Charlottesville Insurance Agent Charged with Fraud

Graham Messer Facing 13 Charges

CHARLOTTESVILLE, VA—A local insurance agent is facing a handful of federal charges related to fraud following the unsealing of an indictment returned by a federal grand jury two weeks ago in the United States District Court for the Western District of Virginia in Charlottesville.

Graham Hutson Messer, 32, of Bremo Bluff, Virginia, was charged in a sealed indictment returned September 12, 2012, and unsealed last week following the defendant’s arrest. Messer has been charged with 13 counts of mail fraud.

According to the indictment, Messer operated as an independent agent offering insurance and insurance products for sale to clients in Virginia. Messer purported to sell insurance offered by a number of different insurance companies, including, but not limited to: the Farmers Insurance group of companies, Chartis Inc., Nautilus Insurance Group, Granite State Insurance Company, and Main Street America Group.

It is alleged in the indictment that Messer would instruct his clients to send payments for insurance premiums directly to him. The defendant told his clients that he would then remit the payments to the insurance companies. However, according to the indictment, Messer embezzled those funds for his own, personal use, never sending them to the insurance company, while also deceiving his clients into believing they had insurance coverage.

If convicted, the defendant faces a maximum possible penalty of up to 20 years in prison and/or a fine of up to $250,000 for each mail fraud charge.

The investigation of the case was conducted by the Federal Bureau of Investigation, the Albemarle County Police Department, the Virginia Bureau of Insurance, and the Charlottesville City Police Department. Special Assistant United States Attorney Elliott Casey will prosecute the case for the United States.

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Bank Executive Convicted by Federal Jury for Involvement in Mortgage Fraud Scheme

SACRAMENTO, CA—United States Attorney Benjamin B. Wagner announced that a federal jury returned a guilty verdict today convicting Joel Blanford, 44, of San Ramon, on six counts of mail fraud.

This case is the product of an extensive investigation conducted by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorneys Paul A. Hemesath and Michael M. Beckwith prosecuted the case. Former Assistant U.S. Attorney Laurel Rimon also participated in the prosecution.

According to evidence presented at the trial, from approximately April 2003 through October 2005, Blanford, while working as a sales representative for Long Beach Mortgage, a wholesale subprime lender and former subsidiary of Washington Mutual Inc., participated in a scheme to defraud his employer. Blanford earned compensation based on the volume of loans processed by Long Beach Mortgage. The evidence established that he paid a loan coordinator in cash and checks to falsify documents, provide false verification of borrowers’ employment or professional licensing status, and to turn a blind eye to fraudulent representations contained in loan applications and other documents submitted to Long Beach Mortgage.

In each of the years 2003, 2004, and 2005, Blanford received, before taxes and payroll deductions, more than $1 million in commissions and other compensation from Long Beach Mortgage as a result of his scheme. Between April 2003 and October 2005, he paid the loan coordinator more than $50,000 in checks alone.

An earlier trial of Joel Blanford, in May 2012, resulted in a hung jury. The jury verdicts returned today followed a seven-day retrial.

“This verdict reflects the commitment of this office, the FBI and the IRS-CI to follow the facts to wherever they lead us,” said U.S. Attorney Wagner. “We have now convicted seven people, including two bankers, two mortgage brokers, a real estate investor, and two straw purchasers, who participated at different levels of a complex loan origination mortgage fraud scheme involving numerous real estate transactions in the Stockton area.”

Sentencing is scheduled before Judge William B. Shubb on December 10, 2012. The maximum penalties for mail fraud affecting a financial institution is 30 years in prison and a fine of up to $250,000 or twice the value of the gain or loss, whichever is greater.

Six other defendants have been sentenced for crimes arising out of this mortgage fraud scheme. William T. Bridge, 41, of San Francisco, and his brother Paul Bridge were loan brokers who paid illegal kickbacks to a loan coordinator at Long Beach Mortgage between 2003 and 2006. William T. Bridge pleaded guilty to tax evasion charges, admitting that in each of those tax years, he derived more than $10,000 from criminal activity involving fraudulent loans funded by Long Beach Mortgage on houses purchased in Sacramento and Stockton. Paul Bridge pleaded guilty to a violation of the Real Estate Settlement Procedures Act. Both brothers testified at the trial of Joel Blanford.

John Ngo, 27, of Dublin, pleaded guilty to lying under oath before a federal grand jury. Between September 2001 and May 2006, while working as a senior loan coordinator at Long Beach Mortgage, he received in excess of $100,000 in checks and bank transfers from a mortgage broker in order to ensure that fraudulent loan applications were processed and funded. In September 2007, Ngo testified falsely under oath before a federal grand jury investigating the mortgage fraud scheme in the San Joaquin County area that the broker had not given him any money. Ngo also testified at the Blanford trial.

Iftikhar Ahmad, 36; Manpreet Singh, 24; and Jose Serrano, 44, all of Stockton, were indicted on October 25, 2007, for mail fraud in connection with a property flipping scheme involving inflating home values. Ahmad and Serrano were also charged with money laundering. Between 2003 and 2005, the defendants engaged in a mortgage fraud scheme primarily in the Stockton area. Ahmad, through I & R Investment Properties, fraudulently sold 10 houses to straw buyers, obtaining in excess of $1.5 million. All three pleaded guilty to felony offenses. The mortgage loans on the properties involved in the scheme were arranged by the Bridge brothers, through Long Beach Mortgage.

William Bridge was sentenced in April 2010 to 21 months in prison and was ordered to pay $1,056,700 in restitution. Paul Bridge was sentenced in August 2010 to 36 months of probation. John Ngo was sentenced in September 2010 to nine months in prison. Iftikhar Ahmad was sentenced in February 2011 to 36 months in prison and was ordered to pay $382,750 in restitution. Jose Serrano was sentenced in November 2008 to 15 months in prison and ordered to pay more than $219,000 in restitution. Manpreet Singh was sentenced in February 2009 to 60 months of probation and ordered to pay $163,500 in restitution.

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Former Chief Financial Officer of Black River Area Development Corporation Pleads Guilty to Mail Fraud

LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced today the waiver of indictment and plea of guilty to a felony information by Debra Shannon, age 56, of Pocahontas, Arkansas. The information, which was filed in open court today, charges Shannon with one count of mail fraud.

For 37 years, Shannon held the position of chief financial officer at the Black River Area Development Corporation (BRAD) in Pocahontas, Arkansas. BRAD administers programs to assist low-to-moderate income residents of Clay, Lawrence, and Randolph Counties. Part of Shannon’s job duties included writing checks from various payroll accounts to pay employees and vendors as well as reconciling those accounts.

At the plea hearing held before the Honorable J. Leon Holmes, Shannon admitted that she wrote checks to herself from various checking accounts with the majority of the checks being written from the payroll account. She would then obtain the bank statements after they were received through the mail, disguise the payee on the cancelled check, photocopy the disguised checks, and put the altered checks in BRAD’s records. This activity began on or before December 28, 2001, and continued until May 2012. The total amount of checks embezzled was $390,735.65.

Thyer stated, “Embezzlement by a trusted employee is conduct which cannot be tolerated.” He added, “The stolen funds should have been utilized to assist the poor citizens and communities in the Black River area of our state, not to fraudulently increase an employee’s salary.”

The statutory penalty for embezzlement for mail fraud is not more than 20 years’ imprisonment and a fine of up to $250,000. Shannon remains free on her own recognizance pending sentencing, which has not yet been set.

The investigation was conducted by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Karen Whatley.

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