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Timothy Chee of San Francisco and Tommy Ho Chi Mak of Daly City figured out how to make a tasty income: mortgage fraud. The recipe was simple: just make up false income tax returns, claim income far beyond their true earnings, show hundreds of thousands of dollars worth of stock that is not really owned and use a fake social security number. Using the plan, Chee applied for one loan at Wells Fargo for $108,000; he obtained a different loan for $400,000 from Western Federal Savings. Things were going so well, Chee enlisted the assistance of Mak. The same kind of false financial information on Mak was presented to both Wells Fargo and Bank of America.
The final results of using this recipe were not quite what the men hoped for, however. The two have been indicted by a federal grand jury on charges of making false statements to federally insured financial institutions to obtain over $760,000 in mortgage loans and of attempting to carry out a scheme to obtain money from federally insured financial institutions to obtain loans. The bank fraud charges carry a maximum sentence of 30 years in Club Fed and fines of up to $1 million.
San Joaquin county retirement officials went out lookin’ for fraudsters. They hired an independent firm to compare the social security numbers of check recipients with the social security numbers of deceased people.
Doris Navarro of Stockton was one of those caught. She is alleged to have cashed more than $14,000 worth of retirement checks that had been made out to her mother, Eloise Hibben, who – unfortunately – had died in 1992. Apparently the grieving daughter needed the money – to pay the restitution that was ordered after she was convicted of $26,098 in welfare fraud in 1991.
He had it all: white plastic stock, computers, embossers, a machine to make colored overlays and thousands of credit card receipts. He even had a video recorder and videotapes of people using ATM machines. Investigators surmise he’d study the tapes to learn the secret access codes; then he would make up cards to match the discarded receipts.
The arrest of Mahmoud Bakier, after a search of his home revealed the extensive cache of equipment, has nipped a multi-state crime spree in its early stages. Participants in the arrest included the Postal Inspection Service, the US Secret Service, the San Diego PD and the Chula Vista PD.
Joseph Irving Middlesworth, Marvin B. Kapelus and Donald C. Berman were accused of running a scam to sell unlicensed securities to three investors in 1992. The victims were wrongly assured that all of the transactions were fully insured; two lost $15,000 each and the third lost $75,000 when the company folded. Investors were promised a 12-percent return on their investments. Middlesworth, a financial advisor, was found guilty of fraud by a Superior Court jury and faces a prison sentence. Berman pleaded no contest to a reduced charge of selling unregistered securities and Kapelus is still awaiting trial.
Bunko detectives have seen it all before; Colorado officials are calling it a Jamaican cash scam. It went like this recently in Littleton: A man approached the intended victim in a parking lot. In a heavy Jamaican accent, the man told how he’d recently arrived in Colorado to settle the estate of his brother, who had been fatally wounded in an industrial accident. Apparently feeling sorry for the Jamaican, who was wearing a very thin coat for such cold weather, the intended victim offered the Jamaican a ride into town. When the two stopped at a restaurant on the way, the Jamaican’s accomplice joined them. The Jamaican and the newcomer began to discuss the American banking system. Flashing a large wad of $100 bills – allegedly the settlement he had received for the death of his brother – the Jamaican offered to match any cash money his friend could withdraw from the bank. The friend entered a bank and came out with $5,000 – which the Jamaican promptly matched. The two men then offered the same “deal” to their intended victim. Luckily, however, he became suspicious and ordered the men out of his car.
Terry Lee Stratton of Tierra Verde, a former insurance salesman, made a living selling in-home services – such as lawn care and transportation – to the elderly. Stratton obtained his leads from insurance agents – they would provide names of senior citizens suffering from dementia and therefore requiring special assistance. Not only were the services not delivered, but victims were often charged twice. One man made the mistake of giving Stratton a blank check. Stratton has been charged with five counts of elderly exploitation and two counts of grand theft. Sheriff’s officials say Stratton may have scammed victims for as much as $800,000 and the investigation is continuing. Agencies cooperating in the investigation are the Pinellas County Sheriff’s Office, the State Attorney’s Office, the State Comptroller’s Office and the Florida Department of Insurance.
