Texas Man Charged With Conspiracy With Michael Mann To Defraud Lenders | USAO-NDNY

0

ALBANY, NEW YORK – Derek R. Schwartz, 52, of Coppell, Texas, was indicted yesterday and charged with conspiring with ValueWise CEO Michael T. Mann to defraud companies that have loaned millions of dollars to ValueWise subsidiaries.

The announcement was made by acting US attorney Antoinette T. Bacon and Janeen DiGuiseppi, special agent in charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).

Schwartz has been charged with conspiracy to commit wire fraud, as well as four counts of wire fraud, and will be brought to justice at a later date. The charges in the indictment are only charges. The accused is presumed innocent until proven guilty.

According to the indictment, Mann obtained millions of dollars in loans from two finance companies, located in New York and Colorado, by falsifying the debts of his companies. Mann falsely told finance companies that Minnesota-based UnitedHealth Group Incorporated (“UHG”) and its subsidiary OptumInsight Inc. (“Optum”) owed its companies millions of dollars. Mann regularly created fake invoices reflecting fictitious debt and assigned them to finance companies as collateral for the loans.

Schwartz was a senior executive at Optum, then started working for ValueWise around October 2013. Until August 2016, he ran TrueHR, LLC, a subsidiary of ValueWise based in Dallas, TX.

According to the indictment, around October 2013, Schwartz recruited UHG / Optum employee Luke Steiner to falsely represent to finance companies that the fake invoices created by Mann were valid and payable by Optum. With Schwartz’s encouragement and direction, Steiner regularly did these false checks for six years, ending in August 2019.

Schwartz also allegedly took other steps to further the fraudulent scheme, including, according to the indictment:

  • In 2014 and 2015, he recruited at least two other UHG / Optum employees to verify the bogus invoices that Mann submitted to one of the finance companies.
  • From 2014 to 2019, he made false statements directly to one of Mann’s lenders, identified in the indictment as “Financing Company-2”. Mann falsely portrayed to Financing Company-2 that one of his companies, Weitz & Associates, needed loans to pay their suppliers. As part of its due diligence process, Finance Company-2 verified with Weitz’s purported suppliers that they were receiving payments from Weitz. One of these purported suppliers was TrueHR, a ValueWise company operated by Schwartz. In fact, TrueHR was not a supplier to Weitz, and Schwartz regularly lied to Financing Company-2 about TrueHR receiving payments from Weitz – and continued to do so even after TrueHR ceased to exist as that business.
  • Schwartz worked with Mann to make Weitz sellers. Mann told Financing Company-2 that in addition to TrueHR, Weitz had a number of other vendors. Mann, with the help of Schwartz, fabricated the names and contact details of non-existent people working at fake Weitz vendors.

If convicted of one of the charges in the indictment, Schwartz faces up to 20 years in prison and up to 3 years of supervised release after imprisonment. A defendant’s sentence is imposed by a judge based on the particular law the defendant is accused of violating, US sentencing guidelines, and other factors.

Mann has pleaded guilty to various crimes related to his fraudulent scheme and was sentenced earlier this month to 144 months in prison. Steiner, 33, of Minneapolis, Minnesota, pleaded guilty in February 2020 to conspiring with Mann and is awaiting sentencing.

This case is currently under investigation by the FBI and is being pursued by Deputy U.S. Prosecutors Michael Barnett and Cyrus PW Rieck.


Source link

Leave A Reply

Your email address will not be published.