Business Crimes Hotline

CALIFORNIA

Secreting of Assets in Offshore Bank Accounts of UBS

On March 14, in a hearing before Judge Michael M. Anello of the United States District Court for the Southern District of California, Jeffrey Chatfield was sentenced for hiding assets in secret offshore bank accounts of Swiss bank UBS. In a related civil tax enforcement matter, Chatfield was ordered to pay $96,000 for failure to file the requisite Reports of Foreign Bank and Financial Reports (FBARs) on IRS Form TD F 90-22.1.

According to the government, Chatfield filed false 2000-2008 tax returns, wherein he did not report UBS and Credit Suisse accounts in Switzerland and the Bahamas where he either possessed signature authority over the account and/or held an interest within the same; additionally, Chatfield never reported income earned on the accounts, nor did he file any FBARs disclosing his offshore financial interests.

Chatfield's prosecution was directly linked to the February 2009 Deferred Prosecution Agreement (DPA) entered into by UBS, whereby the bank admitted to helping multiple U.S. taxpayers hide accounts from the IRS. As part of the terms of that agreement, UBS provided Chatfield's name and account information to the U.S. government, as part of a larger listing of certain of the bank's U.S. cross-border business customers.

DISTRICT OF COLUMBIA

Charges Against More than 100 Individuals Nationwide By Medicare Fraud Strike Force

On Feb. 17, the Department of Justice (DOJ) announced that the Medicare Fraud Strike Force, in what the DOJ characterized as the “largest-ever federal health care fraud takedown,” had charged 111 defendants for their alleged roles in Medicare fraud schemes relating to more than $225 million in false billing. The government also announced that it had expanded operations of the Strike Force to Dallas and Chicago. The Strike Force is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), itself a joint initiative between the DOJ and the Department of Health and Human Services (HHS).

According to the government, the individuals were charged for their respective participation in schemes to submit claims for medically unnecessary services to Medicare, in addition to claims submitted for services that were never provided. A number of those charged are alleged to have participated by supplying beneficiary information to health care providers who then, in turn, submitted false bills to Medicare for payment.

According to the DOJ, the Strike Force has charged more than 990 individuals since it began operations in March 2007. Collectively, those charges were tied to $2.3 billion in alleged false Medicare billing.

INDIANA

Three Financial Services Executives Indicted for
Alleged Roles in $200 Million Investor Fraud Scheme

On March 15, a federal grand jury returned an indictment against former financial services executives Timothy S. Durham, James F. Cochran and Rick D. Snow for their alleged involvement in a $200 million fraud scheme against approximately 5,000 investors of Fair Financial Company, the Ohio financial services business purchased by Durham and Cochran in 2002. Durham formerly served as Fair's chief executive officer and a member of its board of directors, while Cochran chaired the board and Snow served as the company's chief financial officer.

The indictment, filed in the United States District Court for the Southern District of Indiana and unsealed on March 16, includes 10 counts of wire fraud, along with a single count each of securities fraud and conspiracy to commit securities and wire fraud. In connection with what the government characterized as the “largest corporate fraud investigation in the history of the FBI in Indiana,” the indictment alleges that, from around February 2005 through November 2009, Durham, Cochran, and Snow schemed to defraud Fair's investors via false and misleading statements regarding the financial condition of the company and its use of investor funds. Among other allegations, the three are accused of using false representations and promises to obtain investors' funds to enrich themselves. The government alleged that they extended loans from Fair to other businesses they either controlled or owned, in addition to loans to associates and to themselves; in turn, these actions led to the financial deterioration of Fair.

In addition to a potential maximum fine of $250,000 per count of conviction, each of the three faces a 20-year maximum term of imprisonment for each wire fraud count and the securities fraud count, as well as a five-year maximum imprisonment for the conspiracy count.

CALIFORNIA

Secreting of Assets in Offshore Bank Accounts of UBS

On March 14, in a hearing before Judge Michael M. Anello of the United States District Court for the Southern District of California, Jeffrey Chatfield was sentenced for hiding assets in secret offshore bank accounts of Swiss bank UBS. In a related civil tax enforcement matter, Chatfield was ordered to pay $96,000 for failure to file the requisite Reports of Foreign Bank and Financial Reports (FBARs) on IRS Form TD F 90-22.1.

According to the government, Chatfield filed false 2000-2008 tax returns, wherein he did not report UBS and Credit Suisse accounts in Switzerland and the Bahamas where he either possessed signature authority over the account and/or held an interest within the same; additionally, Chatfield never reported income earned on the accounts, nor did he file any FBARs disclosing his offshore financial interests.

Chatfield's prosecution was directly linked to the February 2009 Deferred Prosecution Agreement (DPA) entered into by UBS, whereby the bank admitted to helping multiple U.S. taxpayers hide accounts from the IRS. As part of the terms of that agreement, UBS provided Chatfield's name and account information to the U.S. government, as part of a larger listing of certain of the bank's U.S. cross-border business customers.

DISTRICT OF COLUMBIA

Charges Against More than 100 Individuals Nationwide By Medicare Fraud Strike Force

On Feb. 17, the Department of Justice (DOJ) announced that the Medicare Fraud Strike Force, in what the DOJ characterized as the “largest-ever federal health care fraud takedown,” had charged 111 defendants for their alleged roles in Medicare fraud schemes relating to more than $225 million in false billing. The government also announced that it had expanded operations of the Strike Force to Dallas and Chicago. The Strike Force is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), itself a joint initiative between the DOJ and the Department of Health and Human Services (HHS).

According to the government, the individuals were charged for their respective participation in schemes to submit claims for medically unnecessary services to Medicare, in addition to claims submitted for services that were never provided. A number of those charged are alleged to have participated by supplying beneficiary information to health care providers who then, in turn, submitted false bills to Medicare for payment.

According to the DOJ, the Strike Force has charged more than 990 individuals since it began operations in March 2007. Collectively, those charges were tied to $2.3 billion in alleged false Medicare billing.

INDIANA

Three Financial Services Executives Indicted for
Alleged Roles in $200 Million Investor Fraud Scheme

On March 15, a federal grand jury returned an indictment against former financial services executives Timothy S. Durham, James F. Cochran and Rick D. Snow for their alleged involvement in a $200 million fraud scheme against approximately 5,000 investors of Fair Financial Company, the Ohio financial services business purchased by Durham and Cochran in 2002. Durham formerly served as Fair's chief executive officer and a member of its board of directors, while Cochran chaired the board and Snow served as the company's chief financial officer.

The indictment, filed in the United States District Court for the Southern District of Indiana and unsealed on March 16, includes 10 counts of wire fraud, along with a single count each of securities fraud and conspiracy to commit securities and wire fraud. In connection with what the government characterized as the “largest corporate fraud investigation in the history of the FBI in Indiana,” the indictment alleges that, from around February 2005 through November 2009, Durham, Cochran, and Snow schemed to defraud Fair's investors via false and misleading statements regarding the financial condition of the company and its use of investor funds. Among other allegations, the three are accused of using false representations and promises to obtain investors' funds to enrich themselves. The government alleged that they extended loans from Fair to other businesses they either controlled or owned, in addition to loans to associates and to themselves; in turn, these actions led to the financial deterioration of Fair.

In addition to a potential maximum fine of $250,000 per count of conviction, each of the three faces a 20-year maximum term of imprisonment for each wire fraud count and the securities fraud count, as well as a five-year maximum imprisonment for the conspiracy count.