McHenry County Blog

A press release from the U.S. Attorney’s Office:

CARY BUSINESS OWNER PLEADS GUILTY TO $1 MILLION INTERNATIONAL FRAUD SCHEME

ROCKFORD — A Cary, Ill. business owner pleaded guilty to wire fraud today in federal court before U.S. District Judge Frederick J. Kapala.

CLARE THOMAS ANDERSON, 44, who owned and operated multiple businesses in Cary, Ill, and Florida, admitted that between April 2009 and January 2013, he schemed to defraud over $1 million from more than 10 victims that did business with the companies he operated.

According to the written plea agreement, the businesses Anderson owned and operated were Certifibre, LLC, Anderson International Global, LLC, which hadan assumed name of Worldwide Paper Company, Inc., American Surplus Supply, Southernmost Exports, LLC, Southernmost Holdings, LTD, and Sea Consulting, LLC.

Through these businesses, Anderson contracted to sell wood pulp and other raw materials to manufacturers, brokers and suppliers, which were usually located in foreign countries.

Anderson obtained payments from his customers before the shipments arrived at their destinations. Often, the customers obtained Letters of Credit from their banks in order to pay for the shipments in advance.

Anderson admitted that he caused payments to be disbursed under these Letters of Credit to bank accounts he controlled by creating and presenting fraudulent Bills of Lading, Certificates of Origin, and packing lists. These documents falsely represented that the agreed upon quantity and quality of materials had been shipped.

Anderson admitted that instead of shipping the wood pulp or other raw materials he had agreed to sell, on various occasions he shipped worthless scrap materials to his foreign customers.

When the customers called him to complain about the worthless scrap materials they had received, Anderson falsely told them that the scrap materials were intended for another customer in a different country.

Anderson further admitted that on some occasions, instead of shipping the agreed upon weights and volume of wood pulp or other raw materials, he instead shipped substantially smaller amounts of wood pulp or other raw materials.

When the customers called and complained about the short shipments, Anderson falsely told them that short shipments were caused by clerical errors.

Anderson acknowledged that, in order to maximize the profits from his scheme to defraud, he often failed to pay for the materials he obtained and for the freight shipping charges.

Anderson also admitted that he spent the funds that his customers sent to him on his own As he acknowledged in the Plea Agreement, on a few occasions Anderson refunded some money to his victims in order to avoid detection of his scheme. Anderson paid these refunds

only after the victims contacted, or threatened to contact, federal law enforcement officials.

Anderson admitted that he obtained the funds used to pay these refunds by defrauding additional Anderson is scheduled to be sentenced on Aug. 22, 2013, at 2:30 p.m. Wire fraud carries a maximum penalty of up to 20 years in prison, a term of up to 3 years of supervised release following imprisonment, a $250,000 fine, and mandatory restitution.

The Court may also impose a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. The actual sentence will be determined by the United States Districtimpose a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever

The Court may also is greater. The actual sentence will be determined by the United States District Court, guided by
the advisory United States Sentencing Guidelines.

The guilty plea was announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois, and Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

The government is being represented by Assistant U.S. Attorney Scott A. Verseman.

Woodstock’s Francis X. Sanchez has been sentenced to 11 and a third years in Rockford Federal Court fraudulently obtaining $7 million from investors in his InvestForClosures business.

Sanchez admitted wrong-doing, which can be read in the press release from the U.S. Attorney’s Office below.

This is the case in which Sanchez promoted a Mexican resort called Sands of Gold.

In his scheme, he raised about $9 million, but only repaid $1.7 million.

Sanchez was ordered to pay back $7.8 million.

Here’s the U.S. Attorney’s press release:

McHENRY COUNTY BUSINESSMAN SENTENCED TO 11 YEARS IN PRISON FOR $7 MILLION FRAUD SCHEME

ROCKFORD — A Woodstock, Ill., man was sentenced today in federal court by U.S. District Judge Philip G. Reinhard in Rockford to 136 months in prison for conducting a $7 million fraud scheme. Francis X. Sanchez (“Sanchez”), 52, co-owned and operated a business in McHenry County, known as InvestForClosures.

On May 3, 2012, Sanchez pled guilty and admitted that he had fraudulently obtained more than $7 million from InvestForClosures’ investors.

