Month: February 2023

Source: United States Department of Justice News

AUSTIN, Texas – A dual Nigerian and Canadian citizen was sentenced today in federal court in Austin to 87 months imprisonment, ordered to pay more than $1.67 million in restitution, and forfeited a $2 million money judgment for his role in a conspiracy to commit fraud.

According to court documents, Ejiro Efevwerha aka Festus Akpobonme, 47, facilitated laundering the proceeds of fraud by connecting launderers in the U.S. to fraudsters located overseas.  The conspiracy used a network of individuals in the U.S. to receive victim money in U.S. bank accounts, often opened under fraudulent names, and transferred those funds to co-conspirators inside and outside of the U.S.

The types of fraud used against the victims over more than three years included grandchildren-in-jail scams, romance scams, inheritance scams, lottery scams and investment scams, among others.  Investigators identified a total victim loss of more than $3.9 million in fraud proceeds from hundreds of victims laundered by the conspiracy.  Efevwerha was extradited from Canada to the Western District of Texas in July 2021.  He pleaded guilty on Oct. 19, 2022.

“This case is another example of our dedication to bring fraudsters to justice, whether they are inside the United States or attempting to hide overseas,” said U.S. Attorney Jaime Esparza of the Western District of Texas.  “The scams perpetrated and facilitated by this conspiracy prey on our most vulnerable citizens.  I commend the work of our law enforcement partners who help hold accountable both those who commit fraud and those that help fraudsters hide their profits.”

“This judgment shows HSI’s success in protecting our nation’s seniors and communities from fraud by malicious actors overseas,” said Acting Special Agent in Charge Craig Larrabee of the Homeland Security Investigations San Antonio Division.  “Fraudulent schemes of any kind are disgraceful, especially when they target vulnerable populations. HSI will continue to work with our international partners and other law enforcement agencies to put an end to these transnational criminal organizations.”

“Efevwerha provided a pivotal role in facilitating the movement of victim funds from the U.S. to other countries. The scheme targeted innocent people, many elderly, for millions of dollars. These are kind hearted people, but now they will never forget how their kindness was taken advantage of,” said Special Agent in Charge Ramsey E. Covington of IRS Criminal Investigation’s (IRS-CI) sHouston Field Office.  “We can’t heal the damage he and the other criminals did to the victims and their families, but we helped bring justice, and hopefully some peace of mind. This is what our special agents and the prosecutors they partner with do, and I hope it sends a message to anyone thinking about committing fraud in the future.”

Co-defendant Ochuko Sylvester Eruotor pleaded guilty after being extradited to the Western District of Texas from Germany and was sentenced in July 2018 to 168 months in federal prison for his role in the multi-million-dollar fraud and money laundering schemes. The other seven co-defendants sentenced received a combined 446 months in prison and were ordered to pay restitution.

Law enforcement is continuing its search for a co-conspirator who remains a fugitive of this case.  If you know the whereabouts of Ejovwoke Mark Egorho, please contact the HSI Tip Line at 866-347-2423.

HSI and IRS-CI investigated the case with the help of the United States Postal Inspection Service, Toronto Police Service and Justice Department’s Office of International Affairs.

Assistant U.S. Attorney Michael Galdo prosecuted the case.

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Source: United States Department of Justice News

NEWARK, N.J. – A Russian national was charged in an indictment unsealed today in connection with a series of computer system intrusions that occurred in 2009 and 2010, U.S. Attorney Philip R. Sellinger announced.

Vitaly Kovalev, aka “Bentley,” “Bergen,” and “Alex Konor,” is charged with conspiracy to commit bank fraud and eight counts of bank fraud.

According to the indictment:

From as early as September 2010, Kovalev participated in a conspiracy to obtain unauthorized access to bank accounts held at United States-based financial institutions and transfer funds from those accounts to accounts controlled by Kovalev and his conspirators. Kovalev and his conspirators gained unauthorized access to accounts and made unauthorized transfers of funds into other bank accounts established by, and at the direction of, Kovalev, solely for the purpose of receiving the stolen funds. At the direction of Kovalev, the funds would then be withdrawn or transferred out of these accounts. Kovalev and his conspirators were able to transfer without authorization nearly $1 million from the victim bank accounts, at least $720,000 of which was transferred overseas.

The substantive and conspiracy charges of bank fraud are punishable by a maximum sentence of 30 years in prison and a maximum fine of $1 million.

U.S. Attorney Sellinger credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Jose Riera, with the investigation.

The government is represented by Assistant U.S. Attorney Anthony P. Torntore, Chief of the Cybercrime Unit in Newark.

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

Source: United States Department of Justice News

Damian Williams, the United States Attorney for the Southern District of New York, announced that ADAM BELARDINO, the former chief executive officer of the Maddox Group, was sentenced in White Plains federal court to 42 months in prison for fraud in connection with separate schemes to defraud clients and to fail to pay over contributions made by Maddox Group employees to the Maddox Group 401(k) plan.  BELARDINO had previously pled guilty to two counts of wire fraud and one count of making a false statement to a government agency.  He was sentenced today by U.S. District Judge Kenneth M. Karas.

According to the allegations in the Superseding Information to which BELARDINO pled guilty and other court documents:

Embezzlement from Victim-1

BELARDINO had managed Victim-1’s investments at another firm before he founded Maddox in July 2019.  In August 2019, BELARDINO convinced Victim-1 to liquidate some of her portfolio and to transfer the liquidated funds to Maddox for investment.  Victim-1 then transferred more than $313,000 to Maddox in eight separate transactions between August 2019 and October 2020.  Instead of investing Victim-1’s money as he had promised, BELARDINO used her money to pay the operating expenses of Maddox, including payroll and office rent; to pay down prior debt; to pay credit card charges, which consisted primarily of personal items; and to pay for personal travel. 

