Plus, an Indiana accountant gets jail time for wire fraud, and an Arkansas church accountant is in police custody for allegedly stealing more than $70,000.
Berks County accountant allegedly victimizes the Mennonite and Amish communities in massive Ponzi scheme [Justice Department]
Philip Riehl was charged on Jan. 31 with conspiracy, securities fraud, and wire fraud, stemming from an investigation into a Ponzi scheme worth approximately $60 million that targeted members of the Mennonite and Amish religious communities in Pennsylvania and elsewhere. Authorities say it’s one of the largest Pennsylvania-based alleged Ponzi schemes in history.
Riehl, 68, is accused of fraudulently soliciting tens of millions of dollars in investments, from his accounting clients and others, into a bogus investment program that he operated:
Riehl diverted funds from the program to Trickling Springs Creamery, LLC, a Franklin County–based creamery of which he was the majority owner. Riehl also fraudulently solicited direct investments in Trickling Springs Creamery. The Information further alleges that Riehl made material misrepresentations about the safety and security of these investments in his program and about the performance of the program, as well as misrepresentations and omissions about the creamery’s business and financial condition. Trickling Springs Creamery announced it was ceasing operations in September 2019 and filed a bankruptcy petition in December 2019.
The allegations constitute what is sometimes referred to as “affinity fraud,” which typically involves investment scams that prey upon members of identifiable groups, such as religious or ethnic communities. These types of scams exploit the trust and friendship that exist in groups of people who share common interests or beliefs. The victims of Riehl’s alleged scheme were generally members of the Mennonite or Amish religious communities who wanted a safe and secure investment, operated within their community and in a manner consistent with their religious principles. The charges note that Riehl was a co-religionist in the Mennonite religious community.
If convicted, Riehl faces a maximum possible sentence of 45 years in prison, a $5,500,000 fine, a three-year term of supervised release, forfeiture, and mandatory restitution.
Accounting services owner accused of exploiting elderly [WICS/WRSP]
Vicki McGuar, who has owned McGuar Accounting Services in Springfield, IL, for 39 years, was arrested on Jan. 24 on charges of financial exploitation of the elderly, a class 1 felony.
McGuar is accused of taking money from one of her clients.
Wisconsin accountant found guilty of conspiracy to obtain over $260 million in small business contracts [Justice Department]
Mark Spindler, a CPA with the firm Komisar & Spindler, was found guilty by a jury on Jan. 24 of conspiracy to commit wire and mail fraud for his role in a scheme to use front companies to obtain set-aside contracts intended for small businesses led by service-disabled veterans and disadvantaged individuals.
From the late 1990s to 2017, authorities say Spindler provided accounting services to Brian Ganos and Milwaukee-based construction companies Ganos controlled, including Sonag Co. Inc., Sonag Ready Mix LLC, Nuvo Construction Co. Inc., and C3T Inc.
The scheme involved three construction companies with straw owners who qualified as a disadvantaged individual or as a service-disabled veteran, but who didn’t actually control the companies. Ganos then fraudulently obtained small business program certifications to win government-funded contracts to which the companies weren’t entitled.
At trial, the government introduced evidence that Spindler participated in the conspiracy in several ways, including:
- He wrote multiple letters to certifying agencies that contained false information and enabled the front companies to retain their certifications. For example, Spindler wrote a letter for the Department of Veterans Administration (VA) that claimed Telemachos Agoudemos was the highest-compensated employee of C3T, when in fact, multiple C3T employees were earning more than Agoudemos, the purported president of C3T.
- He provided accounting advice to help Ganos and others conceal the profits they were moving out of the front companies. For example, Spindler provided accounting entries that charged “services” from Ganos’s Sonag Co. to the front companies, even though no services had been rendered, in order to justify millions of dollars that Ganos was taking from the front companies.
- He lied to criminal investigators from the FBI and VA during an interview in June 2012, saying that Ganos had no influence over C3T and that the front companies had no affiliation with each other or Ganos’ Sonag Co. Partly as a result of Spindler’s false statements, the criminal investigation was closed and the scheme continued for four more years. Only after new information came to light several years later was a new investigation started, which eventually ended the scheme.
Ganos pleaded guilty to one count of wire fraud and one count of mail fraud, and was sentenced to 78 months in prison last December. Spindler is scheduled to be sentenced on May 6.
Converse man sentenced to prison and ordered to pay over $3 million in restitution [Justice Department]
Fredrick McCracken, who worked as an accountant for an industrial construction company in Marion, IN, was sentenced to 46 months in prison on Jan. 27 for wire fraud and making a false statement on an income tax return.
McCracken, 62, was also sentenced to two years of supervised release and was ordered to pay more than $3 million in restitution to his former employer and the IRS.
From October 2012 through July 2018, McCracken wrote more than 100 unauthorized checks drawn on the company’s business account and made payable to his personal business. And from March 2016 through July 2018, McCracken used the company’s bank accounts to pay his personal credit card obligations more than 50 times. To avoid detection, McCracken concealed his activities in the company’s accounting records system.
In total, his fraud scheme resulted in the theft of $2,440,490.46 from his employer. McCracken also caused $612,500 in tax losses to the IRS.
Church employee sought in theft of nearly $70,000 [Sentinel-Record]
Alisa Bynum, a former accountant for First Lutheran Church in Hot Springs, AR, sought on a felony warrant since early last year for allegedly stealing almost $70,000 from the church over a period of more than four years, turned herself in to authorities on Jan. 31.
The theft was first reported on Jan. 12, 2018, by a church board member, with the amount stolen estimated at $69,625.88 over an unknown timeline by a known suspect, identified as Bynum, 46, according to authorities.
Bynum, who was employed as the church’s accountant between 2013 and 2017, is accused of making numerous unauthorized charges on the church’s credit cards. She was asked by a church official to produce the church’s files and receipts, but she refused to provide any documents and receipts in her possession and reportedly deleted several QuickBooks files on the church’s server.
Hamersville tax accountant pleads guilty to taking investors’ money for personal use [Cincinnati Enquirer]
Robert White, owner of Robert L. White and Associates Inc. in Cherry Grove, OH, pleaded guilty on Jan. 27 to six counts of securities fraud for using his tax accounting clients’ investments to pay off his own expenses.
White, 72, solicited his clients, friends, and associates over the last several years to invest in Platinum Franchising LLC, and he promised the clients significant returns on the investment, authorities said.
Instead of investing the money, White converted the funds to his own personal spending. The money was used to pay back prior investors, and to pay for ongoing expenses of his business.
He will be sentenced on July 1.