Represented by Mogeeb Weiss 

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Department of Justice

U.S. Attorney’s Office

Northern District of California

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FOR IMMEDIATE RELEASE

Tuesday, August 28, 2018

Saratoga Doctor Sentenced To More Than Five Years In Prison For Lying Related To Health Care Matters And Providing False Billing Statements To Health Care Benefit Programs

SAN JOSE- Vilasini Ganesh was sentenced today to 63 months in prison for making false statements related to a health care benefits program, announced United States Attorney Alex G. Tse and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable Lucy H. Koh, U.S. District Judge.  

Ganesh, 47, and her husband Gregory Belcher, 56, both of Saratoga, Calif., were convicted of the charges on December 15, 2017, after an eight-week trial.  The evidence at trial demonstrated Ganesh submitted a series of false medical claims related to the family medical practice she owned, Campbell Medical Group in Saratoga.  For example, Ganesh submitted claims for days when a patient had not been seen by the provider and claims for patients who had been seen by a physician provider who no longer was affiliated with her practice.  Additionally, Ganesh billed insurers with claims that certain patients were seen twelve to fifteen times in a single month.  

On July 13, 2017, a federal grand jury indicted Ganesh and Belcher, charging them with one count of conspiracy to commit health care fraud, in violation of 18 U.S.C. § 1349; one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h); multiple counts health care fraud, in violation of 18 U.S.C. § 1347 and 2; and making a false statement relating to health care matters, in violation of 18 U.S.C. § 1035. The jury convicted Belcher of one count of making a false statement related to health care matters and convicted Ganesh of five counts of health care fraud and five counts of making false statements.  The jury acquitted defendants of the remaining counts.  

During Ganesh’s sentencing hearing, Judge Koh stated that Ganesh obstructed justice by misrepresenting her understanding of the legal system, the amount of money she was paid by insurers, and whether she understood that it was improper to “upcharge” when submitting claims to insurers.  Judge Koh also found that Ganesh had abused a position of trust by submitting the false claims.  In addition to the prison term, Judge Koh sentenced Ganesh to a 3-year term of supervised release and ordered the defendant to pay restitution in the amount of $344,916.20.  Ganesh will begin serving the prison sentence on November 1, 2018.    

On April 4, 2018, Judge Koh sentenced Belcher to a year and a day in prison to be followed by three years of supervised release.

Assistant U.S. Attorneys Patrick Delahunty and Jeff Nedrow are prosecuting the case with the assistance of Susan Kreider and Nina Burney Williams.  The prosecution is the result of an investigation by the Federal Bureau of Investigation.       
 

Topic(s): 

Health Care Fraud

Component(s): 

USAO - California, Northern

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Crime Victims' Rights Ombudsman

Welcome

A victim of a federal crime may file a complaint against any employee of the Department of Justice who violated or failed to provide the rights established under the Crime Victims Rights Act of 2004, 18 U.S.C. § 3771. The Department of Justice has established the Office of the Victims’ Rights Ombudsman to receive and investigate complaints filed by crime victims against its employees, and has implemented Procedures to Promote Compliance with Crime Victims’ Rights Obligations, 28 C.F.R. § 45.10.

The rights provided by the Crime Victims’ Rights Act are guaranteed from the time that criminal proceedings are initiated (by complaint, information, or indictment) and cease to be available if all charges are dismissed either voluntarily or on the merits (or if the Government declines to bring formal charges after the filing of a complaint).

The complaint process is not designed for the correction of specific victims’ rights violations, but is instead used to request corrective or disciplinary action against Department of Justice employees who may have failed to provide rights to crime victims. The Department of Justice will investigate the allegations in the complaint to determine whether the employee utilized his or her "best efforts" to provide crime victims' rights.

The Office of the Victims’ Rights Ombudsman does not administer crime victim funds or provide services. If you are seeking information about available resources and services, please contact the Office for Victims of Crime.