Shirley Toomer was a personal nurse to 75- year-old Frederick Homage. Homage had a long list of health problems, including a stroke, multiple sclerosis and an amputated leg. He trusted and relied heavily on Toomer. Early in 1995, Toomer began filling out credit card applications in Homage’s name – and the rest is history. She used her new credit cards to pay for car repairs, jewelry and clothing, and she took ATM cash advances of $6,000. Toomer of Coral Springs was arrested by Broward sheriff’s deputies and charged with grand theft, financial exploitation and dealing in stolen property.
Not your smartest of sun bunnies, Char Lie Mills of Avon Park walked into Huntington Federal Savings Bank and opened a new account with a check from a long-closed Alabama account. She then took the starter checks from the Huntington Federal account and opened four more accounts, hitting SunTrust and Highlands Independent Bank in Sebring and Home Savings Bank and Big Lake National Bank in Lake Placid. All this on a Saturday.
Come Monday AM, Mills tried to withdraw some of Saturday’s “deposits.” All she managed to get, however, was an all-expense-paid trip to the county jail and a whole bunch of lines on her rap sheet.
Four executives of General Development Corp (GDC), once Florida’s biggest home builder, were accused of bilking home buyers in nine communities out of $117 million. The men sold the homes, mostly to out-of-state buyers, by telling prospects how much the houses were worth and what rental incomes were projected to be. Although the executives were initially found guilty, the 11th US Court of Appeals recently reversed the decision by declaring that no prudent person would have relied solely on the selling company for information about home values and potential rental income.
Prosecutors expressed fear that this reversal would “create a new, unprecedented barrier to criminal fraud prosecutions, requiring victims to take steps to ascertain the truth of fraudulent representations.”
Cettina Martinson was a maid – sort of. Her job was to check the condos at the Bermuda Bay Club on the edge of Boca Ciega Bay to see if they were clean and ready for new tenants. These condos were a favorite for senior citizens coming from as far away as England or Nova Scotia.
Somehow Martinson decided to act as the rental agent for the apartments – although certainly not the agent authorized by the condo owners. Martinson rented out the units, at a rate of $1450 per month; but she didn’t just rent each one once. She rented them over and over and over again, to as many couples as she could – anyone who would wire her the cash. Then the self- appointed rental agent flew the coop, on the same day that dozens of people appeared, each with a rental receipt for one of the condos. Police were called into the fray and began searching for the elusive Martinson.
A group of young men, mostly teenagers, should have been in school studying math. Instead they got their lessons via a check fraud scheme that cost five area banks about $60,000. John Frank Gaul, Edwin Salas, Jose Soto, Arnold Marin, Christopher Penrod, Aurelio Moreno, Paul Marshall Johnson III, Reynard Menders and Jose A. Gonzalez – some of them members of the Latin Kings gang – participated in the scam; they opened numerous bank accounts and then used stolen or forged checks to obtain money from credit unions and banks. Sentences ranged from prison terms to probation. Banks involved included MacDill Federal Credit Union, NationsBank, First Union National Bank, SunBank of Tampa Bay and Bay Gulf Federal Credit Union.
Michael Carlow, former owner of the Clark Candy Bar Company, and two co-defendants in a bank fraud bit off more than they could chew. Former PNC Bank employee Michael Tarquinio and Mary Jenne Nobers, an accountant, admitted to assisting Carlow in a check-kiting scheme that defrauded PNC of $31.3 million.
