“Investments Sold Through Free Lunch Seminar Turned Out to be a Ponzi Scheme”

“The men allegedly conducted estate planning seminars, aimed primarily at retirees …, and sold promissory notes for investments in Turkish bonds to “individuals with substantial savings….”

“As through this world you wander you’ll see lots of funny men, some will rob you with a six gun and some with a fountain pen” (Woody Guthrie, Pretty Boy Floyd, 1939).

“Free lunch” seminars are a favorite tactic used by today’s fountain pen robbers who target mostly elderly retirees with substantial assets.  They know that audience members are unlikely to be vigilant investors looking for fraud or they would not be there in the first place.  Unfortunately, many audience members come there looking for someone to trust.  That is often their first and fatal mistake.  One recent example of this can be found in an article entitled “Men Charged in $28 Million Investment Scheme.” (more…)

The AP and State Regulators Warn Against Affinity Fraud

The Associated Press just published a great article warning investors about affinity fraud.  While you might not fall for the latest get rich quick scam that pops up in an ad while you are on the internet, “when you know someone through a group, it’s easier to drop your guard.”State Regulators are working hard to get [...]

The Associated Press just published a great article warning investors about affinity fraud.  While you might not fall for the latest get rich quick scam that pops up in an ad while you are on the internet, “when you know someone through a group, it’s easier to drop your guard.”State Regulators are working hard to get the word out and bust up scams, before they claim more victims, but due to the state of the economy, and scamsters such as Madoff ripping off investors, people are looking for “safe” investments- which makes them more likely to take the word of a friend or a fellow church-goer. AND it’s not that the friend is lying to you about the great investment opportunity that he’s involved with- it’s just that he hasn’t realized that he’s being duped as well.The article mentions some tips to avoid being “tricked”: (more…)

 

Norman Hsu Back in the News

When Investor’s Watchdog began blogging, the name Norman Hsu was on the lips of every conservative talk radio host.  A substantial contributor to the campaign of Senator Hillary Clinton, Hsu was a very successful scam artist.  After skipping a court appearance and attempting suicide on a cross country train trip, Hsu was arrested at the hospital [...]

When Investor’s Watchdog began blogging, the name Norman Hsu was on the lips of every conservative talk radio host.  A substantial contributor to the campaign of Senator Hillary Clinton, Hsu was a very successful scam artist.  After skipping a court appearance and attempting suicide on a cross country train trip, Hsu was arrested at the hospital after having his stomach pumped.   (more…)

 

Tell Me Again Why ‘It Could Never Happen to You’

According to the Wall Street Journal, Lehman Brothers may have been defrauded in a $250 million swindle worthy of The Sting or The Spanish Prisoner.  At the center of the swindle are loans that Lehman made to a fund run by a medical consulting company owned by LTT Bio-Pharma Co.–a Japanese bio-tech company.  As security for those loans, Lehman believed [...]

According to the Wall Street Journal, Lehman Brothers may have been defrauded in a $250 million swindle worthy of The Sting or The Spanish Prisoner.  At the center of the swindle are loans that Lehman made to a fund run by a medical consulting company owned by LTT Bio-Pharma Co.–a Japanese bio-tech company.  As security for those loans, Lehman believed that it received certificates from Marubeni Corp., one of Japan’s biggest trading companies.  Marubeni says otherwise.   (more…)

 

Market’s Rollercoaster Ride Likely to Expose Broker Misconduct

Times were good for quite awhile.  Every month when you opened your brokerage account statement, you looked at the figure at the bottom and saw that it was more than it had been the previous month.  If you are like most investors, you did little else to evaluate whether your broker had served your interests [...]

Times were good for quite awhile.  Every month when you opened your brokerage account statement, you looked at the figure at the bottom and saw that it was more than it had been the previous month.  If you are like most investors, you did little else to evaluate whether your broker had served your interests that month.  (more…)

 

Mastermind Behind ‘N Sync and Backstreet Boys Reveals the ‘Art of the Ponzi’

“How the mighty have fallen.”  2 Samuel 1:19.
Lou Pearlman–the mastermind behind ‘N Sync and the Backstreet Boys–now sits in an Orlando jail, having detailed his 20-year life as a Ponzi scheme operator in a signed plea agreement.  The details of how Pearlman’s Ponzi scheme raised $300 million provide a peek into how the most successful Ponzi operators maintain the aura [...]

“How the mighty have fallen.”  2 Samuel 1:19.

Lou Pearlman–the mastermind behind ‘N Sync and the Backstreet Boys–now sits in an Orlando jail, having detailed his 20-year life as a Ponzi scheme operator in a signed plea agreement.  The details of how Pearlman’s Ponzi scheme raised $300 million provide a peek into how the most successful Ponzi operators maintain the aura of legitimacy so necessary to their work.  (more…)

 

Bedeviling Christians from Playboy to Ponzi

The FBI has raided the office of a California company called Christians in Crisis Investment Fund.  Stephen K. Wilson and his wife, Christina Silvas are under investigation for money laundering and running  a Ponzi scheme through that business.    
Silvas had her first fifteen minutes of fame in 2002  when a Christian school that her daughter attended told Silvas [...]

