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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Hockey Owner to Pay $67.5M in Restitution

The San Francisco Chronicle reports that former co-owner of the San Jose Sharks, venture capitalist William "Boots" Del Biaggio III, 41, of San Jose must surrender Jan. 8 to begin serving a sentence of eight years and one month, U.S. District Judge Charles Breyer said at a hearing in San Francisco.

The judge also ordered Del Biaggio to pay $67.5 million in restitution.

Federal prosecutors said Del Biaggio defrauded numerous people to obtain and guarantee loans of about $100 million in connection with various ventures, including the purchase of a $25 million stake in the Nashville Predators of the National Hockey League.

Former Sharks co-owner gets 8 years for fraud

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SanFran City Workers Dupe City $200K

The San Francisco Chronicle reports that two San Francisco public employees are under investigation for allegedly masterminding a scheme that duped the city out of more than $200,000 in goods. The pair, Donnie Alan Thomas and Miles Bonner each made more than $95,000 a year as electrical line workers for the San Francisco Public Utilities Commission. The pair's alleged scheme from 2003-2007 paid for personal goods including high-end car stereo equipment, furniture, designer window shutters and redwood decking, authorities said Tuesday.

The two each face 41 felony and two misdemeanor counts ranging from grand theft to failure to pay unemployment insurance. If convicted, they each face up to 21 years in state prison.

2 SFPUC workers accused of masterminding fraud

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Fraud Hits NYTimes Your Money Columnist

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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F.B.I. Watching for TARP and Stimulus Fraud

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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