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Insider Threat Incident Postings As Of August 3, 2020

Atlanta City Councilman Indicted For Multiple Fraud Charges Against Several Financial Institutions – July 29, 2020
Atlanta City Councilman Antonio Brown has been indicted on multiple fraud charges in connection with Brown’s attempts to defraud several financial institutions by taking out loans and making credit card purchases – and then falsely claiming that he was the victim of identity theft and was not responsible for the charges or repaying the loans

Beginning in 2012, Antonio Brown opened a number of credit cards, which he then used to make thousands of dollars’ worth of purchases for his own personal benefit. Brown also obtained over $60,000 in automobile loans to finance the purchases of a Mercedes C300 and a Range Rover. Despite opening and using these credit cards and despite taking the money for the two automobile loans, Brown allegedly falsely claimed that his identity had been stolen and that someone else had made the credit card purchases or had taken out these loans.


San Jose Police Officer Charged As Mastermind Of $18 Million Fraud Scheme – July 31, 2020
San Jose police officer Robert Foster has been charged with using his off-duty private security company to commit insurance fraud, tax evasion, wage theft and illegally laundering about $18 million. Foster’s wife and eight other company employees were also being charged with four counts of felony conspiracy to commit insurance fraud, unemployment insurance fraud, money laundering, wage theft and 39 additional felonies including extortion and a white-collar crime enhancement.


Staffing Firm Alleges Corporate Espionage By Former Employees – July 31, 2020
Two staffing agencies are locked in a bitter dispute alleging corporate espionage, payroll sabotage, the breaching of non-compete and non-disclosure agreements, and the hijacking of a company Facebook page.

Adecco accuses the upstart Staffworks of raiding its Corning, Elmira, Utica and Syracuse staff to steal proprietary account information and using it to steal long-established business.

Named in the suit are seven former Adecco employees and the Staffworks founder, all of whom are accused of a concerted scheme to aid a competitor at Adecco’s expense.

Two defendants claim say Adecco’s allegations are baseless because they were let go in coronavirus cutbacks, while the others say they left the staffing agency when their wages were slashed at the same time they were asked to assume greater workloads.


Former Bank President Sentenced To Prison For 10 Year Bank Fraud – July 31, 2020
Jimmy Monk, a 60-year-old resident of Elmore County and former PrimeSouth Bank president, was sentenced to 12 months and one day in prison after pleading guilty to bank fraud,

According to court records, investigators uncovered Monk’s fraudulent scheme of illegally issuing numerous loans from existing bank client accounts without their knowledge and applying those funds to other loans he was servicing that were past due or at risk of default. This was done to cover up the real status of loans he had approved and to prevent losing his position as President with the bank. For example, in June of 2015, Monk obtained an unauthorized advance of $22,800 from a PrimeSouth Bank loan issued to the Elmore County Economic Development Authority and applied the proceeds of that advance to the unrelated loan accounts of other persons. His scheme took place over the course of at least ten years and resulted in hundreds of thousands of dollars from unauthorized loans, all of which was credited by the bank back to the accounts once the activity was discovered. In addition to his prison sentence, Monk will have to pay $184,195.45 in restitution to the bank and a fine of $20,000.00.


Former Bank President Pleads Guilty To Charges In Bank Fraud Conspiracy – July 31, 2020
The former President and Chief Executive Officer of Cecil Bank, Mary Beyer Halsey, of Rising Sun, Maryland, pleaded guilty today to the federal charges of conspiracy to commit bank fraud, receipt of a bribe by a bank official, and false statement in bank records, in connection with the straw purchase of a home in Rising Sun, Maryland, upon which Cecil Bank had foreclosed.

According to her plea agreement, from 2012 to 2013, Halsey conspired with Daniel Whitehurst, an employee of a real estate development company that did business in Maryland, to defraud Cecil Bank and another bank to purchase a home through false pretenses, representations and promises. On March 28, 2012, Halsey and Whitehurst met at a restaurant in Cecil County. Whitehurst asked Halsey if she could help him and a business partner get a $500,000 line of credit from Cecil Bank. Halsey agreed to help Whitehurst to obtain a line of credit from Cecil Bank, in exchange for Whitehurst agreeing to serve as the straw purchaser of 127 Ebenezer on behalf of Halsey. Halsey suggested that she increase the line of credit for Whitehurst to $650,000 to include the funds needed to buy the house. Whitehurst agreed to Halsey’s request to secretly buy 127 Ebenezer on Halsey’s behalf. On May 9, 2012, Halsey participated in a loan committee meeting at Cecil Bank that considered and approved a $650,000 line for credit for Whitehurst and a $500,000 line of credit for his business partner.


