LOS ANGELES >> A San Dimas mad who formerly served as vice president of an Ontario-based tool company received a sentence of more than 5 years in federal prison Wednesday for a $9.6 million bank fraud scheme, authorities said.
Chung Yu Yeung, 39, pleaded guilty in late-March to four counts of bank fraud and one count of conspiracy to commit bank fraud.
At his sentencing hearing Wednesday in federal court in Los Angeles, U.S. District Judge Christina A. Snyder sentenced Yeung to 63 months in prison and ordered him to pay $9,618,908 in restitution to his victim, East West Bank, U.S. Department of Justice spokesman Thom Mrozek said in a written statement.
He was also ordered to forfeit a property in San Dimas that he purchased “with proceeds of the scheme,” Mrozek said.
Yeung previously admitted that while working at Eastern Tools and Equipment Inc., Yeung admitted that he and his co-conspirators defrauded East West Bank by misrepresenting the company’s accounts receivable and financial statements in order to obtain loans the company otherwise would not have been able to get, Mrozek explained.
“The conspirators created numerous shell corporations to act as purported suppliers and retailers doing business with Eastern Tools, when, in reality, these shell corporations were entirely under the control of Yeung and existed for the sole purpose of creating the illusion of such business,” Mrozek said. “Yeung also admitted that the fictitious companies allowed Yeung and other conspirators to falsely inflate Eastern Tools’ accounts receivable and financial statements in representations to East West Bank.”
“Yeung created companies and profits that were nothing but illusions, tricking a bank into loaning him millions of dollars,” U.S. Attorney in the Central District of California Eileen M. Decker said. “This was a sophisticated crime that caused substantial losses, warranting the punishment imposed by the Court today.”
Yeung’s co-defendant in the case, former Eastern Tools president Guo Xiang Fan, remains a fugitive, Mrozek said.
IRS Criminal Investigations Acting Special Agent in Charge Anthony J. Orlando described the scene as “truly astounding.”
“(It) illustrates the lengths to which fraudsters will go to game the financial system for personal gain. IRS Criminal Investigation is proud to work with our law enforcement partners by lending our financial expertise in these complex investigations,” he said.
LOS ANGELES >> A Hacienda Heights man began serving a two-and-a-half-year prison term after he was sentenced for his role in a scheme that netted more than $2.6 million in bogus tax returns using stolen identities, authorities said.
Heber Cotton, 40, pleaded guilty late last year to a count of conspiracy to defraud the federal government by obtaining the payment of fraudulent tax refunds, U.S. Department of Justice spokesman Thom Mrozek said in a written statement. U.S. District Judge Michael W. Firzgerald handed down the 30-month prison term Monday in federal court in Los Angeles.
Cotton was additionally ordered to pay $725,000 in restitution.
His father and co-conspirator, 64-year-old Adel Cotton, pleaded guilty to the same charge in 2012 and has since been sentenced to 4 years and three months in federal prison, officials said.
“This father and son pair prolifically defrauded the government and hundreds of taxpayers, earning them the significant sentences imposed by the court,” according to United States Attorney for the Central District of California Eileen M. Decker.
From December of 2008 to March of 2010, “the Cottons caused at least 275 fraudulent income tax returns to be filed with the IRS,” Mrozek said. “Those fraudulent returns sought income tax refunds totaling more than $2.6 million.”
The father and son used the names and social security numbers of victims without their knowledge to fill out fraudulent tax returns, officials said. They instructed the refund checks to be sent to addressed they controlled.
Heber Cotton admitted in court documents that he gave stolen identity information to a co-conspirator, who worked as a bank manager, who opened bank accounts with the fraudulently obtained funds, in exchange for a 20 percent cut of each refund check.
The bank manager, identified in court documents as Michael Rodriguez, managed a U.S. Bank branch inside a Tustin supermarket, Mrozek said.
He has since pleaded guilty to charges in connection with the scheme and is awaiting sentencing.
“These unscrupulous defendants, a father and son team, thought they had figured out a clever scheme to thwart the IRS and steal from American taxpayers,” IRS Criminal Investigation’s Acting Special Agent in Charge Anthony J. Orlando added. “IRS CI has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system.”
LOS ANGELES >> A federal jury convicted a Pasadena doctor and an Anaheim doctor Thursday of health care fraud for collecting more than $8 million in fraudulent insurance payments and kickbacks by falsely certifying that patients were terminally ill and referring them to a Covina hospice care facility, authorities said.
Boyao Huang, 43, of Pasadena and Sri Wijegoonaratna, also known as “Dr. J,” were found guilty of taking part in the fraudulent scheme between March of 2009 and July of 2013 following a two-week trial in federal court in Los Angeles, U.S. DOJ spokesman Thom Mrozek said in a written statement.