This guy deserves to be named “Bum of the Century.” Home contractor Willis Price helped (at least, that’s how he described it) Trilby Thomas move her money – money that came from the sale of her family’s farm and mineral rights in Louisiana – from the control of an attorney – right into his own pocket. It’s estimated that Thomas lost $587,000 and that she has only $6,000 left. Over a three-year period, Price convinced Thomas to write him 98 checks for home repair work – including ten different checks to repair the same section of sidewalk ten times. Price received a 20-year prison sentence, but it’s doubtful Thomas will still be around when Price is eventually released. Thomas is already 100 years old.
The US Attorney’s office has indicted 27 people in banking and financial institution scams that totaled over $4 million. In one case alone, teller supervisor Ellen Rose Seguban was charged with embezzling $771,500 from LaSalle Bank Lakeview.
Carl L. Jansma of Hull has been charged with one count of bank fraud. Federal prosecutors for the US District Court claim that Jansma used fake cattle invoices to fraudulently borrow more than $107,000 from an Orange City Bank.
They pleaded guilty to fraud charges early in 1994, but before they were sentenced DeAnglo Moore and his wife Cassandra fled the state. Georgia authorities recently apprehended DeAnglo, and now he’ll have to face the music. The original charges were in response to the theft of $21 million in cashier’s checks from the unlocked drawer at the Firstar Bank in Ames, Iowa. The DeAnglos were employed as bank janitors at the time of the theft.
Husband, Jim Hammond, the former Floyd County Attorney, pleaded guilty to defrauding the state child-support program of more than $100,000 and to running an $8 million check-kiting scam.
Wife, Janie Hammond, helped. She managed his law office and pleaded guilty to making a false statement to obtain a loan. She’s asked the sentencing judge for leniency because “my dominating husband made me do it.”
Both Gordon Bailey of Austin, Texas, and Richard Henegan of Atlanta, Georgia, face up to five years in prison and a fine of $250,000. The US Attorney’s Office in New Orleans reported the men have been charged with conspiracy to commit bank fraud. A federal indictment alleges that Bailey and Henegan, the owners of the failed Bailey Lincoln Mercury car dealership in New Orleans, collateralized loans with worthless automobile titles. If convicted, the men could be ordered to pay $150,000 in restitution to Hibernia National Bank, the amount reported lost on the loans.
Stephen Perry of Marlboro has been indicted by a federal grand jury on charges of taking over $100,000 from elderly investors.
Using a bogus company, the Crownshield Co. of Marblehead, Perry contacted former clients in Washington state and presented them with the opportunity to invest in the purchase of a housing project. A 74-year-old widow gave Perry $70,000, her son handed over $22,000 and an 85-year-old man suffering from Parkinson’s disease added another $36,357.
Later, Perry claimed that the real estate venture had not paid off and all of the funds had been lost. In reality, Perry and his girlfriend had deposited the money in a Crownshield Bank and taken a lavish gambling trip to Las Vegas.
Perry is charged with mail fraud, wire fraud and interstate transportation of property obtained by fraud.
George W. Kennedy of West Harwich will be paying $4,000 in fines, doing 200 hours of community service and serving a home confinement sentence as the result of a US District Court finding on bank fraud charges. He’s served as both the property buyer and seller and as the closing attorney in the fraud scheme. Borrower’s Court documents indicated that incomes were inflated and cash down payments were shown when none were actually made.
Loans R Us would’ve been a good name for the business Charles Donovan ran from street corners and parking lots. For a paltry three percent interest per week, a borrower could get cash. But three percent a week adds up to a whopping 156 percent a year. And while Donovan was hauling in hundreds of thousands of dollars, his wife Maureen was receiving low-interest student loans to fund her law school studies.
Charles Donovan has pled guilty to racketeering, bank fraud and credit card fraud. He received a 37-month prison term, a hefty fine and an order for restitution.
Judy Ann Hilger-Griffin of White Bear Lake, doing business as Metro Escrow, has pled guilty to bank fraud. Premier Bank of Maplewood suffered a loss of $170,417 and First Bank in White Bear Lake was hit for $42,602 when Hilger-Griffin forged the endorsements on closing checks and then deposited them to her own business account instead of rightfully passing the money on to the closing parties. She faces up to 30 years in prison, a $1 million fine or both.
