Federal Grand Jury Returns Indictments

MADISON, WI—A federal grand jury in the Western District of Wisconsin, sitting in Madison, returned the following indictments today. A charge is merely an accusation, and a defendant is presumed innocent until and unless proven guilty.

Wausau Man Charged with Fraud Scheme

Timothy I. Mathwich, 62, Wausau, Wisconsin, is charged in a 24-count indictment with engaging in a scheme to defraud River Valley Bank in Wausau. The indictment alleges that Mathwich, in his role as the president and chief operating officer of J.N. Manson Agency Inc. (Manson), a corporation operating as an insurance agency, acted with David Schofield and Susan Brockman to sell forged insurance premium financing notes to the bank.

According to the indictment, if a customer requested financing for an insurance premium, Manson would prepare an insurance financing premium note for the customer to sign, and it would be sold to River Valley Bank, and the bank would pay Manson for the note by crediting Manson’s account with the bank or by issuing a check to Manson. The indictment alleges that Mathwich and other representatives of Manson prepared insurance premium financing notes in the names of Manson customers who had not requested financing, forged the customers’ signatures on the notes, and then forwarded the forged notes to River Valley Bank. The indictment alleges that from February 2008 to December 2008, forged notes were sold to River Valley Bank that had a face value of over $3.7 million, resulting in a loss to the bank of more than $1.9 million.

If convicted, Mathwich faces a maximum penalty of 20 years in federal prison on each count charged in the indictment. The charges against him are the result of an investigation by the Wausau Resident Agency of the Federal Bureau of Investigation. The prosecution of this case has been assigned to Assistant U.S. Attorney Grant C. Johnson.

Madison Man Charged with Theft of Social Security Funds

Clyde Dingledine, also known as Clyde Malone, 63, Madison, Wisconsin, is charged with converting to his own use money belonging to the Social Security Administration. The indictment alleges that Dingledine converted just over $60,000 to his own use from June 2004 to May 2012.

If convicted, Dingledine faces a maximum penalty of 10 years in federal prison. The charge against him is the result of an investigation by the Social Security Administration. The prosecution of this case has been assigned to Assistant U.S. Attorney Rita M. Rumbelow.

Mexican Citizen Charged with Illegally Re-Entering the United States

Adolfo Galvin-Lopez, 38, a native of Mexico found in Portage County, Wisconsin, is charged with re-entering the United States after previously being removed. The indictment alleges that he was found in the United States on April 17, 2012.

If convicted, Galvin-Lopez faces a maximum penalty of 10 years in federal prison. The charge against him is the result of an investigation by U.S. Immigration and Customs Enforcement. The prosecution of this case has been assigned to Assistant U.S. Attorney Paul W. Connell.

A Doctor and 532 Others Indicted for Mail and Social Security Fraud Conspiracy

SAN JUAN, PR—A federal grand jury has issued a 709-count indictment, charging 533 defendants with mail fraud conspiracy, mail fraud, social security fraud and one forfeiture count, announced Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. Doctor Ubaldo Planell-Pabon, of Lares, Puerto Rico, is the lead defendant in this indictment. The victim of the offenses charged in the indictment was American Family Life Assurance Company (AFLAC), which paid out nearly $7 million to its policyholders as a result of the fraudulent scheme.

The indictment, which was presented on Jan. 18, 2011, alleges that between the years 2004 to 2008, Planell-Pabon falsely completed and signed the physician statement section of AFLAC's Accidental Injury Claim Form and/or prescription form, falsely certifying injuries for AFLAC claimants and/or policyholders. He falsely represented that the claimants had suffered injuries, when in fact they had not sustained any such injuries, and Planell-Pabon never conducted a physical examination of any of the claimants. Planell-Pabon was paid between $10 and $20 by the AFLAC claimants for each false claim form that he completed and signed, and caused a total disbursement by AFLAC of at least $6,926,374.00, by way of checks, that were sent to the policyholders through the U.S. Postal Service.

Counts 625 to 709 charge defendants with Social Security fraud for the misuse of dependent Social Security numbers. Defendants used Social Security numbers belonging to their children/dependents on AFLAC claim forms in furtherance of the conspiracy to commit mail fraud.

