Stolen Hurricane Sandy Disaster Funds Results in Arrest of 4 in @FEMA Fraud Scheme

A joint investigation between the Federal Bureau of Investigation (FBI) and the Federal Emergency Management Agency (FEMA) resulted in the arrest of four individuals earlier this morning for allegedly submitting false and fraudulent applications to obtain Hurricane Sandy Disaster Relief funds. Darnell Ellis, Diana Shkolnik, Robert Gesuele, and Edward Valentin (the defendants) independently submitted fraudulent disaster relief applications and received benefits from the federal government, which they would not otherwise be entitled.

The arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director in Charge, FBI, New York Field Office; and FEMA Regional Administrator Jerome Hatfield.

Disaster relief assistance is made available after the president of the United States declares that a major disaster has occurred in a specified area. Assistance to individuals is available under the Individuals and Household Assistance Program (IHP), which provides grants funded by the United States government to people in the affected area when losses are not covered by insurance and property has been damaged or destroyed. To qualify for disaster assistance, in addition to registering with FEMA, the applicant must provide basic personal data and the location of the damaged dwelling. The applicant is also asked to verify that the damaged dwelling was in fact his or her primary residence and that he or she was unable to live in his or her primary residence due to disaster-related conditions.

As detailed in their respective complaints, each defendant claimed in their FEMA relief applications that their primary residences were affected by Hurricane Sandy, and as a result, they were seeking financial assistance. Contrary to their claims, the investigation identified that at the time they submitted their FEMA applications, defendants Ellis, Shkolnik, and Valentin were not living in the storm-affected residences identified in their paperwork. The fourth defendant, Gesuele, submitted a FEMA application for a residence he was illegally occupying and did not rent or own. In total, the defendants received tens of thousands of dollars in disaster relief funding to which they were not entitled.

FBI Assistant Director in Charge George Venizelos stated, “At a time when individuals were displaced from their primary residences and businesses due to the affects of Hurricane Sandy, the defendants saw an opportunity to make money. They submitted false claims to FEMA and lined their pockets with money intended to help those who legally qualified for assistance under the IHP. The FBI, along with its law enforcement partners, to include FEMA, will continue to investigate and bring to justice those who defraud the government for their own personal gain.”

“In the aftermath of Hurricane Sandy, FEMA Region 2 responded to those affected and provided both material and financial support. Relief funds meant to assist individuals, businesses, and communities are essential in order to restore normalcy. This process is hampered by those few who wish to defraud and siphon relief and disaster funds away from those who were most at need. FEMA R2 will continue to work with our close federal partners, including the FBI and the Department of Homeland Security-Office of the Inspector General, to identify fraud and misuse of disaster relief funds and to leverage each such violation as a clear message of deterrence to anyone considering the misuse of relief and disaster funds,” said FEMA Regional Administrator Jerome Hatfield.

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Top Ten Highlights of The Chris Christie Press Conference

Top Ten Highlights of The Chris Christie Press Conference

10. Shocking revelation of corruption in New Jersey?

9. Blamed the whole thing on getting drunk with Dennis Rodman

8. More profanity than "The Wolf of Wall Street"

7. Claimed his heart was broken, but acknowledged it might be obesity-related

6. Said he wasn't a bully, then put Chris Matthews in a headlock

5. Christie's claim he had no idea a bridge connected New Jersey and New York

4. An appearance by the fake sign language guy

3. Boldly took responsibility by blaming everyone but himself

2. Announced plans to execute his uncle

1. Interrupted press conference to smoke crack

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"Women in Gaming" A Courtroom Conversation to be Hosted by @TheMobMuseum

On Wednesday, February 19,  The Mob Museum, The National Museum of Organized Crime and Law Enforcement, will host “Women in Gaming” in its historic courtroom. Part of the Museum’s ongoing Courtroom Conversation educational programming series, the event will take place at 7 p.m. and feature a panel discussion among three of the top women in the global gaming industry: Patricia Becker, president, Patricia Becker & Associates and former executive director, UNLV’s International Gaming Institute as well as first and only woman to be appointed to the Nevada Gaming Control Board; Jan Jones Blackhurst, executive vice president, communications and government relations, Caesars Entertainment; and Elaine Wynn, director, Wynn Resorts, and president, Nevada State Board of Education. Moderating the discussion will be Marybel Batjer, secretary, California Government Operations and past vice president, public policy, Caesars Entertainment.

Community partners helping present the event include Global Gaming Women and the Women’s Research Institute of Nevada (WRIN). In addition, the University of Nevada, Las Vegas, Lied Library Special Collections will display archival material relevant to the topic and Vegas PBS will record the event for future broadcast consideration.

These women will come together for one evening at The Mob Museum to discuss the world of gaming from their own unique perspectives. Sure to be among the topics that evening: the highs and lows, challenges and successes of operating as prominent figures in a largely male-dominated gaming industry.