According to Sanchez’s plea agreement, InvestForClosures purportedly bought distressed houses, rehabilitated those houses, and sold the houses for a profit. Sanchez admitted in his plea agreement that he solicited people to invest in InvestForClosures by making various misrepresentations, including:

1. their investments would be safe because they would be backed by real estate;
2. InvestForClosures used the majority of their investors’ funds to purchase real estate; and
3. because of the business’ efficient cash flow from buying and selling houses, InvestForClosures had never failed to make an interest payment on time or return an investor’s principal when requested.

These representations were false, because:

1. the business did not own sufficient real estate to secure all of the investments;
2. the business did not use the majority of investor funds to purchase real estate, but instead used most of the investors’ funds to pay other expenses, including the salaries of the defendants, and to pay Ponzi type interest to prior investors; and
3. InvestForClosures was not making enough money from property sales to pay the interest owed to the investors, but was instead using cash received from new investors to pay the prior investors with Ponzi type payments.

Sanchez further admitted that, in order to conceal from the investors his false promises and misrepresentations, and to prevent the investors from demanding the return of their principal, he told the investors that he was developing an exclusive, luxury, residential community in Mexico known as the “Sands of Gold.”

Sanchez solicited his investors to purchase lots at Sands of Gold and to invest additional monies for the Sands of Gold project.

Sanchez admitted that he made several misrepresentations to his investors regarding Sands of Gold, including:
the government of Mexico had promised to invest millions of dollars in infrastructure necessary for the development of the Sands of Gold;

1. efforts to obtain financing for the project were going well and a financing deal was imminent;
2. he was finishing negotiations with a major hotel chain for the construction of a hotel at Sands of Gold; and
3. a major accounting firm had agreed to do the accounting work necessary so that the business could go public.

During the course of the scheme, Sanchez fraudulently obtained more than $9 million from the investors.

Of this amount, approximately $1,711,711.18 was paid back to the investors through Ponzi type payments.

In addition to sentencing Sanchez to prison, the court also ordered him to pay more than $7.8 million in restitution to the victims of his crime.

Sanchez’s business partner and co-defendant, James D. Bourassa, 55, of Gilberts, Ill., pled guilty to mail fraud on February 27, 2012. Bourassa was sentenced on June 11, 2012, to 51 months in federal prison.

The case was investigated by the Rockford Office of the Federal Bureau of Investigation, the Chicago Office of the United States Postal Inspection Service, and the Illinois Secretary of State’s Securities Department. The investigation was conducted under the auspices of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: www.StopFraud.gov.

The sentencing was announced by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois; William C. Monroe, Acting Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; Thomas P. Brady, Postal Inspector-In-Charge of the Chicago Division of the U.S. Postal Inspection Service; and Illinois Secretary of State Jesse White.

The government was represented by Assistant U.S. Attorney Scott A. Verseman.

A press release from the U.S. Attorney’s Office:

OWNER AND FOUR EMPLOYEES OF CRYSTAL LAKE BUSINESSES CHARGED WITH DEFRAUDING UNITED STATES, U.S. MILITARY VETERANS, AND SERVICE DISABLED VETERAN OWNED SMALL BUSINESSES

ROCKFORD — the owner of certain Crystal Lake, Ill. businesses, three of his current employees, and one former employee, were all indicted today by a federal grand jury in Rockford, Ill. The indictment charges the five defendants with defrauding the United States, U.S. military veterans, and certain other disadvantaged businesses known as Service Disabled Veteran Owned Small Businesses.

Defendant, John C. Blanchard, 51, of Crystal Lake, Ill., owns and operates several businesses referenced in today’s indictment, including

• National Association of Systems Administrators, Inc. (“NASA, Inc.”),
• National Association of Systems Administrators Corporation (“NASA Corp.”),
• NASA Education Corp. (“NASA Education”), and
• Liberating Solutions Corporation (“Liberating Solutions”).

NASA, Inc., and NASA Corp. provide computer system maintenance and support for small businesses and engage in some software design.

NASA Education and Liberating Solutions are companies that are purportedly designed to help homeless U.S. military veterans by providing them with work training, community reintegration, and other services. All of these businesses are located in Crystal Lake, Ill.

