Metropolitan News-Enterprise


Thursday. March 18, 2010


Page 3


Malibu Man Gets 5 1/2 Years in Advertising Fraud Case


By a MetNews Staff Writer


The seventh person convicted in relation to a scheme that collected more than $6 million from companies and organizations that thought they were paying for advertisements that had run in various minority-themed publications has been sentenced to 66 months in federal prison, the U.S. Attorney’s Office said.

Joshua Hoffman, 40, of Malibu, was sentenced by U.S. District Judge George H. Wu. In addition to the 5 1/2-year prison term, Wu ordered Hoffman to pay $2,132,784 in restitution to 277 victims.

Hoffman pleaded guilty in May 2009 to conspiring to commit mail fraud and wire fraud, a charge related to a telemarketing scam involving RAB Publications, a company run out of a Tarzana motel room that claimed to put out several publications and bilked numerous entities with false invoices for advertising purportedly aimed at minority readers.

Hoffman and others involved in the scheme contacted various organizations and collected money based on false claims that the organizations had purchased advertising in the publications.

Six other people have been sentenced in the case. Richard A. Bivona, 63, of Las Vegas, the leader of the fraud scheme, received 87 months in prison and was ordered to pay $3,057,978 in restitution. Frank Hightower, 63, of North Hollywood, was convicted after a jury trial and sentenced to 51 months in prison and ordered to pay nearly $2.1 million in restitution. Mark Scott, 43, of Los Angeles, was sentenced to 41 months in prison and ordered to pay more than $2.1 million restitution. Michael Borodzicz, 56, of Van Nuys, was sentenced to 41 months in prison and ordered to pay more than $1.9 million in restitution. Thomas Woods, 58, of Van Nuys, was sentenced to 37 months in prison and ordered to pay more than $900,000 in restitution. Jeff Hillman, 55, of Calabasas, was sentenced to seven months in prison on tax evasion charges and ordered to pay $12,667 in restitution to the IRS.

Bivona and his collection agents ran a scheme in which they contacted various entities and attempted to convince them that they had purchased advertising in bogus publications that they called The Veteran’s Observer, American Black Employment Journal, The Hispanic World News, Women’s World News, and Israel Today/Jewish News.

They generally targeted entities by contacting officials who had the ability to pay invoices and telling them that a former employee had authorized the purchase of ads in the bogus publications. In many cases, the purported publications were never printed. In other cases, the publications were printed long after the purported publication dates for the sole purpose of generating “tear sheets” to convince the victims that the purported advertisements were real.

The victimized entities lost more than $6 million, authorities say. The victims in the case include the American Red Cross, Southeastern Michigan; ChoicePoint Inc.; the County of Sacramento; E*Trade Financial; Fed Ex Ground Package System; Instinet; and United Defense.


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