Fraud News Around the Nation

September 21, 2016
New Jersey Dry Cleaner Sentenced for Avoiding Payroll Taxes

The co-owner of a dry cleaning firm who conspired to evade payroll taxes for workers who were living in the country illegally is now headed to prison.

Federal prosecutors say 38-year-old Phillip Hui, of Sicklerville, received a 15-month sentence on Thursday. He had pleaded guilty in May to conspiracy to obstruct and impede the IRS and to harboring the workers.

Hui co-owned the Voorhees business with Kathy Lei, a 36-year-old Williamstown resident who pleaded guilty to similar charges. She’s due to be sentenced Oct. 14.

Prosecutors say the pair paid their workers in cash in 2012 and 2013. The workers lived at a house owned by Lei and two others.

By failing to report the workers to the IRS, the owners avoided paying more than $97,000 in payroll taxes.

Prison Terms for 2 Mexican Physicians Guilty of Claims Fraud

Prosecutors in South Texas say two doctors from a family medicine clinic in Mexico must serve nearly three-year U.S. prison terms for insurance-related fraud.

Dr. Mayolo Melchor and 61-year-old Dr. Bertha Hernandez-Melchor, of Reynosa, Mexico, were sentenced Thursday by a federal judge in McAllen.

Both physicians in June pleaded guilty to conspiracy to commit wire fraud in a nearly $2.6 million insurance claim scam. Each was sentenced to 34 months behind bars and must repay the money.

Investigators say the physicians conspired with policyholders of the American Family Life Insurance Company to prepare and submit fraudulent claim forms and faked accident reports from 2001 to 2010.

Prosecutors say forms with bogus information were delivered to the family clinic in Mexico, then faxed to AFLAC headquarters in Georgia.

Philadelphia Official Admits Theft in $400k Auto Shop Fraud

A former city fleet supervisor in Philadelphia has admitted to theft and conspiracy charges in a scheme that prosecutors say steered work to an auto body shop that overcharged the city more than $400,000.

The Philadelphia Inquirer reports Robert Otterson also pleaded guilty Thursday to stealing from city inventory.

Authorities say Otterson qualified an auto body shop for work that didn’t have the necessary equipment. The shop had been run by Ronald Galati Sr. and his son, Ronald Jr.

Authorities say Otterson told them what to bid and shared in the ill-gotten proceeds.

Galati Sr. is serving more than 20 years in prison for attempting a failed hit on his daughter’s boyfriend. He pleaded no contest to charges. Galati Jr. pleaded guilty.

All three are to be sentenced in December.

Was this article valuable?

Here are more articles you may enjoy.