ponzi scheme

Justice Served Up November 21 2014

Fri, 2014-11-21 06:39 -- walt
Casino logo

Casino logo (Photo credit: Wikipedia)

Here is what we are reading today:

From @CrimeADay: 47 U.S.C. §553 makes it a federal crime to steal cable TV.

Madoff Bankruptcy Legal Fees Top $1 Billion (Bloomberg) - Unwinding the biggest Ponzi scheme in U.S. history hasn’t been cheap. Six years after Bernard Madoff’s fraud collapsed, the cost of liquidating his defunct investment advisory firm to repay thousands of victims has topped $1 billion, though the con man’s former customers aren’t footing the bill.

Prosecutors Seek Joint Settlement With Banks In FX Probe (Bloomberg) -  U.S. prosecutors are seeking to settle criminal currency-rigging cases with multiple banks at the same time, allowing lenders to avoid being singled out for industrywide conduct, according to people familiar with the matter. The agreements, which are likely to come early next year, will probably include price-fixing charges stemming from alleged collusion among traders, said the people, who asked not to be named because the negotiations are private.

Steven Cohen's New Firm To Stop Paying Bonuses For Best Trade (DealBook) -  Steven A. Cohen continues to take steps to send a message to federal authorities that his $10 billion family office will not run afoul of the law in the way his former hedge fund did.  Mr. Cohen’s firm is putting an end to its long-standing practice of “tagging” trades as best investment ideas that could generate bigger bonuses. The decision to end the tagging of trades was announced on Thursday in a letter to employees of Mr. Cohen’s new firm, Point72 Asset Management.

An SEC Director With Big Stock Holdings Stirs Debate (Reuters) - Keith Higgins, who runs the office that reviews public companies' books at the U.S. Securities and Exchange Commission, reported stock holdings worth between about $2 million and $6 million last year and the sale of stocks throughout 2014, according to SEC disclosures viewed by Reuters. Higgins disclosed holdings in about 90 public companies during his SEC tenure in 2013, making him the biggest investor in individual stocks among the agency's top officials last year.

Wynn Resorts Probed For Money Laundering Violations (WSJ)Federal authorities are investigating whether casino operator Wynn Resorts Ltd. violated money-laundering laws, according to people familiar with the matter.  Prosecutors from the Manhattan and Las Vegas U.S. Attorney’s offices and investigators from the Internal Revenue Service and Drug Enforcement Administration are coordinating their efforts to look into the Las Vegas-based company, people familiar with the matter said.

Fmr TX Justice Of Peace Sentenced To Prison For Embezzlement (Waco Tribune)Former McLennan County Justice of the Peace Jean Laster Boone was sentenced to nine months in federal prison Wednesday for stealing more than $16,000 in Social Security benefits intended for a friend who died four years ago.  Laster Boone, 62, who pleaded guilty in September, will be allowed to remain free on bail and voluntarily report to prison once the U.S. Bureau of Prisons determines the location. Her attorney, Thomas West, asked that she be sent to a prison in Bryan.

Connecticut Man Sentenced To 18 Months Prison For Tax Evasion (Patch) - According to court documents and statements made in court, Robert Parker earned income by providing information technology services to various businesses. Between 1996 and 2012, Parker did not pay any federal income tax on approximately $2 million of income he received in his own name, and in the name of his alter ego entity known as Success Zone, LLC.

Justice System Is Flawed From Top To Bottom (JD Supra) - I am not an expert by any means, but I was a prosecutor for four years, serving as an assistant U.S. attorney for the District of Hawaii, and I have spent the rest of my 32-year career as a white-collar criminal defense and civil trial lawyer. So I know a bit about the criminal justice system. I have never studied criminology or pored over criminal justice statistics. What I have to say is completely idiosyncratic and based solely on personal experience.  My conclusion is that the criminal justice system is broken.

Fmr Massey CEO Blakenship Could Face 31 Years In Prison For Safety Violations In Mine Disaster (Bloomberg) -  Massey Energy ex-chief Donald Blankenship pleaded not guilty to charges linked to the West Virginia explosion that killed 29 workers in the worst U.S. coal industry disaster in almost 40 years.  Blankenship asked U.S. Magistrate Judge R. Clarke VanDervort today when he was ordered to post $5 million cash bail if he’d be allowed to stay in his Las Vegas home. He was ordered instead to remain in West Virginia until his trial, turn over his passport and not engage in gambling activity.

Stephen Walsh Ordered To Start 20 Year Prison Term (Bloomberg) -  WG Trading Co. money manager Stephen Walsh was ordered to report to prison to begin serving a 20-year prison sentence for a $554 million fraud after a judge declined to hear another bid for leniency.  U.S. District Judge Miriam Goldman Cedarbaum in Manhattan denied Walsh’s request for an additional opportunity to address issues raised in a sentencing hearing last month and ordered him to report to prison Jan. 5.


Justice Served Up September 12 2014

Thu, 2014-09-11 18:54 -- walt
English: Bernard Madoff's mugshot

English: Bernard Madoff's mugshot (Photo credit: Wikipedia)

Here is what we are reading today:

Eight Charged In $280 Million Pump-And-Dump Scheme In New York (Bloomberg) -  Eight people were indicted on charges of defrauding thousands of investors in penny stocks through a $290 million “pump-and-dump” scheme, Manhattan District Attorney Cyrus Vance Jr. said.  Three stock promoters -- Anthony Thompson, 38, Eric Van Nguyen, 30, and Jay Fung, 40 -- are accused of working with five others from April 2009 to May 2012 to drive up prices of penny stocks to induce investors to buy shares, Vance said in a statement today.