The FBI has raided the office of a California company called Christians in Crisis Investment Fund.  Stephen K. Wilson and his wife, Christina Silvas are under investigation for money laundering and running  a Ponzi scheme through that business.    

Silvas had her first fifteen minutes of fame in 2002  when a Christian school that her daughter attended told Silvas to quit her job as a stripper or her child would be expelled from the school.  The flap landed in the national media and got Silvas a photo shoot with Playboy magazine. (more…)

 

The ‘Take Away’ Pitch

No one wants anything more than the thing they can’t have.  The scam artist knows the human mind; knows that scarcity makes things more valuable.  Diamonds are expensive because there are relatively few of them.  The Mona Lisa is priceless because there is only one of her.

No one wants anything more than the thing they can’t have.  The scam artist knows the human mind; knows that scarcity makes things more valuable.  Diamonds are expensive because there are relatively few of them.  The Mona Lisa is priceless because there is only one of her. (more…)

 

Ponzi Operator’s Surrender of Assets Just a Drop in the Ocean

Among the trappings of wealth that Wesley Snyder accumulated in the three years he ran a Ponzi scheme under the name Personal Financial Management Inc., are a house in Oley, Pennsylvania, two office buildings, a North Carolina time-share condominium, bank accounts, two cars, and 12 life insurance policies.  The two office buildings are valued at $525,000.  The [...]

Among the trappings of wealth that Wesley Snyder accumulated in the three years he ran a Ponzi scheme under the name Personal Financial Management Inc., are a house in Oley, Pennsylvania, two office buildings, a North Carolina time-share condominium, bank accounts, two cars, and 12 life insurance policies.  The two office buildings are valued at $525,000.  The home in Oley is valued at $200,000.  The life insurance policies have a face amount of $12 million, but a net cash surrender value of only $111,000.  Unfortunately the value of all of the assets after mortgages and other indebtedness is paid is only about $165,000. 

Don Spatz of the Reading Eagle reports: (more…)

 

Don’t Invest with Stars in Your Eyes

Former San Francisco 49ers Coach Steve Mariucci knew Frank Garza, Jr, who owned a tax service on Powell Street in San Francisco.  When Garza told Mariucci and others that he could get them in on a “rare investment opportunity” in Aerie Networks, a Colorado fiber-optics company, Mariucci invested $1 million, and other investors added another [...]

Former San Francisco 49ers Coach Steve Mariucci knew Frank Garza, Jr, who owned a tax service on Powell Street in San Francisco.  When Garza told Mariucci and others that he could get them in on a “rare investment opportunity” in Aerie Networks, a Colorado fiber-optics company, Mariucci invested $1 million, and other investors added another $2.8 million.  Unbeknownst to any of the investors, Garza diverted $1 million of those investments to his personal use, buying a penthouse apartment and building a home in Arizona.    (more…)

 

One for the Record Books

Today, police led Val E. Southwick out of his office in handcuffs bringing to a close what prosecutors are calling perhaps the biggest scam in Utah history.  For the 800 people who invested through Southwick, though, today was only the beginning of a long journey during which they will learn how much, if any, of their nest eggs [...]

Today, police led Val E. Southwick out of his office in handcuffs bringing to a close what prosecutors are calling perhaps the biggest scam in Utah history.  For the 800 people who invested through Southwick, though, today was only the beginning of a long journey during which they will learn how much, if any, of their nest eggs have survived the scam. (more…)

 

What is it About Polk County, Florida?

In 1992, there was excitement in Lakeland, Florida.  A local businessman, Karl Rehberg had found a way to produce biodiesel fuel from used restaurant cooking grease.  That excitement made it relatively easy for Rehberg and his wife, Helen, to sell stock in their company, NOPEC, to 2500 people not just in Polk County, but in other states [...]

In 1992, there was excitement in Lakeland, Florida.  A local businessman, Karl Rehberg had found a way to produce biodiesel fuel from used restaurant cooking grease.  That excitement made it relatively easy for Rehberg and his wife, Helen, to sell stock in their company, NOPEC, to 2500 people not just in Polk County, but in other states as well.  Between 1992 and 1997, they raised $20.6 million through those sales. (more…)

 

They Can Run, But They Can’t Hide

They can run, but they can’t hide.  Unfortunately, they can spend all your money while they are on the run. 
According to federal authorities, Charles Nolon Bush, 68, of western Washington, ran a Ponzi scheme for four years, between 1998 and 2002, promising investors high yields and giving them the illusion of profits by using money invested by later marks [...]

They can run, but they can’t hide.  Unfortunately, they can spend all your money while they are on the run. 

According to federal authorities, Charles Nolon Bush, 68, of western Washington, ran a Ponzi scheme for four years, between 1998 and 2002, promising investors high yields and giving them the illusion of profits by using money invested by later marks to make payments to earlier marks.   Bush operated under several company names, including Hulaman Management Services, Global Dominion Financial Services, and Cornerstone Institute. (more…)

 

Hedge Fund Case Highlights Danger to Baby Boomers

No recent case better highlights the danger facing baby boomers than this one. 
According to the U.S. Securities and Exchange Commission, Coadum Advisors, Inc. of Holladay, Utah sold four separate investment funds, raising a total of $30 million from at least 150 investors.   Thomas Repke of Salt Lake City and James Jeffery of Belleville, Ontario were [...]

