Who’s Cheating America: Tammy, Orlando & Braun

Uh-oh. Another lawyer in trouble.

A partner with Houston-based law firm Orlando & Braun LLP has been arrested on charges that he committed bankruptcy fraud by failing to disclose a conflict of interest in a Chapter 11 case, Texas authorities said Wednesday.

Hey, I get it. Lawyers like Calvin C. Braun, who’s been practicing for 16 years, have a lot of different clients in a lot of different matters. It can be hard to keep track of them all. So what happened exactly? Continue reading

Who’s Cheating America: A Matter of Integrity

Artistic reenactment:

Attorney: Hi there. I’m Chris Linton from Birmingham, Alabama. I’m an attorney, but don’t hold that against me.

Investor: Hello. What can I do you for?

Attorney: Hahahahaha, good one. [Gets serious.] Look, I’ve got a great new business going and the sky’s the limit. How would you like to get in on the ground floor?

Investor: I don’t know…you look a little young…

Attorney: I’m thirty-four years old!

Investor: That’s all?

Attorney: That’s enough! Look, here’s what I’m going to do. I’m setting up what’s called a factoring business. Lawyers who work for the state will submit vouchers to me so they can get paid quickly. I then get the money from the state for the work they performed.

Investor: How do you make money on that?

Attorney: I receive a cut of the money.

Investor: How much money?

Attorney: Enough to pay for my home, construction projects at the residence, private jet flights, vacations, recreational vehicles, furniture, luxury items, Auburn University football tickets and a donation to the Heisman Trophy Trust. All without committing wire fraud, mail fraud, money laundering, securities fraud, or bank fraud. it’s win-win-win-win-win-win-win.

Investor: That sounds like a lot…are you sure that’s all from your business?

Attorney: Mostly from my business.

Investor: Mostly?

Attorney: Some might be from investments in my business. I occasionally dip into the fund. Here and there. Make ends meet. Keep the lights on. You know how it is.

Investor: Investments? You mean from people like me?

Attorney: Sure. But you don’t need to worry. My business is called Integrity Capital.

Investor: Oh! Why didn’t you say that in the first place? [reaches for wallet]

Attorney: Has a nice ring to it, doesn’t it?

Investor: [writing check] It sure does.

Cut to: exposure, scandal, arrest, guilty plea, and a former attorney now facing up to 65 years in prison. Argh! Live up to your name, Integrity Capital! Stop cheating America!

Oh the irony… first “London Associates” and now this…the irony, the irony…

Previous entries in our Who’s Cheating America? series:

Who’s Cheating America: Breakfast at Tiffany’s

Image Credit: guardian.co.uk

No, no, this isn’t about the divine Audrey Hepburn. We didn’t catch her cheating, thank god. It’s just a boring old insurance company dispute with Tiffany’s, the world-famous jeweler’s. So boring, in fact, I had to jazz it up with a photo. Here’s another:

Image Credit: Elegant Audrey

Sigh. Now onto the case, which is captioned Those Interested Underwriters at Lloyd’s, London who subscribed to the policy of insurance numbered BO80111433 v. Lederhaas-Okun et al.


I thought this was about Tiffany’s? You mean there’s more…?

Indeed there is. Continue reading

Who’s Cheating America: The Bad Penny

Image Credit: USA Today

A penny sale! What could be cuter? In my family, we tell the story of my aunt climbing out of her crib, helping herself to my grandmother’s jewelry, and peddling it to neighborhood kids for a penny apiece. Luckily that was in small-town Wisconsin, and all the jewelry was recovered, with the exception of the priceless heirloom that would have enabled me to retire early. Alas, it was lost to the sands of time… for now, anyway (I’m watching you, Zane Zor Zirbachen!).

Just kidding. I’m sure Zane Zor returned the diamonds just like anyone else.

What does any of this have to do with America’s Greatest Cheaters? Well, a penny sale sounds a lot like a penny auction. Right? Probably one of those things online that lets you buy little trinkets or homemade goods. Kids learn how to invest their money. Spend ten cents and get a smiley-face sticker; fifteen will get you a fake tattoo or something. Hard to imagine anyone making much money at a penny auction. They’re probably run by the folks who brought you Sesame Street and Reading Rainbow.

