Rajaratnam and Chiesi Plead Not Guilty In Hedge Fund Fraud Case

Accused fraudster, Raj Rajaratnam and executive at New Castle Funds LLC. Danielle Chiesi appeared in Manhattan federal court to plead not guilty to insider trading, conspiracy and securities fraud, reports HedgeCo.net.

Bloomberg reports that the two appeared in Manhattan federal court today to plead not guilty in an insider trading case that allegedly generated more than $20 million in illegal profits. They were arrested in October and indicted on Dec. 15. Prosecutors cite multiple schemes dating to 2003 and say the two used secret tips to trade in stocks including Polycom Inc., Akamai Technologies Inc., Google Inc. and International Business Machines Corp.

Learn more: Raj Rajaratnam, Chiesi Deny Insider Trading Charges

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26 Arrested in Three States in Medicare Fraud Schemes

The New York Times reports that Federal agents arrested 26 suspects in three states on Tuesday, including a doctor and nurses, in a crackdown on Medicare fraud totaling $61 million.

The raids came a week after a report that Miami-Dade County got more than half a billion dollars from Medicare in home health care payments intended for the sickest patients in 2008, more than the rest of the country combined, even though only 2 percent of those patients nationwide live there.

Learn more: 26 Arrested in Three States in Medicare Fraud Schemes

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Rajaratnam, Chiesi Indicted in New York for Conspiracy, Fraud

Bloomberg.com reports that Raj Rajaratnam, the billionaire Galleon Group LLC founder, and Danielle Chiesi, an executive at New Castle Funds LLC, were indicted by a federal grand jury for using inside information to profit from stock trades.

The indictment includes 11 counts of securities fraud and conspiracy against Rajaratnam and 10 counts against Chiesi stemming from trades that allegedly generated more than $20 million in illegal profits. It cites multiple schemes dating to 2003 and says the two used secret tips to trade in stocks including Polycom Inc., Hilton Hotels Corp, Akamai Technologies Inc., Google Inc. and International Business Machines Corp.


Learn more: Rajaratnam, Chiesi Indicted in New York for Conspiracy, Fraud

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Louisiana agent accused of stealing $2.9 million in auto policy scheme

IFAwebnews.com reports that Louisiana agent, Jolie R. Bonvillian, 40, of Violet has been arrested and accused of 424 counts of forgery, 339 counts of bank fraud, 85 counts of insurance fraud and three counts of theft. State police say an investigation began when troopers from its insurance fraud/auto theft unit received a complaint from Progressive Insurance Co., concerning an “unusually large” number of commercial auto polices generated by Bonvillian.

An investigation revealed that Bonvillian generated 85 fraudulent policies using fake names, international drivers license information and vehicle information. The Progressive auto policies were created to facilitate 339 bogus premium finance agreements, authorities said.

Learn more: Louisiana agent accused of stealing $2.9 million in auto policy scheme

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Brookstreet and the CEO charged with fraud

According to Reuters, Stanley Brooks, former President and Chief Executive of Brookstreet group have been charged with fraud. They promoted risky mortgage securities to customers after they were warned that the securities were dangerous, illiquid and inappropriate for retail investors.

A statement from Robert Khuzami, director of the SEC's Division of Enforcement, said:
"These were complex mortgage derivative securities with byzantine pricing, valuation and trading characteristics. Selling them to retirees and conservative investors was profoundly and egregiously wrong."

Read more here.

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Alleged Ponzi Scheme Uncovered in Florida

The Associated Press reports that attorneys sorting through the books of disbarred Florida lawyer Scott Rothstein have uncovered handsome salaries for the disgraced attorney and his partners.

In 2008, Rothstein collected $35 million. Stuart Rosenfeldt, a 50 percent partner, received more than $6 million, and name partner Russell Adler was paid $888,000.

The law firm is now in bankruptcy, and Rothstein faces charges including racketeering and money laundering in what authorities allege was a massive ponzi scheme. Creditors have filed nearly $1.2 billion in claims.

Bankruptcy attorneys say the firm's books are a mess, and it's impossible so far to paint a complete picture.

Rothstein has pleaded not guilty.



Florida Lawyer Charged With Fraud Collected $35M in 2008

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Tom Petters Found Guilty of $3.65B Ponzi Scheme

Yesterday a Minnesota jury found businessman Tom Petters guilty for his $3.65B ponzi scheme. The Wall Street Journal reports that, Petters guilty sentence contains 20 counts of wire fraud, mail fraud, money laundering and conspiracy, potentially consigning him to life in prison without parole.

Petters case has been overshadowed by fellow ponzi-schemer, Bernie L. Madoff.

Petters Found Guilty of Fraud

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Baltimore Mayor Convicted of Fraud

Baltimore mayor, Sheila Dixon, was convicted yesterday on a single charge she took gift cards intended for the city’s poor. Although she was acquitted of felony theft charges, her misdemeanor conviction could force her from office, reports the Associated Press. Jurors deliberated more than six days after hearing accusations that the Democrat improperly used or kept $630 worth of gift cards. She was accused of soliciting most of the cards from a developer and buying electronics at Best Buy, clothes at Old Navy, and knickknacks at Target.

Baltimore mayor convicted on fraud charge

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