CONTACT US

Marie A. O'Rourke
Victims' Rights Ombudsman
Executive Office for United States Attorneys
Department of Justice
RFK Main Justice Building
950 Pennsylvania Ave., N.W.
Room 2261
Washington, DC 20530-0001

A FEDERAL CRIME VICTIM HAS THE FOLLOWING RIGHTS:

• The right to be reasonably protected from the accused.
• The right to reasonable, accurate, and timely notice of any public court proceeding, or any parole proceeding, involving the crime or of any release or escape of the accused.
• The right not to be excluded from any such public court proceeding, unless the court, after receiving clear and convincing evidence, determines that testimony by the victim would be materially altered if the victim heard other testimony at that proceeding.
• The right to be reasonably heard at any public proceeding in the district court involving release, plea, sentencing, or any parole proceeding.
• The reasonable right to confer with the attorney for the Government in the case.
• The right to full and timely restitution as provided in law.
• The right to proceedings free from unreasonable delay.
• The right to be treated with fairness and with respect for the victim's dignity and privacy.
• The right to be informed in a timely manner of any plea bargain or deferred prosecution agreement.
• The right to be informed of the rights under this section and the services described in section 503(c) of the Victims' Rights and Restitution Act of 1990 (42 U.S.C. 10607(c)) and provided contact information for the Office of the Victims' Rights Ombudsman of the Department of Justice.

MORE INFORMATION

• Filing a Complaint
• Complaint Forms
• Victims' Rights
• Resources
• Contact Us

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Robert S. Mueller III touched down in Concord to prosecute a massive hashish bust.

Robert Mueller and the San Francisco hash bust of 1978

On a spring day in 1974, just across the street from where now stands the Westfield Mall, cops hauled 1,800 pounds of marijuana and 46 pounds of hashish from high-security trucks into the San Francisco Mint Building.

More than $450,000 worth of drugs, seized by U.S. Customs over a two-year period, went up in smoke that afternoon. The flames were snuffed in the Mint's after-burner, "lest they induce a gigantic high." The story ran in the May 18, 1974 edition of The San Francisco Chronicle 

Media: San Francisco Chronicle

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Four years later, a young
Robert S. Mueller III touched down in Concord to prosecute a massive hashish bust. Then the Assistant U.S. Attorney, Mueller has become a household name as the special counsel presiding over the FBI's current Russia probe.

See more photos of massive drug busts in the San Francisco Bay Area – including a motorcycle cop with a 150-pound sack of pot on his lap – in the above slideshow.

These obscure vignettes reflect a time that may soon be resigned to Bay Area history. Californians voted to legalize the recreational use and sale of cannabis last year. The law goes into effect Monday. However, many of the photos above are from federal busts, which may still be carried out despite California's changing laws.

For full coverage of the rollout of legal marijuana in California, check out the Chronicle's GreenState.com.

Michelle Robertson is an SFGATE staff writer. Email her at mrobertson@sfchronicle.com or find her on Twitter at @mrobertsonsf.

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Ex-CalPERS official Villalobos commits suicide

 Two former CalPERS officials indicted on fraud charges

Alfred J.R. Villalobos, left, and Federico Buenrostro Jr. (Los Angeles Times / Bloomberg)

Marc Lifsher, Los Angeles Times

SACRAMENTO — Three years after a major influence-peddling scandal rocked California and the nation's largest public pension fund, a federal grand jury indicted two former top officials on fraud, conspiracy and obstruction charges.

The indictment, unsealed Monday in San Francisco, names as defendants Federico Buenrostro Jr. of Sacramento, a former chief executive of the California Public Employees' Retirement System, and Alfred J.R. Villalobos of Reno, Nev., a former CalPERS board member and one-time deputy Los Angeles mayor.

The charges are the culmination of a far-reaching investigation into the way the agency invested its money and how the former insider, Villalobos, collected tens of millions of dollars from Wall Street firms for steering CalPERS business their way.

