Wednesday, December 24, 2008

Happy Holidays from AMLAC

We're taking some much needed time off from our coverage of the ever-growing world of fraud to celebrate the season with our loved ones. We want to sincerely thank you for your readership, your comments and your participation.

This year we were stunned by the economic turn throughout the world and we saw it as our duty to keep you informed and proactive in the situation as it relates to your career.

We'll be back in January with more coverage on hedge funds, mortgage fraud and money laundering.

We wish you Happy Holidays!



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Tuesday, December 23, 2008

Bankers Take Aggressive Approach to Fight Money Laundering

Florida bankers have banded together to fight against money laundering and terrorists acts.

Marketwatch: The word is out in the banking industry - the Florida International Bankers Association (FIBA), Inc. offers top-notch, cost-effective training and certification in the prevention of money laundering and terrorist financing. In fact, FIBA has just finished training its first wave of Latin American bankers who came to the U.S. to get certified.

It sounds like a great name, though a bit like the Justice League; however, who is going to pay for this new endeavor? The weakened federal and state economies have little resources to begin new initiatives--especially with those that may endanger national security by attempting to foil money plots. Hmm...

Well good luck, Florida! Get back to us when you get the bad guys.



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Monday, December 22, 2008

Monica and Walter M. Noel Lose over $7B Thanks to Partner, Bernie

Madoff may have been wildly reckless with billions of dollars--but he didn't do it alone. For instance, just how he got hundreds of the wealthiest persons in the world to invest in his schemes came from the help of some very skilled (wealthy) inviduals like Walter M. Noel.

Walter and his wife, Monica head up the Fairfield Greenwich Group which lost over $7B dollars thanks to their good buddy, Bernie.

Affected in this loss are their four grown daughters and four sons-in-law that work at the company plus a children's clothing manufacturer based in Greenwich.The Noel's were featured in a 2002 issue of Vanity Fair and had homes in the most exclusive areas around the world.

Camelot, for the Noels has ended.

For more information, please visit this NYT article



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Friday, December 19, 2008

Former CEO of China World Trade Guilty of Fraud

Finally! Spammer brought to justice over phony stock market scams. The stock market bust is trickling down into our spam inboxes.

This is some great news for your Friday:

How Wai John Hui pleaded guilty in a Detroit federal court for his connection in an international fraud scheme that involved sending bulk commercial spam that manipulated the stock market.

According to court records, Hui conspired with others in 2005 to send tens of millions of unsolicited bulk commercial spam e-mail promoting thinly traded stocks for Chinese companies.
The individuals allegedly sent the spam e-mail to drive up the prices of stocks so they could earn profits.

Hui, a resident of both Hong Kong and Canada, was charged as a result of a 3-year investigation by the FBI, IRS and the United States Postal Inspection Service.

For more information on this case, please click here.



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Thursday, December 18, 2008

Madoff Watch '08: European Banks Tally Losses Linked to Madoff

The French Societe Generale totally knew about the problem of Madoff back in 2003--nearly five years ago? What gives?!

So why didn't Société Générale let the rest of the wealth management organizations know of Madoff's obvious incompetence? I know that the world of wealth management/hedge fund management is highly secretive; however, with a problem of this magnitude--shouldn't they have let someone in on the secret? Perhaps Société Générale thought that the others saw Madoff's incompetence, too and were keeping it to themselves.

What do you think? Should there be a statute of reporting amongst hedge fund/wealth management companies?

The red flags at Mr. Madoff’s firm were so obvious, said one banker with direct knowledge of the case, that Société Générale “didn’t hesitate. It was very strange.” While the bank kept the discovery to itself, as is common in the secretive world of wealth management, the information saved Société Générale more than embarrassment: its total exposure to Mr. Madoff’s apparent Ponzi scheme is less than 10 million euros, or $13.8 million

We've referenced an article from The New York Times.



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Wednesday, December 17, 2008

Texan Health Officials Get Kickbacks

More kickbacks for health officials have landed Texan health officials in some serious hot water. What is important about this case, as with all fraud cases, is that it affects the individuals who trusted in others to do their job and to do it well. People don't want to be seen as dollar signs, it grows contempt in the consumer which is just bad business.This case, with phony advocacy groups and false marketing materials is predatorial and wrong and these individuals deserve to be prosecuted by the full extent of the law.

J&J’s Janssen Pharmaceutica funneled kickbacks to Texas health officials, distributed false marketing materials and deployed phony advocacy groups to get its Risperdal antipsychotic prescribed to low-income Texans, the state alleges in a new filing in an ongoing fraud lawsuit filed in 2006, according to The Dallas Morning News.