The remaining four defendants all worked for John Blanchard’s businesses.

• Joanne Blanchard, 49, of Crystal Lake, John Blanchard’s wife, managed the finances and payroll for her husband’s companies.
• James Blanchard, 55, of McHenry, Ill., John Blanchard’s brother, was a Project Manager for Liberating Solutions and managed security for his brother’s businesses.
• Eric R. Behler, 51, of Curlew, Washington, was a Contracting Officer for Liberating Solutions.
• Amy B. Johnson, 50, of Elkhart, Indiana, oversaw NASA Education.

The indictment alleges that the defendants fraudulently obtained federal contracts that were set-aside for Service Disable Veteran Owned Small Businesses. Federal law allows for certain contracts to be set-aside for Service Disabled Veteran Owned Small Businesses.

To qualify as a Service Disabled Veteran Owned Small Business, a company must be at least 51% owned by one or more service-disabled veterans, and the daily operations of the business must be managed by a service-disabled veteran.

According to the indictment, the defendants caused Liberating Solutions to bid for and win federal set-aside contracts by falsely representing that Liberating Solutions was a Service Disabled Veteran Owned Small Business.

The indictment also charges that the defendants defrauded the U.S. military veterans who were enrolled in the NASA Education program by failing to pay them the wages they were entitled to under the Davis Bacon Act, the Service Contract Act, and Illinois law.

The Davis-Bacon Act requires that companies receiving federally funded contracts for work on federal buildings must pay their employees locally prevailing wages and fringe benefits for similar projects in the area. The Service Contract Act requires companies that are awarded federal contracts to provide certain services to the federal government must also pay their employees certain wage rates. Illinois law has similar requirements for contractors who are awarded contracts for state and local government projects.

According to the indictment, the defendants caused Liberating Solutions and NASA Education to win contracts with the federal government and local governments in Illinois by representing that their businesses would pay their employees the wage rates required under the Davis Bacon Act, the Service Contract Act, and Illinois law.

Then, the defendants required the U.S. military veterans who were enrolled in the NASA Education program to perform the physical labor required by these contracts.

Contrary to the representations on the contracts, the defendants did not pay the veterans the wage rates required by the Davis Bacon Act, the Service Contract Act, and Illinois law.

The indictment also charges the defendants with defrauding the United States in connection with the receipt of certain grant funds.

The U.S. Department of Labor (“DOL”) provides up to $10,000 in grant funds to organizations that sponsor “Stand Downs.”

Stand Downs are events which provide homeless veterans with information regarding training, employment opportunities, and social services.

The DOL requires organizations that receive these grants to provide the DOL with receipts and invoices for the costs incurred. The grant recipients are also required to return any funds not expended for the event.

According to the indictment, the defendants fraudulently caused NASA Education to keep excess grant funds it received for Stand Down events by submitting fraudulent invoices falsely claiming that Liberating Solutions had incurred certain expenses.

For example, some of these fraudulent invoices claimed that security for NASA Education’s Stand Down events had been provided by a company known as “Bull Dog Security,” when in fact security for those events had been provided by veterans who were not paid for their services.

The indictment returned today contains six counts of wire fraud, one count of mail fraud, and ten counts of providing material false statements and documents in a matter within the jurisdiction of a federal agency. Each count of wire fraud and mail fraud carries a maximum penalty of 20 years in prison.

Each count of providing material false statements or documents carries a maximum penalty of 5 years in prison. All of the counts carry a maximum fine of $250,000, or an alternate fine totaling twice the loss or twice the gain derived from the offense, whichever is greater, and restitution. If convicted, the Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines.

The defendants are scheduled to be arraigned on the indictment next Tuesday, August 28, 2012, at 11:00 a.m., at the federal courthouse in Rockford, Ill. The arraignments will be conducted by U.S. Magistrate Judge P. Michael Mahoney.

The indictment was announced today by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois, James Vanderberg, Special Agent in Charge of the Chicago Office of the U.S. Department of Labor, Office of Inspector General, John W. Brooks, Special Agent in Charge of the Central Field Office of the U.S. Department of Veterans Affairs, Office of the Inspector General, Armando Lopez, Special Agent in Charge of the Chicago Field Office of the U.S. Department of Homeland Security, Office of the Inspector General, and Jeffrey L. Arsenault, Special Agent in Charge of the Central Field Office of the Defense Criminal Investigative Service.