"The submission of false injury claim forms on behalf of insured individuals caused AFLAC to disburse close to seven million dollars for injuries which were non-existent. The price of this illegal scheme is ultimately paid by the consumers, whose insurance premiums will increase to cover the loss sustained by the company as a result of these fraudulent claims. We will continue to investigate and prosecute those who devise and participate in these fraudulent schemes to the full extent of the law," stated U.S. Attorney Rodriguez-Velez.

Special Agent in Charge Edward J. Ryan, of the Office of the Inspector General (OIG), Office of Investigations, Social Security Administration said: "This investigation illustrates our office's commitment with other law enforcement agencies to the aggressive pursuit of the intentional misuse of the Social Security Number. We will continue our strides to preserve the integrity of the SSN and pursue illegal activity relating to its misuse. The cooperative efforts of these agencies have ensured the successful outcome of this investigation involving the misuse of SSNs for the purpose of personal financial gain. I would like to thank the FBI and the U.S. Attorney's Office, District of Puerto Rico for their sustained partnership and commitment in addressing this critical issue."

"The 533 individuals charged in this indictment, of which one defendant is a medical doctor, submitted fraudulent injury claims which caused benefits to be paid by AFLAC. I wish to point out that the ultimate victims of this scheme are the consumers, you and me, whose insurance premiums will increase to cover the loss sustained by the insurance company," said Luis Fraticelli, Special Agent in Charge of the FBI-San Juan Field Office. "We must continue the fight against fraud and corruption because the statistics show it eventually ends up affecting all of us in higher prices for goods and services."

If convicted, the defendants could face a maximum penalty of 20 years in prison and/or fines of up to $250,000.

This investigation was conducted by the FBI and Social Security Administration - OIG and the case is being prosecuted by Assistant U.S. Attorney Julia Díaz-Rex.

Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.

This article was sponsored by Police Writers.

West Covina Man Sentenced to Over 11 Years in Prison for Running Ponzi Scheme That Caused $2.2 Million in Losses to Over 100 Victims in Southern California

LOS ANGELES—A West Covina man was sentenced today to 135 months in federal prison for running an investment fraud scheme that took in almost $4 million from more than 100 victims who were lured to the scheme with promises of “guaranteed” annual interest rates up to 120 percent.

Ruben Gonzalez, 34, a Mexican national, was sentenced late this morning by United States District Judge Percy Anderson. In addition to the 11¼-year prison sentence, Judge Anderson ordered $2,220,771 in restitution to his 107 victims.

Gonzalez was arrested on October 23, 2009, on immigration charges after special agents from the Federal Bureau of Investigation executed a search warrant at his business, New Golden Investments Group, or NGI Group, in West Covina.

Gonzalez was indicted in May, and on September 17 he pled guilty to one count of mail fraud, one count of money laundering, and one count of misuse of a Social Security number. Gonzalez admitted that he advertised his investment program in Spanish language newspapers and on radio stations, guaranteeing returns up to 120 percent per year. Gonzalez told victims that their money would be used to invest in commodities like gold and silver, real estate developments, and a gold mine in Mexico. Gonzalez further admitted that most of the investors’ money was used to make Ponzi payments to lure additional investors, and that Gonzalez took well over $400,000 for his own personal benefit.

At Gonzalez’s sentencing this morning, Judge Anderson heard from several victims of the Ponzi scheme, including the mother of a disabled child who was defrauded out of nearly $300,000 that came from a medical malpractice award and was supposed to be used for the future care of her child. The victim said that Gonzalez claimed she would make enough money from the investment to pay for “the best medical care in the world” for her child and that she would one day see her child walk as a result of the profits she would make from her investment. The court also heard from an 81-year-old widow who lost more than $40,000 and who told Judge Anderson that she is forced to continue to work as a result of the losses caused by Gonzalez.

The case against Gonzalez was investigated by the Federal Bureau of Investigation, the Social Security Administration-Office of Inspector General, and U.S. Immigration and Customs Enforcement. The investigation received assistance from the U.S. Commodity Futures Trading Commission.