Fraud in the News

What you see might not be what you get

If you spend any significant amount of time on social media, you’ve noticed the rise of “influencer marketing” — endorsements from people and organizations who supposedly possess expert levels of knowledge and/or social influence in their fields. (See What is an Influencer?, Influencer Marketing Hub, Feb. 1.)

Sarah Osei of Highsnobiety, a German streetwear blog and media brand and production agency, cites a new study on the phenomenon conducted by the cybersecurity company Cheq and the University of Baltimore. Influencer fraud — in which influencers pay for fake followers or engagements — is costing advertisers more than a billion dollars a year, according to the study, originally reported by The Business of Fashion. The survey found that 25% of the followers of some 10,000 influencers are fake. Another survey of 800 brands and marketing agencies, conducted for the same study, found that two-thirds had worked with influencers with fake followers.

High-end restaurant owner cooks up fraud schemes

Barbara Meyzen, 57, the owner of an upscale Westchester County, New York, restaurant, was arrested on July 23 on charges of identity theft and mail and wire fraud. Meyzen, of Redding, Connecticut, is the owner and operator of La Crémaillère Restaurant in Banksville, New York.

According to an article in Patch, prosecutors say that from August 2015 to July 2016, Meyzen submitted applications for credit on behalf of La Crémaillère Restaurant to at least nine lenders. In support of those applications, she gave the potential lenders the restaurant’s bank statement that had been modified to change negative balances to positive ones. She also removed references to checks returned for insufficient funds.

During the summer of 2017, she allegedly charged more than $80,000 in food and restaurant supplies to one of the restaurant’s customers who’d left her credit card number on file.

See La Crémaillère Owner Arrested For Fraud, ID Theft, by Michael Woyton, Patch, July 23.

Fueling fraud

Four family members belonging to a Utah polygamist group recently admitted to defrauding the U.S. of $512 million in renewable-fuel tax credits, according to Bloomberg News in Accounting Today.

According to the article, the group’s leader, Jacob Kingston, is a member of the Davis County Cooperative Society, known as the Order, and one of the largest Mormon polygamist clans in the U.S. He pleaded guilty July 18 in federal court in Salt Lake City. He said his company falsely claimed that it produced or blended biodiesel fuel to qualify for tax credits. He also admitted laundering more than $100 million in fraud proceeds in Turkey, obstructing justice and tampering with witnesses.

See Polygamists admit $512M fraud for fuel-tax credit, by David Voreacos, Bloomberg News, Accounting Today, July 23.