Milwaukee Fraud: Founder of Arabian Fest sentenced to prison

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The founder of Milwaukee’s Arabian Fest has been sentenced to 3 years in prison for stealing $75,000 of federal block grant money. He must also pay $75,000 in restitution and a fine of $1,000.

Mhammad Abu-Shawish got a sentence on the high end because the judge believed he lied while testifying in his trial this past summer. The judge also believes that Abu-Sawish helped 22 immigrants from Jordan enter the U.S. illegally between 2000 and 2002.

The illegal immigrants allegedly were brought here with invitation letters written by Abu-Sawish, indicating they would be working at Arabian Fest, and that the festival would purchase round trip tickets for them. It is believed that the people did not really work for Arabian Fest, and instead had purchased these invitation letters for $11,000 to $14,000. Of the 22 immigrants involved, it is alleged that 11 returned to Jordan, 7 stayed in the U.S., and 4 are unaccounted for.

The defendant was convicted of receiving federal block grant money after submitting a proposal that was identical to a proposal submitted by an agency. Abu-Shawish received the $75,000 block grant, but did not use it for community purposes.

Abu-Shawish will likely be deported after serving his sentence, as he illegally obtained permanent residency in the U.S. with 2 sham marriages. He is currently serving 8 months in prison for a previous federal conviction on his involvement in a mortgage fraud scam.

Shareholder questions spending of public company

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Carl Icahn, a major shareholder in Time Warner Inc. has been speaking out against the company’s expenses. He says that the overhead and the perks are outrageous. Corporate overhead includes airplanes used by senior management for business and personal travel. Icahn also points out that Time Warner’s corporate headquarters, at $1.7 billion, is the most expensive office building ever built in New York.

Time Warner executives say that their overhead spending is not out of line when compared to other companies of a similar size.

Publishing Changes After “A Million Little Pieces” is Outed as a Faud

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The publisher of “A Million Little Pieces” by James Frey has apologized to its readers. Nan A. Talese/Doubleday published the hardcover version, while Anchor Books published the paperback edition. Both publishers are apologizing to readers for the controversy.

The book, a purported nonfiction work, includes many exaggerated truths and outright lies. The publishers have now decided to include author and publisher notes to all future editions shipped to stores. The notes will also be published online.

As you might imagine, this controversy has helped to increase sales of the book.

Enron trial to begin Monday

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It has taken four years, but Ken Lay and Jeffrey Skilling of Enron fame are finally going in front of a jury. The question remains whether or not the two heads of the company were a part of inflating earnings while the company was billions of dollars in debt.

First ‘Survivor’ winner found guilty of tax evasion

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Richard Hatch, the winner of the first season of ‘Survivor’ was convicted of evading taxes on his winnings, as well as money earned as a radio show host and earnings from a rental property. He faces prison time of up to 13 years and a fine of up to $600,000.

Hatch’s defense was based upon his contention that he was a bad bookkeeper, and that he thought the producers of ‘Survivor’ were supposed to pay the taxes on his winnings.

He was acquitted on seven charges of bank fraud, mail fraud, and wire fraud. Hatch was taken into custody because the judge felt he was a flight risk. Sentencing is scheduled for late April.

Wisconsin Fraud: State official accused of corruption

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Georgia Thompson, a purchasing division supervisor in the Wisconsin Department of Administration has been charged in federal court with 2 felonies. The charges include misapplication of funds and participating in a scheme to defraud the State.

The charges stem from the awarding of a $750,000 contract to provide travel services to the State. Thompson was on the team that reviewed bids from travel agencies, and the team awarded the contract to Adelman Travel.

Thompson was the coordinator of a process that limited the number of travel agencies doing business with the State. She allegedly manipulated the contract process to create job security for herself and create a political advantage for her supervisors.

In 2004, bids were solicited for 6 travel contracts. The largest one included 40% of the State’s travel business. Thompson and her team evaluated bids and utilized a scoring system. After written bids were examined, Thompson is accused of manipulating the next step of the process by inflating her scores for Adelman Travel and convincing other committee members to do the same.

Other team members agreed that the contract should go to Omega World Travel because of a higher score than Adelman. Thompson convinced the team to allow Adelman and Omega to present their “best and final” numbers, even though Omega won. A final round of bids was solicited from the two firms, and Adelman was awarded the contract.

The maximum possible penalty if convicted, is 20 years in prison.

Milwaukee Fraud: Museum Considers Hiring Forensic Auditors

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The audit committee of the Milwaukee County Board is considering hiring an outside forensic accounting firm to perform a forensic audit on the finances of the Milwaukee Public Museum. This project would cost between $50,000 and $100,000. The project is being proposed by Supervisor James White.

The board of MPM was told by county auditors that investigators found no evidence of fraud or misappropriation of funds. The museum board once considered a forensic audit, but instead allowed county auditors to examine the books. Continue reading

Ameriquest Mortgage offers settlement to consumers

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Ameriquest Mortgage Co. has offered $325 million to settle accusations of predatory lending in 49 states. Consumers in Wisconsin will receive over $2.7 million of the total. The company was accused of using high-pressure tactics and deception to sell mortgages to homeowners interested in refinancing.

Ameriquest is the nation’s largest sub-prime lender, offering loans to consumers with poor credit. Those mortgages are usually at higher interest rates.

Ameriquest has denied all allegations, but is agreeing to new standards that are meant to prevent the alleged unfair and deceptive practices. The new standards include not paying incentives to employees who secure mortgages with prepayment penalties or other fees.

The settlement must still be approved by the state courts.

Milwaukee Fraud: Voter suppression

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Four men pleaded guilty last week Friday to misdemeanor charges of property damage for their participation in the Election Day 2004 tire-slashing. The defendants were all workers for the Kerry-Edwards campaign, and the 40 tires they slashed were on 25 vans rented by the Republican party to transport inner-city voters to the polls.

The guilty men include:

  • Lavelle Mohammed, 26
  • Lewis G. Caldwell, 29
  • Sowande Omokunde, 26, son of U.S. Rep. Gwen Moore (D-Wis.)
  • Michael Pratt, 33, son of former acting Milwaukee Mayor, Marvin Pratt

The four men must collectively pay approximately $5,300 in restitution prior to their sentencing on April 26. In exchange, the District Attorney will recommend they only get probation. The charges carry a maximum possible penalty of nine months in jail and a $10,000 fine.

The guilty pleas came while the jury deliberated in their trial on felony charges. The defendants claimed that the Democratic party set up the defendants to take the rap for the crime.

No estimate has been made of the number of inner-city voters who were disenfranchised because they were unable to get to the polls.

Survivor winner Richard Hatch goes to trial on tax evasion charges

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The first winner of my all-time favorite television show, Survivor, is on trial for alleged tax evasion. Richard Hatch is accused of not reporting to the IRS his earnings from Survivor, as well as not paying taxes on other income.

In a strange twist, Hatch’s attorney has stated that the Survivor producers made a deal with Hatch to pay the taxes on his winnings if he didn’t spill the beans about contestants whose friends were sneaking food to them on the island. It is not clear whether or not Hatch will testify about the alleged deal.