Category Archives: Fraud

Contractor Prosecuted in Raleigh County – and thats a good thing…

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From the Register-Herald today:

Matthew Peelish, a Raleigh County contractor, pled guilty to 3 counts of felony obtaining goods by false pretenses for taking money from people and not completing the work, and for obtaining materials from local merchants on an account and refusing to subsequently pay. The Court held him to task and sentenced him from 2 to 20 years.

This is extremely common here in Monroe and Greenbrier county, yet no one is ever prosecuted for it. Everyday people are prosecuted for some ridiculous things, and in these situations, you have real victims that lost real money. Yet 9 times out of 10, they have to resort to a civil action, which leaves them trying to collect a judgment years into the future, or worse, from a trustee in bankruptcy. The problem often cited by prosecutors is that it is difficult to show the requisite intent (intent not to pay at the time the goods are taken or money accepted) to prove the charges. But then again, since when do judges or juries hold prosecutors to their burden of proof anyways?

It really hurts a local business when a deadbeat contractor runs up an account of 5, 6 or 7 thousand dollars and then skips out on the bill. It should be prosecuted. Bravo to the Raleigh County Prosecuting Attorney.

You can read the full article here.

– John H. Bryan, West Virginia Attorney.

Sentencing Continued in Greenbrier County “Cattlegate” Case

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I apologize for not posting much this week, but it has been one of those end-of-the-month weeks…

As I had previously detailed, the sentencing for O’Brien, Henthorn and **** was scheduled for Friday, June 30, but now has been continued until sometime in the fall. This was likely a joint motion as probation officers had likely not completed their presentencing reports, which the lawyers must rely on and respond to accordingly, depending on what they contain. It’s important to remember that in federal court, the most frequent claim for legal malpractice comes out of mis-advice given by attorneys, to their clients, regarding the federal sentencing guidelines, so it is important to get it right the first time.

For those of you who don’t know, this is just a case that probably repeats itself in all other small towns across the country. You have good country folks who work hard to earn a living. Then you have the fat cats, who get high-on-the-hog by ripping off the working folks. Most times they are greedy, compulsive, narcissistic liars who have an obsession with all things underhanded. They will do anything for money – anything that is, except for actually earn it. They look down at the working peons as a bunch of suckers who were not blessed with the infinite wisdom they were born with, when in reality they were just born as spoiled rich kids with a lack of morals and manners.

It still blows my mind that this bank CEO, and they almost always become extremely rich legally, would throw his life away for $10,000 worth of bribes… In all likelihood, this was not the first time, there probably were many other bribes passed under the table, and that was what made it worth it in his mind, not this particular bribe.

You can read the full article here.

– John H. Bryan, West Virginia Attorney.

More Corrupt Public Officials in WV…

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This is another one of those “only in West Virginia” news items…

From the Charleston Daily Mail today:

Nicholas County emergency services director, Alfonso J. Derito, Jr., of Richwood, was charged with using county money to pay for hotel rooms for sexual liaisons with a female coworker, and apparently car repairs in order to more efficiently provide transportation to and from said hotel, as well as male sexual performance products, also to assist with said liaisons.

There is an affirmative defense though: The job-description did not adequately define “emergency services,” and Mr. Derito was, in his mind, providing an emergency service to his co-worker. Furthermore, the county provided him a county credit card to assist with all matters involving his rendering of emergency services, including enhancing job performance, providing more efficient transportation, and providing a more comfortable work environment.

According to the article, “Both admitted to going to the hotel on at least three occasions to sit and talk.” What more can I say?

You can read the full article here.

– John H. Bryan, West Virginia Attorney.

Greenbrier County “Cattlegate” Sentencing This Month

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I have been asked many times recently what has happened with this case. Well, nothing has really happened since the sentencing has not yet taken place. The sentencing for these crooks will take place on June 30, 2008 before U.S. District Judge Thomas E. Johnston. There are also several civil cases currently pending in this matter, which undoubtedly will be detailed in the future.

You can read my previous post here.

– John H. Bryan, West Virginia Attorney.

Was a Crime Committed in the WVU Bresch Scandal?