The government is represented by Assistant U.S. Attorney Scott A. Verseman.

The public is reminded that an indictment contains only charges and is not evidence of guilt. Each defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

= = = = =
You can read the indictment here.

A press release from the U.S. Attorney’s Office:

HUNTLEY MAN SENTENCED TO 45 MONTHS IN PRISON FOR DEFRAUDING HIS FRIENDS AND ACQUAINTANCES OUT OF MORE THAN $1,000,000

Rockford — A Huntley, Ill. man was sentenced today in federal court to 45 months in federal prison on his conviction for wire fraud. From 1995 through January of 2012, Frank L. Beaudette, 61, fraudulently obtained loans totaling more than $1,000,000 from at least 25 individuals by making false representations about the purpose for which he needed their money.

Beaudette pleaded guilty to the federal wire fraud charge on December 29, 2011.

In his plea agreement, Beaudette admitted that he usually attempted to befriend his victims.

Then, after he gained their confidence, Beaudette persuaded his victims to lend him money.

On most occasions, Beaudette falsely told his victims he had a “friend” in the computer business who needed capital to complete a large sale of computer equipment.

Beaudette then persuaded the victims to loan money to him so that he could provide the money to his “friend” for the computer transaction.

In return, Beaudette gave the victims personal promissory notes, promising to repay their principal together with large amounts of interest.

As he acknowledged in the plea agreement, however, Beaudette did not have a friend who was selling computers.

Instead Beaudette spent all of the victims’ funds on his own personal expenses.

Beaudette also admitted that when the promissory notes came due, he falsely told the victims he could not repay the loans because his “friend” had been unable to collect what was owed after the computer sale transaction.

Beaudette often promised the victims that he would repay them with profits earned from a business he owned.

Specifically, Beaudette told these victims that he owned a business known as “Thunderbird Aviation,” which allegedly brokered sales of airplanes.

Beaudette frequently promised his victims that he would repay the loans with profits from upcoming airplane sales transactions.

Beaudette further acknowledged that he caused some of his victims to provide additional funds to him by telling them that he needed these additional monies until Thunderbird Aviation could complete a purported upcoming airplane sale.

Today’s sentencing hearing was conducted by United States District Judge Frederick J. Kapala.

In addition to the 45 month federal prison sentence, Judge Kapala also ordered Beaudette to pay $1,050,809.92 in restitution to the victims of his crime. Beaudette will not be eligible for parole on his prison sentence.

The investigation was conducted under the auspices of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: www.StopFraud.gov.

The sentencing was announced today by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois; Robert D. Grant, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Illinois Secretary of State Jesse White.

The government was represented by Assistant U.S. Attorney Scott A. Verseman.

A press release from the U.S. Attorney’s Office:

McHENRY COUNTY BUSINESSMAN PLEADS GUILTY TO $7 MILLION FRAUD

ROCKFORD — A Woodstock, Ill., man pleaded guilty today in federal court in Rockford to conducting a $7 million mail fraud scheme. Francis X. Sanchez (“Sanchez”), 51, co-owned and operated a business in McHenry County, known as InvestForClosures, with his business partner James D. Bourassa. In his guilty plea today, Sanchez admitted that he fraudulently obtained more than $7 million from InvestForClosures’ investors.

Sanchez’s and Bourassa’s business was initially known as InvestForClosures.Com, but later changed its name to InvestForClosures Financial, LLC. According to Sanchez’s plea agreement, he represented to potential investors that this business bought distressed houses, rehabilitated those houses, and sold the houses for a profit.

Sanchez admitted in his plea agreement that he, Bourassa, and their employees solicited people to invest in InvestForClosures.Com and InvestForClosures Financial. Sanchez acknowledged that he and his employees made various representations to their potential investors, including:

1. their investments would be safe because they would be backed by real estate;
2. InvestForClosures used the majority of their investors’ funds to purchase real estate; and
3. because of the business’ efficient cash flow from buying and selling houses, InvestForClosures Financial had never failed to make an interest payment on time or return an investor’s principal when requested.

As Sanchez admitted today, each of these representations was false.

