Fraud in the News

 Twelve steps to fraud

In a March 15, ABC News online story, "Insider Trading Case Involves Secrets Shared Among AA Members" by Alan Farnham, federal regulators charged a Philadelphia investment broker (and four others) of insider trading. Timothy McGee, the broker, bought shares of an insurance company after learning it was going to be acquired from his close friend, whom McGee had known for 10 years through Alcoholics Anonymous. 

According to the story, "The PHLY executive confided in McGee that he felt he was under terrible pressure to bring his company's confidential merger negotiations to a successful end — so much pressure that he feared he might resume drinking. McGee questioned him about the deal, then bought stock in PHLY. Later, when the merger was publicly announced, he made a $292,128 profit when shares shot up 64 percent.

"McGee had also allegedly tipped his co-worker Zirinsky to the merger. Zirinsky likewise bought stock, using his own account plus those of his wife, sister, mother and 89-year-old grandmother. He allegedly tipped his father and a friend in Hong Kong, who, in turn, passed the tip along to others."

JulyAug-pancakes-rotatorTurning 'pancake houses into crime dens'

After a series of raids on Toledo-area IHOP restaurants, 18 people were indicted on numerous fraud charges for "cooking the books as well as cooking pancakes," according to the May 24 Toledo Blade article "Fraud and illegal immigrants at the heart of case against IHOP defendants," by staff writer Taylor Dungjen.

"'These defendants turned pancake houses into crime dens,' said U.S. Attorney for the Northern District of Ohio Steven Dettelbach in a news release. 'This indictment lays out a menu of crimes ranging from harboring undocumented workers to identity theft to money laundering to insurance fraud.'"

For full access to story, members may sign in here.

Not a member? Click here to Join Now. Or Click here to sign up for a FREE TRIAL.