Neither man could be reached for comment, but they have consistently denied any wrongdoing in connection with their CalPERS work. Villalobos' attorney said his client was innocent and would fight the charges.

The agency invests $255 billion of employee and governmental contributions to provide retirement benefits for more than 1.6 million public employees, retirees and their families.

Once a highly regarded organization with an international reputation for smart, ethical investing, CalPERS now must wrangle with questions about commissions paid to the little-known intermediaries and their relationships with fund officials.

Steep investment losses during the recent recession also tarnished the fund. Since then, the CalPERS board has conducted detailed investigations, ordered major changes in the way it operates and improved its financial performance.

CalPERS President Rob Feckner called the long-expected federal indictments "another step in the road to justice."

Pension fund officials hailed the action as an affirmation that the fund moved forcefully to clean up its relations with intermediaries, such as Villalobos, who collected exorbitant fees from private equity investment funds after they signed lucrative contracts with CalPERS.

The scandal at CalPERS and subsequent investigations and the federal indictment should be a warning to public pension funds across the country that they need to root out any potential or actual corruption, said Edward Siedle, a forensic expert specializing in pension funds.

"What the Department of Justice is doing is sending a shot across the bow," he said, "that these matters are taken seriously and people will prosecute."

Pension fund officials credited their own, in-house 2011 review with providing significant findings that helped prosecutors make progress toward indictments.

At the same time, critics have continued to pummel CalPERS and other large government-worker pension funds for being dangerously underfunded and providing overly generous retirement and health benefits. Those costs unfairly burden taxpayers, most of whom have no access to similar largesse, critics say.

At the center of the investigation was the role of placement agents, the middlemen or intermediaries hired by private equity firms and other financial institutions to win CalPERS business. The investigation came during a rough financial stretch for CalPERS. Its investment portfolio value had plummeted nearly $100 billion, to $169 billion, during the recession.

Since then, the Legislature approved a new law requiring placement agents to be registered as lobbyists, and CalPERS has enacted stringent new policies on ethics, governance, conflicts of interest, and board gifts and travel.

"Given its many reforms, CalPERS is a better, stronger and more transparent pension system than ever," said Philip Khinda, a Washington, D.C., lawyer, who conducted the special review.

The indictment charged Villalobos with conspiracy to defraud the United States, engaging in a false scheme against the United States and conspiracy to commit mail and wire fraud. Buenrostro was accused of the same crimes, plus making a false statement to the United States and obstruction of justice.

The maximum penalty for the mail and wire fraud is 20 years in prison and a fine of $250,000 or twice the amount of loss, whichever is greater. The other charges carry five-year maximum prison terms and fines similar to the mail and wire fraud charges.

Villalobos, 69, and Buenrostro, 64, were longtime friends. The indictment set out a series of transactions in 2007 and 2008 between the two men while Buenrostro was still running CalPERS.

At the time, Villalobos was working for the New York-based private equity firm Apollo Global Management as a placement agent to help it get CalPERS business.

According to the indictment, the two men conspired to commit fraud by creating and sending phony documents. These disclosures were needed to comply with a requirement from Apollo for proof that CalPERS officials knew Villalobos was being paid large amounts of money to secure $3 billion in CalPERS business.

Buenrostro then retired from CalPERS and went to work for Villalobos' Nevada firm, ARVCO Capital Research, shortly after Apollo made its last commission payment to Villalobos.

On Monday, both men appeared with their lawyers in federal court in San Francisco, and each was released on $500,000 bail. Later, Buenrostro's lawyer, William Kimball, declined to comment. Villalobos' attorney, Donald Etra, said his client "denies all charges" and will vigorously defend himself.

The two defendants also face civil lawsuits brought by the U.S. Securities and Exchange Commission and the California attorney general's office.

The Justice Department said Monday that the federal indictment capped a 2 1/2 year probe that was assisted by the U.S. Postal Service, FBI, SEC and Secret Service.

