Georgia Woman Imprisoned for 18 Months for Mortgage Fraud

The United States Attorney’s Office for the Middle District of Pennsylvania announced that an Atlanta, Georgia resident was sentenced to 18 months in federal prison by Senior U.S. District Court Judge William J. Nealon for her role in a Luzerne County mortgage fraud scheme in 2005 and 2006.

According to United States Attorney Peter J. Smith, Nancy Barlet, age 52, previously pleaded guilty to a charge of mail fraud as an aider and abettor. Barlet admitted to providing false employment and income information on mortgage applications for numerous properties in the Wilkes-Barre area in 2005 and 2006. The fraud involved mortgages worth more than $400,000.

Barlet was charged in a criminal information filed by the United States Attorney’s Office in October 2008. The charge resulted from an investigation by the Federal Bureau of Investigation and Wilkes-Barre Police.

Judge Nealon also ordered Barlet to serve three years of supervised release following her prison sentence, and pay a special assessment of $100. The amount of restitution will be determined within 90 days.

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Manhattan U.S. Attorney Charges Georgia Man for Selling Fake Vintage Horror Movie Posters and Lobby Cards Over the Internet

PREET BHARARA, the United States Attorney for the Southern District of New York, and GEORGE VENIZELOS, the Special Agent-in-Charge of the New York Office of the Federal Bureau of Investigation ("FBI"), announced that KERRY HAGGARD was arrested this morning in Georgia on mail fraud charges relating to his sale of fake vintage horror movie posters and lobby cards which he misrepresented over the Internet and elsewhere to be authentic vintage collectibles. In doing so, HAGGARD defrauded his victims of over a million dollars in money and property.

According to a criminal complaint unsealed today in Manhattan federal court:

Horror movie posters and lobby cards were displayed in the lobby of movie theaters as a type of advertising product that the movie industry introduced in the 1920s. Lobby cards are popular collectible items which are often sold through auction houses and over the Internet through online auction sites such as eBay.

From January 2006 to August 2009, HAGGARD engaged in a scheme to defraud collectors by selling purportedly vintage horror movie posters and lobby cards which he represented were original pieces, knowing that the items were reproductions that HAGGARD himself had created. HAGGARD used a New York-based printing company to make high-quality ink jet copies of horror movie cards or posters from either hard copies or digital scans of such pieces provided by HAGGARD. HAGGARD also used a restoration company to attach the inkjet copies to lobby card stock and to airbrush and otherwise alter the resulting product to make it look as real as possible.

HAGGARD then fraudulently marketed the reproductions as originals through eBay using a member username and various e-mail addresses. HAGGARD was able to sell numerous fake lobby cards and posters for movies such as "Frankenstein," "Son of Frankenstein," "Mummy's Hand," and "Murder in the Rue Morgue," at prices ranging from $500 to $5,000, to approximately 25 victims. In other instances, HAGGARD traded his fake reproductions to other sellers who gave HAGGARD real lobby cards and/or posters in return.

The victims learned of the fraud in various ways, including after providing the lobby card to a restoration expert, or after consigning the piece to a large auction house for sale. As a result of HAGGARD's fraud, his victims lost more than $1 million in money and property.

HAGGARD is charged with one count of mail fraud. If convicted, he faces a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross pecuniary loss or gain derived from the offense on each count.

HAGGARD, 45, of Commerce, Georgia, was presented today in federal court in Gainesville, Georgia.

U.S. Attorney PREET BHARARA stated: "Kerry Haggard's purported fraud was a real-life horror show for his victims, who are allegedly out of pocket more than one million dollars. It is especially difficult to police fraud over the Internet, but increasingly important that we do so aggressively. Together with our partners at the FBI, this office will continue to go after those who disguise their scams through online auctions and websites."

FBI Special Agent-in-Charge GEORGE VENIZELOS stated: "Authentic vintage movie posters are valuable pieces of memorabilia sometimes worth thousands of dollars. But Haggard wasn't a legitimate purveyor of fine collectibles. He created and peddled fakes. Whether the merchandise is artwork, baseball memorabilia, or movie posters, if you try to peddle fakes, you'll draw the attention of not just potential purchasers, but the FBI."

Mr. BHARARA praised the work of the FBI's New York and Atlanta field offices and said the investigation in continuing.

This case is being prosecuted by the Office's Complex Frauds Unit. Assistant United States Attorney RYAN P. POSCABLO is in charge of this prosecution.

The charge contained in the criminal complaint is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.

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Savannah Attorney Benjamin Sheftall Eichholz Indicted on $950,000 Embezzlement Scheme, Lying and Obstruction of Justice

Edmund A. Booth, Jr., United States Attorney for the Southern District of Georgia, announced August 6 the return of a seventy-seven count indictment by the federal grand jury against Savannah attorney Benjamin Sheftall Eichholz, age 58, charging an alleged scheme to embezzle more than $950,000 from employee pension benefit plans established to provide retirement benefits to present and former employees of the Eichholz Law Firm. The charges against Eichholz include Embezzlement from Employee Pension Benefit Plans in violation of Title 18, United States Code, Section 664; Money Laundering in violation of Title 18, United States Code, Section 1957; Mail Fraud in violation of Title 18, United States Code, Section 1341; False Statements in Documents Required to be Filed by ERISA in violation of Title 18, United States Code, Section 1027; Obstruction of Justice in violation of Title 18, United States Code, Section 1505; and False Statements in violation of Title 18, United States Code, Section 1001.