In September 2021, Victim-1 directed BELARDINO to transfer her portfolio at Maddox to her brokerage account at another firm.  From September 2021 to February 2022, BELARDINO sent Victim-1 and members of her family emails and texts in which he said he was liquidating the portfolio and would return the funds shortly.  BELARDINO also provided Victim-1’s family with documents suggesting that a wire transfer of the funds to Victim-1’s bank account was imminent or pending.  BELARDINO also deposited checks drawn on a checking account held by Maddox (“the Maddox Account”) into Victim-1’s bank account for what he claimed was the full value of her portfolio. 

Victim-1 never received any funds by wire and the checks BELARDINO deposited into her bank account were returned because the Maddox Account did not have sufficient funds to cover the checks.  BELARDINO sent members of Victim-1’s family emails and texts in which he said in substance and in part that he was working with bank officials to resolve the problem and that his family would repay Victim-1 if he was unable to do so.  BELARDINO also sent members of Victim-1’s family a document that falsely stated that the Maddox Account had sufficient funds to repay Victim-1.

Scheme to Obtain Fraudulent Life Insurance Commissions – Victim-2

In or about May 2019, BELARDINO served as the agent for Insurance Company-1 in connection with an application by Victim-2 for a life insurance policy with a face amount of $1 million, which amount was eventually increased to $18 million.  As an agent, BELARDINO received commissions from Insurance Company-1 once Victim-2’s application was approved. 

In or about April 2020, BELARDINO applied for a life insurance policy with a face amount of $3 million with Insurance Company-2 on behalf of Victim-2 without Victim-2’s knowledge or authorization.  BELARDINO made materially false statements regarding Victim-2’s income, net worth, and health in the application.  In or about August 2020, BELARDINO caused Insurance Company-2 to increase the face amount of the policy to $6 million without Victim-2’s knowledge or authorization.  BELARDINO paid and attempted to pay the policy premiums of $194,280 with Victim-2’s funds without her knowledge or authorization.  BELARDINO received approximately $84,997 in commissions from Insurance Company-2.

In or about January 2021, BELARDINO applied for a life insurance policy with a face amount of $5 million with Insurance Company-3 on behalf of Victim-2 without Victim-2’s knowledge or authorization.  BELARDINO made materially false statements regarding Victim-2’s income, net worth, and health in the application.  BELARDINO caused Insurance Company-3 to increase the face amount of the policy to $6.5 million in March 2021 and to $12.1 million in May 2021, all without Victim-2’s knowledge or authorization.  BELARDINO paid the policy premiums in a total amount of $105,000 with Victim-2’s funds without her knowledge or authorization.  BELARDINO received approximately $94,500 in commissions from Insurance Company-3.

False Statement in Connection with Fraudulent Withholding of Employee 401(k) Contributions

BELARDINO adopted a retirement savings plan pursuant to Title 26, United States Code, Section 401(k) (the “Plan”) on behalf of the Maddox Group that became effective on January 1, 2020.  He served as the trustee of the Plan.  Under the Plan, an employee of Maddox could elect to have money withheld from his paycheck each pay period in an amount he chose within specified legal limits.  BELARDINO was required to deposit these withheld funds into the Plan for investment at the employee’s direction in various options offered by the Plan.  Taxes on the money deposited to the Plan as well as gains from investment of those funds would be deferred.  BELARDINO was required to deposit funds withheld for the Plan into the Plan’s trust account for investment within seven business days.

From on or about November 1, 2020, through on or about August 13, 2021, BELARDINO withheld $8,004.67 from the paychecks of the four Maddox employees other than himself who chose to participate in the Plan.  BELARDINO failed to deposit these withheld funds into the Plan’s trust account and instead converted those funds to his and Maddox’s use.

On or about October 14, 2021, BELARDINO authorized the Plan administrator to file with the Internal Revenue Service a Form 5500-SF for the 2020 calendar year in which he falsely answered in the negative when asked “During [2020]:  Was there a failure to transmit to the plan any participant contributions . . .?”

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In addition to his prison sentence, BELARDINO, 36, of New York, New York, was sentenced to three years of supervised release.  He was also ordered to pay restitution in the amount of $501,499.67 and to forfeit $501,499.67.   

Mr. Williams praised the outstanding investigative work of the Special Agents of the Federal Bureau of Investigation and Criminal Investigators of the Employee Benefits Security Administration of the United States Department of Labor.

The prosecution of this case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorney James McMahon is in charge of the prosecution.

Source: United States Department of Justice News

NEWARK, N.J. – A Passaic County, New Jersey, attorney was arrested today for fraudulent acts he committed in connection with COVID-19 relief funds, U.S. Attorney Philip R. Sellinger announced.

Morton Chirnomas, 60, of Clifton, New Jersey, is charged by complaint with one count of wire fraud. He is scheduled to appear before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.

According to the complaint:

From May 2020 to September 2020 Chirnomas fraudulently obtained a $150,000 loan through the COVID-19 Economic Injury Disaster Loans program. He also falsely obtained $200,000 in unemployment insurance benefits using the names of other people.

The charge of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000, twice the gross profits, or twice the gross loss suffered by the victims of the offense, whichever is greatest.

U.S. Attorney Sellinger credited postal inspectors with the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Christopher A. Nielsen, Philadelphia Division; special agents of the U.S. Department of Labor Office of Inspector General, New York Region, under the direction of Special Agent in Charge Jonathan Mellone; and special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Cybercrime Unit in Newark.

The charges and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.