First, the business did not own sufficient real estate to secure all of the investments.

Secondly, the business did not use the majority of investor funds to purchase real estate, but instead used most of the investors’ funds to pay other expenses, including the salaries of the defendants, and to pay Ponzi type interest to prior investors.

In addition, InvestForClosures was not making enough money from property sales to pay the interest owed to the investors, but was instead using cash received from new investors to pay the prior investors with Ponzi type payments.

Sanchez further admitted that, in order to conceal from the investors his false promises and misrepresentations, and to prevent the investors from demanding the return of their principal, he told the investors that he was developing an exclusive, luxury, residential community in Mexico known as the “Sands of Gold.”

Sanchez and Bourassa formed a new business, known as InvestForClosures Ventures, LLC, doing business as Realty Opportunities International, to operate the Sands of Gold project. Sanchez acknowledged that he and Bourassa solicited their investors to purchase lots at Sands of Gold and to invest additional monies with InvestForclosures Ventures.

Sanchez admitted that he made several misrepresentations to his investors regarding Sands of Gold, including:

1. the government of Mexico had promised to invest millions of dollars in infrastructure necessary for the development of the Sands of Gold;
2. efforts to obtain financing for the project were going well and a financing deal was imminent; and
3. they were finishing negotiations with a major hotel chain for the construction of a hotel at Sands of Gold.

Sanchez further admitted that, during the course of the scheme, he and co-defendant Bourassa fraudulently obtained approximately $7,238,506.40 from the investors.

Of this amount, approximately $1,711,711.18 was paid back to the investors through Ponzi type payments.

The indictment, which was filed on November 16, 2010, charged both Sanchez and Bourassa with mail fraud and wire fraud. Bourassa pled guilty to mail fraud on February 27, 2012.

The sentencing hearing for Sanchez will be conducted on August 13, 2012, at 9:00 a.m.

Bourassa will be sentenced on June 11, 2012, at 9:30 a.m.

Mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater, as well as restitution to the victims. The actual sentences will be determined by the United States District Court, guided by the advisory United States Sentencing Guidelines.
The case was investigated by the Rockford Office of the Federal Bureau of Investigation, the Chicago Office of the United States Postal Inspection Service, and the Illinois Secretary of State’s Securities Department. The investigation was conducted under the auspices of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit:
www.StopFraud.gov

The guilty plea was announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Robert D. Grant, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; Thomas P. Brady, Postal Inspector-In-Charge of the Chicago Division of the U.S. Postal Inspection Service, and Illinois Secretary of State Jesse White.

The government is being represented by Assistant U.S. Attorney Scott A. Verseman.

A press release from the U.S. Attorney’s Office:

HOME HEALTH CARE ADMINISTRATOR PLEADS GUILTY TO FEDERAL HEALTH CARE FRAUD AND KICKBACK SCHEME

ROCKFORD — An Elmhurst, Ill., woman pleaded guilty today in federal court in Rockford to healthcare fraud and kickback violations. Merigrace Orillo (“Orillo”), 45, co-owned and operated Chalice Home Healthcare Services, Inc. (“Chalice”), with her husband Virgilio Orillo.

Chalice had offices in Chicago, Freeport, and Morris, Illinois. Orillo admitted that her fraud scheme caused a loss of more than $400,000 to the Medicare program.

Medicare is a national healthcare program which provides free or below-cost health care to eligible beneficiaries, primarily persons who are 65 years of age or older. Chalice was an enrolled provider with the Medicare program since 2004.

According to a written plea agreement, Chalice’s nurses, nurses aids, physical therapists, and occupational therapists provided services to patients in their homes.

Chalice was usually paid for these services through the Medicare program.

Orillo admitted that from January 2007 through April 2010, she and her husband falsified documents in order to increase the payments Chalice received from Medicare. These falsifications were made on documents known as OASIS forms.

The falsifications made Chalice’s patients appear to be sicker than they actually were and in need of greater care than they actually required.

In the plea agreement, Orillo also admitted that she knowingly assisted her husband in paying cash kickbacks to a Chicago doctor.

The kickbacks were paid in return for the doctor referring patients to Chalice for home healthcare services. Orillo admitted that she withdrew cash from Chalice’s bank account and provided that cash to her husband to be used to pay these kickbacks.

