Archive for the tag 'fraud'

Rabbi Yaakov Weingarten

Yaakov Weingarten (Source: vosizneias.com)

A Midwood-based charitable fundraising operation purporting to benefit Israel-related causes was shut down last week, after Attorney general Eric Schneiderman unveiled criminal charges against its operators for allegedly funneling millions of dollars into his own pockets.

The ring, operated out of a call center at 1493 Coney Island Avenue, was lead by Yaakov Weingarten, who, along with two associates, fraudulently raised millions of dollars through 19 separate charities, claiming the funds would go to program in Israel or religious activities, prosecutors say. In many cases, however, the charities never existed, and the funds went to Weingarten and his family’s benefit.

The AG’s press release lays out how the ring functioned, and on what the alleged fraudster spent the money:

As detailed in the complaint, filed in Kings County Supreme Court, more than $2 million in cash was withdrawn from charity bank accounts controlled by Weingarten between 2007 and 2013. At least an additional $350,000 in checks were made payable to cash and more than $280,000 in additional charitable funds was used to pay for mortgages on two homes, including the Brooklyn house purchased in 2009 by Weingarten’s wife, Rivka, which was remodeled with additional tens of thousands of dollars meant for charity. Charitable funds were used to pay for dentist visits, utility bills, for personal vehicles, video rentals and a trip to the Borgata Casino in Atlantic City in July 2011.

… The lawsuit alleges that Weingarten, 52, and an associate, Simon Weiss, 28, used a variety of unusual banking practices to conceal the fraud and transfer funds from account to account and for their own benefit. The defendants’ banking practices were so convoluted that they bounced over 2,100 checks, resulting in over $65,000 in donations being wasted on bank overdraft fees. The complaint further alleges that much of the money raised was funneled through accounts that exist in the names of several religious corporations that Weingarten created for this purpose, rather than to hold worship services or provide religious instruction.

The lawsuit also names Weingarten’s wife, Rivka, 52, who is alleged to have benefited from the charitable fraud. Another defendant, David Yifat, 66, is alleged to have been the office manager who supervised Weingarten’s telemarketing and mail solicitation operation.

Source: David Reber’s Hammer Photography/Flickr

After an international manhunt that lasted nine months and included several nations, fake IDs, an island-hopping private plane piloted by the suspect, and an expanded indictment that saw the suspect’s largess grow from $4.5 million to $8 million, Arthur Bogoraz, a confessed fraudster, now faces up to seven years in prison.

Attorney General Eric Schneiderman announced yesterday that his office won a felony conviction against Bogoraz after the scammer pleaded guilty to ripping off no-fault insurance companies. The elaborate scheme included Bogoraz, who is not a doctor, setting up numerous fake radiology practices to bill through, and even a collections agency through which he laundered the $8 million.

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Source: Tracy O. via Flickr

The forger of phony papers that allowed a Brighton Beach-based ring of individuals to ripoff more than $57 million from a reparations fund for Holocaust victims was sentenced to serve nearly two years in prison last week.

The New York Post reports:

A weeping Dora Grande bowed her head in shame and let out a whimper after Manhattan federal Judge Thomas Griesa said she deserved a “meaningful penalty” for forging about 300 documents at $100 a pop while working as a translator and notary public in Brooklyn.

In addition to the 21 months prison time — just three months shy of the maximum under her plea deal — Griesa ordered Grande to forfeit the $30,000 she pocketed through the scam, and also pay $75,000 in restitution.

Defense lawyer Glenn Morak argued that Grande, 65, had no idea that her fake birth certificates would be used in a massive scheme to rip off the Manhattan-based Conference on Jewish Material Claims Against Germany.

But prosecutor Christopher Frey said Grande “basically turned a blind eye” to her clients’ plans, noting that “the fraud permeated the Brighton Beach community” where she lives.

Authorities busted as many as 19 individuals for their role in the scheme in November 2010. Prosecutors claimed that Brighton Beach residents worked with insiders responsible for verifying applications to the Conference on Jewish Material Claims, doling out kickbacks to approve fraudulent paperwork submitted by Russian immigrants. The scheme went back as far as 1994, authorities alleged.

The Conference is responsible for disbursing funds on behalf of the German government to survivors. One of the ringleaders of the scheme, Semen Domnitser, allegedly signed off on more than 4,000 applications in question. Prosecutors asked recipients to pay back their ill-gotten gains, although did not seek action against them.

