Probation officer gives office BJ to boot-camp teen
Top 5 White Collar Villains: Judge Joseph Bamberger Finds In Favor of His Own Self-Interest
Friday, August 27, 2010 at 9:00 am
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The most shocking crimes are often the most senseless. Though the charges are mere allegations at this point, it's hard not to wonder: Why would the owner of one of Hollywood's premier beauty salons, catering to celebrities like Cher, Halle Berry, Penelope Cruz, Uma Thurman and Jennifer Aniston, run up unauthorized charges on her clients' credit cards?
According to the complaint, 51-year old Maria Gabriela Perez made fraudulent charges totaling $280,000 in one year on the cards of Liv Tyler, Melanie Griffith and high-end jewelry designer Loree Rodkin. Perez founded her Beverly Hills salon in 1986 after studying skin care under an Elizabeth Arden protegee. Facials there run between $3000 and $6000.
Aniston went so far as to call her out recently on Good Morning America, saying she stopped going there five years ago because "I knew something like this would happen."
Apparently after a while hobnobbing with the rich and famous isn't enough, and you feel the need to live (read: spend) like them too. Think this will impact business?
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You can imagine Blackwater's recruitment brochure: Travel the world, kill exotic people and enjoy the finest in adult entertainment, all on the taxpayer's dime. Should we expect anything less from the people that brought us the $400 hammer and the $7600 coffee machine?
It's easy to run a successful private company when most the money comes from heavily-padded, lightly-supervised government contracts. Now a couple of former Blackwater employees, Brad and Melan Davis have filed a lawsuit under the False Claims act charging the company with fraud in carrying out its work Iraq, Afghanistan and Louisiana during Katrina.
As one of the firm's bookkeepers, Melan Davis knows where the bodies are buried. (Okay, maybe a poor choice of words given Blackwater's history of civilian violence.) While filling up their vehicles during Katrina, Blackwater contractors would pick up any left-behind receipts and submit them for reimbursement. Invoices and documentation were ginned up to cover expenses after the fact, and the government was repeatedly over/double-billed.
The most entertaining accusations are that Blackwater hired strippers during the Katrina recovery, under the description "cleaning services" -- which we presume means French Maid outfits, oo-la-la! -- and put a hooker on the payroll in Afghanistan under "Morale Welfare Recreation." Well, that's kind of accurate. It's not like they billed her as "fresh meat."
Melan Davis, who was fired in 2008 while on leave to battle cancer, was frequently told to back off her attempts to investigate billing, and that she "would never win a medal for saving the government money." See, now that's a good idea. We could call it the Medal of Value. Not enough of that in the government right now.
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Do you believe anything you hear in a television ad anymore? So is anyone surprised that TV tex relief pitchwoman Roni Deutch's claims of winning 99% of her battles with the IRS, translates to reduction of taxes owed in but 10% of these cases?
Unfortunately, there are still plenty of gullible people that, like Fox Mulder, want (need?) to believe. They've been worth over $25 million to Deutch's firm, according to a lawsuit filed by California Attorney General (and gubernatorial candidate, natch) Jerry Brown. He's sued her for more than $34 million on behalf of hundreds of clients who paid her $4700, and got bupkus back when she failed to win them a tax settlement.
Deutch frequently appears on national networks offering tax advice and her ads are in heavy rotation on cable television. One features three clients she allegedly helped save a collective $86,000. But she only saved them time, not money. They still owe all their taxes, she only got them a delay. Pretty sneaky, sis. (Particularly since delays only increase the amount of interest and penalties owed the government.)
Naturally, Deutch is no stranger to deceptive practices lawsuits. New York's Department of Consumer Affairs filed a similar lawsuit in 2006 and eventually settled for $300,000.
Of course, when lying's worth $25 million/year (minus $3 million in advertising) what's the margin in telling the truth?
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Faith and fraud are oft-intertwined, because you need to secure one to commit the other. So it's not surprising Minneapolis, Minnesota resident Trevor Cook used a syndicated religious program, titled ironically enough, Follow the Money, and hosted by a longtime associate, 72-year old conservative radio personality Pat Kiley, to secure investors. (Other individuals also helped attract clients for Cook, though no one has been charged as yet.)
