Mundane Motivations

The roots of most financial frauds reach into motivations with which we are all familiar.

Few people who end up as Ponzi scamsters set out to become infamous. None that I know of aspire to be despised and imprisoned. They set out with something else in mind. And oftentimes that something else is something that we’ve all desired: to make it through a difficult financial stretch. Who among us, besides the Mitt Romneys of the world, has not wondered how we are going to make it through a time in which our expenses far exceed our income? Today, from the UK, comes a story about how that very familiar feeling led one man to infamy. According to the UK’s Serious Fraud Office: (more…)

UK Fraud a Veritable Scam Encyclopedia

Investors who think that they’ve done a thorough due diligence investigation are left scratching their heads and wondering how they missed the fraud.

Investment fraud is not an American problem; it’s a world problem. While American frauds give us more than enough cases to discuss on this blog, there are even more cases overseas. Recent guilty pleas in the United Kingdom show that overseas scamsters are just as adaptable, prepared, and audacious as the American characters I describe in The Vigilant Investor. The next book might be about scams in other countries; I’ve certainly got enough material. According to Britain’s Serious Fraud Office: (more…)

$30 Million South Florida Ponzi

The scamster can count on current investors to help supply the endless need for new investors.

According to the U.S. Securities and Exchange Commission (SEC), James Clements and Zeina Smidi of Plantation, Florida, though their companies, MRT, LLC; MRT Holdings, LTD; and Maximum Return Transaction, LLC, promised investors an attractive monthly return to be generated through trading foreign currencies. If the currency trading generated more than the promised monthly returns, Clements and Zeina kept the rest. The SEC alleges that those promises allowed the Clements and Smidi to raise more than $30 million from hundreds of investors between 2005 and 2007 and that the whole enterprise was a fraud. According to the SEC’s press release about the case:   (more…)

You Are On The List

Britain’s Financial Services Authority (“FSA”) has exposed a reality that few appreciate: scam artists know your name. According to a press release from the FSA: The Financial Services Authority (FSA) and City of London Police (CoLP) have contacted 1,000 people across the UK to warn them that their personal details are on a ‘master list’ being used by fraudsters to target and sell them worthless shares.

Britain’s Financial Services Authority (“FSA”) has exposed a reality that few appreciate: scam artists know your name.  According to a press release from the FSA: (more…)

UK’s Serious Fraud Office Charges Seven in Connection with International Fraud

British authorities have charged seven people with conspiring to defraud UK investors out of more than $100 million through a series of boiler room operations.

British authorities have charged seven people with conspiring to defraud UK investors out of more than $100 million through a series of boiler room operations.  The brokerage firms involved, Tresadern & Partners SL,  Pricestone Group SL and Anderson McCormack SL, were based in Spain.  Through those firms the defendants allegedly sold UK investors shares in sham American companies.  The authorities alleged that the market for the shares involved was created through market manipulation involving false press releases and artificially created trading volume.  The allegations sound very much like the pump and dump schemes that constantly plague American investors. (more…)

British Case Shows the Multi-National Nature of Financial Fraud

British Case Shows the Multi-National Nature of Financial Fraud

Britain’s Serious Fraud Office has announced the sentencing of Robert Allan Scott of Newmarket, England on charges that he cooperated in the sale of worthless securities by a boiler room operation based out of Spain.  According to the SFO: (more…)

UK Case Highlights Characteristics of a Modern Ponzi Scheme

A jury in Harrow Crown Court northwest of London has convicted Kevin Foster of operating a Ponzi scheme that defrauded hundreds of investors out more than 34 million pounds. Foster’s scam is a good primer on how many high profile scams operate today.

A jury in Harrow Crown Court northwest of London has convicted Kevin Foster of operating a Ponzi scheme that defrauded hundreds of investors out more than 34 million pounds.  Foster’s scam is a good primer on how many high profile scams operate today. (more…)

UK’s Serious Fraud Office Investigates Possible 20 Million Pound Financial Scam

The island of Majorca is off the Mediteranean Coast of Spain.  For many years it has been a favorite vacation spot for Brittons seeking sunshine and retirement.  The UK’s Serious Fraud office has launched an investigation into a possible 20 million pound fraud that targeted British retirees living on the island.  Specifically, the SFO believes [...]