Patricia Becker is the President of Patricia Becker & Associates, a gaming consulting firm that specializes in compliance and regulatory issues. In addition, she currently serves as chair of the compliance committee at Bally Technologies, Inc. She previously served as executive director of UNLV International Gaming Institute, and was the first woman to be appointed to the Nevada Gaming Control Board. Previously, Becker held numerous executive positions including roles with Aladdin Gaming and Harrah’s. She also served as chief of staff to Nevada Gov. Bob Miller from 1993 to 1995 and on the board of directors for Cash Systems Inc., Fitzgerald’s Gaming Corp. and Powerhouse Technologies. In 2004, Becker was the first woman to be inducted into the International Association of Gaming Advisors and has served as the organization’s president.

Jan Jones Blackhurst is Executive Vice President of Communications and Government Relations for Caesars Entertainment, Corp. In that capacity, she oversees all worldwide government affairs, corporate communications, community relations and corporate-social responsibility programs for the $9 billion corporation.  Those programs include Caesars industry-leading responsible-gaming systems and its various initiatives aimed at enhancing diversity and promoting environmental stewardship companywide.
       
Prior to joining Caesars in November 1999, Jones Blackhurst served two terms as Mayor of the City of Las Vegas.  She was the city’s first woman chief executive, and among the most popular mayors in its history, having won reelection in 1995 by a 72 percent margin. While in office, Jones Blackhurst presided over an unprecedented period of economic, social and cultural expansion, one in which the city’s population increased 66 percent, making Las Vegas the fastest-growing major metropolitan area in America throughout much of the 1990s.

In 2011, Jones Blackhurst was the first woman to be honored with the Lifetime Achievement Award in Gaming Communications by the American Gaming Association.  She was also honored by the Women’s Research Institute of Nevada as a mentor and leader in Las Vegas and honored by the Women’s Chamber of Commerce of Nevada for the ATHENA International Award for leadership.  In 2012 Jones Blackhurst received the Americanism Award from the Anti-Defamation League in recognition of her outstanding leadership, dedication to diversity, and commitment to her community.  In 2013, she was awarded the Free Enterprise Award by the Nevada Taxpayers Association, Employers Association of Southern Nevada, and the Metro Chamber as a distinguished community leader who has made a significant and lasting impact on the Southern Nevada economy.  She also received the William Andrews Clark – Lifetime Achievement Award honoring her extraordinary distinction in lifetime success and a tribute to her years of commitment, dedication, and service to the Southern Nevada community.

Elaine Wynn has served as Director of Wynn Resorts since 2000 and has helped guide the company’s expansion from the opening of Wynn Las Vegas in April 2005 and Wynn Macau in September 2006 to the unveiling of Encore in December 2008.

In her role, Wynn has overseen a multitude of details that have contributed to the creation of the “Wynn lifestyle.” These range from the selection of staff uniforms, luxury shops and spa amenities to playing a key role in special events and the company’s charitable involvement. Prior to her current position, Wynn served in a similar capacity as Director of Mirage Resorts from 1976 to 2000.

Wynn is personally and actively involved in a variety of community organizations and civic bodies dedicated to the enrichment of children, including serving as president of the Nevada Board of Education, chairman of the national board of the Communities In Schools drop-out prevention organization and co-chair of the Greater Las Vegas After-School All Stars, among others.

Wynn has also been a strong supporter of the arts.  Her role as a business leader in Nevada led to her appointments to the Kennedy Center for the Performing Arts Board of Trustees and the Library of Congress Trust Fund Board. In 2011 she established the Elaine Wynn Studio for Arts Education at the Smith Center for the Performing Arts in Las Vegas. The Elaine Wynn Studio includes classrooms, conference rooms and offices for education program staff, interns, and artists in residence.  The building’s two performance spaces, a “black box” theater and cabaret theater, are also used for children’s theater and educational programming.

Her dedication to the community has garnered numerous awards and accolades including the Governor’s Philanthropist of the Year in 2005 and an Honorary Doctorate from the University of Nevada Las Vegas in 1986. She was awarded one of seven National Promise of America Founder’s Awards for improving children’s lives at a ceremony at the White House. She is especially proud of the dedication of the Elaine Wynn Elementary School in 1991.

Seating for this once-in-a-lifetime event is extremely limited. VIP tickets are $250; preferred seating tickets are $125 and include a private reception prior to the event. General admission entry is $40. Dessert and refreshments will be available following the event for all attendees.