Cities Compete To Become The Locale For International Disputes (DealBook) - The 48-mile Panama Canal expansion is an engineering marvel that promises to speed up international commerce and may be a boon for global ports. It is also one that involves lots of disputes over cost overruns and construction delays, and pushed completion beyond the canal’s 100th anniversary last month.  Rather than hash out any of the issues in Panama, where the court system could have an intrinsic bias toward the government, the feuding parties mutually agreed to iron out $1.6 billion in disputes in Miami.

Countries Freeze Assets, But Don't Return Enough Of It (WSJ) - Stolen state assets are increasingly being frozen and there are improvements in assets being repatriated, but it’s still a small amount compared with what’s being taken by corrupt officials, according to a new report.

PwC Fined For Bank Sanctions Report (Bloomberg) -  PricewaterhouseCoopers LLP was fined $25 million after sanitizing a report to regulators on sanctions and money-laundering controls for Bank of Tokyo-Mitsubishi UFJ Ltd., New York’s top bank regulator said today.  The bank persuaded PwC Regulatory Advisory Services to change a compliance report related to financial transactions with sanctioned countries including Iran and Sudan through March 2007, according to a settlement with Benjamin Lawsky, superintendent of New York’s Department of Financial Services.

Madoff's Deceased Son Andrew Leaves Millions To Wife, Children, Fiancee (Bloomberg) -  Andrew Madoff, convicted conman Bernard Madoff’s son, left $11 million in personal property and $4.5 million in real property to his children, wife and fiancee, according to his will.  Madoff, who insisted he had nothing to do with his father’s massive Ponzi scheme, died this month at the age of 48.

The Real Wolf Of Wall Street Bombs At New York Event (Business Insider) - Hundreds of people (mostly men) packed the house at the 92nd Street Y in Manhattan's Upper East Side to see the real-life "Wolf of Wall Street," Jordan Belfort.   The show they got was a disappointment.

Bureau Of Prisons Installs Millimater Wave Scanners For Contracband (BOP) - The Federal Bureau of Prisons has installed monitoring detectors, such as those found at airports, to screen staff and visitors for contraband.  The BOP has been inundated with reports of inmates receiving cigarettes, cell phones, liquor and drugs for years.  The only way the items get into the prison has to be from someone bringing them in ... we'll see if it works.

The Most Dangerous Cities In The U.S. (My Life) - All cities have their bad spots and neighborhoods where crime occurs at a higher rate than others. Sometimes though these things occur so often that it can reflect poorly on the city as a whole. And these cities all have their redeeming qualities and could be shown as fine places to live if different criteria were used. But according to these numbers, these ten cities are the most dangerous in the U.S.  Here they are....


Justice Served Up September 2 2014

Tue, 2014-09-02 06:38 -- walt
The bitcoin logo

The bitcoin logo (Photo credit: Wikipedia)

Here is what we are reading today:

Top Bitcoin Proponent Set To Plead Guilty (DealBook) -  A prominent supporter of Bitcoin, Charles Shrem, says he will plead guilty on Thursday to resolve federal charges that he helped federal court in smooth the way for drug transactions on the online marketplace Silk Road. He is to plead in New York to one count of aiding and abetting the operation of an unlicensed money transmitting business.  Mr. Shrem, one of the most vocal advocates of Bitcoin, was accused in January of using his company to convert dollars into Bitcoin for users of Silk Road, the now-defunct bazaar known for its wide selection of narcotics and drug paraphernalia. Federal prosecutors contended that he operated the scheme in cooperation with Robert Faiella, known as BTCKing, who was also arrested in January, in Florida.

The Overcriminalization Of Our National Parks (Forbes) - Yellowstone is now criminally charging drone and other model aircraft operators who fly their devices in the park.  Individuals who are criminally charged face six months in jail and fines of up to $5,000.  The cases will be prosecuted by The U.S. Department of Justice’s office of the U.S. Attorney for the District of Wyoming (a federal prosecutor who otherwise would be prosecuting federal crimes like terrorism, child exploitation, gang violence and human trafficking).  Persons charged with flying toys, drones and other model aircraft will quickly find that while their citation looks like a traffic ticket these cases bear no resemblance to those that would land them in traffic court.  Rather, to fight the citation defendant’s will need to hire a lawyer (handling this case pro se would be insane) and appear in a U.S. District Court.  Their case in federal court will be tried before a U.S. Magistrate Judge and they will face an Assistant United States attorney who will be armed with the full power of the U.S. government.

Fmr Artrocare CEO Gets 20 Years Prison (Bloomberg) -  ArthroCare Corp.’s former Chief Executive Officer Michael Baker, convicted in June of a $756 million securities fraud, was sentenced to 20 years in prison.  Baker, 55, and his accomplice, ex-finance chief Michael Gluk, 56, were convicted in June of conspiracy and wire fraud for running a “stuffing” scheme from 2005 to 2009 that placed millions of unneeded medical devices with distributors at the end of each quarter to falsely inflate ArthroCare’s financial results. Baker was also ordered yesterday to pay a $1 million fine. Gluk was sentenced to 10 years in prison and fined $50,000.

Insider Trading Cases End In Tougher Sentences In U.S. (Reuters) U.S. judges are imposing increasingly long prison terms for insider trading, a Reuters analysis shows. The rise is at least partly driven by the bigger profits being earned through the illegal schemes, defense lawyers said.  The trend is likely to continue on Monday when former SAC Capital Advisors manager Mathew Martoma is sentenced for what prosecutors have called the most lucrative insider trading case ever brought.

