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According to Dow Jones, coupon fraud has increased significantly over the past year. With the jump of 7 cases of coupon fraud in 2007 to 93 cases in 2008, companies are loosing over $3 million a year due to counterfeit coupons. Some techniques used to make fraudulent coupons: reprinting in-store coupons, smudging bar codes and extending expiration dates. Read the full report here.
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Jack Healy of The New York Times reports that, a federal judge on Monday turned aside Bernard L. Madoff’s assertions of remorse, calling his investment fraud “extraordinarily evil.” The sentencing came at the end of a 90-minute hearing in which victims of the $65 billion fraud told a packed courtroom that the judge should show no mercy and Mr. Madoff himself stood up from the defense table to acknowledge the damage he had inflicted and express regret.
Madoff's lawyers had asked for only a 12 year sentence, due to the age of Mr. Madoff, claiming that they may only have, statistically, 13 years left to live.
The ruling by judge Denny Chin may feel only like a bandage to the deep wounds that Mr. Madoff has inflicted on his victims.
Madoff Sentenced to 150 Years for Ponzi Scheme
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According to this latest article in Fitness Business Pro, Sean Corriveau, former manager and president of Elite Fitness Inc. has pleaded guilty to fraudulent credit card use, in which he will be forced to pay a $14,000 restitution and serve a 30-day jail sentence.
Corriveau used an unauthorized credit card to purchase $14,000 worth of carpeting for his gym and also accepted prepaid memberships, which was another violation.
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According to this article in CNN Money, Madoff's lawyer has requested a 12-year prison sentence for Bernard. His attorney, Ira Lee Snorkin, stated in his request that Madoff is currently 71 years old and has a life expectancy of only 13 more years. Snorkin believes that a sentence of 12 years for a non-violent crime is sufficient. There is much criticism though coming from the families affected. Many of those families believe that Madoff should serve the remainder of his years in prison.
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According to the New York Times, R. Allen Stanford, the Texas billionaire accused of running a multibillion-dollar Ponzi scheme, and at least four others, including an Antiguan official, have been indicted in the fraud case, a federal prosecutor said Friday morning.
In February, the Securities and Exchange Commission shut down Mr. Stanford’s financial operations, while filing a civil suit accusing him and two other senior executives of committing a fraud it characterized as a “massive Ponzi scheme.”
The suspected fraud involved billions of dollars of certificates of deposit issued by Stanford International Bank on Antigua. The instruments paid unusually high returns and were marketed around the world, particularly in the United States and Latin America.
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According to the Wall Street Journal, Richard I. Stahl and Reed Abend, two former employees who worked on with Madoff, sued his sons for over $1.7 million. They charge that the sons, Mark and Andrew Madoff, knew about the Ponzi scheme for a long period of time. Read the full article here.
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This article in the Huffington Post highlights how Republican Jim Bunning might have found a "legal" way to launder money. It is not legal to accept money for signing baseballs, but Jim Bunning, ex-baseball pitcher, has set up a foundation that pays himself a total of $155,000 a year in profits from signing baseballs. His foundation donates less than $20,000 a year to charities. The post gives us this definition of money laundering:
a financial transaction scheme that aims to conceal the identity, source, and destination of illicitly-obtained money.
Even though technically it is legal, do you think the government should step in to regulate this?
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Matthew Weitzman, a U.S. money manager who ran a financial planning firm, has been arrested on charges of defrauding clients of more than $6 million by stealing from their accounts, authorities said Wednesday, Reuters reported.
According to Ron Lieber of the New York Times (his financial advisor was Matthew Weitzman), The Securities and Exchange Commission accused him (Weitzman) of looting client accounts of at least $6 million and using them “as his personal piggy bank.” It accused him of spending the money he took on a multimillion-dollar home, luxury cars and a share in a horse. Mr. Weitzman agreed to settle the claims without admitting or denying the accusations, though the S.E.C. is unsure about how much money his clients will get back.
For an interesting read, check out Lieber's piece on what its like to be defrauded by a financial advisor--sadly, Lieber is not alone.
An Adviser (Mine) Is Charged With Fraud
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This article in About highlights how Alex Mineev of New Hampshire has pleaded guilty to charges of money laundering after his scheme of using trojans to steal victims' assets. After credentials and logins were stored in the trojans, he used this information to wire the funds into a separate account in Russia. He faces a possible two year prison sentence and restitution that ranges from $40,000 to $120,000 USD.
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Last week, USA Today reported that nine people we indicted on charges of conspiring to defraud Washington Mutual Bank and DLJ Mortgage Capital, a unit of Credit Suisse Group, in a $92 million mortgage fraud, prosecutors said Thursday.
To finance the projects, the defendants are accused of staging sales of the properties financed by mortgage loans...Entities controlled by (the group) made monthly payments on the mortgages, ensuring that none became delinquent, until payments ceased in 2007 with about $92 million in principal outstanding on the fraudulent loans, prosecutors say.
This may be one of the biggest mortgage fraud schemes on record; so how will it ultimately play out? With the dwindling economy and lower home prices, we may see many fraudsters following suit. What are your thoughts?
Nine Accused in NY $92M Mortgage Fraud
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According to the Houston Chronicle, two have pleaded guilty to a $5 million healthcare fraud. Ashley Colin Walkes and Kristi Rose were working for a pain management facility and pleaded guilty to misprision of health care fraud. The facility closed in January. Read the full story here.
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The New York Times reports that the FBI and other government agencies are working to prevent fraud and corruption related to government bailout money and the economic stimulus package, in what could be the “next wave” of cases in the financial crisis, the F.B.I. director, Robert S. Mueller III, said Tuesday.
“With billions of dollars at stake — from the purchase of troubled assets to improvements in infrastructure, health care, energy and education — even a small percentage of fraud would result in substantial taxpayer losses,” Mr. Mueller said, according to Reuters.
F.B.I. Watching for TARP and Stimulus Fraud
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