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Prosecutions

WeHo Man Admits to Modern Art Fraud Scheme Using Fake Works

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LOS ANGELES — A West Hollywood man has agreed to plead guilty to federal criminal charges that he sold bogus art he claimed was created by artists such as Jean-Michel Basquiat, Keith Haring, Roy Lichtenstein and Andy Warhol. He also admitted using fake paintings as collateral for loans on which he later defaulted, and using fraudulent pieces for fraudulent write-offs on his income tax returns.

Philip Righter, 43, was charged on March 10 in United States District Court with wire fraud, aggravated identity theft and tax fraud. In a plea agreement also filed today, Righter agreed to plead guilty to the three felony offenses.

In total, Righter’s scheme attempted to bilk victims out of well over $6 million, and he caused losses of at least $758,265. Additionally, his fraudulent tax returns cost the United States more than $100,000, according to the plea agreement.

From 2016 until June 2018, Righter executed a scheme to defraud people, businesses and the United States by using counterfeit and fraudulent art that he asserted was genuine. Righter supported these false claims with fraudulent provenance – or chronology-of-origin – documents that he had created.

Before August 2016, Righter generally conducted these fraudulent transactions in his own name. But after the FBI and the Los Angeles Police Department interviewed him about bogus Keith Haring art he attempted to sell to a Miami art gallery, Righter began using the names of other people to execute his scheme, court documents state.

In order to make the fake artwork appear authentic, Righter ordered and used embossing stamps that appeared similar to the authentic stamps used by the estates of Basquiat and Haring authentic art by these artists. Righter admitted he used these stamps on provenance documents that he created and were later used to deceive his victims into believing the artwork was legitimate.

For example, Righter fraudulently used without authorization the name and signature of Gerard Basquiat – father and previous administrator of the artist’s estate – on fraudulent provenance documents, court documents state. Righter also falsely used the identifications of the estates of Basquiat and Haring, falsely used the names of these two artists, and falsely used the name of a legitimate gallery where Basquiat art was previously sold.

In furtherance of the scheme, Righter obtained and attempted to obtain numerous loans by using the fraudulent art and accompanying fraudulent provenance documents. For example, in October 2016, using another person’s name, Righter contacted a victim about a loan in which a purported original drawing by Basquiat would be used as collateral. Righter created a fraudulent certificate of authentication letter that purportedly came from Basquiat’s estate. The victim wired a $24,000 loan, on which Righter later defaulted. After Righter’s default, the victim attempted to auction the piece, but the auction house determined the piece was fraudulent, and the victim lost $24,000.

Righter also sold or attempted to sell numerous pieces of fake modern art. In August 2017, using another person’s name, Righter listed a purported 1983 piece of art by Basquiat with the word “Samo” written on it with an art sale website and he provided fake provenance documents. The website sold the piece for $50,000. In 2018, after the piece was determined to be fraudulent, the website had to refund the purchase price to the buyer.

Righter also admitted that he knowingly and willfully included a false W-2 and a false donation of fraudulent art to a charity on his 2015 federal income tax return, which resulted in him fraudulently receiving a refund of $54,858. Righter then signed and filed a false 2015 amended tax return, which claimed a false casualty and theft loss of $2,575,000 related to artwork he claimed had been stolen. In truth, the artwork was fraudulent and had no value. This bogus amended tax return resulted in false carryback loss refunds for 2012, 2013 and 2014 totaling $52,485, according to court documents.

Once he enters guilty pleas to the three charges, Righter will face a statutory maximum sentence of 25 years in federal prison.

Righter also currently faces charges in the Southern District of Florida for an approximately $1 million attempted art fraud on the Miami gallery. A hearing in that case is scheduled for March 11.

The FBI’s Art Crime Team, the Los Angeles Police Department, and IRS Criminal Investigation investigated this matter.

This case is being prosecuted by Assistant United States Attorneys Mark A. Williams and Erik M. Silber of the Environmental and Community Safety Crimes Section.

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Prosecutions

Feds Charge Local Man in $410M Medical Fraud Scheme

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GEORGIA — A California man who operated a durable medical equipment (DME) company has been charged for his alleged participation in a massive healthcare fraud scheme. The defendant is the 22nd charged in the Southern District of Georgia as part of an investigation that uncovered more than $410 million in fraudulent claims to Medicare, the largest fraud case in the history of the Southern District of Georgia.