NM Lawyer Embezzles From Restaurant (KOB) -  Albuquerque-based lawyer Cody Kelley is under investigation by Albuquerque White Collar Crime Detectives for allegedly embezzling $130,000 from a Gallup man who was awarded that amount in damages for building repairs at his restaurant.  According to police, the victim allegedly sent four separate checks, totaling $130,000, to Kelley for fund disbursement, which was never made.

Chris Christie's Legal Tab For Bridgegate at $7.3 Million And Growing (NY Post) - The law firm Jersey Gov. Chris Christie hired to handle the George Washington Bridge scandal has cost taxpayers $7.3 million, a new report said Friday.

Feds Hunt For Fraud At Golf Courses (Politico) -  When you dish out illegal stock tips at the golf course, there are no mulligans.  This summer the Securities and Exchange Commission has brought insider trading cases that center on the relationships between golfing buddies and how their chitchat in the tee box or at the 19th hole turned into lucrative and illegal trading bonanzas.

Ohio Man Gets 15 Years For Ponzi Scheme (Ponzi Tracker) - A Cincinnati man will spend the next 15 years in federal prison for orchestrating a devastating Ponzi scheme that took at least $100 million from over 140 investors.  Glen Galemmo received the maximum possible sentence from U.S. District Judge Herman Weber pursuant to a plea agreement with prosecutors in which he pleaded guilty to one count of money laundering and one count of wire fraud.  Galemmo will also be ordered to forfeit his assets.  With credit for time served, Galemmo will serve at least 13 years of his sentence.

Eric Cantor To Join Wall Street Investment Bank (Reuters) - While it isn't a crime, it sure is bending the rules.   Former U.S. House Majority Leader Eric Cantor will join investment bank Moelis & Co (MC.N) as vice chairman and managing director, the company said, adding that Cantor will also be elected to its board.  Cantor, who was defeated in June by a Tea Party challenger in a Republican primary election, will provide strategic counsel to the company's corporate and institutional clients on key issues, Moelis said.



Justice Served Up August 26 2014

Mon, 2014-08-25 20:38 -- walt
English: Mug shot of Charles Ponzi (March 3, 1...

English: Mug shot of Charles Ponzi (March 3, 1882 – January 18, 1949). Charles Ponzi was born in Italy and became known as a swindler for his money scheme. His aliases include Charles Ponei, Charles P. Bianchi, Carl and Carlo. Italiano: Foto segnaletica di Charles Ponzi. Charles Ponzi (Lugo, 3 marzo 1882 – Rio de Janeiro, 18 gennaio 1949) è stato un truffatore italiano. Immigrò negli Stati Uniti, dove divenne uno dei più grandi truffatori della storia americana. (Photo credit: Wikipedia)

Here is what we are reading today:

Staten Island Mand Sentenced To 24 Years In Prison For Fraud (SI Live) - All his last-minute pleas and professions of innocence couldn't keep Peter Liounis out of prison.  The Staten Island resident, who was convicted of swindling millions of dollars from investors, was sentenced Friday in Brooklyn federal court to 24 and a third years in prison.

Fmr Qualcomm Exec Cops To Insider Trading Charges (Reuters)A former Qualcomm Inc sales director has pleaded guilty to insider trading in Atheros Communications Inc after learning that his company planned to buy the rival chipmaker in 2011.  Robert Herman, 52, entered his plea on Thursday in the U.S. District Court in San Diego, U.S. Attorney Laura Duffy said.

Ex-Hanover CEO Sentenced To 14 Years For Ponzi Scheme (FCPA Blog) - The former chief executive officer of now defunct Hanover Corporation was sentenced this month to 14 years in prison.  Terry Kretz, 61, of Gallatin, TN was also ordered to pay $14.8 million in restitution for orchestrating an $18 million Ponzi scheme.

Disbarred NY Attorney Indicted In Real Estate Investment Scheme (FBI) - Two men were indicted by a federal grand jury today for allegedly using a real estate investment scheme to defraud 15 victims of more than $3 million, U.S. Attorney Paul J. Fishman announced.  Paul Mancuso, 46, of Glen Rock, New Jersey, is charged by indictment with one count of conspiracy to commit wire fraud and five counts of wire fraud. Pasquale Stiso, 52, of West Harrison, New York, is charged by indictment with one count of conspiracy to commit wire fraud and one count of wire fraud.

The former chief executive officer of now defunct Hanover Corporation was sentenced this month to 14 years in prison.

Terry Kretz, 61, of Gallatin, Tennessee, was also ordered to pay $14.8 million in restitution for orchestrating an $18 million Ponzi scheme.

- See more at: http://www.fcpablog.com/blog/2014/8/25/ex-hanover-corp-ceo-jailed-14-yea...

Arizona Whistleblower Gets $6 million Award (Whistleblower Today) -  A Tucson health-care network has agreed to settle Medicare fraud allegations by paying $35 million, with the whistleblower who exposed the case will receive nearly $6 million.  The Carondelet Health Network runs Tucson’s St. Mary’s and St. Joseph’s hospitals. It didn’t admit to wrongdoing but agreed to the payout to end a civil complaint from the Department of Justice and a Tucson woman named Jacqueline Bloink, the Arizona Republican said.

Feds Charge Lawyer For Coaching Witness To Lie On Stand (Pantagraph) - A high-profile defense attorney in Chicago has been indicted on federal charges for allegedly encouraging a witness to lie on the stand on behalf of the lawyer's purported drug-dealer client.  According to an indictment announced Thursday, 36-year-old Beau B. Brindley faces multiple counts of perjury, one count of obstruction of justice and one of conspiracy to obstruct justice.

Five Charged With Fraud In Wilkes-Barre, PA City Fed Credit Union Probe (PA Home) - The United States Attorneys Office for the Middle District of Pennsylvania announced that a Grand Jury in Scranton returned indictments Tuesday charging five members of the Wilkes-Barre City Employees Federal Credit Union with conspiracy and bank fraud. The indictments were sealed pending the arrests and/or voluntary surrender of the defendants today.

