Friday, September 26, 2008

Another in a long line of 'fraudsters,' Modesto man admits mistakes as prison time nears

By SUSAN HERENDEEN
sherendeen@modbee.com

last updated: April 10, 2008 11:41:51 AM

The money must have been great while it lasted, but Joel Nathan Ward is facing a decade or more in a federal prison for stealing $10 million from investors in his Turlock-based foreign currency fund.

He is not the only white-collar criminal to crop up in a region known for its fertile farmlands, just the most prolific.

Ward's takings outstrip those of former mortgage lender Tony Daniloo of Turlock, who was sentenced to 7½ years in federal prison after he was convicted of masterminding an $8 million mortgage lending scheme.

And he is leagues ahead of other recent and notable fraudsters.

Lonni Ashlock of Waterford and partner Ronald Buhler of Riverbank swindled people facing foreclosure out of their homes. The value of their fraud was not established in court, but they were sentenced to one year on home detention.

Turlock's MedicAlert lost $1 million to a chief financial officer who used foundation credit cards to pay for a scuba diving trip to the Galápagos Islands, a birthday party in Carmel, laser eye surgery and more. Effie DeBow of Oakdale lost her job and was sentenced to 16 months in prison.

Former medical office manager Brenda Orlando of Ripon got a stiffer sentence, four years in prison, for stealing more than $600,000 from the orthopedic surgeons who employed her.

Christine Pfitzer of Modesto served a 300-day sentence under house arrest after she bankrupted the elderly owners of McHenry Auto Sales by taking advantage of an outdated bookkeeping system.

And the list goes on, dipping into the ranks of moms and dads who siphoned money from the kids clubs they sponsored.

Time after time, frauds are exposed and offenders are punished, as Ward -- who lives in Modesto -- will be if he is sentenced Friday in U.S. District Court in Sacramento as scheduled. In the end, one obvious question never quite gets answered: What were they thinking?

Statements of remorse, offered before judgment is pronounced, give some clues.

Most offenders say they planned to pay the money back, and would have paid the money back if things hadn't spun out of control.

Many ask for forgiveness and talk about redemption or atonement.

Ward went a step further, likening himself to a "financial serial killer" in a confessional diary he penned as his scheme collapsed in the fall of 2006, according to a criminal complaint brought by the U.S. attorney's office in Sacramento.

"I hate the fact that I am just another scumbag con artist bilking old people out of their retirement money," Ward wrote. "I have always hated those guys. How could I become one?"

Embezzlers take $660 billion

Fraudsters -- an artful term used by investigators and prosecutors -- can be found in all walks of life.

According to the FBI, identity theft hits nearly 4 percent of Americans, fraud raises the annual cost of insurance premiums by $300 for the average household, up to 10 percent of all medical bills are fraudulent and U.S. businesses lose $660 billion annually to embezzlement, according to a report from the Association of Certified Fraud Examiners.

Meanwhile, punishments for white-collar criminals are far less severe than those for violent offenders, who are deemed greater threats to society.

An offender with two violent crimes on his record can get 25 years to life in prison if he shoplifts. An insurance agent who pockets premiums from 100 clients, but has not been in trouble before, can repay some of the money and spend a few months on home detention.

The public often calls for stiffer punishments after a scandal breaks. Once the buzz dies down, the reality of overcrowded prisons remains and judges must stay within sentencing guidelines set by state and federal lawmakers.

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