The first case against the ring concluded in August 2011, when Polina Anoshina, a 63-year-old Brighton Beach resident accused of plundering the Conference on Jewish Material Claims for $9,000 and roping 30 friends and neighbors into the scam, was sentenced to one year in prison.

Others have since been sentenced as well.

Rasputin, the windowless, mausoleum-like restaurant and nightclub at 2670 Coney Island Avenue, has been shuttered and padlocked.

There is a notice taped near the entrance that shows it was closed by city marshals and turned over to the landlord.

It’s unclear if this is related to the criminal case against Michael Levitis, the owner of Rasputin Restaurant. Levitis is alleged to be the ringleader of a fraud scheme, in which a company he controlled – Mission Settlement Agency – preyed on debt-laden victims. The company claimed to reduce a client’s debt to creditors and make payments on their behalf. In reality, prosecutors say, the company collected fees and did little or nothing to help clients, and Levitis used the fees to pay operating expenses at Rasputin, lease two luxury Mercedes and pay off his mother’s credit card bills.

Prosecutors have filed to seize approximately 40 bank accounts connected to Levitis, as well as Rasputin Restaurant and two properties he owns in Manhattan Beach. The assets would be used to pay back his victims if Levitis is found guilty.

However, the property on which Rasputin sits is not owned by Levitis. Notices like the one above are often left when a lessee fails to pay his rent and the landlord wins an eviction in court. It’s unclear if that’s the case, or if the landlord was somehow able to wrangle back control of the property amid Levitis’ problems.

The landlord was not available to answer questions as we went to press, but we will update if we hear from them.

Meanwhile, a post on Michael Levitis’ Facebook page that had announced the closure late last week or over the weekend has since disappeared. In reply to comments left on the post, Levitis had credited the closure to “higher powers,” but had not elaborated beyond that point when we stumbled across it.

Three Sheepshead Bay child care operators were sentenced in Manhattan Federal Court yesterday in a bribery scheme where they attempted to pay off government officials $100,000 to perpetrate a fraud against the city’s Day Care Subsidy Program.

We first reported on the arrest of a group of childcare operators and city officials back in August of 2010. The child care operators had netted $18 million for 38 day care centers since 2007 by bribing seven city officials to help them abuse the Day Care Subsidy Program, a system that helps low-income families receive day care for their children.

A press release detailed how the scam worked:

[Liudmila] UMAROV, [Ella] SCHVARZMAN, and [Rimma] VOLOVNICK are each former child day care center owners in Brooklyn, New York, who collectively paid more than $100,000 in bribes to City officials to help the three defendants steal from the Day Care Subsidy Program. Each of the defendants admitted to paying bribes to officials in exchange for, among other things, providing identification information of children that were eligible for the Day Care Subsidy Program but did not attend day care. This identification information was used by the defendants to seek reimbursement from the City for providing day care services to those children, even though those children did not in fact attend day care. Each of the defendants also admitted to paying bribes to officials in return for those officials overlooking health code violations at their day care centers.

Umarov, Schvarzman, and Volonick each pleaded guilty to bribing government officials. Umarov and Schvarzman were sentenced to three years probation and Volonick was sentenced to two years. Umarov, 66, was ordered to pay $100,600 in fines, Schvarzman, 46, had to pay $25,400 in fines and Volonick, 57, was ordered to pay $25,500 in fines.

Source: aresauburn via flickr

While it seems that every major American city has its own brand of political corruption, New York’s scandal plagued politicians are marked by the high cost their misdeeds inflict on taxpayers. The New York Post is reporting that the accumulated cost of all the illegal and unethical actions of dirty politicians have cost taxpayers at least $49,710,630.64 since 2006.

The rogues gallery is led by former state Comptroller Alan Hevesi, who cost the state $36 million in pension-fund management fees after taking nearly $1 million in illegal gifts; ex-state Sen. Pedro Espada, who funneled $7 million to himself and family members through a Medicare-funded nonprofit; and Assemblyman Vito Lopez, who cost taxpayers $103,000 in secret settlements after staffers accused him of sexual harassment.

The huge sum of money does not include the $440,000 in bribes that have recently put State Senator John Sampson in hot water. It also doesn’t include money promised by politicians that was never distributed, including $80,000 in discretionary funds given to a dummy company by Councilman Dan Halloran in exchange for a bribe.

The list of crooked pols also includes former State Senator Carl Kruger, who was bribed into funneling $900,000 to certain nonprofits. Kruger is currently serving a prison sentence on federal corruption charges.

