Reposted from the This Week in Nonprofit Fraud Blog – March 3, 2014
Update: Spotlight on Disability Fraud
On January 13, we reported on a major Social Security Disability fraud case out of New York, involving more than 100 indictments of former New York City police and firefighters.
This week, twenty-eight more people were indicted in conjunction with the massive scheme. Included in the group are the sons of two of the alleged ringleaders. Prosecutors charged Sam Esposito and Douglas Hale with grand larceny and filing fraudulent documents, along with the additional 26 individuals. Esposito’s father is alleged to have coached participants in how to feign depression and post-traumatic stress disorder. Hale’s father is a consultant who is alleged to have led this scheme and has a history of involvement in similar frauds involving veterans.
All four of the accused ringleaders have pled not guilty to the charges. While more than 100 have been arrested on charges in this case, only two have pled guilty thus far. Anthony Maher, a retired police officer, agreed to repay $192,000 in exchange for probation. Raymond Herlihy received a similar deal, agreeing to repay $165,000.
All Greek to Him
February 27, 2014: A Connecticut securities broker has been sentenced to 25 years in prison for stealing more than $27 million from investors, including a Greek Orthodox Church. Gregory Loles targeted more than 50 victims over nearly a decade. His largest victim was a Greek family, from whom he stole $14 million. St. Barbara Greek Orthodox Church lost $2 million to the scheme. Loles’ broker registration had been cancelled, but he continued to represent himself as an active (and successful) broker. He used the stolen money to support an auto racing business and pay personal bills.
See more on this case at ABC News
- Trust but verify! Loles’ broker registration had been cancelled – a fact which would easily be uncovered during a thorough due diligence investigation.
- Signs of personal financial success are no proof of business success. Loles misrepresented his success to potential investors, but the supposed proofs of success were really just proceeds of fraud.
Raffa Forensic Practice Tips:
- Know who you are doing business with! A nonprofit organization has a fiduciary duty to its donors and constituents to safeguard its funds.
- Does your organization have a due diligence process that you follow before establishing new business relationships?
DON’T BE THE NEXT VICTIM OF FRAUD!
The Raffa Forensic Accounting Services Practice offers a wide variety of fraud prevention and detection services including Fraud Risk Assessments, Background and Workplace Investigations, Fraud and Internal Investigations, Transactional Due Diligence Investigations, Anti-Fraud Consulting and Training, and Computer Forensic Analysis.
For more information on the Raffa Forensic Accounting Services Practice please visit us at www.raffa.com/ProfessionalServices/Forensic/ and the Nonprofit Fraud Prevention Institute at www.raffa.com/Fraud.
You can also contact the following Raffa professionals with any questions or if your organization needs assistance in fraud prevention:
Lawrence J. Hoffman, CPA/CFF, CVA, CFE, Senior Partner: Lhoffman@raffa.com
Leslie C. Kirsch, CFE, Manager: Lkirsch@raffa.com