SAC Capital is a hedge fund giant based in Connecticut. The company has been the source of a growing investigation into securities fraud based on insider trading. A 40-year-old portfolio manager was arrested this week and has been charged with conspiracy and securities fraud. The Federal Bureau of Investigation has alleged that the man participated in an "elite criminal club" wherein a network of analysts funneled insider information and private financial data to SAC professionals.
A well-known real estate agent in Cape Coral pleaded guilty to bank fraud, mail fraud and wire fraud earlier this month. The case is one of many that make up an "alarming trend" in Southwest Florida, according to federal agents. Arrests and prosecutions for investor fraud are on the rise as government officials increase their efforts to punish white collar crime in this state. Many types of fraud began to proliferate as people struggled with the economic troubles beginning in 2008. Since that time, the complaints involving investor fraud, real estate fraud, mail fraud and other white collar crimes have steadily risen. Florida is considered a hotspot for many forms of white collar crime.
New legislation was introduced today to create a new safety valve regarding the mandatory sentencing guidelines pertaining to federal crimes. The Justice Safety Valve Act of 2013 would give federal judges a safety valve, allowing them to sentence a person to less than the mandatory minimum in cases where such a sentence is considered too lengthy, unjust or unreasonable, or in cases where the sentence simply does not fit the offender or the crime. With federal detention facilities currently operating at 139 percent of capacity, such a safety valve could help stem the steady increase in the number of people under federal correctional supervision, many of them sentenced for federal drug crimes.
The Miami office of the Federal Bureau of Investigation and the U.S. Justice Department announced that two more people have pleaded guilty in connection with the Health Care Solutions Network Inc. health care fraud scheme. The two people, a licensed therapist and clinic director, along with a registered clinical social worker intern, entered guilty pleas to single counts of conspiracy to commit health care fraud.
In recent years, Florida has become the center of fraudulent activity according to many. South Florida, particularly Tampa and Miami, has seen a sharp increase in arrests and prosecutions for many types of fraud. Florida is now considered the hub of mortgage fraud, Medicare fraud and tax fraud among law enforcement officials. In response, state and federal agencies are devoting greater resources in a targeted attack on people suspected of fraud. The Fort Myers Fraud Conference last week covered many of the issues surrounding the proliferation of fraud and the means used to prevent it.
In 2010, Kevin Ring was convicted of providing illegal gratuities, honest services wire fraud and conspiracy. As an associate of Jack Abramoff, Mr. Ring was convicted in part for providing meals, tickets to events and other perks to government officials illegally in order to receive favorable treatment for his clients. He was also convicted for failing to give shareholders his honest services due to his illegal conduct. While Jack Abramoff was the mastermind of the scheme and received a four-year sentence, government prosecutors asked that Mr. Ring be given a sentence of 22 years in prison. In the end he was sentenced to 20 months in prison, a sentence which he is still fighting.
A U.S. District Judge called for more flexible sentencing guidelines at a legal conference in Las Vegas last week. He indicated that the present guidelines have led to irrational sentences in white collar criminal cases. The current guidelines stopped being mandatory based on a U.S. Supreme Court case in 2005, but many judges continue to adhere to them. The guidelines focus on losses caused by the crime and often leads to severe punishments in white collar cases where many people are involved. Even small losses spread out over thousands of people can lead to a decades-long prison sentence.
According to the latest quarterly report from Interthinx, Florida was the state with the highest rates of mortgage fraud during the fourth quarter of 2012. The report categorizes mortgage fraud risk by state, by ZIP code, by property valuation and by occupancy. Florida listed at least three locations among the top ten in each of these categories. This is the second quarter in a row that Florida was atop that list after surpassing Nevada last year.
A former financial planner at the Tampa company WellCare pleaded guilty to conspiring to defraud the Medicaid program. He is now testifying in the criminal trials against four executives of WellCare in connection with the same Medicaid fraud activities. The company is accused of sending false information regarding how much state money WellCare spent of providing mental health services for its patients.