The indictment alleges that beginning in or before 2001 and continuing to in or about October 2008, through a variety of different means, Eichholz embezzled more than $950,000 from two employee pension benefit plans at the Eichholz Law Firm, and then repeatedly executed, mailed and filed false documents with the United States Department of Labor in order to both execute and conceal his embezzlement. The indictment further alleges that during an investigation by the United States Department of Labor of Eichholz and the two employee pension benefit plans at the Eichholz Law Firm, Eichholz made numerous false statements to an investigator with the Department of Labor, and committed other acts to obstruct justice, in a further effort to cover up his embezzlement from the employee pension benefit plans.

Booth noted that, if convicted of the charges, Eichholz faces the following maximum statutory penalties :

Counts One Through Thirty - Embezzlement from Employee Pension Benefit Plans
Imprisonment for not more than five (5) years;
Fine of up to $250,000 (18 U.S.C. § 3571), or both;
Not more than three (3) years supervised release (18 U.S.C. § 3583);

Counts Thirty-One Through Thirty-Four - Money Laundering
Imprisonment for not more than ten (10) years;
Fine of up to $250,000 (18 U.S.C. § 3571), or both;
Not more than 3 years supervised release (18 U.S.C. § 3583);

Counts Thirty-Five Through Forty-Four -Mail Fraud
Imprisonment for not more than twenty (20) years;
Fine of up to $250,000 (18 U.S.C. §3571);
Not more than three (3) years Supervised Release (18 U.S.C. 3583);

Counts Forty-Five Through Fifty-Four False Statements in Documents Required to be Filed by ERISA
Imprisonment for not more than five (5) years;
Fine of up to $250,000 (18 U.S.C. §3571);
Not more than three (3) years Supervised Release (18 U.S.C. 3583);

Count Fifty-Five - Obstruction of Proceedings Before Departments, Agencies, and Committees
Imprisonment for not more than five (5) years;
Fine of up to $250,000 (18 U.S.C. §3571);
Not more than three (3) years Supervised Release (18 U.S.C. 3583);

Counts Fifty-Six Through Seventy-Seven - False Statements
Imprisonment for not more than five (5) years;
Fine of up to $250,000 (18 U.S.C. §3571);
Not more than three (3) years Supervised Release (18 U.S.C. 3583);

Booth stressed that an indictment is only an accusation and is not evidence of guilt. The Defendant is entitled to a fair trial, during which it will be the Government’s burden to prove the defendant’s guilt beyond a reasonable doubt.

Booth stated that agents of the Federal Bureau of Investigation, United States Department of Labor, Internal Revenue Service, and the Savannah-Chatham Metro Police Department conducted the investigation.

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Former Home Depot “Product Merchant” Pleads Guilty

RONALD DOUGLASS MATHENY II, 42, of Chattanooga, Tennessee, pleaded guilty today before United States District Judge Richard W. Story to one count of conspiracy to commit mail fraud and wire fraud and one count of conspiracy to commit money laundering in relation to a scheme to defraud his former employer, Home Depot.

United States Attorney David E. Nahmias said, “This defendant abused the trust and authority given to him by his employer and lined his own pockets at the company’s expense. For this fraud against his employer, he will now face a federal prison sentence.”

“Consumers pay the ultimate price when corporate executives take kickbacks and try to thwart the competitive process,” said Christine A. Varney, Assistant Attorney General in charge of the Department's Antitrust Division. “The Antitrust Division is committed to bringing to justice those who engage in kickbacks and other anticompetitive schemes.”

IRS Special Agent In Charge Reginael D. McDaniel said: “It is vital for the strength of our economy for our large corporations to be free of individuals who succumb to greed and corruption. IRS Criminal Investigation is committed to actively pursuing corporate fraud at any level.”

According to United States Attorney Nahmias and information presented in court: MATHENY was employed by Home Depot from May 1987 until July 2007. From May 2002 through April 2005, MATHENY held the position of Product Merchant in Home Depot’s Flooring Department and was responsible for overseeing the location of flooring merchandise in all of Home Depot’s retail stores and for locating outside firms to facilitate the display of flooring products within those stores. MATHENY and several unnamed co-conspirators arranged for Home Depot to purchase items for resale in Home Depot’s retail stores on less than the most advantageous terms to Home Depot, and to have the co-conspirators supply services on less than the most advantageous terms to Home Depot. In return, MATHENY’S co-conspirators paid him approximately $1,471,467.64. MATHENY is no longer employed by Home Depot.

MATHENY could receive a maximum sentence of 20 years in prison on the conspiracy to commit mail and wire fraud, and a maximum sentence of 10 years in prison on the conspiracy to commit money laundering. MATHENY also could be fined up to $250,000 on each count. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

MATHENY is scheduled to be sentenced on August 3, 2009, at 2:30 p.m., before United States District Judge Richard W. Story.

Anyone with information on corporate kickbacks and fraud is asked to call the FBI at 404-679-9000.

This case is being investigated by the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation.

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