Former Business Manager Pleads Guilty To Stealing $470,000+ From Company – July 30, 2020
Deanna Wehde pleaded guilty to one count of wire fraud and one count of aggravated identity theft. Wehde admitted that while employed by Stone Care of Texas between May 2016 and September 2018, she defrauded the company by using company credit cards issued in the names of former employees for business-related travel to make unauthorized purchases and cash withdrawals for her own personal use and benefit.


Former West Virginia University Professor Sentenced To Prison For Fraud And Participation In The China’s Thousand Talents Plan – July 30, 2020
Dr. Lewis was as a professor who worked at the West Virginia University for 13 years. In July 2017, Lewis entered into a contract of employment with the China Thousand Talents Plan.

According to Lewis’s contract, the Chinese Academy of Sciences agreed to employ Lewis as a professor for at least three years. In return, Lewis agreed to maintain an active research program that yielded publications in high quality, peer-reviewed journals, and to provide research training and experience for Chinese Academy of Sciences students.

As a part of the program, Lewis was promised benefits, including a living subsidy of 1 million Yuan (approximately $143,000), a research subsidy of 4 million Yuan (approximately $573,000), and a salary of 600,000 Yuan (approximately $86,000). To receive the benefits, Lewis would have to work full time in China for three consecutive years, for no less than nine months per year, and would have to begin work no later than Aug. 8, 2018.

In March 2018, Lewis submitted a request to WVU for an alternate / parental work assignment, requesting to be released from his teaching duties for the fall 2018 semester in order to serve as the primary caregiver for a child he and his wife were expecting in June 2018. In fact, however, Lewis knew this request was fraudulent. Rather than caring for his newborn child, Lewis planned to work in China during the fall 2018 semester as a part of his agreement.

In the fall of 2018, Lewis spent all but three weeks of the semester in China while his newborn child remained in the United States. During this period, Lewis received his full salary from WVU pursuant to his alternate/parental work assignment. Lewis’s scheme allowed him to fraudulently obtain $20,189 from WVU.


Researcher Who Worked At Research Institute For 10 Years, Pleads Guilty To Stealing Scientific Trade Secrets To Sell To China – July 30, 2020
Li Chen and her husband, alleged co-conspirator Yu Zhou, 50, worked in separate medical research labs at the Nationwide Children’s Hospital’s Research Institute.

According to her plea agreement, Chen conspired to steal and then monetize one of the trade secrets by creating and selling exosome “isolation kits.” Chen admitted to starting a company in China to sell the kits. Chen received benefits from the Chinese government, including the State Administration of Foreign Expert Affairs and the National Natural Science Foundation of China. Chen also applied to multiple Chinese government talent plans, a method used by China to transfer foreign research and technology to the Chinese government.


Federal Grand Jury Indicts Ohio House Speaker Of Public Corruption Racketeering Conspiracy Involving $60 Million – July 30, 2020
A federal grand jury has indicted the Ohio Speaker of the House in a federal racketeering conspiracy involving approximately $60 million paid to a 501(c)(4) entity to pass and uphold a billion-dollar nuclear plant bailout.

According to court documents, from March 2017 to March 2020, the enterprise received millions of dollars in exchange for Householder’s and the enterprise’s help in passing House Bill 6, a billion-dollar bailout that saved two failing, Ohio nuclear power plants from closing.


Bookkeeper Pleads Guilty To Wire Fraud Of $473,000+ and Aggravated Identity Theft – July 30, 2020
According to court documents, between January 2013 and October 2017, Rachele Lipps served as a part-time bookkeeper for Business A. Business A was a Louisiana corporation domiciled in Slidell, Louisiana. LIPPS was entrusted with the daily accounting and her job functions included accessing and utilizing QuickBooks software to issue payroll checks and pay vendors on behalf of Business A. Using QuickBooks, LIPPS fraudulently printed and cashed checks made payable to herself and several of her creditors. On or about July 22, 2014, LIPPS forged the signature of Business A’s co-owner on a check despite not having the authority to do so. In all, LIPPS stole $473,978.53 from Business A and its owners.


