The top credit card scam cities
A Florida attorney is sent to federal prison for swindling NFL players out of lawsuit payouts, a $21 million workers’ compensation fraud bust in the heart of Florida, and South Florida is coined the credit card scam capital of the US. It’s all in this week’s Fraud News.
NFL class-action fraud: Attorney Phillip Timothy Howard, once an owner of a Tallahassee-based injury and worker’s compensation law firm, pled guilty to racketeering among other serious charges in August, and was sentenced to 14 years in federal prison for defrauding several NFL players of settlements he achieved in a class-action lawsuit. From 2015 to 2018 Howard and others told the players they were investing proceeds from the lawsuit into other ventures – investment companies created and owned by Howard himself. Prosecutors say the financials were consistently misrepresented to the clients, with the firm providing many falsified financial statements over the course of several years. He also commingled this money with other funds to payroll his office staff, pay personal mortgages, and other forms of enrichment. Once released, Howard will be under three years supervision and is ordered to pay $12 million to his former clients.
Workers’ Compensation Bust: A Lakeland, Florida man is the latest sentenced in an ongoing investigation by the Florida Department of Financial Services and US Homeland Security into the use of shell companies and “ghost” employees in the construction industry. Ramon Paz was sentenced to 33 months in federal prison for conspiracy to commit wire fraud after years of understating his workers’ compensation insurance requirements. Paz owned a company that provided construction services to contractors and subcontractors. Prosecutors say he circumvented worker’s comp insurance coverage by claiming a limited number of his employees were on site, all the while using undocumented individuals that were actually employed by the contracting companies he worked closely with. Paz and others would then cash “payroll checks” received from the contracting companies, amassing some $21 million, which far exceeded the actual figures for the few claimed employees on his payroll. He was also ordered to forfeit $500,731 in addition to his prison sentence.
Florida Tops in Credit Card Fraud: The Sunshine State hosts the most credit card fraud in the nation, with South Florida recently being dubbed the “Credit Card Scam Capital of the US”. Researchers from Backgroundchecks.org using Federal Trade Commission data, analyzed the 50 most populated metropolitan statistical areas in the US and found the number of credit card scams per 100,000 residents in each. The highest concentration of this illegal activity is in the Miami-Port. St. Lucie-Fort Lauderdale metropolitan area, with over 20,386 reports of credit card fraud filed so far in 2023, a whopping 54% higher than Atlanta which came in at second place, landing at a rate of 332 cases per 100,000 residents. Credit card fraud is becoming increasingly common, with numbers skyrocketing after the pandemic, up some 62% from 2019 to 2022. Experts have surmised some of the leading factors causing this rise, especially in Florida, are the large population of elderly people and high levels of tourism and other transience. Orlando and Tampa ranked 5th and 10th respectively.
LMA Newsletter of 12-4-23