Ronald D. Baldwin Jr. of Omaha was perhaps the only friend the three elderly brothers had. The three, ages 76, 72 and 69, would go to the movies or out for ice cream with Baldwin – and they would also go to casinos. The three men liked Baldwin so much, they even let him move into their house and take over their finances. They didn’t mind when he assisted them in refinancing their house to pay off outstanding loans. They wrote checks whenever he told them to – between five checking accounts – in a check-kiting scheme. They handed over everything: social security checks, pension checks, the whole lot of it. What the brothers had they gave their friend, Baldwin.
Authorities may give Baldwin far more. He has been charged with four counts of theft by deception and two counts of defrauding a vulnerable adult, all felonies.
Hundreds of people lost their homes when the bottom fell out of the real estate market. Then federal officials began investigating the sales tactics of Dime Savings Bank in New York, the lender on many of the defaulted loans. Fifteen former Dime employees were charged with fraudulent loan practices. An agreement has been reached that will allow Dime to avoid prosecution by investing millions more into the state’s housing market. The investment will include restructuring of loans for all of the borrowers involved, regardless of previous credit problems encountered on their mortgage loans.
She got caught up in the Atlantic City gambling scene, a habit that required a steady infusion of cash. Linda Sanders, a credit union supervisor from East Orange, admitted in federal court that she cheated her employer, the Ethicon Employees Federal Credit Union of Somerville, out of $228,900 in illegally obtained loans. She faces a prison sentence of 12 to 18 months under federal sentencing guidelines.
Add $77,376.64 to $97,077.85 and what do you get? That’s the amount that a former Passaic lawyer conveniently forgot to send mortgage holders after two homes were sold and refinanced. When the sales closed, Robert Leotti of Bound Brook deposited the clients’ funds into his law firm’s trust account. Authorities don’t know what happened to the money; they know only that Leotti left an extensive trail of bad checks in his wake. The title insurance company and Leotti’s law partner were required to make good on the funds.
The Superior Court grand jury in Paterson has returned a 14-count indictment charging Leotti with four second-degree counts of theft and ten charges of passing bad checks.
The US Attorney’s Office announced the indictments of fifteen people believed to have links with Russian organized crime. The fifteen were accused of crimes ranging from murder and extortion to credit card fraud.
Among those arrested were Vladimir “Vova” Bogdan, Alexander “Sasha” Kronfeld and Joseph “Joey” Smith. The men are believed to be the ringleaders of a group that stole checks and credit cards from the mail. They are charged with using the information gleaned from the stolen mail to open fake bank accounts and to apply for additional credit cards using the victim’s names and supporting information.
Santa Claus was coming to town – carrying American Express cards, lots of them. Andre Lloyd of Greensboro, a former customer service representative at Am-Ex, used his position to steal eight credit cards. Then with his partner, Gary Lamont Carrington, he went computer shopping. The spree came to an end when they tried to buy $10,000 worth of computer equipment from one vender. Both were sentenced to house arrest and a lengthy probation, and they were made to return all of the fancy equipment. Aaaaawwwww…
Cincinnati officials have been going round and round trying to catch some clever fraudsters. Technologically advanced, the individuals rely on computer-generated checks and falsely obtained identification. The crooks take over an innocent victim’s identity by obtaining the victim’s full name, date of birth and social security numbers. Then they obtain valid state identification cards in the victim’s name, but with their own picture. The final step is to print up checks on the victim’s account and cash them all over town. The investigation is continuing…
A California-based mortgage broker, Coast Security Mortgage Company, has been ordered to stop doing business in Oregon. The preliminary order revokes the company’s mortgage lender license and assesses a civil penalty of $20,000. The action is the result of numerous consumer complaints received by the Oregon Department of Consumer and Business Services. The issued order alleges the mortgage broker violated Oregon’s fraud provisions by making false statements and failing to state important information, engaging in unfair and unethical practices, failing to disclose disbursement of loan proceeds in a timely manner, repeatedly violating laws and administrative rules and demonstrating negligence or incompetence in performing state-licensed responsibilities. Coast Security has contested the order and requested a hearing.