In concert with Covina-based California Hospice Care, the doctors falsely stated that patients were ill in order to bill Medical and Medi-Care for $8.8 million worth of hospice services that were not necessary, Mrozek said.
“CHC nurses performed ‘assessments’ to determine whether the beneficiaries were terminally ill and, regardless of the outcome, Wijegoonaratna and Huang certified that the beneficiaries were terminally ill — even though the vast majority of them were not dying,” according to Mrozek. “CHC personnel altered medical records in response to Medicare audits to make the beneficiaries appear sicker.”
Wijegoonaratna also took tens of thousands of dollars in illegal “kickback” payments from CHC in return for sending patients to the facility, prosecutors alleged.
Huang was convicted of four counts of health care fraud, while Wijegoonaratna was convicted of seven counts of health care fraud.
The doctors are due for sentencing August 15, officials said. Huang faces up to 40 years behind bars, and Wijegoonaratna faces up to 70 years in prison.
Four other defendants have already been charged and convicted in connection with the case, including Priscilla Villabroza, 70, of Placentia, “who purchased CHC in 2007 and operated the facility after being charged and incarcerated in another health care fraud scheme,” and her daughter, Mrozek said.
“This scheme is one of many that has victimized public health care programs and, in the end, the taxpayers who fund these important programs,” according to U.S. Attorney for California Central District Eileen M. Decker. “We will continue to investigate these fraudulent schemes, shut down the operations and incarcerate those responsible for stealing from the system.”
LOS ANGELES >> A San Dimas man who served as vice president of an Ontario tool wholesale company on Wednesday admitted to federal charges of defrauding a Pasadena-based bank out of more than $9 million, authorities said.
Chung Yu Yeung, also known as Louis Yeung, 39, served as vice president of Ontario-based Eastern Tools and Equipment Inc., U.S. Department of Justice spokesman Thom Mrozek said in a written statement.
At an appearance Wednesday in federal court in Los Angeles, Yeung admitted to one count of conspiracy to commit bank fraud and four counts of bank fraud, Mrozek said. He was scheduled to return to court June 20 to be sentenced by U.S. District Court Judge Christina A. Snyder.
Between 2007 and 2012, Yeung admitted to setting up a network of shell companies, controlled by himself, to give the false illusion that Easter Tools was conducting far more business than he really was, officials said.
“Yeung admitted that the fictitious companies allowed him and other conspirators to falsely inflate Eastern Tools’ accounts receivable and financial statements in representations to East West Bank,” according to Mrozek.
After using fraudulent documents to boost his business’ line of credit, “Eastern Tools defaulted on the promissory note after East West Bank discovered the fraud, causing more than $9 million in losses to the bank, Mrozek said.
FBI and IRS agents conducted the investigation.
“This defendant went to great lengths to create the illusion of business that defrauded the victim bank out of millions, but law enforcement was able to penetrate the illusion,” U.S. Attorney Eileen M. Decker said. “Crimes like these can threaten the stability of our financial institutions and therefore our national economy.”
Yeung was arrested in connection with the investigation in April of 2015. Alleged co-conspirator and Eastern Tools and former Equipment President Guo Xiang “David” Fan, 53, is also named in the same indictment charging Yeung. He remains at large.
LOS ANGELES >> A Monterey Park doctor received a four-year jail sentence Friday for prescribing diet pills without a legitimate medical purpose and insurance fraud, authorities said.
Dr. Thomas Lin, 46, was scheduled to surrender Friday evening after pleading “no contest” in December to two felony counts, Los Angeles County District Attorney’s officials said in a written statement.
“Lin provided diet pills known as phentermine, a controlled substance, through his pediatrics clinic known as “Kid’s M.D.” on Atlantic Boulevard in Monterey Park,” according to the statement.
He also fraudulently billed Medi-Cal and other insurers for services never rendered, prosecutors said.
“Over the course of several months in 2012, investigators from the California Medical Board posed as new patients and were able to secure phentermine with little or no physical examination by Dr. Lin,” according to the district attorney’s office statement. “Investigators received the drug either by paying his front office staff or receiving the drug for free.”
After serving two years in custody, Lin is to remain on mandatory supervision for another two years, officials said.
Prior to pleading “no contest” to the two felony charges, Lin was initially named in a 55-count indictment. If convicted on all original charges, he could have faced up to 34 years in state prison.
LOS ANGELES >> A federal grand jury Thursday indicted a Rowland Heights woman, a former Hacienda Heights couple and two other defendants who are accused of running a $30 million pyramid scheme targeting Chinese communities on both coasts, authorities said Friday.