In a statement, Apollo said it was troubled by the charges against Villalobos and Buenrostro and "was not aware of any misconduct engaged in by Mr. Villalobos during the time he worked with Apollo." Apollo stressed that it had "cooperated fully with all regulatory agencies investigating this matter and will continue to do so."

Apollo paid Villalobos $14 million for CalPERS deals mentioned in the indictment, court papers said.

In all, Villalobos and his companies got a total of $48 million from Apollo from 2005 to 2009, according to an SEC filing in April of last year. He also received an additional $12 million in placement fees from other investment funds that managed CalPERS money.

marc.lifsher@latimes.com

Times staff writer Andrew Tangel in New York contributed to this story

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Lafayette and Walnut Creek: Local investment fund accused of defrauding Bay Area investors out of $700 million

Bar-K Investors 

Apparently Benny Chetcuti Jr. has friends all over Walnut Creek, Danville and Contra Costa County. 

The interesting story begs where are the  local authorities investigating we've got the SEC and FBI interested in cleaning up the billion dollar fraud cases in Contra Costa County which lead to Seeno Construction, Walter Ng and Benny Chetcuti Jr. who are connected to high level Contra Costa Politics.  

Local investment fund accused of defrauding Bay Area investors out of $700 million

By Karina Ioffee Bay Area News Group

POSTED:   07/19/2014 04:51:39 PM PDT6 COMMENTS| UPDATED:   ABOUT A MONTH AGO

In Walnut Creek, Calif., on Tuesday, June 10, 2014, John McGuire of Walnut Creek, has his photo taken next to letters and statements from a Lafayette based

In Walnut Creek, Calif., on Tuesday, June 10, 2014, John McGuire of Walnut Creek, has his photo taken next to letters and statements from a Lafayette based investment brokers firm that he and other investors say defrauded them out of more than $700 million. McGuire is one of 1,500 investors who say they were defrauded by a fund created by Walter Ng, a well-known Lafayette investment manager, who they say ran a Ponzi scheme. (Doug Duran/Bay Area News Group)

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Aug 7:

Lafayette fund fined $5 million for defrauding investors

Phyllis Christopher and her former husband spent years pinching pennies so they would be comfortable in retirement. As part of their financial plan, the couple invested their savings -- more than $600,000 -- into a fund run by Bar-K, a Lafayette company.

But when they tried to cash out in 2007, fund manager Walter Ng told them that the funds were not available because of "a minor cash flow problem." Christopher recalls sitting in the investment office and crying upon hearing the news. Her first thought: She would have to sell her house.

John McGuire of Walnut Creek, places his hand on letters and statements from a Lafayette based investment brokers firm as he talks about how he and other

John McGuire of Walnut Creek, places his hand on letters and statements from a Lafayette based investment brokers firm as he talks about how he and other other investors were defrauded out of more than $700 million in Walnut Creek, Calif., on Tuesday, June 10, 2014. McGuire is one of 1,500 investors who say they were defrauded by a fund created by Walter Ng, a well-known Lafayette investment manager, who they say ran a Ponzi scheme. (Doug Duran/Bay Area News Group)

It didn't take long for the "minor cash flow problem" to become a major crisis, not just for the Christophers but for an estimated 1,500 other Bay Area investors who had deposited millions with the company. Today, the 84-year-old Ng, youngest son Kelly, 57, and business associate Bruce Horwitz stand accused in a civil action of conning investors out of more than $700 million in IRA accounts, inheritances and other assets cobbled together over a lifetime -- in what may be one of the biggest Ponzi schemes in California's history.

Investors, most of them residents of Contra Costa and Alameda counties, have lost their savings and their homes. But despite the staggering losses, the managers who ran the fund have never been prosecuted for the alleged theft, leaving investors bitter and angry at a system they say failed them.