Frederick Anthony Vasquez and Victor Thanh Vuong recently came out second best in a tangle with federal authorities. The Portland men stand accused of bank fraud in a scheme that defrauded area banks of more than $200,000. Vanquez, Vuong and four other members of a ring are suspected of approaching random victims and requesting assistance to cash cashier’s checks through the victim’s personal bank account. The excuses they gave ranged from “I don’t have my own checking account” to “I don’t have any picture ID.” The real reason they needed help was that the cashier’s checks were forgeries.
It was clever and it almost worked. A father-and-son team, with the help of an attorney, conspired to purchase a $120,000 piece of property. Or was it a $205,000 piece of property? According to the documents supplied to the lender, the Coventry Credit Union, it was the latter. According to the documents supplied to the seller, it was the former. And what happened to the $85,000 difference? Straight into the pockets of dad, James Fraza, and son, Scott Fraza.
Both have been convicted and sent to prison.
Former SCU president James Holderman is in deep trouble with the Feds. Charges run the gamut, from bankruptcy fraud to money laundering. But trouble is not new to Holderman; in 1991 he was convicted of state income tax evasion and using his office for personal gain.
Folks are going to have to get in line to take a shot at Robert E. Lewis Jr. His home-based Memphis business, Advanced Financial Services, offered credit repair, tax preparation and loan assistance. While authorities at the IRS, FBI and Secret Service study Lewis’s files, he sits in jail in Cleveland, Mississippi, on old assault and firearms charges. It seems the son of one of Lewis’s customers was so enraged that he barged into the office and took two file drawers full of manila folders – and promptly turned them over to police. If Lewis is eventually charged in Tennessee, we know who’ll be first in line to take a pot-shot.
Got too many bills? Need a new car, truck or property? No problem. Just use some worthless money orders and bank checks to buy what you want or pay off anything you please. That’s the allegation that has been made against a group of Lone Star State residents who ran a business they called U.S.A. First. Charged with conspiracy and mail fraud are Patricia Rae Koehler, Earl Oscar Forester, Wayne Slater, Vicki Slater, Oliver Neal Paulson, Clarence Ray Mikolajczyk and Michael Joseph Kearns. Billy Mack O’Neill faces only mail fraud charges.
Complicating matters, Kearns claims he is a resident of the Republic of Texas and that the US government has no authority to tell him what he can or cannot do. He promoted bogus money orders in seminars at a San Antonio church and even used them himself to purchase a $100,000 house from the US Department of Veterans Affairs. Later, faced with a civil lawsuit by the VA, Kearns posted a $1 million bail using another fake money order.
Similar to the Freemen of Montana, the anti-government types running U.S.A. First maintained that US currency was illegal since 1933 — when the gold standards were abandoned.
Thus far, court sentences for the group range between 30 months to eight years.
The Texas Department of Transportation has lodged a formal complaint against seven car dealerships in Austin, Houston and Angleton. The seven are Apple Toyota, Apple Dodge and Chevrolet Country in Austin; Apple Chevrolet, Greenspoint Dodge and Greenspoint Isuzu in Houston; and Apple Chevrolet Oldsmobile in Angleston. The dealerships are charged with submitting forged credit applications to creditors in the names of vehicle purchasers, forging buyer signatures on contracts of sale and altering the terms of the sales contracts after the buyers had signed.
