Bank Fraud

A thriving online poker industry catering to Americans but operating from abroad to evade U.S. gambling laws could be wiped out by criminal charges against top executives in the business. Eleven people, including the founders of the three largest poker sites open to U.S. players, were charged by a federal grand jury with bank fraud, money laundering and violating gambling laws. The government also is seeking to recover $3 billion from the companies. The FBI had shut down two of the sites, Full Tilt Poker and PokerStars, by Friday evening and were working to do the same with the third, Absolute Poker.

For former insiders at some of the several hundred banks that collapsed during the financial crisis and in its aftermath, a day of reckoning has arrived. The Federal Deposit Insurance Corp. has told dozens of former bank officers and directors that it has drawn up lawsuits accusing them of misdeeds such as fraud and breach of fiduciary duty. The federal agency is seeking damages to help offset losses in the nation's deposit insurance fund. It's time, the FDIC warns these officials, to sit down and work out settlements ?

A Sherman Oaks man who pleaded guilty earlier this year to a bank fraud charge has admitted to federal authorities that he sought to have a witness in the case killed in a drive-by shooting, officials said Wednesday. Pavel Valkovich, 28, pleaded guilty Tuesday to one count of solicitation of murder for offering to pay $10,000 to arrange for the slaying of a man who was cooperating with authorities in the fraud case against him. Valkovich was involved in a scheme in which he and others used stolen personal identifying information to transfer funds from victims' bank accounts to PayPal accounts he and his cohorts could access, prosecutors contend.

A Boston bank cheated California's two largest employee pension funds of nearly $57 million by inflating fees it charged for foreign currency trades, according to a suit filed Tuesday by the state attorney general's office. The pension funds, including the giant California Public Employees' Retirement System, didn't even know they were being fleeced by State Street Corp., the state's lawyers said. The scheme was uncovered by whistle-blowers with firsthand knowledge of how State Street operated, they said.

Prosecutors charged a fundraiser for Hillary Rodham Clinton and other top Democrats in an alleged $292-million Ponzi scheme that spanned more than a decade, saying he gave some of the money to election campaigns. In an indictment returned in U.S. District Court in Manhattan, Hassan Nemazee is charged with bank fraud and aggravated identity theft. He was arrested in August on charges that he used forged documents to obtain a $74-million loan. Prosecutors allege that he fraudulently obtained loans worth hundreds of millions of dollars.

A Beverly Hills real estate agent to the stars and an appraiser were convicted Monday on federal charges of conspiracy and bank fraud for their roles in a multimillion-dollar Westside real estate fraud ring, but jurors couldn't reach a verdict on another prominent agent accused of being part of the scheme. Real estate agent Kyle Grasso, 38, and licensed appraiser Lila Rizk, 42, were found guilty of multiple counts of conspiracy, bank fraud and loan fraud for their participation in a scheme in which banks lost more than $40 million on loans totaling $142 million.

The owner of an Orange County Nissan dealership and three employees have been arrested and charged with engaging in a conspiracy to steal customers' identities and defraud banks into approving loans for overpriced cars, authorities said Thursday. Employees of Douglas Nissan in Orange were accused of selling used cars at inflated prices to primarily Spanish-speaking customers and defrauding banks into believing the cars were worth more than they were. In some cases, dealership employees informed banks that cars had features that they did not, a scheme that led banks to approve loans they otherwise might have rejected.

A former boy-band mogul pleaded guilty Thursday to an audacious fraud that used fake accountants, fake bank accounts and a dead man's signature to swindle banks and investors out of more than $300 million. Lou Pearlman, known for launching the Backstreet Boys and 'N Sync, took a plea deal in a U.S. court in Orlando, Fla., on two counts of conspiracy involving bank and investor fraud, one of money laundering and one of making false claims in a bankruptcy. "I'm accepting full responsibility," Pearlman, 53, told U.S. District Judge G. Kendall Sharp.

A federal jury in Cincinnati on Friday found the owner of a company that sells so-called male enhancement tablets and other herbal supplements guilty of conspiracy to commit mail fraud, bank fraud and money laundering. Steve Warshak is founder and president of Forest Park, Ohio-based Berkeley Premium Nutraceuticals, which distributes Enzyte and other products alleged to boost energy, manage weight, reduce memory loss and aid sleep.

Former Refco Chief Executive Phillip Bennett pleaded guilty at a hearing in federal court in New York to criminal charges stemming from the 2005 collapse of the futures and commodities broker. Bennett, 59, entered the guilty plea to a 20-count indictment alleging conspiracy, securities fraud, bank fraud, wire fraud and money laundering. Sentencing was set for May 20. Refco and 23 affiliates filed for bankruptcy protection in 2005, a week after revealing that Bennett had hidden $430 million of bad customer debt.