Fraud

Roberto Pagan-Franco didn't have a bank account for decades. His employer paid him in cash or with a check that the Baltimore resident took to a check-cashing store. A few years ago he lost his job after a severe illness and for a time was homeless. Not exactly the type of customer you'd expect a big bank to court. But Pagan-Franco enrolled in a PNC Bank program that targets consumers who otherwise might be shut out of the banking system. And today, the 54-year-old has checking and savings accounts at PNC and is in the process of getting a credit card.

After about eight hours of deliberations Thursday, the Baltimore Circuit Court jury considering the fate of political consultant Julius Henson went home for a second day without reaching a verdict. Henson, 63, of East Baltimore, faces charges of election fraud, conspiracy and failure to include a campaign authority line on an automated call he orchestrated on Election Day 2010. Prosecutors say Republican former Gov. Robert L. Ehrlich Jr.'s campaign used the call in an attempt to suppress black votes.

The woman who says she represents North American Power is not telling the truth about the benefits of buying electricity from her company. "You can save up to 10, 15, 20 percent of your bill, depending on your usage," she says in a telemarketing call to my house. But the rate she eventually quotes is only about 7 percent less than the standard price offered by Baltimore Gas & Electric — something the average customer would have no way of knowing. And of course the percentage savings won't vary even if my "usage" goes up to that of a steel mill.

Political consultant Julius Henson's attorney used a stack of fake oversized money, invoked slavery and called prosecutors' election fraud case against his client a "bunch of bull-honky" during his closing argument Wednesday afternoon. Using props, charts and a blend of humor and outrage, Edward Smith Jr. talked to the jury for an hour, shifting his style between folksy and erudite. He quoted lyrics from the song "Backstabbers" by the O'Jays, showed jurors a photo of what he called a "twisted" man meant to represent the prosecution, and recommended that the deputy state prosecutor "just walk out the door right now" rather than present his arguments.

Many thanks to Jay Hancock for his interesting article about the Justice Department accusing Kernan Hospital of fraud in presenting a diagnosis of kwashiorkor in the billing for a number of patients ("Feds charge fraud in Kernan diagnoses," Nov. 8). I find it hard to believe that any medical personnel would be so stupid as to bill for patients with a wildly unlikely diagnosis of kwashiorkor. It seems more likely that a billing clerk entered an erroneous ICD (international classification of disease)

About 11,000 dead people in seven states, including Maryland, have gotten government heating aid over the past year or so, according to congressional investigators. They say that the grave is cold, but it's illegal to receive energy subsidies when your address is six feet under. Plenty of other Marylanders may also be ripping off the $5 billion Low-Income Home Energy Assistance Program, to judge from last month's report from the U.S. Government Accountability Office. In the seven states, the GAO found households receiving more than $100 million in benefits even though recipients weren't sufficiently documented on state records as being eligible.

Federal prosecutors say a man has pleaded guilty to wire fraud in a plot to defraud a client of $950,000. Fifty-two-year-old Wilkins McNair, formerly of Ellicott City, entered the plea Friday. He will be sentenced March 5. Court documents indicate that McNair, a CPA, was retained by a woman whose husband had died to probate the estate and manage a family trust. Prosecutors say McNair deposited all of the money into accounts he controlled and used the money to pay salary and other expenses at his accounting firm.

Columbia-based Micros Systems Inc. said Thursday that it overstated revenue by $6.9 million and pretax income by $4.4 million over the past five years because of fraud by a Japanese subsidiary. The company, which supplies information systems to the hospitality and retail industry, said the overstatements weren't enough to adjust previous earnings statements. Micros also said that fiscal second quarter earnings for the period ended Dec. 31 were flat at $26.1 million, or 32 cents per share.

AS IF Baltimore's school system weren't financially challenged enough trying to correct a major deficit, it was the victim of a $3 million, decade-long fraud scheme, allegedly by a business contractor who has recently been indicted by a city grand jury. While the fraud preceded the current school administration, the indictment is yet another reminder of the importance of having good financial and management controls in place. As outlined by the grand jury, Gilbert Sapperstein of Baltimore County, the longtime owner and operator of All State Boiler Co., was allegedly involved in two billing schemes in the city.

Howard County police have charged a 39-year-old Columbia woman with 27 counts of prescription-related fraud after an investigation showed she allegedly forged prescriptions and got pain-killers by posing as a health care worker.Barbara Flowers Maestas, of the 6500 block of Quilting Way in the Village of Owen Brown, was charged with forging prescriptions this year and obtaining controlled dangerous substances by fraud, according to Howard County District Court records.The maximum penalty for forging a prescription is two years in prison; the maximum penalty for obtaining a controlled dangerous substance by fraud is four years and a $25,000 fine.

