison for pleading guilty to three counts of conspiracies to commit access device fraud, to produce false identification documents and aggravated identity theft, according to a release from the New York Attorney General's Office.

For anyone not quite sure of how some of these identity theft schemes work, Smith and seven other scammers used credit information from customers with accounts at big-box retail stores -- such as Home Depot, Kohl's and Sears -- to purchase pricey products. He then sold the products to a secondary party at a price lower than market value, according to the release.

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Bernie Madoff Money Manager J. Ezra Merkin Forced To Cough Up $410 Million To Repay Victims

Categories: Frauds
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www.thecaptainsmemos.com

The man who controlled four funds that invested more than $2 billion with convicted ponzi-schemer Bernie Madoff on behalf of hundreds of investors -- including several charitable organizations -- is gonna have to cough up some serious coin to repay victims who lost loads of cash.

New York Attorney General Eric Schneiderman announced this morning that his office has reached a settlement with J. Ezra Merkin to the tune of $410 million, $405 million of which will go towards repaying investors who lost money.

"I am proud to announce that we have recovered over $400 million for the investors and charities that were harmed by history's largest Ponzi scheme. This agreement is a victory for justice and accountability," Schneiderman says. "Many New Yorkers entrusted their investments to Mr. Merkin, who then steered the money to Madoff while receiving millions of dollars in management and incentive fees. By holding Mr. Merkin accountable, this settlement will help bring justice for the people and institutions that lost millions of dollars."


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SEEDCO, Nonprofit Bloomberg Admin Fave, Slapped By Feds With Fraud Lawsuit

Federal prosecutors filed a civil fraud case this week against SEEDCO, which ran two job placement centers under contract with the city, for taking million of dollars in government funding without providing much service.

The SEEDCO lawsuit filed in federal court in Manhattan names seven former managers with the non-profit in the scheme, and makes clear that the fraud was part of the fabric of an organization that had been favored by the Bloomberg organization.

"SEEDCO was supposed to provide valuable job placement assistance that was underwritten by the federal government to New Yorkers in need," Manhattan U.S. Attorney Preet Bharara said. "Instead, as alleged, the defendants went to great lengths to manufacture non-existent job-placements to protect their federal contracts and inflate their compensation."

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The LIRR Fraud Chronicles Continue...

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The Long Island Rail Road is notorious for several reasons: constant delays; late-night battle royales; and, apparently, a shit ton of fraudulent pension claims. 

You might remember this: last October, eleven people connected to the LIRR were arrested as part of a widespread "fraud scheme." While it included not only retired workers, but consultants and pension administrators too, the charges were clear: through a shared network of trust, ex-employees were cashing in on false disability problems and, like any good embezzler, spending the money on more appropriate activities, like golf or biking.

Now, seven months later, a federal prosecutor announced yesterday that another ten people are being brought to court on similar charges. And it seems as if there's many more arrests to come in a scheme that has left the federal government high, dry and out a $1 billion.
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Raj Rajaratnam, Hedge Fund Emperor, Slapped With 11-year Prison Sentence

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One of the more sinister figures in the Wall Street scandals, disgraced hedge fund manager Raj Rajaratnam, was sentenced in Manhattan federal court to 11 years in prison today. He was also fined $63 million.

Prosecutors described his trail of fraud and deception as the largest hedge fund insider trading scheme in history, and Rajaratnam got the longest sentence ever imposed for insider trading. (Maybe that's a story in itself: 11 years isn't a lot compared to the misconduct.)


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Thomas Wu, Bent Banker Indicted For Taking Bailout After Defrauding Investors

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In a case that should resonate with the protesters down in Zuccotti Park, three San Francisco bank officials have been charged with fraud after receiving nearly $300 million in federal bail out money during the Bush era financial crisis.

United Commercial Bank CEO Thomas Wu, along with vice presidents Ebrahim Shabudin and Thomas Yu, allegedly falsified financial records and lied to auditors just prior to getting a $298 million bailout in October, 2008 from Bush's Troubled Asset Relief Program, authorities said. Craig On, the bank's ex-CFO, was accused of misleading auditors and assisting in filing false financial statements. Their motive, court records show, was to hide the true amount of their losses.

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Bernie Madoff Employee Pleads Guilty In Massive Fraud; Five More Madoff Employees Face Likely Charges

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Another one of Bernie Madoff's employees has pleaded guilty, the feds are saying. Eric Lipkin pleaded to six conspiracy and fraud counts, and agreed to cooperate in the ongoing investigation of the Madoff scam. The Lipkin case demonstrates that Madoff wasn't the only person aware of the scam; that in fact, numerous members of the company were involved in constructing the backbone of the largest financial fraud in history.

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Urban Outfitters, Still Stealing Designs From Local Artists

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If Urban Outfitters executives aren't shaking in their boots yet, they should be. Because based on this, and this, they've been caught red-handed stealing from online fashion and jewelry designers. It will have been a year ago tomorrow that Foster Kamer called out the mega-hipster monolith for stealing from Brooklyn's own. Today, Chicago blogger/jewelry designer Stevie Koerner discovered the company had stolen her design for a line she called "United States of Love," calling it instead the "I Heart Destination" line. As Koerner herself commented, "Not cool, Urban Outfitters. Not cool."

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1 in 4 Parking Permits Are Phony, Says Report

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Transportation Alternatives
More than half of those thousands of precious parking permits in the city are either legal permits used illegally or simply illegitimate permits in the first place. And nearly one in four official parking permits are "illicitly photocopied, fraudulent or otherwise invalid." Those are the conclusions of a Transportation Alternatives study just released.

It's a "citywide epidemic of parking permit abuse," the group says.

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Ralph Esmerian, Celebrity Jeweler and Owner of Fred Leighton, Busted For Fraud

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Ralph Esmerian, a Manhattan jeweler who once loaned gems to Hollywood's rich and famous -- including Sarah Jessica Parker, Nicole Kidman, Catherine Zeta-Jones, Jennifer Lopez, and Melania Trump -- was arrested on fraud charges today at his girlfriend's Tudor City apartment.

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