The indictment, which was filed on February 15, 2011, charged both Orillo and her husband Virgilio with healthcare fraud. The charges against Virgilio Orillo were dismissed after he died on August 30, 2011.

Healthcare fraud carries a maximum penalty of 10 years in prison and a $250,000 fine, or a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater, as well as restitution to the victims. The kickback charge carries a maximum penalty of 5 years in prison and a $250,000 fine. The actual sentence will be determined by the United States District Court, guided by the advisory United States Sentencing Guidelines.

The investigation was conducted by the Medicare Fraud Strike Force, which expanded to the Northern District of Illinois in 2011, and is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative between the Justice Department and HHS to focus their efforts to prevent and deter fraud and enforce anti-fraud laws around the country.

The guilty plea was announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Robert D. Grant, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Lamont Pugh, Special Agent-in-Charge of the U.S. Department of Health and Human Services, Office of Inspector General in Chicago.

The government is being represented by Assistant U.S. Attorney Scott A. Verseman.

A press release from the U.S. Attorney’s Office:

HUNTLEY MAN PLEADS GUILTY TO FRAUD

Rockford — A Huntley, Ill. man pleaded guilty today in Federal Court to wire fraud.

The defendant, Frank L. Beaudette, 60, admitted that from 1995 to September 2010, he fraudulently obtained loans totaling more than $800,000 from at least 10 individuals by making false representations about the purpose for which he needed their money.

In a written plea agreement, Beaudette admitted that he first befriended his victims.

Then, after he gained their confidence, Beaudette persuaded his victims to lend him money.

Beaudette admitted that on most occasions, he falsely told his victims he had a “friend” in the computer
business who needed capital to complete a large sale of computer equipment.

Beaudette then persuaded the victims to loan money to him so that he could provide the money to his “friend” for the computer transaction.

In return, Beaudette gave the victims personal promissory notes, promising to repay their principal together with large amounts of interest.

As he acknowledged in the plea agreement, however, Beaudette did not have a friend who was selling computers.

Instead Beaudette spent all of the victims funds on his own personal expenses.

Beaudette also admitted that when promissory notes came due, he falsely told the victims he could not repay the loans because his “friend” had been unable to collect what was owed after the computer sale transaction.

Beaudette often promised victims that he would repay them with profits earned from a business he owned.

Specifically, Beaudette told these victims that he owned a business known as “Thunderbird Aviation,” which allegedly brokered sales of airplanes.

Beaudette frequently promised his victims that he would repay the loans with profits from upcoming airplane sales transactions. Beaudette further acknowledged that he caused some of his victims to provide additional funds to him by telling them that he needed these additional monies until Thunderbird Aviation could complete a purported upcoming airplane sale.

The charge in this case carries a maximum penalty of 20 years in prison, and a $250,000
maximum fine, or an alternate fine totaling twice the loss or twice the gain, whichever is greater, a
period of supervised release of up to 3 years following imprisonment, and restitution. The actual
sentence will be determined by the United States District Court, guided by the advisory United
States Sentencing Guidelines.

Sentencing has been set for April 10, 2012, at 2:30 p.m.

The investigation was conducted under the auspices of the Financial Fraud Enforcement
Task Force, which includes representatives from a broad range of federal agencies, regulatory
authorities, inspectors general, and state and local law enforcement who, working together, bring
to bear a powerful array of criminal and civil enforcement resources. The task force is working to
improve efforts across the federal executive branch, and with state and local partners, to investigate
and prosecute significant financial crimes, ensure just and effective punishment for those who
perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover
proceeds for victims of financial crimes. For more information on the task force, visit:
www.StopFraud.gov.

The guilty plea was announced today by Patrick J. Fitzgerald, United States Attorney for the
Northern District of Illinois; Robert D. Grant, Special Agent-in-Charge of the Chicago Office of
Federal Bureau of Investigation; and Illinois Secretary of State Jesse White.

The government is represented by Assistant U.S. Attorney Scott A. Verseman.

