Filed under: Fraud

Visit our Filed page for categories. To browse by specific topic, see our Inside page. For a list of companies covered on this site, visit our Companies page.


Skilling denied bail while conviction’s reviewed

A federal appellate court judge on Friday turned down former Enron Corp.  executive Jeffrey Skilling’s request for bail pending the continuing judicial review of his 2006 conspiracy and fraud conviction. The former Enron chief executive is serving a 24-year prison sentence.
Get the full story »

Mattel charges Bratz maker with diverting funds

Toymaker Mattel Inc. has filed a lawsuit alleging MGA Entertainment fraudulently transferred hundreds of millions of dollars to keep Mattel from collecting on anticipated judgments and to defraud other creditors.

The suit filed Wednesday in Los Angeles County Superior Court alleges MGA transferred $430 million in dividends and other assets to its chief executive Isaac Larian, his family members and various trusts between 2004 and 2008 to make the company appear insolvent and prevent MGA’s creditors, including Mattel, from cashing in. Get the full story »

2 N.J. funds win $12M in suit linked to Madoff

Investors in Gabriel Capital LP, a so-called feeder fund that funneled money to imprisoned swindler Bernard Madoff, were awarded $12.74 million by a panel of three arbitrators, court records show.

The award to two New Jersey investment funds was disclosed in a filing Thursday with the New York State Supreme Court in Manhattan. Get the full story »

Illinois AG suing firm for identity protection charges

Illinois Attorney General Lisa Madigan said Thursday she is suing a California company for charging consumers for identity protection services that they never requested.

The lawsuit, filed in Sangamon County Circuit Court, claims that ID Lifeguards Inc. of Glendale, Calif., charged $157,562 on the phone bills of 5,071 Illinois consumers between September 2009 and March 2010. Get the full story »

Long Grove man pleads guilty in Ponzi scheme

From The Daily Herald | Francis Alan Schmitz, a 59-year-old man from Long Grove, has pleaded guilty to defrauding financial institutions in an alleged Ponzi scheme.

CFTC settles charges against Naperville trader

The U.S. Commodity Futures Trading Commission said Monday it has settled fraud and unauthorized trading charges against a Naperville floor trader at the Chicago Board of Trade whose activities generated a $4 million loss.

The CFTC order permanently bans John Lee Neuman from trading. He had registered with the CFTC as a floor broker from May 1993 until February 2008, and became a local in the CBOT corn options pit in September 1997. Get the full story »

Blackwater Capital owner gets 6.5 years

A north suburban man was sentenced to 6½ years in federal prison Wednesday for cheating victims out of more than $3.3 million they gave him for purported business opportunities with an investment banking firm that he owned and operated, according to the U.S. attorney’s office.

Mortgage fraud on rise again

According to data from research firm CoreLogic, prepared for the Wall Street Journal, losses from mortgage fraud rose 17 percent last year after declining 57 percent in 2008. And the scams are getting more sophisticated to counter tighter rules put in place after the market collapse.

BofA, Lewis deny charges in Merrill Lynch deal

Bank of America Corp. and former Chief Executive Kenneth Lewis denied civil fraud charges brought by New York’s attorney general over the bank’s takeover of Merrill Lynch & Co. amid the 2008 financial crisis.

In court papers filed Wednesday, Lewis said the state’s prosecutor Andrew Cuomo had no basis in his lawsuit to allege a conspiracy to mislead the public and shareholders about Merrill’s deteriorating finances and Bank of America’s desire for government assistance. Get the full story »

6 gas station owners charged in sales-tax crackdown

Six Illinois gas station owners have been indicted on charges of pocketing sales taxes customers paid when they fueled up.

The fraud investigation has recovered nearly $13 million in unpaid sales taxes, according to the Illinois attorney general’s office and state department of revenue. The indictments were the first in an ongoing probe of businesses that fail to pay taxes, Atty. Gen. Lisa Madigan said Thursday. More charges against other tax frauds are expected in coming months, she said. Get the full story »

Conrad Black, U.S. clash over ‘07 conviction

After the U.S. Supreme Court eviscerated one of the fraud laws used to convict former media baron Conrad Black, federal prosecutors have to prove beyond a reasonable doubt that the trial error was harmless.

Lawyers for Black say the burden is impossible to meet and that a federal appeals court should toss out his conviction. Black was recently freed from prison after the Supreme Court in June ordered a review of his case because of flawed jury instructions.

Get the full story »

Banker pleads guilty in Robin Hood-like scheme

Jeffrey Gonsiewski fancied himself sort of a modern-day Robin Hood at a time when consumers were becoming increasingly delinquent on their bank loans.

The former vice president at First Security Trust & Savings Bank — an Elmwood Park-based lender that’s part of the Wirtz family conglomerate — pleaded guilty on Wednesday to one count of federal bank fraud.

Jeffrey Gonsiewski, who was charged last month, admitted that he changed the terms of at least 100 loans for more than 50 customers to make it appear that their payments were current when in fact they were overdue. Get the full story »

Schrenker to plead guilty to Ind. securities fraud

A former money manager convicted of trying to fake his own death in a Florida plane crash has agreed to plead guilty to securities fraud charges in Indiana. A proposed plea agreement says Marcus Schrenker would face 10 years in prison in exchange for pleading guilty to five of 11 counts.

Alleged bond scam financed cars, porn, and more

About 120 Illinois and California residents thought they were investing more than $20 million in Turkish Eurobonds when, in fact, a Lisle man and others were spending the money on luxury automobiles, homes, vacations and online pornography, the Illinois Department of Insurance alleged Tuesday.

The state’s action follows a lawsuit filed by the Securities and Exchange Commission in March in which the federal regulator said the group was using the investors’ money to also buy a stamp collection, and also invest in “the cryogenic preservation of umbilical cord stem cells.” Get the full story »

Judge: Zell can’t be made to pay for pension losses

A U.S. District Judge in Chicago ruled Monday that Sam Zell can’t be made to pay for the company’s retirement fund losses because Tribune isn’t directly involved in the lawsuit. Zell was sued by workers who claimed that the billionaire caused the company’s employee stock ownership plan to lose value.