Alert Ambulette, an ambulette service located at 2702 Stillwell Avenue, is in big trouble with state auditors.

The company was audited by the Office of the Medicaid Inspector General (OMIG) and the New York City Human Resources Administration (NYCHRA) and, according to a press release, was found to be violating a slew regulations that will force them to pay back taxpayers over $4 million.

According to the OMIG and NYCHA, Alert Ambulette had received over $5 million for 89,847 services rendered to 6,993 Medicaid recipients. The audit reviewed a random sampling of 100 services and 91 Medicaid enrollees and found that the service had committed a number of violations:

The auditors discovered practices ranging from improperly licensed and/or registered vehicles, inappropriate procedure codes used for billing, and inaccurate or missing information on claims. In more than 50 percent of the claims examined, license plate and/or driver’s license number information was missing. In more than one-third of the claims, drivers were unlicensed by the New York City Taxi & Livery Commission (TLC), a Medicaid as well as New York City requirement for ambulette drivers.

 As a result of the OMIG and NYCHA findings, Alert Ambulette will have to cough up $4,028,190. HRA Commissioner Robert Doar warned medical services that they are keeping a close eye on fraudulent activity.
HRA staff work with the OMIG to audit providers who violate Medicaid program rules, and audits like this send a message to the Medicaid community that someone is watching,” Doar said in the release. “We value our partnership with New York State and are proud to use our staff’s unique knowledge of New York City neighborhoods and skills to help weed out fraud, waste, and abuse in New York City’s Medicaid program.”

Levitis (Source: Facebook)

Rasputin owner and Russian Dolls co-star Michael Levitis pleaded not guilty to charges of wire fraud, mail fraud and conspiracy and was released on $1 million bail after his indictment yesterday. But, more interestingly, Levitis claims he’s a victim of government neglect who had tried to tip off authorities to malfeasance by “rogue employees.” He said he was ignored.

This nugget from the New York Times has all you need to know:

Mr. Levitis, who was charged with conspiracy, mail fraud and wire fraud, pleaded not guilty and was released on $1 million bond. His lawyer, Jeffrey Lichtman, said by phone that his client had known about the investigation for several months, had cooperated fully and had tried to provide information to the government about certain employees he believed were responsible for wrongdoing. Mr. Lichtman said his client was ignored.

“The frustrating part about this is we repeatedly attempted to present evidence to the government that there were rogue employees that were working at Mission and were engaging in the sort of fraud that we now see in the indictment,” Mr. Lichtman said.

“We’re prepared to fight it to the end,” he added.

The Times also notes that the investigation into Mission Settlement Agency and Michael Levitis was aided by undercover agents and a cooperating witness who posed as a customer.

As we first reported yesterday, Levitis is alleged to be the ringleader of a fraud scheme, in which a company he controlled – Mission Settlement Agency – preyed on debt-laden victims. The company claimed to reduce a client’s debt to creditors and make payments on their behalf. In reality, prosecutors say, the company collected fees and did little or nothing to help clients, and Levitis used the fees to pay operating expenses at Rasputin Restauraunt, lease two luxury Mercedes and pay off his mother’s credit card bills.

Prosecutors have filed to seize approximately 40 bank accounts connected to Levitis, as well as Rasputin Restaurant and two properties he owns in Manhattan Beach. The assets would be used to pay back his victims if Levitis is found guilty.

Levitis and three other co-conspirators face 20 years in prison for each charge. Two additional employees were charged, pleaded guilty, and are aiding the investigation.

His attorney, Jeffrey Lichtman, has represented high-profile clients including John Gotti, Jr., and rappers The Game and Fat Joe.

Levitis’ home at 1001 Oriental Boulevard. Prosecutors are moving to seize it to repay his alleged victims. (Source: Google Maps)

Prosecutors have filed papers to restrain approximately 40 bank accounts operated by Michael Levitis or those connected to him, and have moved to seize two Manhattan Beach properties in order to preserve funds for victims of his alleged fraud, according to statements by U.S. Attorney Preet Bharara.

The home at 132 Norfolk, also owned by Levitis, which prosecutors are moving to seize. (Source: Google Maps)

According to the indictment, investigators have identified several bank accounts in the name of Levitis, Rasputin, Mission Settlement Agency and alleged co-conspirators which may be turned over to victims of the debt settlement fraud charges revealed this morning. They are also targeting his stake in Rasputin Restaurant, at 2670 Coney Island Avenue.

