HAMMOND | A Munster accountant accused by the feds last fall of stealing from a client to gamble at local casinos is facing 34 new federal charges, U.S. Attorney David Capp announced Thursday.
A federal grand jury returned a 34-count superseding indictment charging Jack Weichman with nine counts of bank fraud, 14 counts of bankruptcy fraud, two counts of money laundering, four counts of wire fraud and five counts of filing false federal income tax returns, court records show.
In a statement Thursday, Weichman's attorney, Theodore Poulos said, "we are deeply disappointed and, quite frankly, appalled that the government has decided to bring these additional trumped up charges against Mr. Weichman, especially the additional charges relating to 'Doctor B.' Jack Weichman didn't do anything wrong and we are going to prove it in court."
According to the superseding indictment, Weichman, a CPA, owned and operated the accounting firm Weichman and Associates and the medical billing firm MMDS, both in Munster. The businesses managed medical practices and provided payroll, billing, accounting and tax services for its physician clients.
Weichman is accused of illegally obtaining more than $3 million from a local bank via his physician clients' bank accounts, and secured lines of credit in the name of a client without the client's permission. The indictment charges that Weichman caused about $1 million in fraudulent withdrawals to be made from the brokerage account of a client identified in court papers as Dr. B.
The indictment alleges Weichman used the lines of credit to pay off gambling debts at local casinos.
Poulos, in his statement, said the claim Weichman improperly used funds belonging to Dr. B is "totally false." Poulos contends Dr. B and Weichman have been "dear friends" for many years, that the physician authorized Weichman to use his funds, and that the doctor doesn't believe Weichman wronged him in any way.
Weichman is also charged with defrauding a second bank by renewing a more than $355,000 term loan by failing to reveal that he owed the IRS about $2 million in back taxes.
The superseding indictment also alleges Weichman hid assets from creditors and a bankruptcy trustee during his Chapter 11 bankruptcy. The feds also accuse him of hiding hundreds of thousands of dollars paid to area casinos and tens of thousands of dollars in credit card payments used to purchase cigars, luxury handbags, sports memorabilia and cruises.
The bankruptcy charges also trigger allegations of money laundering, alleging hundreds of thousands of dollars in criminally derived property.
The wire fraud charges center on allegations Weichman and employees at his accounting firm caused the transmission of withdrawal requests on a client’s IRA accounts to be faxed to brokerage offices in San Diego and St. Louis without the client’s knowledge or permission. Weichman allegedly told his employees to pretend to be the holder of the IRA accounts when contacting the brokerage firm.
Weichman allegedly used the money obtained for his own benefit, including gambling.
He is also accused of filing five false income tax returns from 2009 through 2013.
In September, Weichman was charged with four counts of bank fraud stemming from allegations he stole $660,000 from a physician's account to gamble at local casinos.
Poulos said Weichman has successfully managed the financial affairs of hundreds of physicians and medical practice group for three decades and properly conducted millions of financial transactions on behalf of his clients. He also claims Dr. B still uses Weichman to handle his financial affairs.
"We do not dispute that some mistakes could have been made. But Mr. Weichman always acted honestly and in good faith in the interest of his clients. He will continue to do so," Poulus said in the statement.
According to Poulos, the charges based on Weichman's personal financial affairs "arise in the context of the complex tax and bankruptcy code and the involvement of other professionals who guided Mr. Weichman." He contends that the evidence "will establish there was no fraud nor any intentionally false statements."
The case is being prosecuted by assistant U.S. Attorneys Diane L. Berkowitz and David Nozick.