Wen Chen “Wendy” Lee, 53, of Rowland Heights; Cheong Wha “Heywood” Chang, 47, of Taiwan and a former resident of Hacienda Heights; Chang’s wife Toni Chen, 46; Dalian “David” Guo, 53, of Hyde Park, New York; and Chih Hsuan “Kiki” Lin, 50, of Los Angeles and La Vegas are each charged with 13 counts of wire fraud and one count of conspiracy, U.S. Department of Justice spokesman Thom Mrozek said in a written statement.
The five operated a Hong Kong-based company known as CKB, WIN169 Biz Solutions Ltd., CKB168 Ltd. and Cyber Kid Best Education Limited, officials said.
The company purported to run a profitable business selling online educational courses for children, “but in reality was a pyramid scheme designed to generate new revenue by adding new investors,” Mrozek said.
Prosecutors allege the defendants collected about $30 million from investors, primarily in Chinese-American communities in Los Angeles, San Francisco and New York City between 2011 and 2014. They kept about $6.5 million of the money for themselves and transferred the rest to others involved in the scheme, according to the indictment.
“We believe that over 1,000 people invested in CKB, though it is unclear how many of those people invested directly through the defendants charged in this case,” Assistant U.S. Attorney Stephen Goorvich said.
To lure investors into the scam, the defendants made numerous false promises and statements about CKB, which was not registered with the U.S. Securities and Exchange Commission, authorities said.
All five defendants are expected to appear in court to enter pleas next month, Mrozek said. They were arrested earlier this month following the filing of a sealed criminal complaint, Mrozek said.
Lin, who is also accused in the indictment of threatening victims in order to collect funds and dissuade them from talking to authorities, is being held without bond, while the others have been freed on bonds ranging from $250,000 to $500,000. If convicted as charged, each defendant faces up to 265 years in federal prison.
LOS ANGELES >> Federal officials on Wednesday arrested the owner and two manager of a chain of four schools, including one in Alhambra, on charges of running a “pay-to-stay” scheme officials allege helped hundreds of foreign nationals remain in the U.S. as foreign students without attending classes.
A federal grand jury returned a 21-count indictment against the three defendants Tuesday, U.S. Department of Justice spokesoman Thom Mrozek said in a written statement. The involved schools are the Likie Fashion and Technology College in Alhambra, Prodee University/Neo American Language School in Los Angeles; Walter Jay M.D. Institute, and Educational Center in Los Angeles; and the American College of Forensic Studies in Los Angeles.
“Given the implications for national security and public safety, we will move aggressively to target individuals who compromise the integrity of our nation’s immigration system out of greed and self-interest,” HSI in in Los Angeles Special Agent in Charge Claude Arnold said. “Simply put, those who exploit the benefits of the student visa program can expect to get a lesson in criminal justice.”
The schools were authorized by U.S. Homeland Security Investigations to sue Certificate of Eligibility for Nonimmigrant (F-1) Student Status for academic and languages students, Mrozek said. The school-issued forms, known as form I-20, made students eligible to obtain F-1 student visas allowing them to remain in the United States.
The schools’ enrollees paid up to $1,800 “tuition” for six months of enrollment, Mrozek said. The schools collected as much as $6 million per year in purported tuition payments.
But HSI officials who made an unannounced visit to Prodee University’s main campus in 2011 investigators to Prodee University’s main campus found only three students attending a single English class, although records indicated more than 900 students were enrolled at the university’s two campuses, Mrozek said. Another inspection the same day as the American College of Forensic Studies turned up a single student sitting in one religion class, officials said. Federal records reflected that the school should have had more than 300 active students.
His investigators also found dozens of purported foreign students, primarily from South Korea and China, who originally entered the U.S. to attend other schools, but transferred to the Prodee Network, Mrozek said. “These students lived across the nation, indicating that they were not actually attending classes at Prodee or the other schools,” he said.
School network owner Hee Sun Shim, 51, of Beverly Hills, who is also known as Leonard Shim and Leo Shim, is charged in the indictment along with alleged co-conspirators Hyung Cham Moon, 39, of Los Angeles, also known as Steve Moon, and Eun Young Choi, 35, of Los Angeles, also known as Jamie Choi, according to the DOJ.
All three are charged with conspiring to commit immigration fraud, Mrozek said. Shim is also charged with 13 counts of use or possession of an immigration document procured by fraud, three counts of encouraging illegal residence and two counts of money laundering.
Moon and Choi are each accused of one count of use or possession of an immigration document procured by fraud.
HSI officials planned to immediately seek withdrawal of the schools’ Student and Exchange Visitor Program certification, Mrozek added.