Or… maybe not:

A key player in an online penny auction site pled guilty in North Carolina federal court Wednesday to securities fraud and tax evasion…Dawn Olivares and her stepson, Daniel Olivares, each pled guilty and face five years in prison for their roles at Zeekler.com, a penny auction site.

What??? Five years? For running Zeekler.com? But that’s such a cute lil’ name! How much could this mom-and-pop (or mom-and-stepson) shop have been taking in!? A few hundred dollars, tops! And for that they get five years?

As a result of the scheme, victims worldwide, including more than 1,500 victims in the Charlotte, N.C., area, sustained losses of at least $750 million.

$750 million? That’s an awful lot of pennies. How many fake tattoos are there, anyway?

Hmmm. Something else must be going on here. (Pause for Googling.)

Okay, thanks to Investopedia, I have a better understanding of penny auctions:

A new trend in the auction market is the Penny Auction. How the penny auction works is you buy a certain amount of bids for a flat rate (the bids are worth around 60 cents), which are used to try to buy items. Every time you bid on an item, a bid is removed from your account and a timer pops up. If the timer reaches zero, then you have won the item. There have been cases of bidders winning items for up to 97% off the retail price. The danger is that there are others bidding on the items as well.

And it turns out there are a ton of these on the Internet, or at least there were before places like Zeekler started getting rolled up by the Feds.* They all have names like Beezid and BidFun and Happy Bidday and offer you the chance to buy an iPad for $18. Are they all scams? I suppose not. Are they a good idea? Let’s just say I’m hanging onto my pennies. You never know when the grandchildren of Zane Zor Zirbachen are going to show up with a tableful of heirlooms and I can repurchase my retirement plan for a cent. (Just kidding, Zane Zor!)

*To be clear, Zeekler cheated to the tune of hundreds of millions by ripping off investors, not just auction buyers.

Previous entries in our Who’s Cheating America? series:

Who’s Cheating America: Zip-A-Dee-Doo…D’Oh!

Oh man. The nicknames for bribe money continue. Last time it was thanks to some lovers of literature. This time, our corrupt officials are apparently Disney fans. Old-school Disney fans. As in, old-school pretty ugly more-or-less-racist Disney fans:

According to prosecutors, the investigation revealed Mayor Mack colluded with Trenton sandwich shop owner Joseph “JoJo” Giorgianni, former municipal worker Charles Hall III, his brother Ralphiel and the late Lemuel Blackburn, a disbarred attorney, to funnel Mayor Mack bribe money from a federal informant posing as a developer interested in building a municipal garage.

Say it ain’t so, JoJo! And why oh why didn’t you come up with something more believable?

Moran played short excerpts from the wiretap evidence, many of which were from phone calls between Mayor Mack and Giorgianni. The excerpts were played to remind jurors of Giorgianni’s repeated use of the words “Uncle Remus” — not because of a shared love of “Song of the South,” the 1946 Disney film featuring the character, but as a code word Giorgianni used to let Mack know a bribe payment was pending his instruction.

“I gotta see you, Uncle Remus is coming by,” Giorgianni said to Mayor Mack in one portion. “Whenever you have time, I’ve gotta see you.”

Mack replied: “OK, baby.”

Nobody actually has an Uncle Remus! Is there a worse code name? (“Ben Franklin” maybe?)

The prosecutor pounced:

“What was Tony Mack’s reaction?” Moran said, following the excerpt. “Not ‘Joe, why are you saying that to me? Who is this person? What you talking about Joe?’ No. ‘OK, baby,’ and that was it.”

Mack didn’t do himself any favors:

Just minutes after leaving the meeting, Moran said, the illicit funds were “burning a hole” in Mack’s pocket, and the wiretap audio reveals the mayor making a call to his local tax assessor’s office to find out its preferred form of payment for a $6,000 lien against his home.

You want fifties or hundreds? I got hundreds right now. Fifties – I’ll need to stop at the bank.

I also like how this one expanded. First, it was cash for a good price…

The mayor is accused of accepting the bribe money, then selling the “developer” city-owned land on the cheap. The land was valued at $272,000, and the “developer” agreed to pay $200,000 for it in exchange for a bribe, authorities said.

…and then they went straight for the whole enchilada:

Giorgianni and Tony Mack eventually agreed that the land would be sold for $100,000 and that they would keep the remaining $100,000, according to prosecutors.

