Federal prosecutors say they’ve caught two men masterminding unrelated complex schemes to siphon off large sums from class action settlements by falsely posing as members of the class. Richard Lagerveld was charged with mail and wire fraud after settlement administrators in two class actions mailed $9.2 million to his stated address in San Diego, which was in fact a homeless shelter. Authorities said he had a long criminal record including aliases and stolen identities; in one of the class actions, he submitted forged brokerage records to document his claim that he’d owned $145 million worth of stock in Oxford Health Plans, the target of securities litigation. In a second case, he collected a check for $2.3 million after claiming to be an owner of a fictitious company that had purchased glass from companies settling a class action. In the other case, inmate Alan N. Scott, who resides in the Schuylkill federal correctional institution in Pennsylvania, is charged with orchestrating an $8 million assortment of false settlement claims of which about $200,000 had been received as of the time of his arrest. According to the U.S. Attorney’s office, Scott used co-conspirators to correspond with claims administrators in about 90 securities class actions, “and routinely sent directions and correspondence to his co-conspirators by falsely labeling the correspondence ‘legal mail.'” (Onell R. Soto, “Ploy paid man millions, authorities say”, San Diego Union-Tribune, Jan. 18; Department of Justice press release, Feb. 9; Robert E. Kessler, “Two are charged in separate scams”, Newsday, Feb. 10; Securities Litigation Watch, Jan. 18).

Filed under: class actions, Pennsylvania, San Diego