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From West Virginia Metro News website:

Regarding the recent controversy regarding the governor’s daughter and WVU, was a crime committed when the Bresch transcript was altered? Attorney Tom Payton with the Payton Law Firm, analyzed that very question. His take on the facts are that:

1) In at least one course that she did not actually complete, she was given a grade that “was simply pulled from thin air.”

2) The grade modification forms bear only the signature of Dean Sears and “[a]ppropriate faculty and division chairs were neither consulted nor asked to sign these forms.”

3) “[O]ver Dean Sears’ signatures rather than the requisite course instructors’ and department chair’s signatures (as required by WVU standard operating procedures), grade modification forms were prepared and filed to add to her transcript credit for (redacted) hours of (redacted) that the principals all knew that she had not taken.”

4) The amended transcript now reflects her completion of some courses that she did not in fact complete, and reflects a number of grades that she did not in fact earn.

He points to the pertinent criminal statute which could apply as West Virginia Code § 61-5-22, which provides that:

If any clerk of a court, or other public officer, fraudulently make a false entry, or erase, alter or destroy any record in his keeping and belonging to his office, … he shall be guilty of a misdemeanor, and, upon conviction, shall be confined in jail not more than one year and be fined not exceeding one thousand dollars; and, in addition thereto, he shall forfeit his office and be forever incapable of holding any office of honor, trust or profit in this State.

So as he sees it, given that Dean Sears signed the document, if he is a “public officer,” then the statute may apply to him. However, his analysis of the case law reveals that the statute probably would not apply to Dean Sears, and that the ultimate punishment for his in this matter is likely resignation. He does note though, that there is enough authority here to form an investigation, subpoenas, grand juries, etc.

Read the entire article here.

– John H. Bryan, West Virginia Attorney.

McDowell County Pharmacist Admits Crimes Tied To Gambling

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From the Charleston Gazette today:

Yesterday Saad Kamil Deeb, a Welch Pharmacist, pled guilty to a 3 count information, charging him with enlisting others to help him conduct transactions at a McDowell County bank so that he could move large amounts of money without triggering a Currency Transaction Report. A financial institution is required to file such a report with the Internal Revenue Service for any transaction over $10,000.

Assistant U.S. Attorney Hunter Smith said that between 2001 and 2005, Deeb became heavily involved in gambling on sports, betting large sums of money and even placing bets on behalf of his friends.
Whether he won or lost, his gambling proceeds or debts were paid in cash, Smith said. Usually, the amounts would approach $100,000 before Deeb or his bookies paid up, he said. “Mr. Deeb did not want the IRS to know that he was engaged in large cash transactions,” Smith said. So he and the others would keep their transactions under the $10,000 ceiling, Smith said, sometimes transferring just under that amount to various accounts several days in a row. According to the information, Deeb and his associates moved more than $871,000 that way over a four-year period. Deeb also admitted skimming cash from the pharmacy and filing false tax returns in 2003 and 2004, failing to report roughly $300,000 in income for each year, resulting in a tax loss of $175,000. Deeb has since filed amended reports and caught up on the taxes he owes, Smith said.

Who knew that a small town pharmacy could make that much so as to skim $300,000 per year for a gambling habit (addiction)? It makes you wonder who is at fault for the high prices of prescription drugs… My grandfather was a small town pharmacist, and for part of my life I grew up in his pharmacy. Things must have changed a lot since then… or maybe that is just par for the course in McDowell County….

– John H. Bryan, West Virginia Attorney.

Another Lawsuit Filed in Cattle/Bank Scam Case

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From the Register-Herald:

Another lawsuit filed against bank, officials in alleged cattle fraud case

By Christian Giggenbach
Register-Herald Reporter

LEWISBURG — Another lawsuit has been filed against First National Bank of Ronceverte and two former bank officials, this time by an Illinois man who alleges disgraced cattle broker Kevin Scott O’Brien defrauded him out of $104,000.

The lawsuit, filed by Robert Dwyer, named First National Bank, former bank president Charles A. Henthorn and former board director **** as defendants.

Henthorn and **** recently pleaded guilty in federal court, Henthorn for taking $10,000 in bribes from O’Brien, and **** for setting up bribes.

O’Brien pleaded guilty to a mail fraud charge involving the sale of cattle in fraudulent Ponzi schemes. A sentencing date has not been set for any of the defendants.

