Top 5 White Collar Crimes: SEC Lawyer Phillip Offill Gets 8 Years For Fraud Scheme
Friday, April 30, 2010 at 9:19 am
Detroit is not a wealthy city. This we know.
Still, that hasn't stopped some folks from pillaging what's left of the crumbling metropolis. Not even folks who were once showered with adoration by its impoverished dwellers. Folks who don't mind biting the hand that feeds them. Cowards with no moral compass. Dickheads like former Detroit Lion Michael Farr.
On April 22, the Securities and Exchange Commission busted Mike Farr and his business partner, Roy Dixon, after it discovered that the two men had stolen more than $3 million from three pension plans in the cities of Detroit and Pontiac.
The lawsuit states that Dixon, founder of Onyx Capital Advisors, raised $23.8 million from the three separate pension funds for a start-up private equity fund that would invest in small to medium-size companies throughout the Midwest.
Instead, Dixon gave the majority of the cast -- more than $15 million - to a Georgia-based chain of used car lots and two finance companies, all ran by Farr.
The rest of the money went straight into Dixon's pocket, financing his lavish lifestyle, the building of his multi-million dollar home, and to pay the mortgage on at least 40 rental properties that Dixon owns around Detroit.
The lawsuit claims that Farr also personally benefited from the misappropriated funds, though it doesn't describe how specifically.
Both men now face charges of fraud.
4. Stephen Hill and Christina Polk-Osumah
As if there was anything else left in Detroit to steal, two school officials were also caught with their hands in the city's cob-web lined cookie jar.
Two former Detroit school officials and two vendors were recently caught helping themselves to money from the district, which is currently facing a $300 million deficit.
Stephen Hill, the district's former executive director of risk management, and Christina Polk-Osumah, the former risk management finance manager, were recently charged with eight counts of fraud in a kick-back scheme that they had going with the partners of Associates For Learning.
Hill and Polk-Osumah authorized inflated invoices from the company's four-month wellness program, which cost no more than $150,000. Still, Hill and Polk-Osumah allowed Associates For Learning to charge the district more than $3 million.
In return for his generosity, Hill received more than $158,000 in kick-backs from the contractor. Polk-Osumah was given more than $50,000 just to host parties for herself as well as her mother, and received more than $6,000 in jewelry.
The alleged incident occurred between 2005 and 2006. And it's just the tip of the iceberg.
In 2008, the Detroit School District sued the defendants, along with several other vendors, for shelling out $60 million to contractors who did little to no work. That case is supposed to go to trial this year, too.
3. Sholom Rubashkin
In May 2008, federal agents raided the meatpacking plant at Iowa's Agriprocessors, the country's largest distributor of kosher meat, and rounded up 389 undocumented workers.
About 300 of those workers pled guilty to charges of identity theft. Most of them were sentenced to five months in prison and were ordered deported. In the end, more than 270 workers were shipped back to Guatemala.
Immigrants' Rights groups were not happy. After all, none of the company's hire ups were busted for hiring illegals or for providing them with fake identities. Even worse, the company was found violating child labor laws. At least 32 minors -- many under 16 -- were found working with dangerous chemicals and operating meat grinders, circular saws and other heavy machinery at the plant.
The scene at Agriprocessors had been described as something straight out of Upton Sinclair's novel The Jungle. Yet, the men responsible for creating such a dangerous and illegal workplace had yet to be charged.
Finally, by October 2008, charges were brought against the company's executive director, Sholom Rubashkin, son of the company's founder. Apparently, Rubashkin had personally paid for falsified documents for the illegals working at his plant.
But that was just the beginning of Rubashkin's misdeeds -- and hardly the end of his evasion from justice. Just days after he was arrested on those charges, Rubashkin was charged with 86 counts of fraud for duping First Bank out of a $35 million loan by providing them with false documents that showed the company making more money than it was.
Figuring they had a stronger and faster case against Rubashkin for fraud, federal prosecutors dropped all the immigration and identity theft charges against Rubashkin in 2009. Instead, he was convicted on all 86 counts of money laundering, as well as mail and wire fraud. He now faces life in prison.
Last week, Rubashkin's sentencing hearing began and he found major support from the unlikeliest of folks.
Six former attorneys general and 17 other senior Justice Department veterans are claiming that a life sentence for Rubashkin would be "grossly excessive." Amongst Rubashkin's supporters are Janet Reno and Edwin Messe.
Rubashkin's lawyers are asking of a sentence no longer than 6 years.
Do we need to remind our politicians that this man employed babies to run meat grinders? Apparently, so.
2. Abdul Alishtari aka Michael Mixon
We absolutely love this next story, not just because Abdul Alishtari defrauded investors and then gave his money to finance terrorist training camps in Pakistan. But also because he gave more than $15,000 to the Republican Party at the exact same time. Talk about varied interests.
Alishtari's story begins in Ardsley, New York, where he worked as a bank underwriter and sometimes operated under the name of Michael Mixon.
In 2002, Alishtari created a phony investment program called the "Flat Electronic Data Interchange," through which he promised investors high returns with no intention of ever delivering on his promises.
Instead, he stole millions and diverted the funds to two places: 1. To a terrorism training camp in Pakistan and 2. The National Republican Congressional Committee.
Alishtari was arrested in 2007 for investment fraud and financing terrorism. Unfortunately, giving money to Republicans is not a crime.
Last week, he was sentenced to 10 years in federal prison.
1. Phillip Offill
It's not necessarily the nature of Phillip Offill's crime that has landed him the No. 1 spot. We do consider handing children circular saws and funding terrorism to be much worse than straight up fraud.
Rather, it's who Offill is that has earned him the highest honor on today's list. After all, if you can't trust an SEC attorney, then who can you trust?
For over 15 years, Offill worked as a lawyer for the Securities and Exchange Commission. Offill was supposed to be one of the good guys -- charged with bringing down greed and corruption in America.
Unfortunately, Offill was only contributing to the very epidemic he'd been enlisted to fight.
After working for the SEC, Offill took a job with Godwin Gruber, a Dallas-based law firm. It was there that he put his extensive knowledge of financial crime to do not good, but pure evil.
Offill helped cheat at least 1,500 investors out of almost $3 million by pumping up the value of penny stocks and then selling the shares to unwitting buyers. Offill used his status as a well-respected attorney to shield the fraudsters -- of whom eight were charged -- from criminal prosecution.
Fortunately, his cover was somewhat transparent. Earlier this year, a jury convicted the former SEC lawyer on 10 counts of wire and fraud conspiracy.
Last week, he got eight years in the slammer.
Read last Friday's Top 5 White Collar Crimes: Steven Moos Posed As Top Plastic Surgeon, Butchered Patients.