Iowa Couple Sentenced For Social Security Fraud (KCRG) -  An Iowa couple has been sentenced for improperly collecting nearly $50,000 in disability benefits.  U.S. Attorney Nicholas Klinefeldt’s office says 45-year-old Robert Alexander and 38-year-old Maureen Alexander were both sentenced last week.

Man Indicted For Pointing Laser At Aircraft (Dallas News) - Four days before he turns 24, Steven Alexander Chavez Jr. was scooped up by federal authorities in Lubbock and charged with one count of aiming a laser pointer at an aircraft — in this case, a Texas Department of Public Safety helicopter. He was arrested today, three days after he was indicted by a federal grand jury in Dallas.

How A Man Built A Multi-Million Dollar Business After Prison (Forbes) - Frederick Hutson is a man who sees business opportunities in everything. By his own admission, this doesn’t always work out for the best. Hutson spent over four years in prison after getting busted for an opportunity he saw in drug trafficking, a huge market, and one that was as he saw it, ripe for disruption. Police busted him at his Vegas mail store, where he’d been reducing inefficiencies by rerouting marijuana through his Florida business via FedEx, UPS and DHL.  Now he started a fantastic new business ... shout out to man in green!

Interview With 'Orange Is New Black' Piper Kerman (NY 1) - An interview with the originial author and advocate for prison reform.

he hit prison dramedy "Orange is the New Black" has 12 Emmy nominations, and has already won three technical awards this year, but the show, based on Piper Kerman's year in federal prison, is just part of the story. NY1's Stephanie Simon sat down with the real "Piper and Larry" and filed part one of a special two-part report. - See more at: http://bronx.ny1.com/content/lifestyles/arts/214404/woman-whose-year-in-...



Justice Served Up July 21 2014

Sun, 2014-07-20 20:44 -- walt
English: Bernard Madoff's mugshot

English: Bernard Madoff's mugshot (Photo credit: Wikipedia)

Here is what we are reading today:

FedEx Indicted For Shipping Drugs For OnLine Pharmacies (Bloomberg) -  FedEx Corp. was indicted for delivering prescription pain pills, sedatives, anti-anxiety drugs and other controlled substances for illegal Internet pharmacies.  The operator of the world’s largest cargo airline was charged by the U.S. with 15 counts of conspiracy to distribute controlled substances and misbranded drugs and drug trafficking that carry a potential fine of twice the gains from the conduct, alleged to be at least $820 million for it and co-conspirators. The company, while denying the allegations, said today in a regulatory filing that conviction could be “material.”

Prosecutors Push For Lengthy Sentences For Madoff-5 (Reuters)Five former employees of disgraced investment manager Bernard Madoff should be sentenced to "significant" prison sentences of up to 20 years or more, prosecutors said in a court filing on Friday.   "The five defendants here, along with others, were the people who allowed Madoff's fraud to succeed as wildly as it did," prosecutors with U.S. Attorney Preet Bharara's office in Manhattan said in the filing. "Justice requires that each receive a significant prison sentence, commensurate with their active and long-standing role in the fraud."

Stanford Losses Not Covered By SIPC (Bloomberg) -  The U.S. Securities and Exchange Commission can’t force a brokerage account insurer to pay victims of R. Allen Stanford’s $7 billion fraud because their purchases weren’t covered, an appeals court ruled.  The U.S. Court of Appeals in Washington said the 7,000 investors in certificates of deposit sold by Stanford didn’t qualify as customers of a brokerage who would be insured by the Securities Investor Protection Corp., as the SEC argued. The CDs were bought at Antigua-based Stanford International Bank LLC, which wasn’t a SIPC member, the court said.

PA Man Charged In $5 million Ponzi Scheme (Ponzi Tracker) - Federal authorities unveiled charges against a Pennsylvania man and accused him of orchestrating a $5 million Ponzi scheme..  Walter "Buddy" Lambert, 73, was charged with sixteen counts of mail fraud, five counts of wire fraud, and one count of interfering with the due administration of the Internal Revenue Service.  The criminal charges come over three years after the Federal Bureau of Investigation raided Lambert's offices, and nearly four years after almost a dozen lawsuits were filed against Lambert by victims.

How The World's Best Wine Was Kidnapped (NY Post) - As journalist Maximillian Potter describes in his new true thriller, “Shadows in the Vineyard,” the mysterious man injected the contents of one syringe into the vine’s root, sealed the drill hole with a tiny wooden plug and smoothed over the dirt. He repeated the act one vine over.

Academic Fraud, Athletes and Faculty Responsibility (Inside Higher Ed) - The National Collegiate Athletic Association rarely admits to the need to revisit an infractions case, and particularly one that strikes at the core of academic integrity issues. So when the NCAA announced an unusual and embarrassing return to the University of North Carolina at Chapel Hill to reopen an academic fraud investigation that first came to light in 2011 and resulted in narrowly constructed sanctions in 2012 that affected the eligibility of a single athlete, it marked another confidence crisis in whether the NCAA can control the powerful forces of big-time college sports.

Dallas Woman Gets Federal Prison For Bankruptcy Fraud (Dallas News) - A Dallas woman was sentenced Friday to one year and one day in federal prison for making false statements during her multiple bankruptcy filings, the U.S. attorney’s office said.  Estela Martinez, 54, had pleaded guilty in August 2013 to one count of making a false statement under penalty of perjury related to bankruptcy filings.  Martinez’s prosecution is part of U.S. Attorney Sarah R. Saldaña‘s effort to crack down on bankruptcy fraud in the Northern District of Texas, her office said. Under the office’s Bankruptcy Fraud Initiative, seven people have been charged with various felony offenses since February 2013.

