White-collar crimes are typically non-violent offenses committed for financial gain, often involving deceit, fraud, or a breach of trust. In Illinois, these crimes are prosecuted aggressively, and the consequences of a conviction can be devastating. If you are accused of a white-collar crime, understanding the relevant Illinois statutes and the potential penalties is crucial to protecting your rights and your future.
Bilking government agencies of publicly disbursed entitlements is now a national pastime, and when COVID struck, it only got worse. As Uncle Sam began rolling out one relief program after another, several bad actors moved into place to see how much of that money they could get without doing anything in return. These lawsuits are still being filed as the forensic number-crunchers at the IRS track down the information provided by individual applicants. In this case, briefly reviewing the records resulted in the numbers not adding up, and now one individual is facing charges for $83 million in losses.
The laboratory’s co-owner has been charged with 10 counts of wire fraud and one count of stealing government funds.
How Did the Fraud Work?
A Chicago woman will spend the next five years in federal prison after authorities convicted her of using the identities of dead people to commit fraud against the federal government. According to the authorities, the woman used the identities to apply for benefits, some of which were disbursed during the coronavirus as pandemic aid packages.
The woman acquired the identities of murder victims to pull off the scam. Authorities say it netted over $45,000 in profit. The information was used to file tax returns and pandemic-related entitlements. The woman would pose as relatives of the murder victims to collect payments on their behalf.
Prosecutors characterized the theft as “morally repugnant.” The woman had prior convictions for various forms of fraud. The court, in passing sentence, characterized her as a career criminal who had multiple opportunities to turn away from a life of crime but chose fraud anyway.
Federal authorities have just unsealed an indictment against seven defendants accused of identity theft and draining the bank accounts of their victims. According to the indictment, they stole over $1 million in funds from unsuspecting victims draining their accounts of tens of thousands of dollars at a time.
The scheme allegedly involved the purchase of stolen identifying information that included information like bank accounts, passwords, and more. That information was then passed to ID forgers who would create fake IDs for stolen identities.
In some cases, the alleged fraudsters were accused of tricking the victim’s cellphone provider into swapping in a new sim card under the control of the fraudsters. In other cases, they paid employees of cellphone companies to do that. Once they had the victim’s cellphone information, it was easy to gain access to their personal bank accounts.
A staffer has been accused of stealing nearly $2 million in payroll from other employees at the Art Institute, according to a federal indictment. The staffer is accused of diverting funds meant for other employees into his own bank account. The fraud went on for nearly 10 years before it was discovered when another staffer noted unusual account activity.
According to the Art Institute, they instituted an audit process to review their financials in 2019. That was when the perpetrator was caught. The employee was immediately terminated, and the matter was referred to law enforcement. The employee is now facing charges of wire fraud and bank fraud.
The Heypenny Scheme
Two FTX associates have pleaded guilty to charges including wire fraud, commodities fraud, and securities fraud amid the crypto collapse that temporarily destabilized the U.S. economy. Amid the allegations leveled at the company are accusations that they kept no discernable ledger for transactions, did most of their bookkeeping with QuickBooks, and cut themselves loans with their own names as both borrower and recipient.
The largest player, Sam Bankman-Fried, was still in the Bahamas as he was supposed to be testifying before Congress. He was flown back to the U.S. and is currently in FBI custody. A deal was reached with the two associates in exchange for testimony against Bankman-Fried. Bankman-Fried appears poised to be the fall guy for whom the FBI has been waiting. Collectively, the two associates faced 110 years in federal prison. However, their cooperation with law enforcement could help them secure much better deals moving forward.
Ultimately, the federal prosecutors want Sam Bankman-Fried. Bankman-Fried recently disbursed $100 million in FTX assets to Bahamian investors even as the crypto-exchange assets were frozen per the bankruptcy court. This amounts to bankruptcy fraud and is yet another charge that will be added to Bankman-Fried’s growing list of charges.
A benefits specialist for the CTA is facing federal fraud and embezzlement charges related to the withdrawal of $350,000 worth of pension benefits related to deceased employees. She has since been charged with five counts of wire fraud. Each count carries a maximum sentence of 20 years in federal prison, but usually, the sentence is tied to the amount of money stolen and not the number of times the fraud was committed.
According to the prosecution, the defendant made requests to disburse death benefits and pension benefits to purported beneficiaries of CTA pension plans. The funds, however, were later diverted into bank accounts controlled by the defendant. The money was then used for personal expenditures.
Authorities say that the defendant made 43 death benefit or pension refund requests totaling an estimated $350,000. The defendant worked as a bus driver and later as a retirement plan specialist.
A man has been sentenced to 90 months in federal prison after eight years as a fugitive in Utah. The man was charged in connection with the theft of over $2.2 million from his employer when he worked as a bookkeeper. The defendant was responsible for paying invoices to vendors, but fabricated duplicate invoices for work already paid and diverted the money into his own account. In 2012, he was caught and charged with wire fraud, money laundering, and tax evasion, but he fled the police while on house arrest. He was caught eight years later and will now serve eight years in federal prison.
The Crime of Embezzlement
What is embezzlement specifically? Well, you can steal money from anyone, but when you embezzle, you steal from someone with whom you have a duty of service, it is considered embezzlement. Companies and governments can be the victim of embezzlement. Employees and actors who operate on behalf of governments can be the perpetrators of embezzlement. Nonetheless, there is no “crime of embezzlement” under federal law. Instead, you have wire fraud.
She was the “first African-American woman” to hold the title of Director of Special Investigations for the State of Illinois. She was the only woman to ever hold the position. She was the only African-American to ever hold the position. She was the only person ever to have held the position, largely because the position did not exist. It was invented by the only person ever to have held it. But the spectacle of her having received awards and commendation for the position was videotaped for all to see. The defendant had hired the participants to act in these ceremonies including individuals who posed as judges. According to the participants, they were never paid. Therein lies the fraud. The fraudster told the actors that judges were not available for her swearing-in ceremony which is why she required paid actors. The theft of services adds up to over $21,000.
In addition, the defendant coaxed others into advancing her money under false pretenses; money she had no intention of ever paying back. She was also charged with writing fake checks to landlords, letting the checks bounce, and then forcing the landlords to evict her when she refused to pay. She was able to sustain housing like this for an extended period of time.
She has since pleaded guilty to five counts of theft by deception and one count of impersonating a state employee. The prosecution has agreed to recommend a five-year sentence, but the defendant’s actual sentence will be up to the court.
Most folks do not understand how our economic system really works. What is a bank? What is a security? What is a corporation? Folks who have general ideas about what the concepts mean tend to be misinformed. As an example, most folks believe that banks use deposits to issue loans. They do not. Banks can fabricate loans ex-nihilo so long as they pay interest on the loans they create. Once the loan has been issued, the bank issues a deposit to the borrower and creates a liability in its own ledger. If all goes well, the bank makes money because the interest paid by the borrower is greater than that charged by the Federal Reserve.
So, what if I created a bank just to issue worthless loans to my pals? Well, then you end up in prison. The system is actually quite easy to abuse, but the thing you have to understand is that they will catch up with you eventually. In this case, the bank was closed after accruing $66 million in non-performing loans issued to bank insiders. The government, of course, believes that they used the bank apparatus to fabricate money they had no intention of ever repaying.
The charges
Chicago Criminal Lawyer Blog