Scott M. Hirsch, the operator of JI Medical, Inc., a company formerly based on the Miracle Mile in the City of Los Angeles, is accused of conspiring to pay kickbacks in exchange for obtaining orders for DME that JI Medical, Inc. would then bill to Medicare. As part of this scheme, the physicians receiving the kickbacks from JI Medical, Inc. knowingly signed false medical records describing “consultations” of Medicare patients.

Research shows that JI Medical operated under the name RAMAT Medical at 5812 West Pico Blvd.

“Telemedicine is an important tool for legitimate providers – but paying kickbacks is not part of telemedicine and will not be tolerated under any circumstances,” said U.S. Attorney Bobby L. Christine. “While many of our prosecutors and law enforcement partners may be working remotely during the COVID-19 pandemic, this office continues to work day and night to bring bad actors to justice.” 

The healthcare fraud scheme charged is the largest in the history of the Southern District of Georgia. Previous charges in this string of cases include eight physicians, two nurse practitioners, two operators of telemedicine companies, and two brokers of patient data. The Medicare and Medicaid beneficiaries whose identities were used as part of the scheme are located throughout the Southern District of Georgia, including the Augusta, Brunswick, Dublin, Savannah, Statesboro, and Waycross Divisions, as well as elsewhere in the United States. 

The $410 million fraud scheme charged in the Southern District of Georgia is part of nationwide operations by the Department of Justice that thus far has halted a multi-billion dollar fraud network involving fraudulent claims for genetic testing, orthotic braces, pain creams, and other items.

“The growing number of medical providers and equipment providers alleged to have been involved in this ongoing scheme is disheartening,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI and our federal partners will continue to root out such deceitful practices and protect taxpayers and the citizens who deserve the benefits from programs like Medicare, even as telemedicine becomes more common.” 

“This investigation is a stellar example of inter-agency cooperation and working together to bring those who defraud the health care system to justice,” said FBI Birmingham Special Agent in Charge Johnnie Sharp Jr. “The public can be assured that the FBI and our partners will continue to seek to identify and pursue investigations against such egregious offenders.” 

“In these trying times, it’s more important than ever that we safeguard the Medicare trust fund,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “HHS/OIG, along with our partners, will vigorously pursue any provider who puts their own financial gain above that of their patients.” 

“Cases of this magnitude can only be tackled using a strategy that recognizes that the most effective way to fight these large criminal networks is by combining the strengths, resources, and expertise of our federal agencies,” said Resident Agent in Charge Glen M. Kessler of the U.S. Secret Service. “Our nation’s healthcare system cannot tolerate kickbacks to physicians and pharmacies while criminals line their pockets with taxpayer funded healthcare dollars.”

“The U.S. Postal Inspection Service aggressively conducts investigations of those who fraudulently use the U.S. Mail to facilitate complex fraud schemes,” said Inspector in Charge Joseph W. Cronin of the U.S. Postal Inspection Service’s Boston Division.  “We will continue to support and work with our federal law enforcement partners to stop those who are engaged in these types of fraudulent activities and defend the U.S. Mail from criminal misuse.”

“The defendant in this case used the U.S. Mail to facilitate his elaborate criminal scheme. Postal Inspectors partnered with other agencies to quickly identify the scheme and worked aggressively with the U.S. Attorney’s Office to dismantle this criminal enterprise. Through cases like these, the Postal Inspection Service upholds its longstanding mission of protecting the public and preventing criminal misuse of the U.S. Mail,” said Antonio J. Gomez, Inspector in Charge of the U.S. Postal Inspection Service – Miami Division.

Indictments or criminal informations contain only charges; defendants are presumed innocent unless and until proven guilty.

This investigation is ongoing. As telemedicine becomes an increasing part of our healthcare system, vigilance in ensuring that fraud and kickbacks do not usurp the legitimate practice of medicine by electronic means is more important than ever. If you are aware of any fraud or kickbacks relating to telemedicine, including COVID-19 fraud, please call the FBI hotline at 1-800-CALL-FBI. 

