Long Island Businessman Pleads Guilty to Multi-Million Dollar Covid-19 Loan Fraud

Donald Finley, Owner of Jekyll & Hyde Restaurant in Manhattan and the Bayville Adventure Park on Long Island, Allegedly Used Fraudulently Obtained Small Business Loans to Buy a House

Earlier today, at the federal courthouse in Central Islip, Donald Finley, a Locust Valley businessman and owner of the now-defunct Jekyll & Hyde theme restaurant in Manhattan and the Bayville Adventure Park on Long Island, pleaded guilty to disaster relief fraud and wire fraud in connection with his receipt of millions of dollars in small business loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDLP). Today’s proceeding was held before United States Magistrate Judge Arlene R. Lindsay.  When sentenced, Finley faces up to 30 years in prison, as well as restitution totaling more than $3.2 million and a fine of up to $1.25 million.

Breon Peace, United States Attorney for the Eastern District of New York, Thomas Fattorusso, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), and Daniel Brubaker, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), announced the guilty plea.

“Finley has admitted diverting millions of dollars in COVID-19 disaster relief funds to finance his personal expenses, including the purchase of a home in Nantucket, Massachusetts,” stated United States Attorney Peace. “This Office will continue investigating and prosecuting those, like the defendant, who shamelessly steal from government programs that were intended for struggling small businesses and families during the pandemic.”

“We have seen the abuses of disaster relief programs when all too often criminals find an opportunity for exploitation.  In this case, Finley obtained millions in COVID-19 relief funds, only to use the ill-gotten cash for his own personal gain. While he may be the owner of an amusement park meant to bring joy, with his guilty plea and pending sentencing, Finley may be facing a future that he could find much less enjoyable,” stated IRS-CI Special Agent-in-Charge Fattorusso. 

“Mr. Finley took advantage of a program intended to be used to support small businesses as part of the CARES Act of 2020, when he devised a scheme to submit fraudulent information to the government to obtain millions in funds during the pandemic to fund his lavish lifestyle. Not only did he purchase a home on Nantucket, but he utilized those funds to pay for personal expenses. Postal Inspectors and their law enforcement partners are always on a mission to ensure those who truly need assistance get it, and those who scheme and break the law to receive funds which they are not entitled to, are brought to justice,” stated USPIS Inspector-in- Charge Brubaker.

As set forth in court filings, between March 2020 and March 2021, amid the COVID-19 pandemic, Finley fraudulently applied for, and received, at least 29 PPP and EIDLP loans totaling approximately $3.2 million, on behalf of corporate entities he controlled.  Instead of using the funds for disaster relief, Finley diverted them for personal use, including the purchase of a home in Nantucket, Massachusetts, in February 2021.

Congress created the PPP and EIDLP as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.   Enacted on March 29, 2020, the CARES Act provided emergency financial assistance in connection with economic effects of the COVID-19 pandemic.  One source of relief provided by the CARES Act was the allocation of funds for the issuance of forgivable loans to small businesses for job retention and certain other expenses through the PPP.  The PPP allowed qualifying small businesses to receive unsecured loans on favorable terms, which they were required to use for specified expenses, including payroll costs, interest on mortgages, rent and utilities.  The PPP provided for forgiveness of the loan if the recipient businesses spent the proceeds on these specified expenses within a limited time period and used a certain percentage for payroll costs.

Another source of relief provided by the CARES Act was the EIDLP, which provided low-interest financing to small businesses, renters, and homeowners in regions affected by declared disasters.  Under the program, EIDLP recipients were eligible to receive advances of up to $10,000 for small businesses within three days of applying for an EIDL (EIDL Advance).  The amount of an EIDL Advance was determined based on the number of employees working for the applicant.  The EIDL Advance did not have to be repaid.

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorney Mark E. Misorek is in charge of the prosecution.

The Defendant:

DONALD FINLEY
Age:  61
Locust Valley, New York

E.D.N.Y. Docket No. 23-CR-181 (JMA)

Contact

John Marzulli
Danielle Blustein Hass                                         
United States Attorney’s Office
(718) 254-6323

Updated May 25, 2023

Dental Practice Owners Charged with Fraud and RICO Conspiracy

Multiple dental practice owners and co-conspirators were charged in the Eastern District of Pennsylvania for allegedly engaging in a multifaceted racketeering conspiracy through a multi-state network of dental practices and related dental businesses.

On Jan. 18, a federal grand jury returned an indictment charging 12 individuals with operating and participating in a series of dental practices and related companies (the Savani Group) that engaged in visa fraud, health care fraud, wire fraud involving federal tax evasion, and money laundering. Six of the defendants were charged with being part of a racketeer influenced corrupt organization (RICO) conspiracy based on their roles in the Savani Group, and three defendants were also charged with obstruction of justice.