Drug Sentences Can Be Cut Retroactively (Bloomberg) -  Federal drug offenders may get their sentences cut by an average of two years under changes to U.S. guidelines in a move praised by Attorney General Eric Holder, who has made fair sentencing and prison overcrowding two of his signature issues.  The U.S. Sentencing Commission voted unanimously to allow some convicts to return to court and seek shorter terms, according to a statement by the agency. The commission, which has the legal power to permit judges to act retroactively, said offenders eligible for reductions could see their sentences cut by an average of 25 months, or 18.8 percent.

Corrections Officer Gets Prison For Fraud (SF Gate) - A former Miami-Dade County corrections officer and three others have been sentenced for operating an identity theft and tax fraud ring using identities of current and former prisoners.  Ex-officer Anthony Pace Jr. was sentenced last week to more than six years in federal prison after pleading guilty to fraud conspiracy and theft charges. The other defendants got lesser prison sentences.


Justice Served Up July 1 2014

Mon, 2014-06-30 21:42 -- walt

Here is what we are reading today:

BNP To Pay $9 billioni in Plea Deal (Bloomberg)BNP Paribas SA (BNP) pleaded guilty to U.S. sanctions violations and agreed to pay a record $8.97 billion in a case that reached the highest echelons of French and American diplomacy.  BNP, France’s largest bank, admitted that it processed almost $9 billion in banned transactions from 2004 to 2012 involving Sudan, Iran and Cuba, the Justice Department said today. The bank will also be barred from U.S. dollar-clearing operations for one year for its oil and gas commodity finance business.

Ex-Jeffries Trader Deserves 9 Years U.S. Says (Bloomberg) -  Former Jefferies & Co. Managing Director Jesse Litvak, who was convicted earlier this year of fraud in the trading of mortgage-backed securities, should be sentenced to nine years in prison, the U.S. said.  Litvak was convicted in the only criminal case against an individual in connection with a U.S. program that used bailout funds to spur investment in mortgage-backed securities. He is scheduled to be sentenced July 23 in New Haven, Connecticut.

Former Rothstein Partner Sentenced To 30 Months (WSJ) -  A South Florida lawyer on Friday received a 30-month prison sentence, the consequences of getting mixed up with Ponzi-scheme operator Scott Rothstein.  Russell Adler, one of three name partners in the now-defunct law firm Mr. Rothstein founded, received his sentence from a federal judge after pleading guilty to making illegal contributions to political campaigns at Mr. Rothstein’s request.  “Being the A in RRA turned into an ironic curse that has ruined my name and haunts and humiliates me to this day,” Mr. Adler said in court Friday, according to the Palm Beach Daily Business Review (sub. req.).

Pennsylvania Woman Charged In Massive Ponzi Scheme (Ponzi Tracker) -  Federal authorities have indicted a Pennsylvania financial advisor on charges that she orchestrated a "massive Ponzi scheme" that may have duped hundreds of victims out of millions of dollars.  Patricia S. Miller, 67, was charged with five counts of wire fraud by the U.S. Attorney for Massachusetts.  If convicted of the charges, Miller could face up to twenty years in federal prison for each count as well as up to a $250,000 fine.  Miller served as a financial advisor with several brokerage firms, most recently with Investors Capital Corp in McMurray, Pennsylvania.  Using her position as a financial advisor, Miller solicited potential investors for "investment clubs" that offered high rates of return through purported investments in fixed-income notes and other investments.  According to the indictment, investors entrusted millions of dollars towards these "investment clubs," some of which were known as KS Investments and Buckharbor.

Mary Jo White Speaks On FCPA Self Reporting and Cooperation (FCPA Blog) - SEC chair Mary Jo White spoke Monday at Stanford University's Rock Center for Corporate Governance. Her talk was called "A few things directors should know about the SEC." She spent some time describing what should happen after your company finds a possible FCPA violation.

Whistleblowers Increasing On Wall Street (NY Post) -  In the post-Dodd-Frank world, every Wall Street bank, it seems, has a rat.  This year has marked a turning point for regulatory action against the country’s largest financial institutions, with federal and state agencies moving beyond the misdeeds of the 2008 financial crisis and devoting attention to other fraudulent schemes, including money-laundering, tax-dodging and predatory trading.

Former McKinsey Partner Takes Stand Against Another Rajaratnam (Reuters)A former McKinsey & Co partner whose testimony helped convict Raj Rajaratnam for insider trading returned to court on Thursday to testify against the Galleon Group founder's younger brother, Rengan Rajaratnam.  Anil Kumar, once a top partner at the elite consulting firm, told jurors in New York federal court that for years he leaked information to Raj Rajaratnam about his client Advanced Micro Devices Inc (AMD.N), including a 2008 deal involving an Abu Dhabi fund.

Company Hires Ex-Cons To Clean Up People's Lives (Yahoo Finance)Clutter Cleaner cleans up the messiest homes in America. The kind seen on reality shows like A&E’s "Hoarders" (in which the company appeared in over 60 episodes).  “Something tragic has happened in these people’s lives,” says owner Matt Paxton. “So we go in very delicately and help them through the process of cleaning up.”


Justice Served Up June 11 2014

Wed, 2014-06-11 06:37 -- walt

Here is what we are reading today:

The Wheel of Misfortune, How Judges Are Picked For Trials (Forbes) - Walt Pavlo received a blog submission from an avid reader (thank you) who faced the federal criminal system ... and lost.  Now the person has some views and we wanted to share them with all of you.

