LAWFUEL – Law News, Law Jobs – Three people linked to several bogus publications that bilked numerous entities for “advertising” purportedly aimed at minority readers were arrested this morning on federal fraud charges. The three defendants, who are expected to make their initial court appearances this afternoon, are among six defendants recently indicted in the scheme that cost several hundred victims more than $18 million.
The six defendants are named in a 48-count indictment that outlines a scheme in which agents of RAB Publications claimed to produce several minority-themed publications and, operating from a motel in Tarzana, contacted various organizations and falsely claimed that the organizations had purchased advertising in the publications. Victims of the scam include a local branch of the American Red Cross, the County of Sacramento and several private entities. In fact, the indictment alleges, the purported publications were never printed, or were printed long after their claimed publication dates.
Those arrested this morning are:
Joshua C. Hoffman, 37, of Malibu;
Frank Hightower, 60, of North Hollywood; and
Michael Borodzicz,, 53, of Van Nuys.
The alleged leader of the scheme – Richard A. Bivona, 56, of Las Vegas, Nevada – has agreed to surrender to federal authorities next Tuesday.
The final two defendants –Mark Scott, 40, believed to be in Los Angeles, and Thomas Regan Woods, 55 – are currently being sought by federal authorities.
The indictment alleges that Bivona and five of his collection agents ran a “back-dooring” scheme in which they contacted various entities and attempted to convince them that they had purchased advertising in bogus publications that they called The Veteran’s Observer, American Black Employment Journal, The Hispanic World News, Women’s World News, and Israel Today/Jewish News. The defendants generally targeted entities by contacting officials who had the ability to pay invoices and telling them that a former employee had authorized the purchase of ads in the bogus publications. In many cases, the purported publications were never printed. In other cases, the publications were printed long after the purported publication dates for the sole purpose of generating “tear sheets” to convince victim entities that the purported advertisements were real.
As a result of the conspiracy alleged in the indictment, victim entities lost more than $18 million. Named victims in the indictment include the American Red Cross, Southeastern Michigan; ChoicePoint, Inc.; E*Trade Financial; and Fed Ex Ground Package System.
The six defendants are all charged in a conspiracy count, as well as various counts of mail fraud, wire fraud and money laundering.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
This case is the result of an investigation by IRS-Criminal Investigation Division; the United States Postal Inspection Service; the Department of Defense, Office of Inspector General; and the California Department of Justice.
CONTACT: Assistant United States Attorney Keri Curtis Axel
Release No. 07-039List your legal jobs on the LawFuel Network