The island of Majorca is off the Mediteranean Coast of Spain.  For many years it has been a favorite vacation spot for Brittons seeking sunshine and retirement.  The UK’s Serious Fraud office has launched an investigation into a possible 20 million pound fraud that targeted British retirees living on the island.  Specifically, the SFO believes that John Hirst and his firm Gilher, Inc. “targeted British nationals and other expatriates” living on Majorca with a scheme that promised guaranteed returns.The Times of London described Hirst as follows:

Hirst, who ran the fund for seven years while living on the island, was a well-known figure in the expat community and was a keen cricketer. Most of his clients are thought to have been friends or social acquaintances. It is understood he has returned to Britain but has not contacted the authorities. He told investors he had been diagnosed with leukaemia.

That description is typical in three respects.  First, notice that Hirst was well-known and socially active.  Scam artists are big hits on the cocktail circuit.  They are naturally gifted at engendering trust.  You like them right away.Second, notice many of the alleged victims were friends or social acquaintances.  Running a scam is all about establishing creditbility and trust.  Those who consider you a friend are those most likely to believe that you would never betray their trust.  They are therefore less likely to do a pre-investment investigation that might warn them away from the scam.Finally, notice the claim to have a deadly disease.  Scam artists, when caught, often try to fake their own death or offer some reason why victims ought to pity them.Those who entrusted their money to Hirst are smart people.  They worked hard and saved to afford a comfortable retirement.  Yet, if the SFO finds a fraud, those people likely fell for it because they believed the one thing that all victims of financial scams believe — that it could never happen to them.  If you want to protect what it took you so long to save, do what banks do when they move cash: hire private protection.

 

UK’s Serious Fraud Office Obtains Convictions Against Five Who Operated a Global Financial Scam

The United Kingdom’s Serious Fraud Office (“SFO”) has obtained convictions against five people who defrauded about 1.93 million pounds from 56 investors. Operating under the name Prudential Commercial Investments, the scam targeted retired British ex-pats all over the globe — from the Czech Republic to Malaysia, from Brazil to Pakistan. The scamsters told their victims that [...]

The United Kingdom’s Serious Fraud Office (“SFO”) has obtained convictions against five people who defrauded about 1.93 million pounds from 56 investors. Operating under the name Prudential Commercial Investments, the scam targeted retired British ex-pats all over the globe — from the Czech Republic to Malaysia, from Brazil to Pakistan. The scamsters told their victims that investments would go to make loans for the purchase of valuable commercial property. Instead, the scamsters wired the money off-shore and used it for their personal benefit. The men convicted in connection with the scam are Peter Roope (sentenced to four years and eight months due to an early plea), Gareth Matthews (sentenced to six years reduced to four years due to an early plea), Charles Frisby (sentenced to four years and six months), Douglas Miller (sentenced to three years and six months), and John Roope (sentenced to two years). (more…)

 

UK’s Serious Fraud Office Investigating Cayman Islands Hedge Fund

In the United Kingdom, the Serious Fraud Office (“SFO”) has the ability to file criminal charges against those suspected of engaging in financial fraud.  Recently, the SFO announced that is conducting a criminal investigation of a hedge fund operated in the Cayman Islands, Dynamic Decisions Capital Management Ltd. (“Dynamic Decisions”).  The SFO’s press release reads as follows:

In the United Kingdom, the Serious Fraud Office (“SFO”) has the ability to file criminal charges against those suspected of engaging in financial fraud.  Recently, the SFO announced that is conducting a criminal investigation of a hedge fund operated in the Cayman Islands, Dynamic Decisions Capital Management Ltd. (“Dynamic Decisions”).  The SFO’s press release reads as follows: (more…)