Rationalizing Bribery:  Corruption Has No Witnesses (Corporate Compliance Insights) - his article addresses the reality that there are usually no witnesses to overseas discussions involving an actual or potentially corrupt transaction.  As tweeted by Ben DiPietro, Wall Street Journal Reporter,  @BenDiPietro1 during my interview with Wall Street Journal Reporter Chris Matthews at the April 23, 2014 Dow Jones Global Compliance Symposium (DJGCS):

Indiana Man Gets 18 Years Prison For Ponzi Scheme (Ponzi Tracker) - An Indiana man received an eighteen-year prison sentence for operating a Ponzi scheme that duped victims out of at least $1.5 million.  Rudolf “Rudi” Pameijer, of Johnson County, Indiana, received the sentence from Johnson County Judge Mark Floyd, who also ordered Pameijer to pay $1.8 million in restitution to his defrauded victims.

Ex-Councilman Offered Tens Of Thousands To Undercover Agent (NY Post) -  Former City Councilman Dan Halloran offered to dole out tens of thousands of dollars in no-show city consulting work to an undercover agent in exchange for funds to boost a congressional run — and then demanded to be paid even after losing the race, the federal agent told jurors Monday.  Jurors at the White Plains federal corruption trial of Halloran, state Sen. Malcolm Smith and Queens GOP operative Vincent Tabone also heard audiotape of Halloran telling the agent that he’ll take his money in cash.

Federal Correctional Officer Heads To Prison For Cell Phone Smuggling Into Prison (Inforney) - A former guard at a federal prison has been sentenced to prison for working with an inmate to smuggle contraband, including cell phones, into Big Springs Correctional Center in Texas.

former Correctional Officer at Big Spring Correctional Center (BSCC), Matthew Castaneda, 24, and an inmate at BSCC, Ferdinand Trinidad, 45, have been sentenced for offenses related to contraband smuggling at the facility, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. - See more at: http://inforney.com/texas/item/1904-former-correctional-officer-and-inma...
former Correctional Officer at Big Spring Correctional Center (BSCC), Matthew Castaneda, 24, and an inmate at BSCC, Ferdinand Trinidad, 45, have been sentenced for offenses related to contraband smuggling at the facility, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. - See more at: http://inforney.com/texas/item/1904-former-correctional-officer-and-inma... gu

An Inmate Gives Update From Federal Prison (KymKemp) - A former marijuana farmer is not in federal prison and writing about the experience.  Brett McFarland wrote, "You have actively covered my legal story since federal agents first stormed our tranquil coastal community back in July of 2012 to arrest my brother Sean. I could not speak with you during the course of the investigation for obvious reasons, but now that the case has been adjudicated I see no reason not to be perfectly candid."  Let's hear it


Justice Served Up June 9 2014

Sun, 2014-06-08 22:10 -- walt
English: Hotel / Casino New York-New York in L...

English: Hotel / Casino New York-New York in Las Vegas. Français : L'hôtel-Casino New York-New York à Las Vegas, dans le Nevada. (Photo credit: Wikipedia)

Here is what we are reading today:

Gambler Linked To Ichan-Mickelson Faced $15 Million Loss (Bloomberg) - William “Billy” Walters, the Las Vegas gambler U.S. authorities are said to be investigating in connection with possible insider trading in 2011 and 2012, was at the time facing a multimillion-dollar debt to the government over a soured golf-course deal, according to court records.  In early 2011, Walters told CBS’s “60 Minutes” in a rare interview that he wagered millions of dollars on football and basketball and had never had a losing year as one of Vegas’s biggest sports bettors. Walters had a $20 million jet and seven homes, the program reported.

SEC Loses Another Insider Trading Case To Former STEC CEO (Bloomberg) -  The U.S. Securities and Exchange Commission, in a third insider-trading trial defeat in the past year, lost its lawsuit claiming STEC Inc.’s former chief executive officer made $134 million by selling stock before divulging a sales setback to investors.  Federal jurors in Santa Ana, California, returned their verdict on the first day of deliberations.  The SEC claimed Manouchehr Moshayedi, who co-founded the maker of computer-storage cards with his two brothers in 1990, sold 4.5 million STEC shares in an August 2009 secondary offering after learning that a major customer, EMC Corp. (EMC), would scale back purchases of the ZeusIOPS flash memory product.

Fmr IRS Worker Sentenced To Prison For Tax Fraud (OnLineAthens) - Federal prosecutors say a former Internal Revenue Service employee has been sentenced in a tax fraud and identity theft scheme.  Officials say 47-year-old Missy Sledge of Atlanta has been sentenced to four years and nine months in prison on charges of mail fraud and aggravated identity theft.

Testimony That State Senator Funneled Money To Lawmakers (NY Times) - A real estate developer from Rockland County came to New York City dangling tens of thousands of dollars in cash and checks and slowly began to set a trap. State Senator Malcolm A. Smith, federal prosecutors tried to demonstrate on Friday, took the bait.  In secretly recorded meetings in restaurants in the city and Rockland County and in late-night telephone conversations in 2012, Moses Stern, a developer based in Monsey, N.Y., turned over checks for $12,000 and $15,000 to Mr. Smith so he could spread campaign contributions to Senate colleagues facing difficult primaries who might reward Mr. Smith by voting to restore him as the chamber’s Democratic leader.

Ponzi Schemer's Lawyer: "Pay Me Out Of Funds Earmarked For Victims (Ponzi Tracker) - A Pennsylvania lawyer is drawing fire from prosecutors after his request that a portion of funds seized from his client, who pleaded guilty to a $10 million Ponzi scheme, be used to pay legal bills instead of being distributed to victims.  George Heitczman, a Bethlehem, Pennsylvania lawyer, served as counsel to Richard A. Freer, who pleaded guilty to 181 counts of theft on charges he operated a Ponzi scheme that duped victims out of at least $10 million.  Freer was sentenced last month to serve at least 12 years in prison.