Former Twitter Employees Charged For Spying On Twitter User Accounts – July 29, 2020
The U.S. government has charged two former employees and one other person with seven offenses for allegedly spying on Twitter users critical of the Saudi Arabian royal family.

The two former Twitter employees, Ahmad Abouammo and Ali Alzabarah, and a third person named Ahmed Almutairi, were first charged with two offenses in 2019 for allegedly using their work at the social media platform to provide non-public information about Twitter accounts critical of the Saudi royal family to the Saudi government.


4 Former Casino Employees Charged With $5 Million Of Fraud – July 21, 2020
A woman and a former worker at a Florida casino operated by a Native American tribe have been sentenced to federal prison for their roles in stealing more than $5 million from the business.

A federal judge in Miami sentenced Lester Lavin to 4 years and 3 months, and girlfriend Anisleydi Vergel Hermida to six months. Three of Lester’s former co-workers at Miccosukee Resort & Gaming and their three respective spouses have also pleaded guilty in the case and are set to be sentenced by the end of next month.

The four workers tampered with gambling machines at the casino run by the Miccosukee tribe. The machines would generate credit vouchers that were then exchanged for cash. The workers’ significant others helped launder the money.

The money was used for purchases of real estate, investments, vehicles and even children’s prepaid college funds.


Former Twitter Employees Charged For Spying on Twitter User Accounts – July 29, 2020
The U.S. government has charged two former employees and one other person with seven offenses for allegedly spying on Twitter users critical of the Saudi Arabian royal family.

The two former Twitter employees, Ahmad Abouammo and Ali Alzabarah, and a third person named Ahmed Almutairi, were first charged with two offenses in 2019 for allegedly using their work at the social media platform to provide non-public information about Twitter accounts critical of the Saudi royal family to the Saudi government.


Former University Employee Admits Role In $5.3 Million Prescription Drug Scheme – July 29, 2020
John Cuffari admitted his role in a scheme to defraud public and private health benefits programs of at least $5.3 million for the billing of medically unnecessary compounded prescriptions.

Between November 2014 and July 2016, Cuffari participated in a conspiracy that involved the submission of fraudulent prescriptions for medications to public and private insurance plans. The scheme centered on the discovery that certain insurance plans paid for prescription compounded medications – including scar creams, wound creams, and metabolic supplements / vitamins – at exorbitant reimbursement rates.

Cuffari exploited this opportunity through working as a sales representative for several compounding pharmacies. In order to profit as a sales representative, Cuffari targeted individuals who had insurance plans that covered compounded medications and then convinced those individuals to obtain prescriptions for compounded medications, regardless of medical necessity, often by providing them with cash payments. In order to obtain prescriptions for compounded medications for some of the recruited individuals, Cuffari caused payments to be made to a New Jersey-based physician.

Once the prescriptions were written, they were filled by the compounding pharmacies with which Cuffari worked. The compounding pharmacies would then receive reimbursement from the insurance plans, and would pay Cuffari a percentage of the reimbursement amount.


Former Director Of Minority Business Assistance Center Sentenced To Prison For Accepting Cash Bribes – July 29, 2020
RoShawn Winburn disclosed internal information regarding minority-owned, woman-owned and small disadvantaged business contracts to a local business owner who hoped to obtain contracts with the City of Dayton, Ohio.

Between July 2015 and July 2016, Winburn accepted cash payments totaling more than $6,500 from the individual in exchange for internal City of Dayton documents with restricted public access.


Former Saratoga Race Course Worker Sentenced To Prison Methamphetamine Trafficking – July 28, 2020
Francisco Badillo admitted that he sold crystal methamphetamine from May 2019 to August 2019, while residing at and working on the grounds of the Saratoga Race Course in Saratoga Springs, New York. Badillo admitted to hiding the drugs in various locations within the Race Course property, including his dorm room. He admitted to selling more than 400 grams of crystal methamphetamine.


Former Employee Pleads Guilty To $2 Million Wire Fraud Scheme – July 28, 2020
Robert Munguia knowingly submitted false work orders to his company in order to receive gifts and payments from outside vendors. He also admitted he knew the work would never be completed.

