Friday, October 30, 2009

Guilty Plea Expected from Madoff's Accountant reports that Bernard Madoff's former accountant will likely plead guilty on November 3rd to a variety of fraud and other charges in connection with largest Ponzi scheme ever to hit Wall Street, officials said Friday.

In a letter filed in federal court in Manhattan, Assistant U.S. Attorneys Lisa Baroni and Marc Litt said that it is expected that David G. Friehling, 49, of upstate New City, will plead guilty Nov. 3 to charges of securities fraud, investment adviser fraud, making false statements to the Securities and Exchange Commission, and obstructing tax collection laws.

Madoff accountant expected to plead guilty to securities fraud

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Thursday, October 29, 2009

More Money is Being Advanced to Madoff Victims

Looks like progress is slowly being made in Bernie Madoff's $65 billion Ponzi scheme. This article in Bloomberg discusses Madoff's liquidators are making repayments of about $534.2 million to 1,558 victims that suffered losses. There have been over 16,000 claims made since Bernie's arrest back in December, so there is still a long way to go. Irving Picard, a trustee, was able to recover $1.4 billion in assets to repay victims and more is expected back in fake profit from some of Madoff's biggest investors. There will be a lot controversy going forward on who gets paid and who doesn't.

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Tuesday, October 27, 2009

French court convicts Church of Scientology of fraud

CNN International reports today that a French court on Tuesday convicted the Church of Scientology and six of its members of organized fraud, but stopped short of banning the church.

The court also fined the members as much as 400,000 euros ($595,000) each.
The decision follows a three-week trial in May and June, during which two plaintiffs said they were defrauded by the organization, which is classified as a sect in France.

The plaintiffs focused their complaints on the use of a device that Scientologists say measures spiritual well-being. Members used the electropsychometer, or E-Meter, to "locate areas of spiritual duress or travail so they can be addressed and handled," according to Scientology's Web site.

The plaintiffs said that, after using the device, they were encouraged to pay for vitamins and books. They said that amounted to fraud.

Will other Scientology churches around the globe see the same judgement as those in France?

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Monday, October 26, 2009

Madoff Investor Dies in Swimming Pool

A recent article in CNN mentioned that an investor of Madoff's Ponzi scheme recently died in his Florida pool. Jeffry Picower, a 67 year old investor from Florida was found dead in his swimming pool in Palm Beach.

Jeffry's Picower Foundation had announced earlier that it was shutting down because of losses from the Madoff sheme. His recent tax return valued the portfolio at $955 million. There are also allegations that Picower benefited from Madoff's secretive investment business.

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Tuesday, October 20, 2009

Manhattan US Attorney Names Heads Of New Complex Frauds Unit

Yesterday, The Wall Street Journal reported that Preet Bharara, the U.S. Attorney in Manhattan, named the heads of his office's newly created Complex Frauds Unit on Monday.

Anirudh Bansal and Jonathan Kolodner were named as chiefs of the new unit, which will oversee the investigation and prosecution of bank fraud, mortgage fraud, health-care fraud and tax fraud, as well as cyber crimes.

Bharara said his office, between the Complex Frauds Unit and the office's Securities and Commodities Fraud Task Force, now has more than 30 attorneys targeting sophisticated white-collar crime.

Bansal was previously chief of the office's International Narcotics Trafficking Unit. Kolodner was acting deputy chief of the office's Criminal Division and Mortgage Fraud Group coordinator. He was previously acting deputy chief of the office's Organized Crime Unit.

Christopher L. Garcia also was named deputy chief of the Securities and Commodities Fraud Task Force.

At the same time, Anjan Sahni was named chief of the International Narcotics Trafficking Unit, while Joan M. Loughnane and Stephen J. Ritchin were named chiefs of the General Crimes Unit.

Jocelyn E. Strauber was named the deputy chief of the International Narcotics Trafficking Unit and Jennifer G. Rodgers was named the deputy chief of the Organized Crime Unit.

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Monday, October 19, 2009

FBI joins $53M fraud investigation

The Detroit News reports today that the FBI has joined the investigation surrounding an alleged $53 million Ponzi scheme, according to documents filed in federal court in Detroit.

Until now, the alleged "Billionaire Boys Club" scheme involving businessmen John J. Bravata of Brighton and Richard J. Trabulsy of Northville has been a civil case, with the U.S. Securities and Exchange Commission pursuing the men and their companies through a civil fraud and securities lawsuit filed in U.S. District Court.

The SEC filed the lawsuit against Bravata, Trabulsy and their companies, BBC Equities and Bravata Financial Group, on July 26. Under the alleged scheme, authorities said, more than 400 investors were promised returns of 8 percent or more while the principals spent millions on luxury homes, boats, jewelry, gambling, exotic vacations and expensive cars.

FBI joins $53M fraud investigation

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Wednesday, October 14, 2009

Fraudster Nabbed Thanks to Facebook

The Associated Press reports today that 26-year-old native of Cameroon is now in a Mexico City jail, where he is awaiting extradition to the United States on bank fraud charges -- thanks to his incessant post on Facebook about the high life in Cancun and befriending a special FBI agent.

Federal prosecutors say he and an associate falsely obtained more than $200,000 from Seattle-area banks and credit unions.

"He was making posts about how beautiful life is and how he was having a good time with his buddies," said Assistant U.S. Attorney Michael Scoville, who helped find Sopo. "He was definitely not living the way we wanted him to be living, given the charges he was facing."

Although Sopo's profile was set to private, his list of friends was not, and Scoville started combing through it. He was surprised to see that one friend listed an affiliation with the Justice Department and sent him a message requesting a phone call.

Prosecutors say he masterminded the bank fraud scheme with Edward Asatoorians, who was convicted by a federal jury in Seattle last week. Testimony at trial indicated the pair persuaded young co-conspirators to lie about their income to obtain loans for fabricated auto purchases, and then used the money to prop up Asatoorians' business and to take an expensive trip to Las Vegas.

Asatoorians is expected to face at least five years in prison when he's sentenced. If convicted, Sopo could face up to 30 years.

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Tuesday, October 13, 2009

Millionaire Guilty of Money Laundering Charhe

According to this post on 69 year old Trevor Baines has been found guilty of money laundering. The prosecution claimed that Mr. Baines knew the origin of the $175 million he received through the Isle of Man Bank, which was the result of a massive fraud on US shareholders. Although he and his wife denied that they knew how the money was obtained, they both have been charged.

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Thursday, October 8, 2009

F.B.I. Indicts Dozens in Online Bank Fraud

The New York Times reports that in what it is calling Operation Phish Phry, the F.B.I. began arresting 53 people on Wednesday on charges of conducting a vast financial fraud based on phishing — the act of tricking Internet users into revealing their passwords and other information.

The arrests were in Southern California, Nevada and North Carolina, while the authorities in Egypt sought to arrest 47 people whom the F.B.I. said were co-conspirators.

It's reported that the total amount stolen from Wells-Fargo and Bank of America totaled nearly $2M. The investigation into this fraud began in 2007 and authorities noted that this operation was very clean and well organized.

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Monday, October 5, 2009

Fmr InterMune Inc. Chief Convicted of Fraud

According to The Associated Press, a federal jury in San Francisco convicted Dr. W. Scott Harkonen after a seven-week trial. The conviction centered on an August 2002 news release that misstated the results of a clinical trial using Actimmune to treat the disease. The release falsely said the test showed Actimmune helped IPF patients live longer.

Treating one IPF patient with Actimmune for a year cost about $50,000, and most Actimmune sales were for the unapproved treatment of IPF, the Justice Department said.

For more information about the case, please click here.

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