In cases where the loan applications were altered, the result would be twofold. Banks would approve the loans based on false information, and such loans had a better chance of going bad because the purchaser might not be able to actually afford the car sold to him. The purchaser, too, was often defrauded, according to the charges. Although the new cars were released to their buyers, the buyers were told the sale was not final until the lender had approved the credit application.
When a trade-in was involved, the trade-in was often sold before the purchaser was told there was no financing for the new car. The trade-in would then have to be returned and more money would have to be paid or a lesser value car would have to be selected.
Customers who became too enraged were allegedly paid off in exchange for their silence. It is also alleged that former employees were threatened with frivolous lawsuits if they made their concerns known to state investigators.
While it is difficult to control the acts of hundreds of salesmen, dealerships are expected to have procedures in effect that will catch such illegal activity. The difference between the seven dealerships charged and the rest of Texas’s car sales businesses is that the DOT believes management at the seven dealerships knew of or was directly responsible for the fraudulent activities.
A $1 million civil penalty was being sought by the state, plus revocation or suspension of dealership licenses. As of mid-June, a tentative agreement had been reached whereupon Apple retained ownership of his flagship dealership, Greenspoint Dodge, but the five others would be taken over by new owners. Additionally, a substantial penalty was to be levied by the state.
Sue Bush Lavinder of Irving has been arrested and charged with misappropriation of fiduciary responsibility. The charges stem from allegations that Lavinder, while operating a title insurance company, did not pay off old mortgages after receiving the new mortgage funding. The scam, alleged to have netted her over $500,000 in 1994, involved four separate transactions. She was apparently able to cover her tracks for a period of time by making the payments on the old mortgages and changing the address for late notices to a box number that she controlled. A title insurance company that Lavinder purported to represent has paid off the old loans and filed its own suit against Lavinder. Commonwealth Land Title Insurance Company charges that Lavinder misrepresented herself and mishandled escrow accounts.
It’s been five long years, but the Feds finally got their men. William C. Roberts of Rocky Mount and Carson W. Carter of Roanoke have agreed to plead guilty to charges they defrauded two banks out of a total of $1.9 million. Using 16 checking accounts, Roberts and Carter set up an extensive check-kiting network in which they transferred funds between First Security Bank in Roanoke and the Bank of Buchanan. First Security, which lost $500,000 in the scam, was shut down by regulators soon afterwards.
Between 1988 and 1994, Frank E. Fuhrmann of Kenosha worked at Heritage Bank & Trust, American State Bank and First Bank Southeast. During that time he made off with $350,000 that didn’t belong to him. The scams were many; creating phony bank documents, making improper cover-up loans and misapplying bank and customer funds. When Fuhrmann would change jobs, from president of one bank to president of another bank, he would take the questionable loans along with him so he could continue to manipulate the accounts and thereby conceal the wrongdoings. After pleading guilty to 15 counts of bank fraud, he was sentenced to 25 months in prison, a fine and restitution.
It was called the Rafter Lafter Association Inc. and owners James and Shirley McAleer assured investors that a $100 investment would be repaid with $200,000. Potential investors were told of the merging of four world monetary super powers, La Cosa Nostra, the Illuminati, the CIA and the Vatican. According to McAleer, these four organizations had put all their money together and planned to conquer and rule the world. McAleer was going to use invested money to hire a “paymaster” who would then control this massive sum of money by way of a “master transaction.”
James McAleer has been charged with securities, mail and wire fraud. His wife, Shirley, was charged with wire fraud and conspiracy to launder money. And from McAleer’s own mouth came the claim that he had 2,400 investors. $200,000 for $100? Where do we sign up?
Portia Frederick and Duncan Robert Hogg of Edmonton, will be tried in November on charges they fraudulently obtained over $2 million in mortgage funds from CIBC Mortgage Corp., Capitol City Savings and Credit Union, Canada Trustco Mortgage Co. and the federal government housing agency Canada Mortgage and Housing Corp.