"When someone literally steals your money from you, it's a horrible feeling," says the 69-year-old Christopher, who lives in Rossmoor. "It's embarrassing and humiliating. But what is worse is that nothing has been done about it."

HUMBLE BEGINNINGS

For decades, Bar-K Inc., one of several LLCs run by the Ngs, offered its clients what seemed like an easy -- and reliable -- return: It collected their cash, lent the money to local homebuyers and developers, and then paid dividends to investors from the loan proceeds. Investors received returns averaging 8 percent annually in exchange for a small fee, according to a class-action lawsuit investors have filed.

Bolstered by Walter Ng's standing as a trustworthy financier, investors flocked to Bar-K. But as the real estate market heated up in the early 2000s, the Ngs grew more ambitious, especially as Walter's older son, Barney, now 60, and Kelly took over the day-to-day operations and Walter spent more time on the golf course.

In 2002 the Ngs, together with Horwitz, a retired Orinda pediatrician, formed a new fund, called R.E. Loans. Rather than staying local, Walter Ng's sons began to lend money to developers for projects in at least 22 states, including condominiums in Atlanta and Las Vegas and a casino in Reno. They appraised the properties themselves, even though neither one was a certified appraiser. Doing so was a conflict of interest, attorneys say, since the Ngs stood to gain from higher appraised values.

In the increasingly profitable real estate market, business was booming. By 2007, R.E. Loans had raised more than $700 million and had more than $55 million in cash on hand, according to the lawsuit.

As a way of thanking investors, the Ngs held annual appreciation dinners. A string quartet entertained guests and Walter, Barney and Kelly Ng made speeches about how well the fund was performing.

"You could meet other investors, so it gave us all a very secure feeling," recalled Christopher, who met the Ngs through her former husband.

Dwight Christopher, 80, now suffers from Parkinson's disease and is worried about how he will afford his medical care after losing a significant portion of his savings.

THE END OF THE PARTY

In early 2007, R.E. Loans ran into trouble: Managers were told the fund was in violation of federal securities laws because more than half its investments were in out-of-state projects. The discovery meant they were prohibited from taking in new funds and had to contact investors, tell them about the violation, and offer to return their money.

Instead of disclosing the violation, the Ngs sent letters assuring clients their investment was safe. They did this even as the real estate market began its meteoric decline and more developers defaulted on their loans.

To stay solvent, the fund needed a new source of cash. On the advice of Greenberg Traurig, a global law firm with offices in Palo Alto and San Francisco, R.E. Loans applied for and received a $50 million loan from Wells Fargo Capital Finance in July 2007. Today, Greenberg is one of the defendants in the class-action lawsuit filed by investors in 2011, claiming the firm facilitated the fraud and delayed action that could have helped investors.

In addition to the bank loan, fund managers also structured a transaction that exchanged investors' equity for promissory notes, essentially trading clients' shares in properties around the country for IOUs. Managers pitched the move as necessary in order to reorganize the fund. Attorneys for investors now say the real intent was to hide their securities violation and conceal the fund's quickly deteriorating financial situation.

"It was a combination of events -- a perfect storm, if you will -- that sunk the company," said Richard Brown, one of the attorneys in a class-action lawsuit. "The first was the inability of the managers to see the risk involved in their type of investments in an economy that suffered a large financial shock. The second was their loose appraisals, and the third was their securities violation because they depended heavily on new money to pay investors their dividends.

"So when the banking markets failed and their stream of money stopped, they were doomed."

After the Wells Fargo loan, things improved temporarily for R.E. Loans, but the company risked not being able to pay dividends to investors, some of whom collected a monthly or an annual payment.

In December 2007, managers created a new investment, called Mortgage Fund '08. Investors flocked again, depositing a total of $40 million in the first three months and another $40 million in the next year, attorneys say. But instead of investing the proceeds, the Ngs used them to pay dividends to R.E. Loans clients, creating a classic Ponzi scheme, attorneys allege.

