Fraud

NEW YORK -- Former WorldCom finance chief Scott Sullivan was sentenced yesterday to five years in prison by a judge who called him "the architect" of the company's epic fraud -- but who gave him a break because he helped convict his onetime boss, former chief executive Bernard Ebbers. US District Judge Barbara Jones praised Sullivan for pleading guilty last year and helping the government build its case against Ebbers, who was sentenced to 25 years in prison. Still, "Mr. Sullivan's offenses were of the highest magnitude," Jones said.

Food stamp recipients are ripping off the government for millions of dollars by illegally selling their benefit cards for cash — sometimes even in the open, on eBay or Craigslist — and then asking the government for replacement cards. The Agriculture Department wants to curb the practice by giving states more power to investigate people who repeatedly claim to lose their benefit cards. It is proposing new rules Thursday that would allow states to demand formal explanations from people who seek replacement cards more than three times a year.

As Massachusetts leaders seek to slow soaring health care costs, a growing network of community-based organizations is trying to squelch Medicaid and Medicare fraud and abuse -- which also drive up costs. On Friday, a coalition of groups known as the Massachusetts SMP (Senior Medicare Patrol) Program, will outline its efforts to eliminate fraud at a day-long conference in Marlborough. The event, which is free and open to the public, will feature presentations by an agent with the Boston office of the FBI, an agent from the state's...

A former Army Corps of Engineers employee has pleaded guilty to his role in a $30 million bribery and kickback scheme involving the awarding of government contracts. Kerry F. Khan entered the plea Thursday in U.S. District Court in Washington. His son, Lee Khan, is scheduled to also admit guilt. The Khans and two other men are charged in an indictment unsealed in October in a complex scheme to defraud the government through inflated invoices and the corrupt steering of contracts.

ALEXANDRIA, Va. - An executive convicted of orchestrating a nearly $3 billion fraud as chairman of one of America’s largest private mortgage companies was sentenced yesterday to 30 years in prison by a judge who said he showed no remorse. Federal authorities say the case against Lee B. Farkas, former chairman of Florida-based Taylor Bean & Whitaker, is one of the largest prosecutions arising from the nation’s financial crisis. The fraud put thousands of employees out of work and contributed to the collapse of Colonial Bank, which authorities described as the sixth-largest bank collapse in US history.

The Norfolk district attorney's office sent a letter to Norwood public school parents and others in the county last week regarding possible fraud on Facebook pages of local teenagers. An area student, not identified by name or town, recently friended someone appearing on the site as a teenager named "Sarah John. " After a few months, the person initiated conversations that led to the student sharing personal information, a letter from District Attorney Michael Morrissey said. Morrissey said "Sarah John" is now trying to extort money from the student threatening to make the information...

A Berlin man has been sentenced to life without parole for the 1996 strangulation of a Fitchburg woman. Alex Scesny, 42, was sentenced Friday in Worcester Superior Court. Theresa Stone's body was found on a rural road in 1996. Scesny's lawyer, Michael Hussey, said his client will appeal. Prosecutors say Scesny remains a "person of interest" in the unsolved slayings of five prostitutes from the Worcester area. (AP)

A legislative committee this week will take another look at a bill to authorize payments to people who report MaineCare fraud. The Judiciary Committee has scheduled a work session on the bill for Tuesday afternoon. At a hearing last week, the committee heard from some individuals and groups who praised the idea as a potential money maker for the state, and others who found the idea of bounties distasteful. Lincoln Republican Rep. Jeffrey Gifford's bill allows payments for a person who brings action citing fraud in MaineCare.

MIAMI — Federal authorities have charged the nation’s largest chain of community mental health centers with Medicare fraud. The Florida-based company preyed on patients with severe dementia to bill $200 million for services that were never delivered, they said yesterday. Prosecutors said American Therapeutic Corp. and its sister companies faked charts and paid the owners of assisted living facilities to bring patients to mental health centers for therapy sessions that were never held.

WASHINGTON -- Contractors who were paid billions of dollars for post-Hurricane Katrina cleanup double-billed the government for debris removal, overstated mileage claims to get extra fees, and inflated prices by improperly mixing debris, a Democratic study alleged yesterday. Representative Henry A. Waxman, ranking Democrat on the House Government Reform Committee, compiled the report and accused the US Army Corps of Engineers of lax oversight of contractors. The Corps' director of civil works, Major General Don Riley, defended his agency's performance, telling a committee hearing...