Any students enrolled at the involved schools were advised to contact SEVP representatives at 703-603-3400 for further instructions, officials said. Information is also available online at the SEVP page of ICE’s website at www.ice.gov/sevis/whats-new.
IRWINDALE >> Police jailed a wanted felon Friday after he tried to using a stolen credit card and identification to buy items at an Irwindale hardware store, officials said.
Daniel Garcia, 33, of Los Angeles, is accused of identity theft, false impersonation of another person and possession of drug paraphernalia, Irwindale police Sgt. George Zendejas said. He’s additionally wanted by South Gate police due to an auto theft warrant and Manhattan Beach police in an identity theft case.
The arrest took place about 5:20 p.m. when the suspect tried to make purchases at Grainger Industrial Supply, 12780 Schabarum Ave., the sergeant said.
Store employees called police to report the fraud attempt, and Garcia ran from officers when they arrived at the store, Zendejas said. He was captured nearby, without a struggle.
Friday’s incident was the second time in recent days Garcia has gone shopping at the hardware store with stolen identification and credit cards, police said. He successfully bought goods at the store with fraudulent information in recent days, though the exact date was not available Saturday.
It is estimated that the suspect fraudulently purchased items totaling $3,000,” Zendejas added.
According to Los Angeles County booking records, Garcia was being held without bail pending a scheduled arraignment Tuesday in West Covina Superior Court.
GLENDORA >> A West Covina man who has worked as a nursing assistant at healthcare facilities throughout the San Gabriel Valley is accused of stealing more than $40,000 from at least two elderly patients in Glendora by fraudulently using their financial information, police said.
Police arrested 29-year-old Maui Berganio at his home Thursday, Glendora police Detective Zach Houser said in a written statement.
He allegedly stole debit card and account information from two elderly guests of Kindred Transitional Care in Glendora to purchase items for himself online, including furniture, Nike tennis shoes and car parts, Glendora police spokeswoman Tricia Ayers said.
“He’s worked at several different care facilities,” Ayers said. Detectives continued seeking any additional victims. “There could be possible additional charges filed,” she said.
In addition to Kindred Transitional Care, over the past 10 years, Berganio has also worked at Arbor Glen Care Center in Glendora, Doctors Hospital in West Covina, West Haven Healthcare Center in West Covina, Citrus Valley Health Partners – Queen of the Valley Camapus in West Covina and Sierra View Care Center in Baldwin Park, police said. And it’s possible he has worked at other Southern California facilities.
Berganio’s alleged identity theft first came to light Jan. 8 when a woman in her 80s staying at the care center noticed some suspicious behavior, officials said.
An elderly guest as Kindred Transitional Care in Glendora awoke to find certified nursing assistant Maui Berganio kneeling by her bedside,” Houser said. “It was later discovered that Berganio had obtained the elderly guest’s debit card information, which he used to attempt numerous fraudulent online transactions totaling over $8,000.”
Investigators ultimately arrested Berganio Thursday afternoon at his home in the 1300 block of East Fairgrove Avenue in West Covina, according to police and Los Angeles County booking records.
The suspect admitted also using the financial information of another woman in her 80s who was staying at Kindred Transitional Care over the past year, police said. The alleged victim died earlier this month.
In that case, Berganio is accused of running up more than $40,000 in online purchases, Ayers said.
Police booked Berganio on suspicion of elder abuse and identity theft, she added.
According county booking records, Berganio was being held in lieu of $50,000 bal. He is scheduled to appear Monday in West Covina Superior Court.
Anyone with information was asked to contact Detective Houser at 626-914-8286.
PHOTOS of suspect Maui Berganio, 29, of West Covina, and photos of goods allegedly purchased with the stolen identities of elderly women, courtesy of the Glendora Police Department.
LOS ANGELES >> The owner of a Glendora egg donation and surrogacy company pleaded guilty Thursday to wire fraud for misappropriating clients money for her own personal gain, officials said.
Allison Layton, a 38-year-old former Glendora resident now living in Utah, entered the guilty plea in federal court in Los Angeles, U.S. Department of Justice spokesman Thom Mrozek said in a written statement. She also sometimes uses the name Allison Jarvie.
Would-be parents paid tens of thousands of dollars to Layton for the services of Miracles Egg Donation between AUgust of 2008 and January of 2012, Mrozek said. But instead of setting the money aside for costs related to the services, Layton spent the money herself and used it to cover unpaid costs of other clients.
As a result, Egg donors, surrogates, attorneys and others were not paid for all of the services they provided, Mrozek said.
“More than 40 victims lost more than $270,000,” he said.
Layton faces up to 20 years in federal prison when she returns to court for sentencing May 28.