Wonderful feeling, wonderful day, yes sir!

Previous entries in our Who’s Cheating America? series:

Who’s Cheating America: Lovers of Literature!

Okay, okay. Government procurement officials have been corrupt since the beginning of time. It happens everywhere; America is no exception. Stories like this one

A Utah federal judge sentenced a former U.S. Department of Defense procurement official involved in an alleged bribery and fraud scheme with foreign military aircraft purchases to 24 months in prison, the Department of Justice said Wednesday.

…hardly raise eyebrows. $185,000 to tip off government contractors and to give them favorable treatment? Ho-hum.

But details like THIS one certainly fire the synapses:

Mendez and Sylvester Zugrav allegedly used code names, covert email addresses and password-protected computer documents to conceal the scheme. In the secret communications, Mendez was called “Chuco” and Sylvester Zugrav used the name “Jugo,” while cash was referred to as “literature,” according to the DOJ.

Oh boy! I love this idea. Maybe something like this?

“Dear Chuco, the lowest bid on the P-8A Poseidon maritime patrol aircraft is $180 million dollars. As you may recall, I am a great lover of literature. Please send me ALL of my literature via FedEx as soon as you can. Love, Jugo.”

What would the response be?

“Dear Jugo, Thank you for the information. We have submitted our bid at $170 million. Could you please place our contract on the top of the pile? By the way, we recall how much you LOVE literature. We have sent via FedEx one hundred and eighty-five thousand pieces of literature. The literature is unmarked and in small, easy-to-read denominations.”

The two will now have 15 to 24 months in the “library” to think about their crime.

Previous entries in our Who’s Cheating America? series:

Who’s Saving America? The Promise of the B-Corp

We’ve had enough of cheaters for a while. Today let’s look at someone (or something) with the potential for saving America, or at least one corner of it.

Ladies and Gentlemen, the B Corporation!

What’s a B Corporation (or “B Corp”), you ask? It’s a new type of business that aims to benefit the community and turn a profit. These entities have a much broader mission than traditional companies and as such are rebooting the idea of business success. But they’re only one aspect of what I consider to be a trend among intrepid millennials – a new economic movement I’ll call Indie Capitalism.

The quote comes from an article by Kathleen Sharp, who (probably at her editors’ request) frames this in terms of Baby Boomers vs. Millennials, a sideshow that she herself winds up contradicting. Put that aside. This is a story worth reading!

While some may argue that B Corporations run counter to the free market system, I don’t see it that way. Rather, they look to me like an attempt to fill a hole. Most corporations are required by law to maximize profits. If you, as the head of the corporation, want the freedom to pursue other goals as well (such as doing good for the community or helping the environment), you are out of luck.

Well, that’s not exactly true. You can own the business yourself and do whatever you want. But if you want access to capital, you will probably need to buy into the profit-maximization plan.(Let’s leave not-for-profits for another day.)

That’s all fine. Investing stockholders, for the most part, like the system of maximizing profits. The last thing you’d want is to invest in some company that fritters away money on some pet cause. But what if investors also want to help the environment or do good for the community? Can’t they invest in responsible companies with a well-defined broader mission? Probably not, at least in the traditional model. The law doesn’t really allow companies that freedom.

Enter the B Corporation. A legal entity, available in some states, that embraces the concept of broader-mission corporations—and in so doing increases the freedom of corporations and investors who want to see their time and money spent in advancing these goals.

Here we go, America! Long live the B Corporation! Let’s start saving America from the cheaters!

And…onward and upward!

Who’s Cheating America: Let’s Go Fly A Kite!

Image Credit: Charles Schulz via John Harris

Check kiting! Maybe the most colorfully named of all the great frauds. And something you could almost see someone falling into inadvertently. Let’s say you don’t have enough to pay a certain bill in one checking account, but hey, you have more than one account. And a few credit cards. All their due dates are different! So you have some money coming in here, flowing out there, this one can cover that one, and then that one can cover this one, this bill’s not due until the tenth, the paycheck’s the fifteenth, when does the bank cash this thing anyway? Wait, what? This is illegal? I thought it was called running a household.