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Monday, December 15, 2008

NYT: Fraud Inquiry Centers on Investment Firm’s Sanctum

From NYTimes.com
And the 17th floor is now an occupied zone, as investigators and forensic auditors try to piece together what Mr. Madoff did with the billions entrusted to him by individuals, banks and hedge funds around the world.

Bernie Madoff has taken nearly $50 billion dollars and, well, no one has a clear sense of where it all went. From influential Hollywood celebrities to large sports companies, the money is long gone. What happened with the Madoff Organization is that people found out they were unable to get their money--which with most hedge funds they're able to do so--unless there is a gate in place.

What do you think of this debacle?



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Friday, December 12, 2008

NYT: Prominent Trader Accused of Defrauding Clients

From NYTimes.com

Bernard L. Madoff, was arrested at his Manhattan home by federal agents who accused him of running a multibillion-dollar fraud scheme — perhaps the largest in Wall Street’s history.


Investors in the Madoff scheme include Steven Spielberg, eek. The 70 year old Madoff seems to have walked away with nearly $50 billion dollars--but where did it all go? We can tell that this is going to be some epic news. Gordon Gekko has nothing on this guy.


For the rest of this article, please click here.



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Thursday, December 11, 2008

Patricia Blagojevich: First Lady Fraudster

From NYTimes.com

...Ms. Blagojevich appears to be an influential and demanding partner to her husband’s schemes to trade the Senate seat vacated by President-elect Barack Obama for money-making or politically aggrandizing opportunities.

From her foul-mouthed antics to her seemily cool and a cucumber demeanor, Mrs. Blago has more information on her infamous husband's dealings than his closest advisors. Patricia comes from Illinois political royalty and some would say this was a marriage for politicial power over love. Regardless, this lady has the goods that the feds want. Let's see what she can tell us about hubby.

For the rest of this article, please click here.



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Wednesday, December 10, 2008

Kansas City: NovaStar agrees to settle securities-fraud class action for $7.25M

From Kansas City Business Journal:

NovaStar Financial Inc. has agreed to pay $7.25 million to settle a class-action securities-fraud lawsuit that originated in April 2004.

Novastar's insurance has agreed to pay the settlement; however, is it really the insurance company's responsibility to do so? Even though they don't have an admission of wrong doing, that doesn't mean that wrong doing didn't take place. I think a bigger investigation is in order for the company--and the people who work and do business with Novastar deserve answers.

For the rest of this article, please click here.



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Tuesday, December 9, 2008

Feds Nab $100M Hedge Fund Fraudster




We have a new admission to the "Worst" category of money fraudsters. Marc S. Dreier has now been arrested in a $100M fraud schemes. Basically, Dreier forged the return on investments by clients and took home the profits. Sorry to say that $100M is nearly chump change to recent losses in the financial sector--its still bad, Dreier.




From NYTimes.com

...when the lawyer, Marc S. Dreier, stepped off a flight from Canada on Sunday night, federal authorities in New York arrested him in a $100 million fraud scheme, portraying his recent undertakings as more high-stakes grifting than high-end lawyering.



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Monday, December 8, 2008

Kansas City: Jury Convicts Columbia Businessman for Multi-million Dollar Investment Fraud, Money Laundering Conspiracy

They just keep pouring in from all over the country--phoney businessmen taking money from the well to do and losing it with ease.

Today's report comes from Missouri where crooked Daryl Miles Brown convinced people to invest in high-yield, short term investments. He made the investments sound very enticing--claming that they weren't available to the general public. There are a bunch of losers in this scenerio; however, its difficult to feel that sorry for people who blindly put their money into schemes that seemed too good to be true. Pyramid anyone?

From Infozine.com
Daryl Miles Brown, 31, who was chairman of The Vertical Group, located in Columbia, and principal of Cerberus, Inc., located in Fulton, Mo., was found guilty of the charges contained in an Aug. 11, 2006, superseding indictment.

For the rest of this article, please click here.



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Friday, December 5, 2008

S.E.C. Charges a Venture Capitalist With Fraud

Is there a classified ad out there that I'm not reading?

"Newbie investor seeks large amounts of funds from people who should know better. "

Today's example comes from Silicon Valley where a former capitalist used money from investors to buy a multi-million dollar stake in a hockey team. Really. I can't make this stuff up.

From NYTimes.com

Federal authorities accused William Del Biaggio III, 41, a former Silicon Valley venture capitalist and part owner of the Nashville Predators hockey team, of defrauding investors and using the money to buy his $25 million stake in the professional sports team.