The 39-year old Cook lured more than 900 investors into his bogus currency investment scheme, netting an estimated $190 million between January 2007 and July 2009. Among the victims who testified were people who lost their life's savings, and a man who had hope to use investment returns to pay for his son's two brain surgeries. Yeah, Cook's a real sweetheart.
Cook, who suffers from a birth defect in his face that's still evident despite multiple corrective surgeries, used the money to fund a lavish lifestyle of strippers, gambling and booze. (He's had multiple drunk driving convictions.) He proved a skilled investor on his own behalf, buying a real estate development in Panama, ownership interest in two trading firms, and acquiring the Van Dusen Mansion in Minneapolis.
He's been in jail since January when he refused to hand over more than $35 million in frozen assets including $27 million in offshore accounts, a BMW and two Lexus automobiles, a collection of expensive watches, rare coins, and Faberge eggs, along with $670,000 in cash hidden by his brother, but revealed when Cook failed a lie detector test.
It's presumed that Cook's salted away more money that's yet to be located, which helped prompt U.S. District Judge James Rosenbaum to give him the maximum sentence of 25 years. (That's twice as long as any defendant in Minnesota that's plead guilty to fraud has ever received.) He'll have to serve at least 20 of that, and wasn't given credit for the seven months he's already served because of his recalcitrance in helping auditors round up investor assets.
The judge also irrevocably waived the statute of limitations to forestall Cook's ability to keep any hidden cash once he does get out. So far only $7.2 million has been recovered at a cost of $2.1 million in the process.
It's refreshing to witness a judge throw the book at a white collar criminal, a relatively rare occurrence. Sadly, it will be one of Rosenbaum's last acts, as he retires from the bench next week after 25 years.
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It's bad enough that a pharmaceutical company would take advantage of people's desire to lose weight to knowingly sell a dangerous drug. But sadly greedy amoral crooks abound. The lawyers in the suit against diet drug fen-phen's (which causes fatal heart valve damage) maker American Home Products (now Wyeth), took most of the settlement money for themselves in a deal Judge Joseph Bamberger signed off on in 2003.
The deal afforded the three lawyers William Gallion, Shirley Cunningham Jr. and Melbourne Mills Jr. $98 million of the $200 million settlement, despite contingency contracts they'd signed limiting them to one-third of any settlement. Another $20 million was allocated to create the Kentucky Fund for Healthy Living, which appointed Bamberger, his friend, trial consultant Mark Modlin (who also made $2M in the settlement), and the three lawyers as paid directors, each receiving in the neighborhood of $60,000 a year, plus expenses.
Since then the three lawyers have all been disbarred and forced to return $42M. Cunningham and Gallion were convicted of fraud and sent to prison last year. A trial commissioner has recommended Gallion's former assistant, attorney David Helmers, be suspended from legal practice for five years, and the bar association is pursuing a disciplinary charge against renowned Cincinnati class action lawyer Stan Chesley, who helped negotiate the settlement.
However the 68-year old Bamberger has as yet escaped sanction. Last week a trial commissioner recommended Bamberger be disbarred. According to the report, Bamberger didn't request or review any documentation authenticating the lawyers charges when he signed off on the settlement, nor did he ask for any settlement details before declaring it as fair and reasonable. They say he then helped cover-up the scandal by sealing the file and requiring that all future documents be distributed only to the plaintiff's (crooked) lawyers.
According the commissioner, lawyer Susan Phillips, he signed orders he knew were blatantly false, and failed to review a single document despite numerous red flags. He even berated one client who complained about the settlement, before offering her an additional $100,000 and a $1200/month life annuity on the condition she cease talking about the settlement and her objections to it. The squeaky wheel gets the grease, and these guys were soaking in it.
Bamberger quit the KFHL directorship and returned the $48,000 he'd been paid when the Judicial Conduct Commission began investigating him in 2004. He stepped down from the bench in 2006 rather than be removed after the Judicial Conduct Commission reprimanded him for misconduct that "shocks the conscience."
Bamberger's defense? "I took [the lawyers] at their word." Trusting a lawyer? Either he's a lying crook or was suffering the early stages of dementia. In any case, the only courtroom he should see for the rest of his life is as a defendant.
Read last Friday's Top 5 White Collar Villains: David Marks and Relatives Go From Palm Reading to Insurance Fraud.
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