Feds Crack Down On Penny Stock Sales In South Florida (Sun-Sentinel) -  A 3½-year-old investation into investment fraud in South Florida has resulted in 180 arrests, federal officials said this week.  Courts have ordered $1.8 billion in restitution.  In the fiscal year that ended Sept. 30, South Florida led the nation in convictions for securities and investment fraud, said FBI Supervisory Special Agent David Nanz, who is in charge of those investigations here. It continues to be a top metro area for such cases, along with New York and Los Angeles, he said.

Michigan Men Busted In Misuse of Grant Money (MLive) - Two Ada, MI area men are charged with felonies after police say they misused more than $300,000 in state grant funds, using some of the money to pay for expensive dinners and possibly a "gentleman's club" in Las Vegas.  Gardner Klaasen, 46, and David Valdiserri, 47, are charged with false pretenses involving more than $100,000. They were arraigned Friday, June 6, in Montcalm County District Court.

"Golf Addict" Arrested For Stealing Clubs (NY Post) - Police say a man suspected of taking $9,200 worth of clubs and other merchandise from the pro shop at Gold Mountain Golf Course had no criminal history, but appears to be addicted to golf.

After Prison, Free But Alone (Economist) -  THE prison gate swings shut and a man stumbles blinking into the desert sunshine. Looking up, he sees a blonde with big sunglasses and a headscarf waiting for him in a convertible. That is how screenwriters imagine the scene, but the reality of leaving prison is grimmer.  Prisoners are often released with no supervision and no help finding a job. That makes them more likely to reoffend. According to a report published on June 4th by Pew, a think-tank, the number freed with no form of parole has more than doubled over the past 20 years, though this varies a lot from state to state. In Florida 64% of prisoners leave like this; in California the figure is less than 1%

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Justice Served Up April 22 2014

Mon, 2014-04-21 20:11 -- walt
FBI Badge & gun.

FBI Badge & gun. (Photo credit: Wikipedia)

Here is what we are reading today:

Ponzi Scheme?  TelexFree Raided By Authorities (Boston Globe) -  Federal agents from the FBI and Homeland Security have raided the Marlborough headquarters of TelexFree Inc. in the intensifying investigation of an alleged billion-dollar scheme that has the potential to rank among the largest international financial frauds.  Regulators accused the company, which sells Internet telephone services, of luring investors from immigrant communities who sometimes put in their life savings. Some distraught victims have threatened suicide.

What's Next For TelexFree Investors (Ponzi Tracker) - Last week was a busy week for TelexFree.  After filing for bankruptcy protection on Monday in a Nevada bankruptcy court, state and federal securities regulators filed civil actions accusing the company of operating a massive pyramid and Ponzi scheme that, by one estimate, may have raised $1 billion from investors worldwide.  That same day, federal agents from the FBI and the Department of Homeland Security raided the company's headquarters in Marlborough, Massachusetts, which later drew headlines after authorities discovered TelexFree's Chief Financial Officer attempting to remove $38 million in cashier's checks from the offices. (The company later claimed there was no nefarious purpose behind this effort.)

Tennessee Focuses On Healthcare Fraud (The Tennessean) -  Health care lawyer Matthew Curley is in a room on top of the Nashville skyline, his hand resting on a glossy book chronicling dozens of stories of health care fraud.  He and Anna Grizzle, both soft-spoken and cerulean blue-eyed, work on Bass Berry & Sims’ health care fraud task force. They were part of the team that published the firm’s 2013 Healthcare Fraud and Abuse Review, which is sitting near Curley on a conference room table.  For attorneys who specialize in health care fraud, business is good. That’s because the feds are turbo-charging investigation efforts.

Entrapment For Good Law Enforcement? (Police One) - The FBI used millions of dollars, liquor and cigarettes seized in other cases and more than a dozen undercover operatives in an elaborate, seven-year sting operation targeting a San Francisco Chinatown association thought to be a front for a notorious organized crime syndicate.  The agents, posing as honest businessmen and a Mafia figure, spent freely and aggressively offered their targets criminal schemes, leading to the indictment of 29 people — including state Sen. Leland Yee — on charges that included money laundering, public corruption and gun trafficking.

Bootlegging Movies Ends In Probation For Alabama Man (Nery Advertisesr) - An Alabama man faces two years in federal prison after pleading guilty to copyright infringement in November.  In a news release, prosecutors say 54-year-old Augustus Powell, of Huntsville, Ala. was stopped by police in Louisiana three times in one year and found in possession of thousands of bootlegged movies and music.  U.S. District Judge Richard T. Haik in Lafayette, La., ordered Powell to undergo three years of supervised release last week and pay $7,000 in restitution to the Motion Picture Association of America.

Knockoff Batteries Could Land Couple In Prison (Courthouse News) - A Simi Valley businessman was convicted of selling $2.6 million in cheap, knock-off batteries for emergency backup power on nuclear aircraft carriers and other Navy vessels.  A federal jury last week convicted Didier De Nier, 63, of five counts of wire fraud and one count of conspiracy to defraud the United States.

Receptionist Used Doctors Rx Pad To Get and Sell Drugs (State Journal) - A Beckley woman who stole a prescription pad from her former employer will spend 14 months in federal prison for obtaining oxycodone by fraud, U.S. Attorney Booth Goodwin said.  Tina Marie Richmond, 41, was working as a receptionist at a doctor’s office in the Beckley area when she stole the prescription pad, which had the doctor's DEA registration number on it. She then forged the doctor's signature on prescriptions, she admitted to the court in December.

