November 2011 Archives

Tennessee Woman Pleads Guilty to Possession of Counterfeit Securities and Money Laundering

November 17, 2011, by The McKellar Law Firm, PLLC

An Eastern Tennessee woman has pled guilty to one count of possession of counterfeit securities and one count of money laundering in the U.S. District Court of Eastern Tennessee.


Joan Black of Maynardville, Tennessee admitted before a judge that in 2007 she began soliciting investors to purchase annuities through her company, Benefit Capital, Inc. Part of her solicitation consisted of promising the investors that an insurance company in Galveston, Texas guaranteed to pay an annual interest rate of 10% on the annuities. In reality, Ms. Black created fake portfolios by printing the name and logo of the Galveston insurance company at a print shop in Knoxville. The insurance company had no knowledge that their name and logo were being fraudulently used.

Within one year, she was paid over $673,500 by at least five different investors. Instead of investing those funds, Joan deposited that money into her bank account for her own personal use. Her activity was discovered after an investigation was conducted by both the U.S. Postal Inspection Service and the IRS Criminal Investigation. Her sentencing has been set for January 2012.

Pursuant to 18 U.S.C. ยง 513(a), a person who "makes, utters or possess a counterfeited security of a state or a political subdivision thereof or of an organization, or whoever makes, utters, or possesses a forged security of a state or political subdivision thereof or of an organization, with intent to deceive another person, organization, or government" can be found guilty of possession of counterfeit securities. If a person is found to be guilty of such a crime, they can either be fined, imprisoned up to 10 years, or both.

Under subsection (b) of the same United States Code, a person can also be fined and/or imprisoned up to 10 years if they have either made, received, possessed, sold, or "otherwise transfer[red] an implement designed for or particularly suited for making a counterfeit or forged security with the intent that it be so used."

Supreme Court Set to Tackle Issue of Warrantless GPS Searches by Law Enforcement

November 14, 2011, by The McKellar Law Firm, PLLC

Warrantless surveillance is not what it once was. In the past, law enforcement had to physically follow persons of interest and typically were forced to rely on memory and notes when recalling that information later. Now, with GPS systems, surveillance is not subject to human error or manpower. This technological development has led to a case reaching the U.S. Supreme court to mete out whether GPS surveillance should require a warrant (U.S. v. Jones).


According to the Associated Press in an article titled "High Court Troubled by Warrantless GPS Tracking" (November 9, 2011), the hearing on warrantless GPS tracking was made personal to the U.S. Supreme Court's Justices when they were told that law enforcement could place GPS devices on all of their vehicles without a judge's approval. The Justices all expressed grave misgivings about the amount of information that can be amassed through computers and the repercussions this could have on citizens. Justice Breyer summed up these fears by stating, "...if you win this case then there is nothing to prevent the police or the government from monitoring 24 hours a day the public movement of every citizen of the United States."

While the misgivings seem to be shared by the Justices, the solution did not appear easily reached. Prior court decisions have held that warrants were not needed to track a person's vehicle with a beeper or a team of agents, because there was not an expectation of privacy in public. Now, with computer technology becoming so advanced, police can collect an immense amount of information with little effort and no human error.

While many will agree that limits need to be set, there is plenty of debate on what those limitations should be and how they should be administered. Justice Department Attorney Dreeben stated that lawmakers should make the limitations, not the Court ("High Court," 2011). Others expressed concern about making law enforcement's job more difficult.
The issue before the Justices is a two-fold question: 1) is a warrant needed prior to installing a GPS device, and 2) is a warrant needed to in order to use a GPS to track a vehicle. The Court is expected to render their opinion on the issue in the spring of 2012.

Federal Government Increases Money Recovered from Medicaid Scams

November 4, 2011, by The McKellar Law Firm, PLLC

Medicaid fraud defense attorneys will be among the first to tell you that federal prosecutors are becoming more active in pursuing alleged healthcare fraud, particularly as it relates to Medicaid Fraud. As it turns out, the Government is reaping the financial benefits of their efforts.


According to an article in USA Today, the Federal Government made over $1.85 billion in Medicaid fraud prosecutions in 2010. This is triple the amount gained in 2004, where the Federal Government made only $573 million.

Medicaid is a state program that uses federal funds to assist children, pregnant woman, disabled, and elderly patients who need medical care but fall below the poverty line. However, a growing number of medical providers have found ways to bill their respective state programs for services that were either underperformed or not performed at all. To help combat this fraudulent behavior, the Obama Administration created certain programs and regulations while passing the new health care law.

For example, all medical professionals who provide health care for Medicaid patients are now required to keep electronic records. This requirement enables law enforcement to more successfully catch possible fraudulent activity. Also, private Medicaid contractors who audit health care clinics are now required to report any potential fraudulent activity to enforcement agencies. The Federal government has also sent more resources to high-fraud states like Florida and Texas to help with investigations and better catch fraudulent behavior.