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Thursday, December 4, 2008

Australia: OneVue Launces Anti-Money Laundering Product

From MoneyManagement.com

OneVue has launched an anti-money laundering product to help financial businesses protect themselves and reduce costs.
Connie McKeage, the chief executive of OneVue, said financial planners must meet their obligations under anti-money laundering legislation (AML) simply and effectively.

We believe [the] AML Explorer [product] represents a breakthrough in helping financial service businesses of all sizes to comply with AML legislation,” McKeage said.
The AML Explorer product presents compliance obligations in an easy to read format that enables users to identify problems quickly. It can also process phonetically-matching names against government supplied lists of politically exposed people and sanctioned organisations, at a speed of one million names per second. It can be integrated into most financial administration systems.
AML Explorer can be installed as an application or via the web. OneVue also offers a consultancy service to help clients set up and integrate the product.
Australian Unity Investments and OneVue’s subsidiary, DirectPortfolio, have already adopted the product.
OneVue is developing the product to submit applications electronically to the Australian Transaction Reports and Analysis Centre.

For a link to this article, please click here.



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Wednesday, December 3, 2008

Retailers Balance Security, Customer Service


Store owners have lost $42.3B in stolen merchandise since the beginning of the year


From: NJBiz.com


Retailers are getting into the holiday season this week, following the early-morning openings and price slashes of Black Friday, the day after Thanksgiving.
Traditionally, store owners would be focused on ringing up enough sales to turn a profit before the end of the year. But fears that a weak economy point to an anemic holiday season are driving retailers in New Jersey and elsewhere to pay a lot of attention to the theft of goods, called shrinkage, that can hammer a company’s bottom line.

“Loss-prevention continues to be a big concern for all sorts of retailers,” said John Holub, president of the New Jersey Retail Merchants Association in Trenton. “Based on my talks with New Jersey retailers, there is some anecdotal evidence that the weak economy is helping to drive an increase in shoplifting as we head into the all-important holiday season.”
Theft will cost North American retailers about $42.3 billion in 2008, down from $43.5 billion last year, according to an annual study released last month by Checkpoint Systems Inc. The Thorofare-based company, which sells retail antitheft systems, credits the drop in shrinkage to improved security measures.

Most of the shrinkage cost is borne by U.S. retailers, according to the Checkpoint survey.
The true cost, though, “is not just borne by retailers, but by consumers and society at large,” said Rob van der Merwe, chief executive officer of Checkpoint. “Shrink is a serious threat to retailers’ bottom lines, and amounts to a hidden ‘tax’ on consumers who are already dealing with the strain of their tightening household budgets during the economic downturn.”



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Tuesday, December 2, 2008

FBI arrests Birmingham, Alabama, mayor


From CNN.com:

The FBI on Monday arrested the mayor of Birmingham, Alabama, on federal charges including conspiracy, bribery, fraud, money laundering and filing false income tax returns.


Larry Langford, 62, is named in an indictment that alleges criminal activity while he was a county commissioner, said U.S. Attorney Alice Martin.
As president of the Jefferson County Commission and head of its department of finance and general services from November 2002 until about November 2006, Langford put his personal affairs ahead of those of the county, Martin said.
"Our investigation has revealed, and the indictment alleges, that Langford sold his public office to his friends and political supporters," Martin said.
For the rest of this article, please click here.



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Monday, December 1, 2008

Mobster Busted for Money Laundering

Scranton, PA

StandardSpeaker.com

Reputed mob boss William “Big Billy” D’Elia was sentenced to nine years in prison Monday, as more information was revealed about his cooperation in the prosecution of Dunmore business magnate Louis DeNaples.The 62-year-old Hughestown man, whom investigators believe is the head of the Bufalino crime family, was sentenced for his role in hiding $600,000 in drug proceeds and for arranging a hit on a co-defendant who was cooperating with investigators.He receives credit for two years already spent in prison, and may not even serve the full remaining seven years if he continues to cooperate in the perjury case against DeNaples in Dauphin County.Assistant U.S. Attorney Gordon Zubrod said he will recommend the judge reduce D’Elia’s sentence if Dauphin County officials decide D’Elia provided “substantial help” in their investigation.
In July, D’Elia testified in front of a Dauphin County grand jury regarding DeNaples, who is accused of lying to state gambling regulators when he sought a license for his Mount Airy Casino Resort in 2006.What came to light Monday was that sometime before going to prison, D’Elia had written several letters and given them to friends to mail in case something happened to him. One of those letters, which was never mailed, was dated October 2006 and addressed to the Pennsylvania Gaming Control Board.Defense attorney James Swetz recently turned that letter and others over to the U.S. Attorney’s Office. The prosecutor said he forwarded that and other handwritten letters from D’Elia to Dauphin County authorities involved in the DeNaples investigation.

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