They also list two properties owned by Levitis – his home at 1001 Oriental Boulevard, and another property at 132 Norfolk Street.

If Levitis is found guilty and ordered to compensate as many as 2,200 victims of fraud through Mission Settlement Agency’s services, the properties will be liquidated to reimburse the victims.

The charges revealed this morning allege that Levitis and three co-conspirators offered debt settlement services, in which they collected fees without doing the services they advertised. Moreover, they are believed to have made false claims about their fees and their track record. And while clients forked over millions of dollars to be paid to their creditors, little if any ever made it that way. Instead, Levitis used it to pay operating expenses at Rasputin, lease two luxury Mercedes, and pay down his mother’s credit card debt.

Aside from the four that were charged this morning, two other Mission sales representatives were also charged: Felix Lemberskiy and Zakhir Shirinov. These two employees have been separately charged and have already pleaded guilty.

Mission Settlement Agency also went by the names Mission Abstract LLC and Alpha Debt Settlement.

View the U.S. Attorney’s remarks on the case, as well as the indictment.

Michael Levitis Marina Levitis Rasputin Brighton Beach Show

Michael and Marina Levitis (Source: James Edstrom)

Rasputin Restaurant owner and Russian Dolls co-star Michael Levitis, and three others, were charged with fraud this morning, as prosecutors claim they operated a debt settlement company that swindled more than 1,200 people out of a total of millions of dollars

The offices of Mission Settlement Agency at 2713 Coney Island Avenue, (Source: Google Maps)

Levitis, who owns Mission Settlement Agency at 2713 Coney Island Avenue in addition to Rasputin, was charged with mail and wire fraud along with three employees: Denis Kurlyand, its vice president of sales; Boris Shulman, a sales representative; and Manuel Cruz, an employee who assisted with customer solicitation.

(UPDATE: Prosecutors are moving to seize Levitis’ properties. Additionally, two other co-conspirators were identified and have already pleaded guilty.)

Prosecutors say that Mission Settlement Agency claimed to help customers struggling with credit card and bank debt by helping them reach settlements that could cut the amount owed. But the company “systematically exploited and defrauded” customer, the criminal complaint says, by charging fees without ever rendering services.

Mission also served as the middle man, collecting payments from customers that were supposed to be passed on to those they owed. Instead, the indictment says, from mid-2009 to March 2013, about 2,200 customers paid nearly $14 million, of which only $4.4 million went to the creditors.

The company kept $6.6 million for itself as fees. As many as 1,200 of the clients paid $2.2 million in fees without “a single penny” reaching their creditors.

Meanwhile, Levitis used the remaining funds as his personal piggy bank, directing some of it to pay his own debts on Rasputin Restaurant (2670 Coney Island Avenue), as well as to lease two luxury Mercedes cars. He did also manage to pay down the credit card debt of his mother, Eva, who owned the company on paper, the Post reports.

According to the indictment, as part of his sales pitch, Levitis touted an affiliation with the federal government and one of the three leading credit bureaus in the U.S., relationships that prosecutors say was all smoke.

It’s not the first time Levitis has claimed a government relationship he may not have had.

Back in 2010, Levitis was charged with lying to federal agents after he got caught up in a bribery case involving former State Senator Carl Kruger.

Levitis told a fellow nightclub owner, who was secretly recording the conversation for the FBI, that he had an inside line to the state pol, and could assist him with a liquor license issue if he steered thousands of dollars to Kruger – with a kickback for Levitis’ role in setting it up.

As the case moved forward, Levitis’ claim that he had influence in Kruger’s office began to unravel, and Levitis, who is also an attorney, later pleaded guilty to lying to federal agents, sentenced to three years probation and fined $15,000.

In April, Levitis was also hit with a six month suspension of his license to practice law – retroactive to January 2012 – for his role in the case. According to Reuters:

The appeals court said it took into account mitigating factors presented by Levitis, including “the aberrational and unplanned nature of his misconduct,” his remorse, his cooperation with the grievance committee’s investigation and his reputation as an “ethical and honest attorney.”

Levitis, his mother and his wife, Marina, were also the co-stars of Russian Dolls, a failed Lifetime reality series canceled less than two months after its premiere.

The case against Levitis and Mission is being hailed as historic, as it’s the first criminal referral from the U.S. Consumer Financial Protection Bureau, an agency established after passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. The CFPB is also bringing civil charges against Mission, Levitis and others.

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