According to court documents, the defendants were allegedly part of a wide-ranging scheme to defraud Medicaid, U.S. Immigration authorities, the IRS, and the Food and Drug Administration (FDA), and to launder the fraud proceeds. Bhaskar Savani, 57, and Niranjan Savani, 51, both of Maple Glenn, Pennsylvania and both licensed dentists, owned and controlled the Savani Group dental practices. Arun Savani, 55, of Blue Bell, Pennsylvania, owned and managed the Savani Group companies and was responsible for the Savani Group’s financial affairs. The three brothers – Bhaskar, Niranjan, and Arun – allegedly conspired to recruit foreign workers for U.S. work visas while concealing the workers’ true job titles and responsibilities. Read More

Long Island mom and daughter ran 13-year credit card fraud scheme that racked up $850,000 in charges

Stephen M. Lepore For Dailymail.Com - Aug 29

A mother and daughter from Long Island have been charged with racking up $850,000 in fraudulent credit card purchases for over a decade. 

Karan Geist, 61, and her daughter Alyssa Geist, 33, both pleaded not guilty to grand larceny, fraud and other charges in Manhattan Supreme Court Friday. 

They're alleged to have used 14 different credit card companies to run the 13-year-long scam to buy designer clothes and expensive vacations, according to the New York Post. 

Manhattan prosecutors accuse Karan Geist of falsely reporting the nearly $1million between 2008 and 2021. 

They say she got credit placed on her statements when she would call banks and report phony charges. On separate occasions, she got $205,000 put on an American Express card and $155,000 put on a Chase Card. 

DA Albin Bragg's office said the purchases 'ranged in nature from the luxurious to the mundane.' 

The Geist women would travel on the card to destinations as wide-ranging as Paris, Milan, Norway, Costa Rica and Hawaii. A photo posted online shows the two walking the famous Abbey Road in London.

Assistant District Attorney Catherine McCaw said in court: 'She booked tickets in her own name, car rentals in her family member's name, hotel stays in her own name, and other luxurious purchases like watches and handbags while she was traveling.' 

As Bragg's office called out, she wouldn't just use the credit for extravagancies, she would use it at dollar stores or to pay simple bills for veterinary care, in addition to the occasional department store shopping spree.

Defendant Led Group That Made Tens of Millions of Dollar Misleading Victims into Believing The Group Had Inside Information on College and Professional Sporting Events

A two-count indictment was unsealed today in United States District Court for the Eastern District of New York charging Cory Zeidman with conspiracy to commit wire fraud, mail fraud and money laundering conspiracy in connection with a sports betting fraud scheme he operated from Long Island and Florida. The defendant was arrested this morning and Florida and will make his initial appearance at the federal courthouse in Miami.  

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Former NFL Players Plead Guilty to Nationwide Health Care Fraud Scheme

Three former National Football League (NFL) players have pleaded guilty for their roles in a nationwide scheme to defraud a health care benefit program for retired NFL players. A total of 15 defendants have pleaded guilty in connection with this scheme.

Clinton Portis, 40, of Fort Mill, South Carolina, and Tamarick Vanover, 47, of Tallahassee, Florida, pleaded guilty on Friday, Sept. 3. Robert McCune, 40, of Riverdale, Georgia, pleaded guilty on Aug. 24. The former players admitted to participating in a scheme to defraud the Gene Upshaw NFL Player Health Reimbursement Account Plan (the Plan). The Plan was established pursuant to the NFL’s 2006 collective bargaining agreement and provided for tax-free reimbursement of out-of-pocket medical care expenses that were not covered by insurance, and that were incurred by former players, their spouses, and their dependents – up to a maximum of $350,000 per player. 

According to court documents, Portis caused the submission of false and fraudulent claims to the Plan on his behalf over a two-month period, obtaining $99,264 in benefits for expensive medical equipment that was not actually provided. Vanover recruited three other former NFL players into the fraudulent scheme and assisted them in causing false and fraudulent claims to be submitted to the Plan, obtaining $159,510 for expensive medical equipment that was not actually provided. McCune orchestrated the nationwide fraud, which resulted in approximately $2.9 million in false and fraudulent claims being submitted to the Plan and the Plan paying out approximately $2.5 million on those claims between June 2017 and April 2018.

Portis and Vanover pleaded guilty two days after a trial against them resulted in a hung jury and a mistrial on certain counts against Vanover. McCune, the third defendant in that trial, pleaded guilty to all charges against him on the second day of trial. A retrial on the charges against Portis and Vanover had been scheduled to begin today.