A press release from the U.S. Attorney’s Office:

CRYSTAL LAKE WOMAN SENTENCED TO 18 MONTHS IN FEDERAL PRISON
FOR THE ROBBERY OF CHASE BANK IN CARY, ILLINOIS

ROCKFORD – PATRICK J. FITZGERALD, United States Attorney for the Northern District of Illinois; ROBERT D. GRANT, Special Agent-In-Charge of the Chicago Office of the Federal Bureau of Investigation; RONALD K. LUKASIK, Chief of the Fox River Grove Police Department; and STEVEN CASSTEVENS, Chief of the Cary Police Department, today made the following announcement:

Today, in Rockford federal court, United States District Judge Philip G. Reinhard sentenced SILK P. LUMPKINS, 36, of Crystal Lake, Illinois, to 18 months in federal prison for the May 26, 2010, robbery of Chase Bank, 300 Northwest Highway, Cary, Illinois.

Lumpkins pled guilty on February 16, 2011.

]In pleading guilty, Lumpkins admitted that at about 2:20 p.m. on May 26, 2010, she entered Chase Bank wearing a disguise consisting of heavy covering make-up on her face and hands, a long blonde wig, long-sleeved shirt, and a baseball cap.

Lumpkins further admitted that she wrote a note at the self-service desk ,approached a teller at the counter, and handed the note to the teller that stated something to the effect of:

“If you don’t want to die today, give me all your money. You have 30 seconds to do this.”

According to the plea agreement, the teller then removed $5,876 from her drawer and handed the money to Lumpkins. Lumpkins then put the money into a blue “Chase” deposit bag that she brought with her and walked out of the bank with the bag.

Lumpkins was arrested on June 2, 2010.

In addition to the 18 month prison sentence, Lumpkins was ordered to serve 3 years of supervised release following her release from prison.

The court further ordered Lumpkins to serve the first 6 months of her supervised release in home confinement with electronic monitoring.

The court also ordered Lumpkins to pay restitution to Chase Bank in the total amount of $5,876.

The case was investigated by the Rockford Office of the FBI, the Fox River Grove Police Department and the Cary Police Department.

The case was prosecuted in federal court by Assistant United States Attorney SCOTT A. VERSEMAN.

A press release from the U.S. Attorney’s Office:

FORMER MARENGO CONTRACTOR SENTENCED TO
11 YEARS IN PRISON ON FEDERAL FRAUD AND TAX CHARGES

ROCKFORD – PATRICK J. FITZGERALD, United States Attorney for the Northern
District of Illinois; ALVIN PATTON, Special Agent-In-Charge of the Chicago Office of the Internal Revenue Service – Criminal Investigation Division (“IRS-CID”); and ROBERT D. GRANT, Special Agent-In-Charge of the Chicago Office of the Federal Bureau of Investigation (“FBI”), today made the following announcement:

Late yesterday afternoon, in Rockford Federal Court, United States District Judge Frederick J. Kapala sentenced JOHN M. VOLPENTESTA, 54, formerly of Marengo, Illinois, to 133 months in federal prison without parole on his federal fraud and tax convictions.

On July 19, 2010, after a four week trial, a federal jury in Rockford returned guilty verdicts against Volpentesta, convicting him of

• two counts of mail fraud,
• two counts of wire fraud,
• eleven counts of failing to pay over to the IRS taxes he withheld from the wages of his employees,
• three counts of failing to file unemployment tax returns, and
• three counts of failing to file personal income tax returns.

The jury acquitted Volpentesta of two remaining mail fraud counts.

The fraud charges arose from Volpentesta’s operation of a residential construction business located in Marengo, known as Volpentesta Construction, Inc. (also known as “VCI”).

The indictment alleged that Volpentesta defrauded at least four families with whom VCI contracted to build homes. Specifically, the indictment charged Volpentesta with obtaining large sums of money from these families by

1. falsely stating that VCI had performed work on their homes that was
   actually performed by subcontractors;
2. fraudulently billing his customers for work performed by
   subcontractors and materials suppliers, and then failing to pay those subcontractors and suppliers;
3. billing customers for materials he used on other projects, including a strip mall he owned; and
4. charging additional “fees” to which VCI was not entitled under its contracts with the families.

The indictment also alleged that Volpentesta defrauded certain individuals who invested money in, or loaned money to, VCI by making false promises about the security of their investments and when their money would be returned.