A shoe-repair shop owner must have thought the national lottery had landed on his doorstep when $250 million was delivered to him in Quebec City. The five certificates, in denominations of $50 million each, were being investigated by Canadian police. They were fake Mexican term-deposit notes that may be part of an international fraud scheme.
A 10-month probe by the bankruptcy fraud unit of the Royal Canadian Mounted Police has resulted in an 18-count charge of bankruptcy fraud against Robert Obadia, four counts against his wife, Liliane Levy Obadia and one count against his son, Yorel Obadia.
Obadia, the owner of the defunct charter airline Nationair, declared personal bankruptcy on December 3, 1994. Central to the investigation are a 1986 Jaguar, a 1992 Plymouth Voyager, a 1986 Rolls-Royce Silver Spur, a Westmount residence, a Laurentians cottage, a stock portfolio … $4.4 million worth of assets that were either sold or transferred to different ownership.
He was the mayor of Brampton. He was named as the city’s Citizen of the Year in 1992. He’s been arrested for fraud in conjunction with a $2.4 million mortgage fraud. Quite the combination.
Paul Beisel, owner of the First Midland Mortgage Corporation, is alleged to have arranged mortgages based on false or altered information. Canada Trust made the loans and paid commissions. Several of the loans defaulted, but neither Canada Trust nor the applicants were aware of the misinformation. Beisels employees, Robert Bonham and James Ryan, were also arrested.
Dong Huchen is being investigated for “malfeasance and unauthorized foreign investments” in connection with his former position as the head of the Guangdong Construction Bank of China. A joint investigation team set up by the People’s Construction Bank of China and the People’s Bank of China is looking into the alleged fraud involving 1 billion yuan ($200 million US). Dong is suspected of making unauthorized overseas investments and speculating in Hong Kong real estate with bank funds, accounting for the losses. He is also accused of using $20 million of the bank’s funds by channeling the money through a Hong Kong company owned by his wife. Profits from this company were then allegedly embezzled by Dong.
If convicted of the charges, Dong will be the most senior financial sector official to be apprehended and punished in recent years. China has a low tolerance for financial crimes. As recently as last year, eight bank employees were executed for lesser offenses.
In the US fraud defense industry, the ICAC is the International Committee for Arson Control. In China those same initials stand for the Independent Commission Against Corruption. Recently, the ICAC in China was accused by three senior judges of withholding information that might have made a major difference in the outcome of a fraud trial.
It began when Malaysian businessman Ch’ng Poh was found guilty of involvement in a $127 million swindle and sentenced to five years in prison. Ch’ng had been accused of conspiracy against the Intercontinental Housing Development Ltd. The prime witness for the prosecution was Low Chang-Hian, former director of Ka Wah Bank. Low himself was sent to prison a few years earlier for his part in a plot to defraud Ka Wah Bank. Ch’ng maintained that Low wanted to frame him. He backed up his charges by alluding to information contained in interviews that had been taped earlier at the organization’s headquarters. The defense was unaware of the existence of the tapes until the prosecution case against Ch’ng had ended.
A glitch in English and Welsh law provides a convenient loophole for mortgage fraudsters to slip through. Currently, the only way to prosecute is under conspiracy statutes – ie. working with others. While such thievery would ordinarily be prosecuted under theft statutes, an Appeals Court ruling says mortgage loans don’t count as services so the “obtaining services by deception” wording in the theft laws won’t hold. The Law Commission has registered a demand for urgent action to close the loophole.
“Bloody machine won’t work,” was heard over and over as cash card holders tried to use a new machine in East London. One after another, at least 300 people in all, approached the newly installed Halifax cash card dispenser in front of a mortgage broker’s office (albeit a fictitious mortgage broker, it turned out) to swipe their card and get some money.
Little beknownst to the victims, the machine had been built and installed by three fraudsters who wanted only to record the victims’ account and PIN numbers so they could later steal from the victims’ accounts. The crooks got their hands on pounds 120,000.
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