From Feb. 27, 2015, until April 12, 2018, Munguia worked as an environmental specialist at a Texas-based corporation. During that time, he conspired with outside contractors to bill for 68 false work orders that were never completed. In return, Munguia received various gifts and cash.


CEO Sentenced To Prison For Multi-Million-Dollar Student Loan Repayment Services Scam Involving Employees – July 27, 2020
Brandon Frere was sentenced to prison for a multi-million-dollar scheme to use deceptive sales tactics to convince people to enroll in his companies’ student loan repayment services programs.

Between January of 2014 and November of 2018, Frere marketed student loan document preparation services for borrowers who wished to apply for programs through the Department of Education. Frere targeted potential customers who were seeking federal loan forgiveness, loan consolidation, and reduced-payment programs. When Frere’s companies sold consumers document preparation services, they also sold them a purportedly optional membership in a financial education benefits program. The so-called benefits program provided the opportunity to customers to sign up for services such as LifeLock identity theft protection and roadside assistance.

Frere admitted he instructed his employees to follow misleading sales scripts and to employ deceptive sales tactics so that people would enroll for services without fully understanding what they were paying for. For example, when initially enrolling consumers in the document preparation service and signing them up for the financial education benefits program, Frere hid the fees for the financial education benefits program and described the benefits program in a way that made it seem like the cost of the program was included in the document preparation services. Further, Frere admitted he instructed enrollment associates not to present the benefits program as an optional or additional service to the document preparation service; this way, consumers would purchase the benefits packages without knowing they were doing so.


Former Employee Working At Warehouse Leased By U.S. Government Admits To Theft Of Hundreds Of iPhones – July 27, 2020
Joel Cruz admitted that he stole almost 300 iPhones that had been seized by Customs and Border Protection (CBP) and were temporarily stored at a warehouse in Dayton, New Jersey,

In November 2014, CBP seized approximately 14 boxes, containing 628 iPhones, from Boston Logan International Airport. All of the boxes were shipped from the United States, and were en route to Dubai, United Arab Emirates. After their seizure, the boxes were consolidated into six containers, each containing a unique shipping code, and were shipped and delivered to the Dayton warehouse.

Cruz was an employee of Company 1, which had contracted with the Treasury Executive Office for Asset Forfeiture (TEOAF), a federal agency, to provide services regarding the management of property seized by CBP and stored at the warehouse. Company 1 contracted with third parties, including Company 2, to provide temporary contractors to work at the warehouse.

Between Jan. 9, 2015, and Feb. 2, 2015, Cruz scanned the location of the seized boxes inside the warehouse and stole 292 iPhones worth $218,372. He removed the iPhones from the warehouse on separate occasions by concealing them in his pants, boots, and jacket. Luis Ramos, a Company 2 employee, assisted Cruz in removing a small number of the iPhones in exchange for one or two of the phones. Ramos was previously charged in connection with his role in the scheme, and those charges remain pending.

Cruz provided 175 to 200 of the stolen iPhones to a former employee of the warehouse to sell on Cruz’s behalf. Cruz sold the remaining stolen iPhones on his own.


Former Employee Stole Trade Secrets From Navy Contractor – July 26, 2020
Clarus Fluid Intelligence LLC knew how to flush some of the Navy’s vital mechanical systems. And more importantly from a business aspect, the company knew how to win the necessary Department of Defense contracts to keep the lights on.

But according to a new lawsuit filed in U.S. District Court in Norfolk, that competitive edge may have walked out the door earlier this year with a disgruntled employee versed in not only the company’s technical systems — but also its pricing structure.

Clarus’ parent company, Ohio-based RelaDyne, sued Charles Bronder of Virginia Beach this week claiming he violated various state and federal laws intended to protect the company’s trade secrets and computer systems. It also claims multiple contract breaches.

The lawsuit said Bronder stole various trade secrets from Clarus that he had access to while employed. The lawsuit alleges he transferred or copied the information to his personal Gmail account in the months before his termination.

It said Bronder then joined Accurate Marine, and even boasted he was going to go after Clarus’ federal contracts in a call Bronder initiated with RelaDyne’s director of finance. In the same call, the lawsuit alleges, Bronder outlined specific ways he intended to harm RelaDyne’s business — mainly by going after RelaDyne’s employees.

This entry was posted on Tuesday, August 4th, 2020 at 11:47 am. Both comments and pings are currently closed.

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