Prison Reform Has Red And Blue Working Together (Los Angeles Times) - For decades the Republican Party prided itself for being tough on crime, often putting Democrats on the defensive by pushing for longer, mandatory sentences for convicts.  In 1988, that hard-line stance helped sink the presidential dreams of then-Massachusetts Gov. Michael Dukakis, who was blamed in Republican TV ads for having released convicted killer Willie Horton as part of a weekend furlough program. (Horton failed to return after a furlough and went on to commit robbery and rape.)   But now, as the U.S. Senate prepares to take up the most far-reaching changes in years to federal sentencing and parole guidelines, some conservative Republicans are flipping sides, driven by concerns about the rising cost of caring for prisoners and calls for compassion from conservative religious groups seeking to rehabilitate convicts.

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Justice Served Up February 28 2014

Thu, 2014-02-27 21:23 -- walt

Here is what we are reading today:

Madoff's Fmr Employee Confronted With Backdated Records (Bloomberg) - The woman who ran Bernard Madoff’s investment advisory business admitted she didn’t tell federal investigators in 2009 that her duties included backdating trades and turning stocks into bonds with a few pen-strokes.  Annette Bongiorno, accused with four former colleagues of aiding Madoff’s $17 billion Ponzi scheme, acknowledged in cross-examination today that she omitted details of some of her biggest backdating projects when she was interviewed by the government after the con man’s arrest. She did so, even though she has claimed not to have known that backdating was illegal.

Study Finds SEC Staffers Sold Stock Of Companies Prior To Cases Being Disclosed (Bloomberg) - People working for the U.S. Securities and Exchange Commission who owned stock in companies under investigation were more likely to sell shares than other investors in the months before the agency announced it was taking enforcement actions, according to a new academic paper.

New York's AG Inventing New Insider Trading "Crime" (Bloomberg View) -  Today Eric Schneiderman said his office has reached agreements with 18 financial-services firms, most of which are Wall Street banks, to "stop their practice of cooperating with analyst surveys administered by certain elite, technologically sophisticated clients at the expense of others." He said this practice "can put the market at large at an unfair disadvantage." And maybe he's right about that.  But who said life is fair?

Mayor Trenton Removed After Conviction (WSJ) - A judge has removed the mayor of New Jersey's capital city from office 19 days after a jury convicted him of corruption. Trenton Mayor Tony Mack had fought to remain in office until he is sentenced to prison. That is scheduled for May, although Mr. Mack is also asking for the conviction to be thrown out.  Judge Mary Jacobson on Wednesday rejected his arguments and signed an order removing him from office.

UNC Cheating Scandal and The Whistleblower Retaliation (BusinessWeek) - Mary Willingham had been feeding information since 2011 about academic fraud to a reporter with the News & Observer in Raleigh. The coverage had put UNC on the defensive. But rather than seriously investigate the connection between sports and classroom corruption, top university administrators used vague committee reports to obfuscate the issue. Willingham’s conversations with the elderly Friday hadn’t addressed the tradecraft of whistle-blowing. Still, he’d encouraged her to act on her concerns. “At his memorial,” she says, “I realized I had to speak up.” In November 2012, she went public with what she knew.

Fraud Trial Opens For Fmr Sentinel Management Group CEO (Chicago Tribune) - Eric Bloom was still in his 20s when he took over his father’s Sentinel Management Group Inc., a well-connected Northbrook money management firm known for always paying dividends on safe, reliable investments.  But prosecutors say Bloom secretly began exposing his well-heeled customers to an increasingly risky mix of leveraged deals, leading to the company’s spectacular collapse in 2007 and the loss of more than half a billion dollars to about 70 investor groups.

Details Of $14M Whistleblower Award Revealed (WSJ) -  A record $14 million whistleblower award paid by the Securities and Exchange Commission last year was for a tip about an alleged Chicago-based scheme to defraud foreign investors seeking U.S. residency, according to people familiar with the payment.  The award is by far the biggest arising from a 2010 law designed in part to encourage tipsters to come forward with information about financial fraud. The SEC announced the payment in October without naming the whistleblower or the case, as the law gives tipsters the option to remain anonymous.

Chilean Shipping Company Pleads To Price Fixing (Maritime Exec) - Compañía Sud Americana de Vapores S.A. (CSAV), a Chilean corporation, has agreed to plead guilty and to pay an $8.9 million criminal fine for its involvement in a conspiracy to fix prices, allocate customers and rig bids of international ocean shipping services for roll-on, roll-off cargo, such as cars and trucks, to and from the United States and elsewhere, the Department of Justice announced.

Five Indicted For Fraud Following Joplin, MO Tornado (KSPR) - A federal grand jury indicted five Joplin-area residents, in separate cases, for fraudulently receiving (or applying for) federal disaster benefits following the tornado that struck the city of Joplin on May 22, 2011.  The tornado killed 158 people and caused more than $2.9 billion in damage

Woman Steals $1.2M From Non-Profit Over 9 Years (Penn Live) - A former employee of the Bon-Ton Stores Foundation will serve 5 years in federal prison in connection with a $1.3 million theft from the charitable group.

Federal Inmates In Morgantown Training Dogs For PTSD Veterans (BOP.gov) - In November 2013, FCI Morgantown began a Veterans-to-Veterans Service Dog Training Program. The service dog program will provide training and certification to 21 inmates who will become service dog trainers. The inmates have been carefully screened and selected for this particular training. All of them are military veterans and will be training dogs for veterans in the community who have mobility impairments and/or Post Traumatic Stress Disorder (PTSD).




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