Fraud News Update 11.20.14

Fraud News

Fraud News Update 11.20.14: This week’s Fraud Solutions news update features: Football Fraud (The Giants Turn It Over Again?), Military Madness (Prosecutors Are Fed Up), Jewish Organized Crime (Oy Vey!), Liar Liar (Pants on Fire) and Breaker Breaker (You Got Your Ears On?).

Read on for more topical information and our insights, observations and unique commentary on the weekly fraud news. Like our content? Feel free to share Fraud News Updates with your network or colleagues.

Football Fraud?

At 3-7, some might argue that it’s Eli Manning and the 2014 NY Giants football team’s performance that are the fraud. But this lawsuit alleges troubling off the field merchandise issues, claiming that the Giants and Manning passed off fake, “game worn,” autographed football gear, to a number of memorabilia dealers who ultimately got caught up in an FBI sting operation.

According to the Daily News, “The Justice Department dropped fraud charges against a New Jersey sports memorabilia dealer [Eric Inselberg] after defense attorneys claimed witnesses – including three employees of the New York Giants — lied to federal agents and the grand jury that indicted the dealer.”

Inselberg ultimately brought the suit and his legal team is basically alleging that, off the field, the Giants “turned the ball over” on this one. This is nothing new as the Giants have been doing this on the field ALL season!

The Giants have failed in their attempts to move the case into federal court, which is generally more favorable to defendants, while a federal court judge is allowing the case to move forward in state court. Given the Giant’s dismal season to date, this just might be the “perfect storm.”

Sports memorabilia is “big business” and when we follow the money we [often] find fraud. Does anyone think for a moment that this isn’t a more widespread sports [collectible] issue than just the one involving Eli Manning and the NY Giants?

Given the dollars involved, and the demand for collectible merchandise worn, or autographed, by pro athletes I’d be really surprised if it wasn’t. Follow the money!

Military Madness?

In this fraud news story, federal prosecutors and law enforcement officials are troubled by the number of military fraud cases which seem to be on the rise. We concur as we’ve covered quite a few cases involving military personnel, civilians and contractors, both domestically and abroad, over the last several months.

In the words of Australian-born motivational speaker Susan Powter, “stop the insanity!”

Reports are placing fraud, waste and abuse losses at somewhere between 30-60 billion dollars in Iraq and Afghanistan during the last ten years. America’s tax dollars at work! Or not, as the case may be.

The prosecutors might be on to something here as we seem to be seeing military fraud cases reported regularly. While the amount of fraud may be proportionate to the massive size of the U.S. military, and reflect a percentage of crimes committed in this size population, the fraud cases suggest a significant breakdown in culture and internal controls, organizational size aside.

Jewish Organized Crime

Oy Vey! Organized crime comes in all sizes, types, shapes and in this fraud news story denominations! What’s even more interesting about this case is that it combines two frauds that are distinctly different but hot in their own rights: SNAP fraud and mortgage fraud.

The gig: Federal authorities are alleging that a NY family collected SNAP benefits while simultaneously representing how wealthy the family was to financial institutions in order to get millions of dollars in mortgage loans they otherwise would not have been entitled to.

I guess the family that prays together… stays together. Until proven guilty and sentencing that is!

We’ve covered both topics along with family fraud connectivity in previous fraud news updates so this case is a real triple-header!

Liar Liar Pants on Fire

This fraud news story reminded me of that thing we used to say as kids when we caught someone fibbing. However, in the fraud profession it’s still pretty relevant as deceit is a central element in all cases.

Every now and then a case comes along where the published facts make you think that there must be more to the story but you don’t always know what that is. Because published reports usually don’t include all the facts, this fraud news story is one of those cases for me.

The initial story was that a person (Franklin Ansu) was convicted for lying on a federal job application form for a job with the Air Force. Okay, so I’m sitting here thinking “so what?” It happens every day…don’t we have better things to be doing with federal investigative resources then this? Organized crime cases with large-scale dollar losses and major economic impact on the public comes to mind.

There MUST be more to this story.

So, I looked at quite a few of the press releases and started to put together some of the other pieces of the puzzle. According to the USDOJ, Ansu was charged in a 3 count indictment. Count I involved submitting a false statement to the Air Force while Count II involved submitting false statements to the Office of Personnel Management (OPM) Investigations Services.

Translation on Count II appears to involve “lying to a federal agent.”

On Count I and II, there were apparently some large gaps in time where Ansu failed to accurately represent his past to the government and what he was actually doing during those periods. Okay, we’re still at the “so what” stage. Again, it happens every day at employer’s around the globe and that usually doesn’t involved people getting prosecuted federally for it!

Then according to the government, it appears that Count III (aiding and abetting the misuse of a Social Security Number) is where it got interesting. Digging a little deeper, various news sources reported that Ansu had given his SSN to another individual for the purpose of getting a job at several different employers.

The other individual was then depositing his check into Ansu’s account and Ansu was then writing checks to be cashed at another bank. Reading between the lines, perhaps, after taking a cut for the use of the SSN?

Money laundering? Identity theft? Now, we’re getting somewhere…but I’m still challenged by the U.S. Attorneys Office prosecution of this case when businesses are referring large-scale, major league losses (millions of dollars) to federal prosecutors and the cases aren’t prosecuted because the loss amounts don’t meet the government’s prosecution threshold.

I.e. you didn’t lose enough! And they usually don’t prosecute individual ID Theft cases because resources are tied up working large, organized ring cases.

While I’m not saying that what Mr. Ansu did was right, given the above, this appears to be one of those “it’s the principle of the thing, letter of the law” type cases. Unless of course, there’s much, much more to the story than what’s being published.

Breaker Breaker… You Got Your Ears On?

That’s a big 10-4 good buddy! C’mon back. According to recent legal filings, in this fraud news story two trucking companies (National Retail Transportation and Keystone Freight), who previously opted out of the Flying J class action lawsuit settlement against the company, are alleging that Cleveland Browns owner Jimmy Haslam is the mastermind behind the scheme to defraud trucking customers out of rebates and discounts.

Haslam has previously denied any involvement so it will be interesting to not only see how this plays out but what evidence the two companies bring forward to prove their contention.

Flying J already settled with the feds for their role in the scheme and the legal proceedings are now “rolling on down the road” with this suit. I’m out!

Fraud News – The Bottom Line

Fraud – empowering people to break the law. It’s a way of life for some and every fraud has a story. At Fraud Solutions, fraud is our world and we’re passionate about prevention. Being proactive is key, so, follow us each week as we cover the fraud beat with added insights, information and unique commentary on stories making the fraud news.

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