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Precious House, Brian Huges, Michael Turner, and Keith Foster Indicted in Alleged $1.4 Million Automobile Loan Fraud Scheme

Four Chicago and area defendants were indicted on federal bank fraud charges for allegedly engaging in a scheme to fraudulently obtain 46 automobile loans totaling approximately $1.4 million without ever intending that the borrowers would purchase the high-end luxury cars that they claimed to be buying. As a result, various credit union lenders, Including Great Lakes Credit Union, Pentagon Federal Credit Union, and Sherwin-Williams Credit Union, incurred losses totaling at least $914,000, the charges allege.

One defendant, Precious W. House, 47, of Chicago, the president of Rolling Auto Inc., a Plymouth, Indiana wholesale auto dealership that purported to be selling many of the autos, was arrested yesterday. He pleaded not guilty to five counts of bank fraud and one count making false statements on a loan application and is scheduled to have a detention hearing at 9:15 a.m. next Tuesday before Magistrate Judge Sidney I. Schenkier in U.S. District Court.

Another defendant, Brian K. Huges, 41, of Homewood, was arrested January 9 and was ordered detained in federal custody. He was charged with four counts of bank fraud and one count of making false statements on a loan application.

Co-defendants Michael O. Turner, 44, of Richton Park, who was charged with one count of bank fraud, and Keith B. Foster, 46, of Harvey, who was charged with one count each of bank fraud and making false statements on a loan application, were not arrested and will be arraigned next Tuesday in U.S. District Court.

The six-count indictment was returned by a federal grand jury. The indictment also seeks forfeiture of approximately $914,511 from all four defendants.

According to the indictment, between February and November 2013, the defendants fraudulently obtained at least 28 automobile loans of the 46 they fraudulently applied for and obtained approximately $914,000 of $1.4 million they sought in loan proceeds. They made and caused others to make false representations in documents submitted to lenders, including loan applications, vehicle purchase orders, and verifications of employment, concerning the individuals’ income, employment, credit history, intent to use the loan proceeds to purchase automobiles, and the existence of contracts obligating the borrowers to purchase vehicles from House and Rolling Auto.

House, Hughes, and Turner allegedly recruited individuals seeking auto and personal loans and agreed to find loans for them in exchange for a fee of 20 to 30 percent of the loan. Then, they submitted false information in the borrowers’ loan applications, their income, employment, and credit history, as well as their intent to use the loan proceeds to purchase autos from Rolling Auto and other dealerships, and the existence of contracts obligating them to purchase luxury automobiles made by BMW, Chevrolet, Jaguar, Lexus, Mercedes-Benz, Nissan, and Porsche, the indictment alleges.

If the individual borrowers refused to cash checks obtained as part of the scheme, Hughes allegedly threatened them with civil lawsuits and criminal prosecutions. House allegedly deposited the loan proceeds into bank accounts he controlled in Illinois, California, and Georgia.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.

The government is being represented by Assistant U.S. Attorney Christopher R. McFadden.

Each count of bank fraud and making false statements on loan applications carries a maximum penalty of 30 years in prison and a $1 million fine, and restitution is mandatory. The court may impose an alternate fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

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Details on Conrad Ulz's Indictment in Alleged $3.2 Million Mortgage Fraud Scheme Involving Properties in Chicago’s Englewood Community

A Lake County man who operated two real estate–related firms was indicted on federal mortgage fraud charges. The defendant, Conrad Ulz, allegedly engaged in a scheme to fraudulently obtain 13 residential mortgage loans, totaling approximately $3.2 million, from lenders to purchase properties in Chicago’s Englewood neighborhood. The indictment alleges that Ulz paid buyers to purchase the properties and promised them no out-of-pockets costs and then made false statements to lenders on their behalf. As a result, the lenders incurred losses totaling more than $3.1 million because the amount of the mortgage loans was not fully recovered through subsequent sale or foreclosure.

Ulz, 73, of Libertyville, who operated Citywide Financial Group and Metro Realty Services, was charged with five counts of wire fraud and three counts of making false statements to financial institutions in an indictment that was returned by a federal grand jury. The indictment also seeks forfeiture of at least $3.1 million. Ulz will be arraigned on a date to be determined in U.S. District Court.

According to the indictment, between August 2007 and May 2009, Ulz caused buyers to fraudulently obtain 13 mortgage loans from various lenders for properties on South Sangamon, South Carpenter, South Morgan, South May, and South Ada streets, among others, in Englewood on the city’s south side. The alleged fraud involved false representations in documents, including loan applications and HUD-1 settlement statements concerning sales prices and the buyers’ employment, assets, income, and intention to occupy the property.

Ulz allegedly recruited buyers with good credit, promising to pay them for purchasing the properties and promising that they would not have to pay any of their own money toward the purchases, including down payments and mortgage payments.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.

The government is being represented by Assistant U.S. Attorney Renai Rodney.

Each count of wire fraud affecting a financial institution and making false statements on loan applications carries a maximum penalty of 30 years in prison and a $1 million fine, and restitution is mandatory. The court may impose an alternate fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

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