In the state of New York, there are people who seek to obtain money by setting up schemes. There are two major types of schemes: pyramid schemes and Ponzi schemes. While both types of schemes are illegal, they are set up and work in different ways.
According to court documents, a New York health club owner pleaded guilty to health care fraud in federal court on April 20. The man is now facing a fine of up to $250,000, 10 years in federal prison and restitution.
New York residents may have seen media reports concerning a number of proposals made by a federal panel that would change the way penalties are calculated for white collar crimes such as fraud and embezzlement. While defense attorneys have criticized the proposed reforms for not going far enough, the U.S. Department of Justice has come out against the measures. The department made its views known by releasing a letter during a March 12 U.S. Sentencing Commission hearing.
A New York attorney general announced on Jan. 15 that he planned to bring fraud cases against large banks that were accused of selling securities that were mortgage-backed prior to the United States' 2008 financial crisis. Some of the targeted banks include Bank of America Corporation, Citigroup Inc. and JP Morgan Chase & Co.
On Dec. 10, a 48-year-old man was the fourth former employee of Bernard L. Madoff Investment Securities LLC. to be convicted and sentenced on securities fraud charges and conspiracy. The man worked as a computer programmer from 1991 to 2008, an era of Madoff's Ponzi scheme that cost investors billions.
Individuals in New York may have heard of Ponzi schemes. A Ponzi scheme is an illegal investment scheme in which money is generated from new investors. It is named for a man named Charles Ponzi who ran a fraudulent investment scheme in New England in the 1920s related to postage stamp speculation. Ponzi told investors they would get a 50 percent return after 90 days. After first supporting his scheme with international mail coupons, he then turned to using the funds of new investors to pay longer-term investors in the way that Ponzi schemes are known for today.
A man in New York was sentenced to 34 months in prison on Oct. 10 after admitting that he had defrauded the producers of a Broadway musical. According to one of the producers who attended the sentencing hearing, "Rebecca - The Musical" was never debuted as a result of the man's actions. After pleading guilty to the white-collar crimes, the accused man was also ordered to pay $68,000 to the play's producers.
A New York State Supreme Court in Manhattan recently indicted eight people for an alleged "pump-and-dump" scheme involving penny stocks. The accused individuals include three stock promoters and five other people that they reportedly worked with. According to the indictment, the scheme resulted in thousands of investors being defrauded from April 2009 to May 2012.
A 38-year-old man from Bayside, Queens, was taken into custody on Aug. 7 in connection with fraudulent credit card and counterfeit document use. A Westbury hotel reportedly experienced losses of $18,000 due to the man's presentation of fraudulent cards in payment during his time staying at the premises. Payments were eventually declined by the credit card company. Authorities indicate the man rented another room in East Garden City where a search was reportedly made with his consent. The search allegedly turned up several identifications and credit cards that were fraudulent as well as counterfeit driver's licenses. He was also allegedly in possession of equipment and materials needed for the production of such documents.
New York concertgoers may have heard that six people were indicted on July 23 for stealing account information from StubHub in order to illegally buy approximately 3,500 tickets. Prosecutors charged the accused individuals with 117 counts that included money laundering, possession of stolen property and grand larceny.