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Kiwi to Face Aussie Charges in June

It is rare these days for a scamster to confine his operations to a single jurisdiction.

One of the more satisfying things about hosting InvestorsWatchblog is seeing where our readers are from. More than half are from outside the United States. We therefore love to cover stories of alleged investment fraud beyond the States. Our brothers and sisters down under will be treated to headlines this summer from a case that spans the globe. According to Stuff.co.nz: (more…)

Ponzi Schemes Surge Down Under

A better restatement of a widely known axiom is, “If it seems too good to be true, you are talking to an amateur scam artist.”

For the past two years, Investor’s Watchdog has been warning that there is tsunami of investment fraud breaking over the world.  We call it the Worldwide Scamdemic.  Officials in Australia are warning citizens that they are living under the shadow of that wave.  According to the International Business Times: (more…)

Sometimes They Try to Hide Here

With regulators closing in and civil lawsuits piling up, Bangaru fled to the United States in July 2005.

Australian authorites have secured the conviction of Kovelan Bangaru, a former director of Streetwise, on 13 counts of fraud.  According to the Australian Securities and Investments Commission (ASIC), Bangaru obtained $9.1 million in fraudulent loans from banks including National Australia Bank, and $3.5 million from investors, before fleeing to the United States.  Writing about the case for The Sydney Morning Herald, journalist Ben Hills says: (more…)

According to an article in smartcompany.com the Australian Securities and Investment Commission (ASIC) has won court approval of a proposal to wind up 13 companies associated with a possible Ponzi scheme.  The ASIC is concerned that the companies may have defrauded $16 million from more than 100 investors in the Victoria area.   The ASIC’s court victory allowed the ASIC to appoint an insolvency expert to wind up the affairs of the companies, including Meloka Pty Ltd, Contango Investments Pty Ltd, DIX-Walker Pty Ltd and Teronte Pty Ltd..  According to the ASIC, Peter van de Steeg, Jonathan Ezzy and Peter Berlowitz of Victoria and Scott Walker of Western Australia are  ”associated with the companies,” which promised profits from real estate investment and foreign currency trading. (more…)

Australian Securities and Investment Commission Secures Conviction of Market Manipulator

Market manipulators monkey with the market price of the shares, pumping the price up through misinformation, then selling out once innocent purchasers snap up the apparently rising shares.

Securities fraud is as widespread as human nature. It happens down under as often as it does in the States, in Europe as often as Canada, in South America as often as Asia. Worldwide, regulators and prosecutors are chasing down those who violate the laws designed to protect investors. The Australian Securities and Investments Commission (“ASIC“) has succeeded in running to ground one such violator. (more…)

Australian Ponzi Scamster Pleads Guilty

Australian Ponzi Scamster Pleads Guilty

Ponzi schemes are as prevalent down under as they are the United States in Europe.  The Australian Securities and Investment Commission (“ASIC”) has shut down a scamster operating in Kew, Victoria.  Mrs Hazel Bernice Bucello, who operated Victorian Finance Broking Services Pty Ltd (“VFBS”), pleaded guilty to defrauding more than $2.5 million from five investors by promising them that their money would be used to provide “birdge financing” and that investors would receive four to five percent per month in interest payments.  Rather than use the money as promised, Bucello used the money of later investors to make payments to earlier investors to lull them into believing that the scam was legitimate. (more…)

Why That ‘Sure Thing’ Isn’t

Why That ‘Sure Thing’ Isn’t

In February 2009 we posted about George Georgiou, accused of manipulating the market in the securities of four micro-cap companies:  Avicena Group, Inc., Neutron Enterprises, Inc., Hydrogen Hybrid Technologies, Inc., and Northern Ethanol, Inc.  Last week a federal jury convicted Georgiou on criminal charges stemming from the same conduct alleged by the SEC.  The SEC’s press release summarizes the allegations against Georgiou: (more…)

Madoff’s Scam Not a One-Man Operation

Madoff’s Scam Not a One-Man Operation

The U.S. Securities and Exchange Commission has charged Daniel Bonventre with assisting in Bernard Madoff’s record-setting Ponzi scheme. According to the SEC, Bonventre was Director of Operations at Bernard Madoff Investment Securities (“BMIS”) and knew that Madoff was not purchasing securities for investor accounts. The SEC alleges:

Bonventre was responsible for the firm’s general ledger and financial statements that were materially misstated because they did not reflect the manner in which investor funds were maintained and used. Bonventure ensured that BMIS financial reports did not reflect the firm’s massive liabilities to investors or the corresponding assets received from investors. To hide the fact that BMIS normally operated at a significant loss, the firm used more than $750 million in investor funds to artificially improve reported revenue and income.

The SEC alleges that Bonventre also helped Madoff, his lieutenant Frank DiPascali, Jr., and others orchestrate lies to investors and regulators when investment advisory operations at BMIS came under review. With Bonventre’s assistance, they made serial misrepresentations to external reviewers by manufacturing reams of false reports and data.

Why don’t people blow the whistle on scams run by their employers? Because of the paycheck. That is why it is never safe to assume that a large operation is a legitimate operation. A handful of people with knowledge, all of them afraid to lose their incomes, can create a scam that lasts for decades and robs thousands of everything they have worked and saved for.

On the Lam for Five Years, Scott Frye Returns to Face Securities Fraud Charges

On the Lam for Five Years, Scott Frye Returns to Face Securities Fraud Charges

Scott Frye left the United States shortly after Alabama regulators charged him with defrauding several Alabamians out of their retirement savings.  He ran to the Philippines where he felt safe enough to start at least two pornographic websites (hardly the actions of someone who thought the law was hot on his trail).  He is now back in the United States having been arrested in Manila several months ago.  With the help of Philippine law enforcement, the FBI nabbed Frye and is returning him to Alabama to face the charges against him. (more…)

SEC Charges Two Sacramento Men with Stealing $10 Million

SEC Charges Two Sacramento Men with Stealing $10 Million

According to the U.S. Securities and Exchange Commission, Lawrence “Lee” Loomis and his father-in-law John Hagener defrauded 100 investors out of $10 million by soliciting investments in supposed loans to homebuyers to be secured by real estate deeds of trust. According to the SEC, the defendants told prospective investors that the investments would be put into safe “liquid high-yield accounts” earning 12 percent and that the investments were guaranteed by a third party. (more…)

The Wrong Kind of Help

This time last year four people (three men and a woman), clad in bullet proof vests, wearing ear-pieces, and sporting at least one stun gun walked into the Folsom, California offices of Equity Investment, Management and Trading Inc.,  operated by accused Ponzi artist Anthony Vassallo, and said that they worked for the FBI and the Securities and [...]

This time last year four people (three men and a woman), clad in bullet proof vests, wearing ear-pieces, and sporting at least one stun gun walked into the Folsom, California offices of Equity Investment, Management and Trading Inc.,  operated by accused Ponzi artist Anthony Vassallo, and said that they worked for the FBI and the Securities and Exchange Commission.  They demanded that Vassallo wire more than $300,000 to a specified bank account.  Vassallo wired no money.  Likely, there was no money left.  As it turns out, the four were trying to recover the investments of four victims of the alleged Ponzi scheme.   (more…)