According to the indictment, Volpentesta defrauded his construction customers and investors out of a total of more than $1 million dollars.

The indictment also charged Volpentesta with seventeen federal tax charges.

Eleven of those counts charged that from the second quarter of 2003, through the fourth quarter of 2005, Volpentesta collected

• federal income tax,
• Medicare, and
• Social Security taxes

from the wages of VCI’s employees, but then failed to pay those monies to the IRS. According to the indictment, the amount of taxes Volpentesta collected from his employees and failed to pay to the IRS was $164,999.

Three of the tax counts charged Volpentesta with failing to file Form 940 Federal Unemployment Tax returns on behalf of VCI for the years 2003, 2004, and 2005.

The remaining three counts charged Volpentesta with failure to file Form 1040 federal income tax returns on behalf of himself and his wife for the years 2003, 2004, and 2005. According to these three counts, Volpentesta received gross income in the following amounts during those years:

1. 2003 –$375,853.01;
2. 2004 – $156,844.95; and
3. 2005 – $193,833.53.

Judge Kapala decided several of the sentencing issues raised by the parties in a written order
issued yesterday morning. In this order, Judge Kapala said: “

The court has observed defendant’s actions, expressions and demeanor while testifying in this court and in this court’s estimation the truth for defendant has very little connection to reality or actuality. The truth in defendant’s mind had been perverted to mean whatever profits or benefits him, as he is unfettered by any desire or sense of moral obligation to tell the truth.” Judge Kapala also stated:

“[Volpentesta] has shown himself to be a pernicious, self-absorbed and cold-hearted person who is oblivious to the pain he causes other people.”

In addition to the 133 month prison sentence, Volpentesta was ordered

• to serve 5 years of supervised release following his release from prison, and
• to pay restitution in the amount of $1,378,127.03 to the victims of his fraud scheme.

The case was investigated by the Rockford offices of the IRS-CID and FBI. The case was prosecuted in federal court by Assistant United States Attorney SCOTT A. VERSEMAN.

A press release from the U.S. Attorney’s Office:

FORMER MARENGO RESIDENT CHARGED WITH FEDERAL TAX FRAUD

ROCKFORD — PATRICK J. FITZGERALD, United States Attorney for the Northern
District of Illinois, and ALVIN PATTON, Special Agent-in-Charge of the Chicago Field Office of Internal Revenue Service Criminal Investigation Division, today made the following announcement:

BRAIN MARVIN GAYE, GAY or GAYLORD (also known as Brain M. Gaylord-Tousana and Jennifer A. Williams) (hereinafter “Gaye”), 46, formerly of Marengo, Illinois, was arrested today in Chicago on charges that she made false claims for an income tax refund against the United States and for aggravated identity theft.

According to the indictment, on January 6, 2010, Gaye filed three separate federal Individual Income Tax returns, one in the name of Brain M. Gaylord-Tousana and two in the name of separate deceased individuals in which Gaye falsely stated she was the representative of each deceased individual.

Gaye is charged with falsely claiming on each return that estimated tax payments were made in 2009 of $9,999,999 and claiming a refund in that amount, knowing she was not entitled to the refund.

The indictment also charges that Gaye unlawfully used the Social Security Number of each deceased individual in making the false claim on each of those federal income tax refunds.

If convicted of the crimes charged in the indictment, Gaye faces a maximum sentence of up to 5 years imprisonment on each count of false tax returns, and a mandatory term of imprisonment of a consecutive 2 years to be served on each count of aggravated identity theft, and up to 3 years of supervised release following imprisonment.

In addition, each count carries a fine of up to $250,000. If convicted, Gaye’s actual sentence will be determined by the United States District Court, guided by the United States Sentencing Guidelines.

Gaye appeared in Rockford federal court before United States Magistrate Judge P.
Michael Mahoney today and was released on bond. Gaye is scheduled to appear again before Magistrate Mahoney on June 1, 2011 at 11:30 a.m.

Members of the public are reminded that an indictment is only a charge and is not
evidence of guilt. The defendant is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The case was investigated by the Rockford Office of the Internal Revenue Service
Criminal Investigation Division, with the assistance of the United States Postal Inspection Service. The case is being prosecuted in federal court by Assistant United States Attorney SCOTT A. VERSEMAN.