Portis and Vanover were originally indicted, along with McCune and seven other defendants, in the Eastern District of Kentucky in December 2019 for their roles in the fraud. Since the initial charges were announced, five additional retired NFL players were charged in the scheme. All 12 of the other defendants charged have pleaded guilty to conspiracy to commit health care fraud: Joseph Horn, Correll Buckhalter, Carlos Rogers, James Butler, Etric Pruitt, Ceandris Brown, John Eubanks, Antwan Odom, Darrell Reid, Anthony Montgomery, Fredrick Bennett, and Donald “Reche” Caldwell, who passed away in June 2020.

Portis and Vanover pleaded guilty to conspiracy to commit health care fraud and agreed to pay full restitution to the Plan. Portis is scheduled to be sentenced on Jan. 6, 2022, and Vanover is scheduled to be sentenced on Jan. 22, 2022. They each face a maximum penalty of 10 years in prison.

McCune pleaded guilty to conspiracy to commit wire fraud and health care fraud, 13 counts of health care fraud, 11 counts of wire fraud, and three counts of aggravated identity theft. McCune is scheduled to be sentenced on Nov. 19. He faces a maximum penalty of 20 years in prison for conspiracy to commit wire fraud and health care fraud, 10 years for each count of health care fraud, 20 years for each count of wire fraud, and two years for each count of aggravated identity theft.

A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Acting U.S. Attorney Carlton S. Shier IV for the Eastern District of Kentucky; and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.

This case was investigated by the FBI and included efforts by various FBI Field Offices and Resident Agencies, including Augusta, Georgia; Birmingham and Mobile, Alabama; Cleveland, Ohio; Chicago, Illinois; Columbia, South Carolina; Dallas and Houston, Texas; Denver, Colorado; Jackson, Mississippi; Lexington, Kentucky; New Orleans, Louisiana; Miami, Jacksonville, and Tampa, Florida; Newark, New Jersey; Los Angeles, San Diego, Sacramento, and Newport Beach, California; Phoenix, Arizona; Salt Lake City, Utah; and Washington, D.C. 

Trial Attorneys John (Fritz) Scanlon and Alexander J. Kramer of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Andrew E. Smith of the Eastern District of Kentucky are prosecuting the case.

DOJ Tuesday, September 7, 2021

Medical Equipment Company Owners Sentenced to More Than 12 Years for $27 Million Fraud Scheme

A Texas woman and an Austrian national were sentenced yesterday to 151 months in prison for a $27 million Medicare kickback conspiracy.

According to the evidence presented at trial, Leah Hagen, 50, of Arlington, and Michael Hagen, 54, a citizen of Austria and Arlington resident, owned and operated two durable medical equipment (DME) companies, Metro DME Supply LLC and Ortho Pain Solutions LLC. From March 2016 to January 2019, the defendants paid kickbacks and bribes to their co-conspirator’s call center in the Philippines in exchange for signed doctors’ orders for DME that were used to submit false claims in excess of $59 million to Medicare. From those claims, Medicare paid the defendants more than $27 million. The defendants transferred millions of dollars overseas to, among other things, purchase a home in Spain.

To conceal the payments of kickbacks and bribes from the authorities, the defendants, through their DME companies, signed sham contracts that disguised payments as marketing and business process outsourcing. The DME claims submitted by the defendants to Medicare were for services that were medically unnecessary and not provided as represented. In some cases, beneficiaries were convinced to accept braces they did not need or want and were offered gift cards in exchange for accepting those braces.

On July 8, the Hagens were convicted following an eight-day trial on charges of conspiracy to defraud the United States and to pay and receive health care kickbacks and conspiracy to launder money. The Hagens were sentenced by U.S. District Judge Jane J. Boyle of the Northern District of Texas, who also ordered them to pay $27,104,359 in restitution.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Chad E. Meacham of the Northern District of Texas; Special Agent in Charge Miranda Bennett of the Department of Health and Human Services, Office of the Inspector General’s (HHS-OIG) Dallas Region; Acting Assistant Director Jay Greenberg of the FBI’s Criminal Investigative Division; and Special Agent in Charge Matthew J. DeSarno of the FBI’s Dallas Field Office made the announcement.

This case was investigated by HHS-OIG and the FBI’s Dallas Field Office and was brought as part of Operation Brace Yourself, a federal law enforcement action led by the Health Care Fraud Unit of the Criminal Division’s Fraud Section, in partnership with the U.S. Attorney’s Offices for the District of South Carolina, District of New Jersey, and the Middle District of Florida. 

