Tennessee Federal Criminal Lawyer Blog

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. § 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."

The federal government is continuing its crackdown on doctors and operators of pain clinics, with the most recent example being the arrest yesterday of five operators and employees of two Maryville, Tennessee pain clinics. The defendants were charged with conspiracy to distribute controlled substances, conspiracy to commit money laundering and structuring cash transactions to avoid federal transaction reporting requirements, according to the U.S. Attorney's Office for the Eastern District of Tennessee.

Each defendant faces a potential term of imprisonment of up to 20 years in prison. They also face fines and forfeiture damages in excess of $1 million and criminal forfeiture as alleged in the indictments.

The U.S. Attorney's Office says that the indictment is the result of a 13-month investigation by the Fifth Judicial Drug Task Force, a Drug Enforcement Administration Task Force, and the Internal Revenue Service-Criminal Investigations (IRS-CI).

People who are unfamiliar with health care fraud cases may be surprised to see that the Internal Revenue Service is involved in the investigation. However, it is more of the rule than the exception to have the IRS involved due to the likelihood of failure to report income and violation of tax structuring laws. Christopher R. Pikelis, Special Agent in Charge of the IRS-CI in Nashville, Tennessee says, "The Internal Revenue Service plays a very unique role in this fight, focusing on the illegal financial activities of the individuals and entities involved with these criminal acts. We are committed to investigating financial fraud and taking away the profits from, and assets used to commit, these crimes."

My advice to anyone running a pain clinic and fearing a possible government investigation is to contact an experienced health care fraud lawyer immediately. As this case illustrates, the Government had been investigating this matter for over a year before any arrest had been made. Having a defense team protecting your rights throughout the investigation is critical and may ultimately determine your chances of successfully defending any charges that may be brought against you.

Additional Resources
Press Release, "Operators and Employees of Two Maryville Pain Clinics Arrested," U.S. Attorney's Office, December 14, 2010
BreakthroughPainIndictment.pdf