As Massachusetts leaders seek to slow soaring health care costs, a growing network of community-based organizations is trying to squelch Medicaid and Medicare fraud and abuse -- which also drive up costs. On Friday, a coalition of groups known as the Massachusetts SMP (Senior Medicare Patrol) Program, will outline its efforts to eliminate fraud at a day-long conference in Marlborough. The event, which is free and open to the public, will feature presentations by an agent with the Boston office of the FBI, an agent from the state's...

A teacher went on trial Wednesday after publicly claiming that she was pressured to help rig Russia's parliamentary election to boost the results for Vladimir Putin's party. Like many teachers and principals in Russia, Tatyana Ivanova was in charge of a polling station set up in the school where she worked. She accused Natalya Nazarova, an education department official in St. Petersburg, of pressuring her and other poll workers to falsify the vote and instructing them on how to do it. Ivanova now faces charges of damaging the education official's professional...

Six more people have been arrested in connection with an investigation into food stamp fraud in the state's electronic benefits transfer system, the attorney general's office said Thursday. Arrested were Benjamin Ruiz, 34, of South Boston; Jason Little, 31, of Weymouth; Stephen Byrnes, 24, of Quincy; Audrey Amaro, 34, of Waltham; Kenneth Babij, 21, of Quincy; and Steven Rigby, 31, of Milford, according to Attorney General Martha Coakley. All are being charged with larceny over $250 and procurement fraud.

Deutsche Bank agreed to pay $202 million to settle civil fraud charges brought by the federal government over the practices of a subsidiary it acquired five years ago, authorities announced Thursday. A federal judge in Manhattan approved the deal reached by representatives of the Frankfurt, Germany-based bank and the government. Under the agreement, Deutsche Bank AG admitted that it didn't follow all federal housing regulations when it made substantial profits between 2007 and 2009 from the resale of risky mortgages through its subsidiary MortgageIT.

Serbian nationalists accused pro-European Union reformists Thursday of stealing the recent general elections, fueling tensions ahead of a key presidential runoff. Progressive Party leader Tomislav Nikolic alleged that the Democratic Party printed extra ballots and tampered with voting lists in Sunday's vote. He presented a sack stuffed with thousands of voting ballots that he claimed were replaced by other ballots by the pro-EU camp and alleged "hundreds of thousands of ballots" were switched in such a way. "This was an election robbery of an...

A former Southbridge resident was sentenced Thursday to nearly 22 years in prison for his involvement in a fraud scam related to the federal first-time homebuyer tax credit program. Junior A. Lopez, also known as Ace, was sentenced in US District Court in Worcester for his involvement in a 2008 scam involving more than 50 fraudulent tax forms and $500,000 in refunds, prosecutors said. He pleaded guilty last year to fraud-related charges linked to the federal program, which was aimed at stimulating the sluggish US...

WASHINGTON -- Smokers who pay hundreds of dollars to be zapped by lasers purported to help them quit are victims of fraud, a watchdog group alleged yesterday in seeking a federal crackdown. Public Citizen petitioned the Food and Drug Administration to halt five companies from promoting low-power laser therapy for smoking cessation. The companies do not have FDA clearance to market the lasers for that purpose, nor is there any scientific evidence they are safe or effective, said Dr. Sidney Wolfe, director of Public Citizen's Health Research Group.

An Internet tool for entrepreneurs to gather small donations got a big boost April 5 when President Obama signed legislation allowing companies to sell equity through crowdfunding websites. While the Jumpstart Our Business Startups Act is designed to help young companies grow and create jobs, it may lead to a rise in scams and losses for investors, according to state regulators. "States are concerned that the fraud and scammers will come out of the closets now and start using the social-networking sites to rip off investors," said Jack Herstein,...

Daniel Adams, a Cape Cod filmmaker convicted of fraud for illegally obtaining $4.7 million in film tax credits, was sentenced Thursday to two to three years in state prison. His prison term will be followed by 10 years of probation, and he was ordered to pay $4.4 million in restitution under the sentence imposed by Massachusetts Superior Court Judge Carol Ball. Adams's attorney, James Greenberg, said he felt the sentence was fair, given that his client had no prior criminal history.

An organization created to address online fraud says scams in which criminals impersonate FBI agents were one of the most common types of Internet crime complaints last year — a total of 14,350 nationwide. The Internet Crime Complaint Center says it has handled over 300,000 complaints in each of the past three years. The 314,246 complaints in 2011 marked a 3.4 percent increase over 2010, when complaints totaled 303,809. The amount of money lost by the victims last year: $485.3 million.