A Severna Park woman was sentenced Tuesday to just over three years in prison after pleading guilty to a mortgage scam involving $4.7 million in fraudulent loans, the Maryland U.S. attorney's office said. Mary Anne Dean, 60, brokered loans in a scheme pitched to homeowners trying to avoid foreclosure, according to her plea agreement. The homeowners were told they could sell to investors, stay on as renters, and then buy back their homes after getting their finances in order. Dean, who ran a mortgage brokerage firm called Sunset Mortgage Co. from her home, submitted falsified mortgage applications to secure the loans for the "investors" — relatives and acquaintances of a co-defendant, Charles Donaldson of Bowie.

I have been watching the congressional hearings on the waste, fraud and abuses of public servants in the General Service Administration who spent more than $800,000 on a "conference" trip to Las Vegas. And according to the Inspector General's Office that was just the tip of the iceberg. The really frustrating aspect of this is twofold. First, this occurred in 2010 and was discovered soon after. The exact time is difficult to ascertain from the hearings since there is so much double-talk, but the Inspector General began an investigation.

Federal securities regulators allege an executive at Eastern Savings Bank in Hunt Valley participated in a fraudulent short-selling scheme involving his personal brokerage firm, according to a complaint filed Monday. In an administrative case, the U.S. Securities and Exchange Commission said that Chicago-based optionsXpress, four of the firm's officials and Jonathan I. Feldman, a senior vice president at Eastern Savings, violated SEC rules by engaging in a plan to profit off a series of "sham" transactions designed to give the impression that the firm had bought certain securities.

An Owings Mills man has been arrested on charges of forging loan modification documents that led five homes into foreclosure proceedings, state licensing officials said. Rodney Getlan, 45, has been charged by the Baltimore County State's Attorney with felony theft, operating without a license, mortgage fraud and other counts, according to a statement Friday from the Maryland Department of Labor, Licensing and Regulation. For three years, from Jan. 2009 through Jan. 2012, Getlan forged documents that showed his victims had been approved for loan modifications by their mortgage lenders, according to the licensing department.

The number of city workers charged with rooting out property tax fraud and errors would triple — from one employee to three — under Mayor Stephanie Rawlings-Blake's budget proposal for next fiscal year. The "billing integrity" program, launched last spring, has focused on finding homestead property tax credits that go to owners who don't live in the homes receiving the break, which violates the rules. The Finance Department wants extra staff to audit all tax credits and investigate the accuracy of property assessments.

A 35-year-old Parkville woman has been charged with three counts of insurance fraud stemming from allegations that she filed three fraudulent claims and was paid a total of $21,563, the office of the Maryland attorney general said Thursday. Charges were filed against Katina Hutchinson, Maryland Attorney General Douglas F. Gansler said. An arraignment is set for April 27 in Baltimore Circuit Court. The state accuses Hutchinson of filing fraudulent claims as well as fraudulent supporting documents on her supplemental health policy with American Family Life Assurance Co. last year between July 15 and Aug. 17. AFLAC issued three separate checks for a total of $21,563, the state said.

Shares of Owings Mills-based Medifast Inc. recovered slightly yesterday after the weight-loss products company responded to what it called false claims in a report this week by the Fraud Discovery Institute and defended the business model of its direct-selling division. Medifast shares closed at $5.20 a share, up 7 cents, after losing nearly 30 percent of their value Tuesday in the wake of the report by San Diego-based FDI. The report said Medifast's direct-selling Take Shape for Life division offers a "misleadingly promoted income scheme ... that requires paying fees and buying Take Shape for Life products."

An Edgewater man was sentenced to six years in prison and a Crofton man pleaded guilty Friday for their involvement in a Gambrills-based mortgage fraud scheme in which they stole nearly $5 million for their personal use, prosecutors said. Gary Pierce, 44, was sentenced Friday to six years in prison for his part in a wire fraud conspiracy to divert funds that were supposed to be used to pay off mortgages during home transfers on 17 Maryland properties, according to a statement from Maryland's U.S. Attorney's Office.

Your recent editorial stated that there is little reason to require a photo ID to vote ("The phantom menace," Feb. 27). But there is another way to look at this. Two of my children have been away from home for several years, yet they still show up as active voters on the rolls at our precinct, despite my telling officials there that my children have left home. The elections judge writes this down at every election. But when that information gets back to election headquarters, anyone with access could copy those names and use them to cast ballots elsewhere during early voting.