Fraud in the News

$50 million by age 50 could get lawyer 50 years

Mark Scott, 51, a former equity partner at the law firm Locke Lord LLP, was convicted in Manhattan Federal Court on Nov. 21, 2019, for laundering about $400 million from the massive international OneCoin fraud. (See OneCoin crypto-scam lawyer found guilty of worldwide $400m fraud, by Lisa Vaas, Nov. 25, 2019, Naked Security.)

According to the article, Scott had once boasted of making 50 by 50 — $50 million by the age of 50. He’s now facing a potential 50+ years in prison for money laundering and lying to banks about funds flowing from OneCoin, a cryptocoin Ponzi scheme that started in Bulgaria.

The U.S. Department of Justice says that Scott set up a series of bogus private equity investment funds — the “Fenero Funds” — in the British Virgin Islands and lied when he said about $400 million in OneCoin fraud money was investments of wealthy European families. He funneled the money through Fenero Fund bank accounts in the Cayman Islands and Ireland.

He’s just not that into you

The FBI has warned people to be careful as romance scams escalate nationwide, according to CNN. Scams that prey on vulnerable people cost Americans more money than any other fraud reported to the Federal Trade Commission in 2018 — more than 21,000 people were conned into sending $143 million in such schemes. (See 10 suspects in four states defrauded women in a romance scam and laundered the money, feds say, by Faith Karimi and Sheena Jones, CNN, Nov. 14, 2019.)

According to the article, 10 people in Oklahoma, New York, California and Texas have been charged with conspiring to launder money that they obtained in a romance scam targeting women nationwide. The suspects — most of them Nigerian — would start online relationships with women and tell them they were U.S. citizens working overseas.

The suspects asked the women for money and iTunes gift cards or cellphones and then began demanding larger amounts as the relationships progressed, according to the CNN article. They’d instruct their victims to send money using electronic wire transfers.

Not the outcome these execs were hoping for

Former Outcome Health executives Rishi Shah, 33, and Shradha Agarwal, 34, were charged Nov. 25, 2019, in federal court in Chicago, Illinois, with allegedly running a massive fraud scheme to obtain $487.5 million in financing and bill clients millions of dollars for ads that never ran. (See Feds file criminal charges against four former Outcome Health executives, alleging massive fraud, by Jason Meisner and Ally Marotti, Nov. 25, 2019, Chicago Tribune.)

According to the article, a criminal indictment charges Shah, Agarwal and two other former executives with a combined 26 counts of fraud. The most serious charges carry up to 30 years in prison if convicted.

Pharmaceutical companies paid Outcome Health, founded in 2006, to run ads and other content on screens and tablets placed in doctors’ offices and waiting rooms. According to the article, the alleged scheme began no later than 2011 when the four former executives allegedly lied to clients; falsely inflated engagement metrics; caused revenue inflation on Outcome’s financial statements; and used those inflated statements to obtain a $110 million loan in April 2016, a $375 million loan in December 2016 and the $487.5 million in financing in 2017.