"There were so many people who didn't want to believe that they had been had. It's incredibly disappointing," said Deborah Kurtin, 65, a Piedmont investor who lost more than $2 million. The money included a settlement the Kurtins received after their son, Jared, was struck and killed by a truck in 2005; the family hoped to use that money to set up a music therapy program in Jared's memory at a local children's hospital.

They received only two checks before being told the fund was insolvent.

By 2009, R.E. Loans and Mortgage Fund '08 had stopped paying dividends. By 2011, both had filed for bankruptcy.

WARNINGS IGNORED

Wells Fargo has declined to comment on the case, citing ongoing litigation. Greenberg Traurig issued a statement calling the litigation "meritless" and saying accusations were baseless and defamatory. Walter Ng said he could not comment, and numerous calls and emails to Walter Ng's and Kelly Ng's attorneys were not returned.

In 2009, the FBI began an investigation, then handed its files to the Department of Justice. But when it came time to prosecute, the DOJ brought only one charge against Walter and Kelly Ng: keeping cash withdrawals under $10,000 to avoid detection. Both the FBI and the DOJ have refused to comment on the case.

Kelly Ng was sentenced to 18 months in prison and is now at federal prison in Lompoc. Walter Ng was given five years probation and was ordered to participate in a mental health treatment program and pay a $1,100 fine.

Barney Ng has never been charged in the case.

Last year the Securities and Exchange Commission sued Walter Ng, Kelly Ng, Bruce Horwitz and Mortgage Fund '08, alleging they ran a "multimillion-dollar securities fraud." The agency has reached a settlement with the plaintiffs, but has not yet disclosed the details. But the SEC is a regulatory agency and can only impose fines, not prison sentences.

The minor penalties have bewildered investors.

"Bernie Madoff was sentenced to life in prison, but these guys got a slap on the wrist," said John McGuire, 51, a Walnut Creek investor who lost $300,000. McGuire, who uses a wheelchair, hoped the money would help his family once he could no longer work, and pay for his children's college. Instead, his older son went to a junior college and his mother-in-law, also an investor, was forced to move in with the family.

Investors' attorneys say without a criminal case, a class-action lawsuit against the institutional players -- Greenberg and Wells Fargo -- is the only chance to recoup the lost money. Regardless, it will be a small comfort to investors, most of them in their 70s and 80s, many now wondering how they will support themselves.

"Seven hundred million dollars goes up in smoke and nothing gets done?" said Jerry Clair, a retired banker who said he lost $700,000 to the Ngs. "It's just unreal."

Contact Karina Ioffee at kioffee@bayareanewsgroup.com. Follow her on Twitter @kioffee.

WHERE DiD THE MONEY GO?

Investors claim that Walter Ng's Bar-K investment firm and affiliated funds lost hundreds of millions of their dollars to shaky real estate investments and poor management. Here is a timeline of events as recounted in a class-action suit filed by investors:

1975: Bar-K is created to loan money to local developers. The company draws clients, who are rewarded with an average return of 8 percent.

2002: The Ng family launches R.E. Loans, a high-liquidity fund that promises to let investors cash out any time. The company begins investing in out-of-state real estate projects.

2007: R.E. Loans faces a cash-flow crisis after attorneys tell fund managers that the company's sizable out-of-state real estate portfolio puts it in violation of federal securities law. The company secures a $50 million loan from Wells Fargo Capital Finance, which negotiates a clause calling for it to be first in line for repayment, before investors.

December 2007: Managers launch a new fund, called Mortgage Fund '08, and encourage investors to deposit their money, collecting an estimated $80 million. Walter and Kelly Ng, along with Bruce Horwitz, begin to transfer funds from MF '08 into other accounts.

January 2009: R.E. Loans stops making payments to its investors.

June 2009: Mortgage Fund '08 stops making payments to investors.

2011: Both funds file for bankruptcy.

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