This particular prosecution resulted from a joint investigation of multiple agencies and offices.  U.S. Attorney Christine acclaimed the hard work of the investigatory team, led by FBI – Savannah, FBI – Birmingham, the Department of Health and Human Services Office of Inspector General, the United States Secret Service, and the United States Postal Inspection Service. 

Assistant U.S. Attorneys J. Thomas Clarkson and Jonathan A. Porter are prosecuting these cases on behalf of the United States.

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Prosecutions

Century City Mall Murder Suspect Arrested in Baltimore

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LOS ANGELES — The Los Angeles Police Department’s Operations West Bureau (OWB) Homicide investigators have announced the arrest of a suspect in a murder that took place at the Century City Mall. 

On January 20, 2020, West Los Angeles Division officers responded to a call of a shooting in progress at the Century City Mall. Upon their arrival, officers found a victim down and unresponsive.

Brandon Hinton

The investigation revealed that a fight involving the suspect had occurred outside of a nearby restaurant.  The fight involving the suspect stemmed from another dispute inside of the same restaurant.  During the fight, the suspect armed himself and shot the victim to death.  Investigators from OWB Homicide identified Brandon Hinton as the suspect.  It was determined that Brandon Hinton had fled the area and a murder warrant was issued.

On March 16, 2020, Federal Bureau of Investigations Fugitive Task Force agents in Baltimore, Maryland located and arrested Hinton.

On Friday, April 10, 2020, LAPD-FBI Fugitive Task Force agents extradited 26-year-old Brandon Hinton to Los Angeles to face murder charges.  Hinton was booked on a four-million-dollar murder warrant and will be arraigned this week.

Anyone with information, including possible additional victims, are urged to call Los Angeles Police Department’s Operations West Bureau homicide investigators at (213) 382-9470. During non-business hours or on weekends, calls should be directed to 1-877-LAPD-24-7 (877-527-3247).  

Anyone wishing to remain anonymous should call the LA Regional Crime Stoppers at 1-800-222-TIPS (800-222-8477) or go directly to www.lacrimestoppers.org.  Tipsters may also visit www.lapdonline.org and click on “Anonymous Web Tips” under the “Get Involved-Crime Stoppers” menu to submit an online tip.  Lastly, tipsters may also download the “P3 Tips” mobile application and select the LA Regional Crime Stoppers as their local program.

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Prosecutions

Weinstein Gets New Sex Assault Charge for Bev Hills Hotel Incident

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Los Angeles County District Attorney Jackie Lacey announced today that film producer Harvey Weinstein was charged with an additional sexual assault count stemming from an incident that allegedly occurred at a Beverly Hills hotel in May 2010.

Case BA483663 was amended to add one felony count of sexual battery by restraint. Weinstein (dob 3/19/52) was charged in January with one felony count each of forcible rape, forcible oral copulation, sexual penetration by use of force and sexual battery by restraint.

“We are continuing to build and strengthen our case,” Los Angeles County District Attorney Jackie Lacey said. “As we gather corroborating evidence, we have reached out to other possible sexual assault victims. If we find new evidence of a previously unreported crime, as we did here, we will investigate and determine whether additional criminal charges should be filed.”

The new charge alleges that Weinstein sexually assaulted a woman at a Beverly Hills hotel on May 11, 2010. The victim was first interviewed by law enforcement in October 2019 as a possible corroborating witness in the case. Last month, she provided detectives with information confirming that the assault took place within the 10-year-statute of limitation.

The original criminal complaint charged Weinstein with sexually assaulting two women during separate incidents in 2013.

If convicted as charged in the amended complaint, the defendant faces up to 29 years in state prison.

Prosecutors have initiated a request for the temporary custody of Weinstein from New Yorkthe first of several steps in the extradition process.

At this time, it is unknown when Weinstein will be transferred to Los Angeles County. Upon his arrival, he will be arraigned on the amended complaint. Once a court date is set, the public will be notified.

Prosecutors also announced today that two cases involving Weinstein were declined for prosecution because the victims did not want to testify against the defendant in this case.

Deputy District Attorney Paul Thompson of the Sex Crimes Division is prosecuting the case.

The case remains under investigation by the Los Angeles and Beverly Hills police departments and the District Attorney’s Bureau of Investigation.

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