No recent case better highlights the danger facing baby boomers than this one. 

According to the U.S. Securities and Exchange Commission, Coadum Advisors, Inc. of Holladay, Utah sold four separate investment funds, raising a total of $30 million from at least 150 investors.   Thomas Repke of Salt Lake City and James Jeffery of Belleville, Ontario were the people behind the companies.

According to the SEC, Repke, Jeffery, Coadum and related companies fraudulently promised investors “no risk” returns of between 2.5% and 8% per month, and created account statements showing that investors were earning those returns when in fact none of the investments made any money.  The SEC also alleged that the defendants “borrowed” $3 million in investor deposits to pay the monthly returns that they had led investors to expect, in classic Ponzi fashion. (more…)

 

Montana Operates Texas Ponzi

According to federal prosecutors in the Southern District of Texas, Mark Montana ran a Ponzi scheme for five years, from 1999 to 2004, ultimately netting more than $10 million.  Operating through a company called M&M Financial, Montana used money from later marks to pay off earlier marks in classic Ponzi fashion. 

According to federal prosecutors in the Southern District of Texas, Mark Montana ran a Ponzi scheme for five years, from 1999 to 2004, ultimately netting more than $10 million.  Operating through a company called M&M Financial, Montana used money from later marks to pay off earlier marks in classic Ponzi fashion.  (more…)

 

The Ponzi Epidemic

WSBT in Detroit reports:
A suburban Detroit man was in court to answer charges of running a so-called Ponzi scheme.
Fifty-two-year-old Raymond Joseph of Bloomfield Hills was arraigned Thursday on two counts of wire fraud, two counts of transportation of stolen money or property, and nine counts of monetary transactions in criminally derived property.

WSBT in Detroit reports:

A suburban Detroit man was in court to answer charges of running a so-called Ponzi scheme.

Fifty-two-year-old Raymond Joseph of Bloomfield Hills was arraigned Thursday on two counts of wire fraud, two counts of transportation of stolen money or property, and nine counts of monetary transactions in criminally derived property. (more…)

 

Why Aren’t These People in Prison?

Following a series of posts about scam artists who pick up where they left off after serving a prison sentence for fraud, comes a case that reminds us that many scam artists go from scam to scam without ever facing a criminal prosecution. 
They’re at it again.  The SEC alleges that Gerald H. and Marie A. Levine (the [...]

Following a series of posts about scam artists who pick up where they left off after serving a prison sentence for fraud, comes a case that reminds us that many scam artists go from scam to scam without ever facing a criminal prosecution. 

They’re at it again.  The SEC alleges that Gerald H. and Marie A. Levine (the Levines) have misappropriated $1.4 million raised through fraudulent sales of shares in bogus penny stock companies: Avitech LifeSciences, Inc., Biomaxx Systems, Inc., Evolution Global Capital Partners, Inc., Green Machine Development Corp., and Xiiva Holdings, Inc.     (more…)

 

Supreme Court Sides with Wall Street Against Main Street

With less than a year until the elections of 2008, the Supreme Court’s decision in Stoneridge Investment Partners v. Scientific Atlanta shows the importance of electing legislators and a president who understand that protecting Main Street is more important than protecting Wall Street. 

With less than a year until the elections of 2008, the Supreme Court’s decision in Stoneridge Investment Partners v. Scientific Atlanta shows the importance of electing legislators and a president who understand that protecting Main Street is more important than protecting Wall Street.  (more…)

 

Old Dogs — Old Tricks

If you ever met David McDowell Robinson, you likely walked away under the impression that he was a licensed attorney who had earned a doctorate and had over 30 year’s experience in real estate.  You would have been impressed.  He was one of those people who seem to naturally inspire trust.

If you ever met David McDowell Robinson, you likely walked away under the impression that he was a licensed attorney who had earned a doctorate and had over 30 year’s experience in real estate.  You would have been impressed.  He was one of those people who seem to naturally inspire trust. (more…)

 

Australia Seeking Extradition of Accused Fraudster

Bad guys like to run.  At the SEC, we dealt often with the threat that promoters of fraudulent scams would flee overseas before we could take steps to keep them in the country.  In many emergency actions to shut down an ongoing fraud, the SEC asks that a federal judge to order the promoter to [...]

Bad guys like to run.  At the SEC, we dealt often with the threat that promoters of fraudulent scams would flee overseas before we could take steps to keep them in the country.  In many emergency actions to shut down an ongoing fraud, the SEC asks that a federal judge to order the promoter to turn over his passport. Bad guys run this way, too.  Former director of The Streetwise Groups, Kovelan Bangaru, has been in custody in the United States since his arrest in April.  The arrest was on the basis of 16 warrants obtained by the Australian Securities and Investments Commission (ASIC). (more…)