Dwyer claims he gave O’Brien $104,000 in February 2006 for “80 pairs of heifers and their calves,” which should have been shipped to Dwyer’s farm in Carthage, Ill.

“Instead of arranging for the cattle to be trucked to Dwyer … O’Brien sold the cattle to ****,” the lawsuit said. “O’Brien’s sale of the Dwyer cattle to **** was simply one of the last acts of fraud and deceit in O’Brien’s continuing scheme.”

Dwyer claims the bank knew about the **** deal, but looked the other way because O’Brien owed the bank money.

“The bank, through its senior management, including Henthorn and ****, devised a scheme with O’Brien pursuant to which O’Brien would sell **** cattle,” the lawsuit said. “The money that **** paid for the cattle was to be deposited into O’Brien’s checking account in satisfaction of debts that O’Brien owed the bank.”

Dwyer is seeking punitive damages on the basis of fraud, civil conspiracy, and aiding and abetting a wrongful act, among other charges.

Dwyer is being represented by Charleston lawyer James W. Lane.

Neither **** nor Henthorn could be reached for comment.

In February, another Illinois man, Frederic W. Nessler, filed a $340,000 lawsuit against the same three defendants alleging fraud.

O’Brien, who is currently mired in a multimillion-dollar bankruptcy, wasn’t named as a defendant in either suit.

— E-mail: cgiggenbach@register-herald.com

Dirtbag Door-to-Door Vacuum Salesman Conns Elderly Lady into Buying SUV

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From the Register-Herald:

Man charged with conning 82-year-old

What a piece of trash this guy is. He gives a bad name to door-to-door vacuum salesmen everywhere. Shouldn’t there be some liability on the part of the car dealership? They were so eager to make a sale that they ignored an obvious problem. I would be interested to see an interrogation of this car salesman who allowed this to happen. There may not be any criminal liability, but there must be civil liability for negligence at the very least. – John H. Bryan, West Virginia Criminal Defense Attorney.

Deputies say $70,000 SUV purchased in scam

By Amelia A. Pridemore
Register-Herald Reporter

Raleigh County sheriff’s deputies say a Daniels man conned an 82-year-old woman into buying him a $70,000 SUV.

Steven Mitchell Cox, 30, of Daniels, is charged with obtaining property by false pretenses, according to Deputy J.L. Redden. Cox was taken into custody Thursday and released on $50,000 bond set by Magistrate Charles Humphrey.

Cox took the woman from Daniels to Beckley Auto Mall on Feb. 15, Redden said, and convinced her to sign for a 2008 GMC Yukon. Cox had told her she would simply be co-signing for the vehicle to help him establish credit, Redden said.

Cox also told staff at Beckley Auto Mall the woman was his grandmother and she wanted to buy him a vehicle, Redden said. Neither statement was true. Cox is not related to the woman, who signed and financed the Yukon.

It left the woman more than $70,000 in debt, Redden said.

Cox took the vehicle and all the paperwork, then kept it, Redden said. The woman discovered she had actually purchased the vehicle when she received registration forms from the state Division of Motor Vehicles.

The woman and Cox met through a business transaction when Cox was going door-to-door selling vacuum cleaners, Redden said. Cox also started a home improvement project for the woman that he never finished.

— E-mail:

apridemore@register-herald.com

Ex Huntington Car Dealer Pleads Guilty to Fraud

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From the Charleston Daily Mail:

Ex-car dealer pleads guilty to defrauding bank

by The Associated Press

HUNTINGTON — A former car dealer who falsely obtained at least $2.5 million from BB&T through a financing scheme pleaded guilty Monday to federal fraud charges.

Frederick G. Davis of Lesage admitted that he used a line of credit for his dealership to defraud the bank. The 51-year-old Davis owned Davis Chrysler Plymouth Jeep Eagle in Huntington until 2003, when he sold it.

U.S. Attorney Charles Miller’s office says the fraud occurred from July 2001 through December 2002 and cost BB&T between $2.5 million and $7 million.

Davis pleaded guilty to one count of bank fraud and one count of engaging in an unlawful monetary transaction.

He faces up to 40 years in prison and a fine of at least $1.25 million. Sentencing is set for June 8.