Assistant Deputy Chief Adrienne Frazior and Trial Attorneys Brynn Schiess and Catherine Wagner of the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

DOJ Thursday, December 16, 2021

Defendants Charged in $4M Unemployment Fraud Case

DETROIT – Two Michigan men have been charged via criminal complaint for their roles in a large-scale, multi-state Unemployment Insurance benefit fraud scheme, announced Acting United States Attorney Saima S. Mohsin.

Joining in the announcement were Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor, Office of Inspector General, Special Agent in Charge John R. Marengo, US Secret Service, Rodney Hopkins, Postal Inspector in Charge of the Detroit Division, Special Agent in Charge Sarah Kull, Internal Revenue Service-Criminal Investigation and Julia Dale, Director of the Unemployment Insurance Agency.

The complaint charges Jermaine Arnett, 34, of Pontiac, Michigan, and Terrance Calhoun, Jr., 32, also of Pontiac, Michigan, with aggravated identity theft, mail fraud, fraud using a false name and address, wire fraud, bank fraud, money laundering, and conspiracy to commit each of those acts, as well as firearm crimes.

According to the complaint, Arnett, Calhoun Jr., and one or more other individuals are responsible for filing over 500 claims for fraudulent unemployment insurance benefits across the United States, including Michigan, using just a handful of Internet Protocol addresses and mailing addresses. As described by the complaint, those false claims resulted in numerous debit cards loaded with unemployment insurance funds being mailed to addresses that Arnett, Calhoun Jr., and others controlled. The complaint alleges that Arnett, Calhoun Jr., and other individuals then systematically unloaded the funds from the cards by making large cash withdrawals at ATMs.

According to the complaint, between April and July 2020 those false claims resulted in multiple states collectively issuing more than $4 million in unemployment insurance benefits. The complaint alleges that, although a portion of the funds were electronically reclaimed before being unloaded, more than $1.7 million dollars in purchases and cash withdrawals were successfully made from the cards over a 2½ month period, and the majority of those cash withdrawals took place at ATMs located in Troy, Bloomfield Hills, and Rochester Hills, Michigan. As further described within the complaint, agents utilized ATM surveillance photos to identify Arnett and Calhoun Jr. as two of the individuals who made large cash withdrawals from ATMs using debit cards loaded with unemployment benefits issued in the names of other individuals. As also described within the complaint, when agents executed search warrants at three principal mailing addresses used for the fraudulent unemployment insurance benefit claims, including the residences of Arnett and Calhoun Jr., agents found and seized multiple debit cards in the names of numerous other individuals, distinctive clothing worn in ATM surveillance photos, firearms, and numerous documents containing the personal identification information of other individuals.

A complaint is only a charge and is not evidence of guilt.  Trial cannot be held on felony charges in a complaint.  When the investigation is completed, a determination will be made whether to seek a felony indictment.

This investigation is being conducted jointly by agents from the Department of Labor Office of the Inspector General, the United States Secret Service, the Internal Revenue Service – Criminal Investigations Division, the United States Postal Service Office of the Inspector General, and the State of Michigan -Unemployment Insurance Agency. The case is being prosecuted by Assistant United States Attorney Carl D. Gilmer-Hill. 

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

More than 43 people in 11 judicial districts were accused of participating in an array of different schemes relating to telemedicine.

The U.S. Department of Justice announced this past week that it was bringing criminal charges against 138 total defendants for their alleged participation in various healthcare fraud schemes, resulting in about $1.4 billion in alleged losses.  

More than $1.1 billion of that loss involved allegedly fraudulent claims related to telemedicine.  

"We have seen all too often criminals who engage in health care fraud – stealing from taxpayers while jeopardizing the health of Medicare and Medicaid beneficiaries," said Deputy Inspector General for Investigations Gary L. Cantrell of HHS-OIG in a statement.

"Today’s announcement should serve as another warning to individuals who may be considering engaging in such illicit activity: Our agency and its law enforcement partners remain unrelenting in our commitment to rooting out fraud, holding bad actors accountable, and protecting the millions of beneficiaries who rely on federal healthcare programs," said Cantrell.  

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The U.S. Department of Health and Human Services Office of Inspector General is alerting the public about fraud schemes related to the novel coronavirus (COVID-19).

The U.S. Department of Health and Human Services Office of Inspector General is alerting the public about fraud schemes related to the novel coronavirus (COVID-19). Scammers are using telemarketing calls, text messages, social media platforms, and door-to-door visits to perpetrate COVID-19-related scams.

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Man Sentenced for COVID-19 Relief Fraud

A Florida man was sentenced today to 33 months in prison for fraudulently seeking over $7,263,564 in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

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