Well, yes, it is illegal. Paying with money you don’t have (yet) is illegal. And it’s often the sign of a gambler, or a small-business owner, or Homer Simpson.

It’s certainly not the handiwork of an audited Nasdaq-traded company. Except when it is! Continue reading

Who’s Cheating America: Sharing Time (or Doing It?)

Vacation timeshares! What a great business, helping people to explore their dreams. I love vacations! I love staying in nice places!

Sure, there’s a possibility of some abuse. The clientele skews older, and salespeople can be pushy. But what might seem like aggressive sales tactics could also, in a different light, be viewed as encouraging people to pull the trigger on their dreams. Sales can be an honest profession! There’s no sense smearing everyone with the same brush!

Pappalardo, also known as “Patsy Ubatz” and “Posh,” started a branch office of Timeshare Market Pro, a time-share resale business, in February 2009 with Joseph Crapella, according to evidence presented at the trial…Witnesses testified that Pappalardo had met Crapella, who has used the nickname “Joey Cigars,” while both were serving time in federal prison.

Oh dear. Joey Cigars? Why do I think this is not going to end well…?

Or am I being too hard on them? I might be jumping to unfair conclusions! Maybe Posh and Joey Cigars have turned a new leaf! So what if they met in prison? They paid their debt to society, and then they wanted to help seniors honestly realize their vacation dreams, and…well…uh…

Timeshare Mega Media hired salespeople who worked for a fraudulent time-share resale companies, including Lovinsky, who used the work alias Edwin Lovins, the DOJ said.

Lovins? As in McLovin?

Oh, wait, this was a timeshare resale company. I missed that the first time around. That’s promising! If people have been saddled with something they don’t want – maybe because of shady salespeople – you step in with a plan to resell it for them. In other words, to help them get out from a burden they can no longer afford.

But why would Mr. Cigars hire a salesperson who worked for a fraudulent time-share resale company? Well, maybe McLovin wanted to turn a new leaf too! Or maybe…

[The men were recently convicted] for their roles in a time-share resale telemarketing scheme that fraudulently obtained about $5 million from its victims.

Fraudulently obtained! What did they do?

The salespeople called time-share owners, told them they had completed sales of their units and then asked for fees ranging from $1,996 to $10,000, according to the DOJ.

So what? $10,000 seems reasonable, and $1,996 seems like an outright bargain. You’re helping people alleviate their burden! Matching up sellers with buyers!

In reality, there never were any buyers, prosecutors said.


Over 10 months of operation, Timeshare Mega Media collected about $5 million from some 3,000 customers, of which Pappalardo received at least $300,000 in checks and hundreds of thousands of dollars more in cash, the DOJ said.

Ugh. People got ripped off going in (one assumes), then got ripped off getting out (one does not need to assume). There’s a special place in hell for people like this. Or at least in federal prison:

Pasquale Pappalardo was sentenced to 20 years in prison and was ordered to pay $1,061,401 in restitution and a forfeiture of $3.5 million. Audwin Lovinsky was sentenced to 33 months in prison and ordered to pay $34,635 in restitution. Both men were sentenced to three years of supervised release following their prison time.

And Joey Cigars pled guilty in a separate proceeding. This time, boys, use your time in jail wisely. Figure out an honest way to make a living when you get out. And stop cheating America!

Previous entries in our Who’s Cheating America? series:

Who’s Cheating America: Lonesome Highway Edition

Ah, the joys of interstate travel! Europe may have trains, but we Americans have the I-system. The open road! Freedom! Purple mountains! Amber waves!

And for those of us who love the wide-open feeling of hitting the road, there are all the little wayside restaurants and truck stops and lonely old gas stations. Selling Cokes and coffee and all that good road food.

Okay, some are disgusting. Some have bathrooms that feel almost sub-human. But the clean, well-run places – like the Flying J Travel Centers – are welcome oases.

I love the Flying J! Second only to Sheetz on my list of welcome sights at the bottom of Interstate offramps.

It turns out that the Flying J Travel Centers are run by Cleveland Browns owner Jimmy Haslam. We’ve had some issues with NFL owners in the past, as well as the NFL itself… but here’s a good story. The Flying J! Clean, well-lighted joints where Americans need them most! Thank you, Jimmy Haslam!

Except for one problem… America is being cheated. And the Flying J is at the heart of itContinue reading