Scams and shams — April 2015

An ex-CFL player gets six years in prison for masterminding one of the largest frauds in Manitoba’s history. Plus, a Florida accountant is serving time after claiming over US$1 million in phoney business expenses.

MAJOR PENALTY

Ex-CFL star’s foul play lands him in jail

David Pitcher, a former player with the Winnipeg Blue Bombers and Saskatchewan Roughriders, was sentenced to six years in prison for masterminding one of the largest frauds in Manitoba’s history. The 46-year-old pleaded guilty to 17 charges — including forging documents in the name of a provincial cabinet minister — linked to a $12-million Ponzi scheme he operated between 2007 and 2012. Investors lost more than $5 million in the bogus deal, billed as a 27.5-hectare recreation development in Winnipeg for disadvantaged youth. Pitcher, who was a CFL slotback in the 1990s, must also pay restitution to the victims.

UNCONVENTIONAL BEHAVIOUR

Nonexistent conference led to accountant’s undoing

Hello my name is Fraud 

Florida accountant Andyara Mata, 41, is in county jail after being arrested for allegedly stealing more than US$1 million from her Fort Lauderdale employer. Police say Mata used her position as CFO of Business Cards Tomorrow Inc. to make fraudulent transactions to her own bank accounts, pay off her credit cards and claim phoney business expenses for travel and conferences she didn’t attend. Worse, some of these conferences didn’t even exist — which is how Mata’s boss discovered something was amiss. He happened to ask a friend why he wasn’t at the American Institute of Certified Public Accountants conference that Mata was supposedly attending, and learned there was no conference. (He later confirmed this with the AICPA.) Questionable expense reports submitted by Mata for 12 conferences dating back to 2009 were subsequently found.

PATENTLY FALSE

Fraudster gets the clink for "miracle ink"

An Ancaster, Ont., man has been sentenced to five-and-a-half years in jail for cheating more than 100 Canadians who invested in his company, Majestic Supply Co. Inc., out of $5.3 million. Herb Adams, 66, told investors he had developed and patented a new environmentally friendly "miracle ink" that would dry just as quickly as traditional solvent-based inks, claiming Majestic would produce and market the ink across North America, with the potential for hundreds of mil- lions of dollars in sales. But there was no patent, and no such ink. Some victims lost their life savings, including one couple that was out of pocket $250,000. Adams must pay a fine of $1.6 million in addition to $5.3 million in restitution within six years of being released from prison, or he will return to prison for six more years, the judge ruled.

THAT’S TEAMWORK

School footballers among fraud ring

An American College football player who convinced five of his teammates, his girlfriend and four others to steal personal information they used to file US$1.1 million in fraudulent tax returns has been sentenced to more than five years in prison. Alphonso "Rico" Valdez, 23, led the fraud ring — which duped the IRS out of US$421,000 — between June 2011 and May 2012 while attending the University of South Dakota. He and his accomplices used stolen Social Security numbers and other identifying taxpayer data to receive income tax refunds issued as preloaded debit cards. All 11 defendants, originally from Tampa, Fla., pleaded guilty to federal fraud charges and were sentenced to at least two years in prison. All but three must also pay joint restitution.

About the Author

Tamar Satov


Tamar Satov is managing editor of CPA Magazine.

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