Scams and shams — October 2015

The firm behind Edward Snowden’s security check settles a fraud suit with the US justice department, while a fraud complaint keeps hip-hop star Chris Brown detained in the Philippines for three days.

CANCELLED CHECKS

Firm behind Snowden security check settles in suit


The background screening company that cleared Edward Snowden, the former National Security Agency worker who leaked information about his employer’s spy programs, has struck a deal with the US justice department in a fraud lawsuit. The suit claimed US Investigations Services Inc., which had been the federal government’s biggest provider of private security checks, cut corners between 2008 and 2012 by using software to submit checks without going through a required quality review. Under the settlement, USIS and its parent firm, Altegrity Inc., will forfeit US$30 million in outstanding payments from the US government. 

PAY, BUT NO PLAY

Chris Brown denies fraud

Chris Brown 

A fraud complaint filed against hip-hop star Chris Brown kept him from leaving the Philippines for three days after performing a concert there in July. Religious group Iglesia ni Cristo says it paid Brown and his Canadian promoter, Michael Pio Roda, US$1 million for a New Year’s Eve concert in Manila last year, but the singer never showed up. (He says he missed the gig because he lost his passport.) While authorities did allow Brown to leave the country to continue his world tour, they say the fraud complaint hearings will proceed and prosecutors will determine whether or not to file criminal charges.

TELEMARKETING

Timeshare scammer will do lots of time

A Florida man has been found guilty of heading up a telemarketing scheme that defrauded more than 5,000 Canadian and US timeshare owners out of US$10 million. Fabian Fleifel, 45, of Winter Springs, Fla., hired and trained telemarketers to make unsolicited calls to owners of resort timeshare properties and convince them to pay fees associated with the bogus sale of their properties. Fleifel, who could get a prison term of more than 500 years for the 26 counts he was convicted on, was in custody at press time awaiting sentencing.

COOPERATION CREDITS

$20 million = 3 years?

Mark Bloom, a former partner at BDO USA who stole more than US$20 million from clients and then helped authorities to prosecute his ex-colleagues, has been sentenced to three years in jail. Bloom pleaded guilty to securities fraud in 2009, but the evidence he provided about the BDO scheme — said to be the largest criminal tax fraud in history — won him leniency. “I deeply regret my actions,” he told the court. “Over the last six-and-a-half years, I’ve been in my own prison.”

BARE-FACED TRUTH

Groom sues un-madeup bride for fraud

An Algerian man is demanding US$20,000 in damages from his new wife for “psychological suffering” because he could not recognize her once she washed her makeup off after their nuptials. According to news reports, he said she deceived him by never going bare-faced prior to the wedding, and alleges that she looked so shockingly different the next morning that he mistook her for a thief who broke into their apartment.


About the Author

Tamar Satov


Tamar Satov is managing editor of CPA Magazine.

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