Headlines that Matter for Companies and Executives in Regulated Industries
Arkansas Men Convicted in $18 Million Global Investment Fraud Conspiracy
A federal jury in the Western District of Arkansas convicted four men of conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering for their roles in an investment fraud scheme through an entity known as “The Brittingham Group,” created by one of the defendants.
According to the US Department of Justice (DOJ), court documents and evidence presented at trial revealed that between at least 2013 and 2021, the four defendants conspired to engage in an investment fraud scheme by falsely representing the nature of their investments and promising returns that they could not deliver. Victims were instructed to send money to bank accounts controlled by the co-conspirators, and the defendants then transferred the victims’ funds through a complex series of financial transactions to different bank accounts worldwide. Over the course of the scheme, victims were ultimately defrauded of more than $18 million.
The defendants face a maximum of 20 years in prison on each count. One co-conspirator was also convicted of money laundering, and he will face a maximum of 10 years in prison for that charge. A sentencing date has not yet been set.
Read the press release here.
Verizon Settles False Claims Act Allegations for $4 Million
Verizon Business Network Services LLC agreed to pay $4,091,317 to resolve allegations that it violated the False Claims Act (FCA) by failing to satisfy certain cybersecurity controls required for federal government contractors providing information technology services. The allegations arose from Verizon’s Managed Trusted Internet Protocol Service (MTIPS), which is designed to provide federal agencies with secure connections to the public internet and other external networks. The government alleged that Verizon’s MTIPS solution did not satisfy three necessary cybersecurity controls for Trusted Internet Connections (TIC) with respect to General Services Administration (GSA) contracts between 2017 and 2021.
The government has acknowledged, however, that Verizon took a number of significant steps deserving of credit for cooperating with the government. Verizon self-disclosed the issue to the government after learning of it, conducted an independent investigation and compliance review, and made several detailed supplemental written disclosures to the government thereafter.
Read the press release here.
Florida Man Pleads Guilty to $1.15 Million Tax Fraud Conspiracy
On September 6, 2023, a Florida man pleaded guilty to conspiring to defraud the United States, filing a false tax return, and aiding and assisting the preparation of a false tax return.
According to the DOJ, the defendant admitted that he prepared tax returns for his clients seeking refunds from the US Internal Revenue Service (IRS) by falsely claiming that banks and other financial institutions had withheld large amounts of taxes from the clients’ income. To perpetuate the fraud, the defendant and his co-conspirators filed false documents with the IRS, purporting to have been issued by the banks, to substantiate the amounts allegedly withheld on the tax returns. When the IRS sought to recoup the amounts improperly refunded, the defendant attempted to obstruct the IRS’s efforts by advising his clients to transfer funds out of their bank accounts and providing them with fraudulent correspondence to send to the IRS to falsely report that they self-prepared their returns. The defendant’s scheme defrauded the IRS of over $1.15 million.
The defendant will be sentenced on November 30, 2023. He faces a maximum penalty of five years in prison for conspiracy and three years in prison for each count of filing a false return. Additionally, he faces a period of supervised release upon release from prison, as well as restitution and monetary penalties.
Read the press release here.
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