Posts Tagged ‘Ponzi scheme’

JPMorgan Chase to pay $1.7 billion for Bernie Madoff scandal

JPMorgan Chase

Newscast Media NEW YORK—Federal prosecutors and JPMorgan Chase have reached
a $1.7 billion settlement over the the bank’s role in the $65 billion Bernie Madoff
fraudulent Ponzi scheme. It is estimated that the actual amount of fraud may never
be known, due to the fact that many celebrities and politicians who were also
victims, are too embarrassed to come forward and admit they were duped.

The fine is the largest one ever imposed by federal regulators on an entity for
a violation of the Banking Secrecy Act. JPMorgan Chase was the lender in the Madoff
scheme, in which he defrauded investors out billions of dollars based on non-existent
investments and ghost trusts, into which his victims invested their money, that
Madoff spent on himself.

“We recognize we could have done a better job pulling together various pieces of
information and concerns about Madoff from different parts of the bank over time,”
wrote JPMorgan spokesman Joseph Evangelisti in an email to CNNMoney.

“We do not believe that any JPMorgan Chase employee knowingly assisted Madoff’s
Ponzi scheme,” he added.

The press release by prosecuting US Attorney Preet Bharara read as follows:

A press conference will be held today to announce criminal charges against
JPMorgan Chase Bank, N.A. for two felony violations of the Bank Secrecy Act in
connection with its relationship with Bernard L. Madoff Investment Securities, a
deferred prosecution agreement with the bank, and related civil actions. The
criminal charges against JPMorgan will be deferred for two years under an
agreement requiring JPMorgan, among other things, to admit to its conduct; pay
$1.7 billion to victims of Madoff’s fraud; and to reform its anti-money laundering
policies. The $1.7 billion payment by JPMorgan is the largest ever bank
forfeiture, and also the largest ever Department of Justice penalty for a Bank
Secrecy Act violation.

Currently, the 57-year-old Madoff, who really is the fall guy, is serving a 150 year
sentence for his crimes.

http://newscastmedia.com/bernie-madoff.htm

Be the first to comment - What do you think?  Posted by Joseph Earnest - January 7, 2014 at 6:06 pm

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SEC charges Madoff’s accountant for falsifying records and books

SEC

The Securities and Exchange Commission has charged the longtime accountant for many of Bernard Madoff’s oldest and wealthiest clients for his role in the creation of false books and records used in the massive Ponzi scheme.

The SEC alleges that Paul Konigsberg’s assistance resulted in the formation of
inaccurate trade confirmations each month as well as the development of phony data
and records documenting the fabricated trades that were, in turn, falsely reflected in
the ledgers and related books and records at Bernard L. Madoff Investment Securities
LLC (BMIS). CONTINUE TO FULL STORY>>

         

Be the first to comment - What do you think?  Posted by Joseph Earnest - September 27, 2013 at 8:41 pm

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SEC charges portfolio manager for forgery of documents

SEC

Newscast Media WASHINGTON—The Securities and Exchange Commission today sanctioned a former portfolio manager at a Boulder, Colo.-based investment adviser for forging documents and misleading the firm’s chief compliance officer to conceal his failure to report personal trades.

An SEC investigation found that Carl Johns of Louisville, Colo., failed to pre-clear or report several hundred securities trades in his personal accounts as required under the federal securities laws and the code of ethics at Boulder Investment Advisers (BIA). Johns concealed the trades in quarterly and annual trading reports that he submitted to BIA by altering brokerage statements and other documents that he attached to those reports. Johns later tried to conceal his misconduct by creating false documents that purported to be pre-trade approvals, and misled the firm’s chief compliance officer in her investigation into his improper trading.

To settle the SEC’s charges – which are the agency’s first under Rule 38a-1(c) of the Investment Company Act for misleading and obstructing a chief compliance officer (CCO) – Johns agreed to pay more than $350,000 and be barred from the securities industry for at least five years.

Click here to read or download SEC cease-and-desist order.

“Securities industry professionals have an obligation to adhere to compliance policies, and they certainly must not interfere with the chief compliance officers who enforce those policies,” said Julie Lutz, Acting Co-Director of the SEC’s Denver Regional Office. “Johns set out to cover up his compliance failures by creating false documents and misleading his firm’s CCO.”

In settling the SEC’s charges, Johns has agreed to pay disgorgement of $231,169, prejudgment interest of $23,889, and a penalty of $100,000. Without admitting or denying the SEC’s findings, Johns consented to a five-year bar and a cease-and-desist order.

The SEC’s investigation was conducted by Michael Cates and Ian Karpel of the Denver Regional Office following an examination conducted by Craig Ellis, Bruce Ketter, and Thomas Piccone of the Denver office’s investment adviser/investment company examination program.

http://www.newscastmedia.com/portfolio-manager.htm

         

Be the first to comment - What do you think?  Posted by Joseph Earnest - August 27, 2013 at 5:31 pm

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SEC charges Texas man with running ponzi scheme

The Securities and Exchange Commission

Newscast Media WASHINGTON—The Securities and Exchange Commission today charged a Texas man and his company with defrauding investors in a Ponzi scheme involving Bitcoin, a virtual currency traded on online exchanges for conventional currencies like the U.S. dollar or used to purchase goods or services online.

The SEC alleges that Trendon T. Shavers, who is the founder and operator of Bitcoin Savings and Trust (BTCST), offered and sold Bitcoin-denominated investments through the Internet using the monikers “Pirate” and “pirateat40.” Shavers raised at least 700,000 Bitcoin in BTCST investments, which amounted to more than $4.5 million based on the average price of Bitcoin in 2011 and 2012 when the investments
were offered and sold. Today the value of 700,000 Bitcoin exceeds $60 million.

The SEC alleges that Shavers promised investors up to 7 percent weekly interest based on BTCST’s Bitcoin market arbitrage activity, which supposedly included selling to individuals who wished to buy Bitcoin “off the radar” in quick fashion or large quantities. In reality, BTCST was a sham and a Ponzi scheme in which Shavers used Bitcoin from new investors to make purported interest payments and cover investor withdrawals on outstanding BTCST investments. Shavers also diverted investors’ Bitcoin for day trading in his account on a Bitcoin currency exchange, and exchanged investors’ Bitcoin for U.S. dollars to pay his personal expenses.

The SEC issued an investor alert today warning investors about the dangers of potential investment scams involving virtual currencies promoted through the Internet.

“Fraudsters are not beyond the reach of the SEC just because they use Bitcoin or another virtual currency to mislead investors and violate the federal securities laws,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office. “Shavers preyed on investors in an online forum by claiming his investments carried no risk and huge profits for them while his true intentions were rooted in nothing more than personal greed.”

According to the SEC’s complaint filed in U.S. District Court for the Eastern District of Texas, Shavers sold BTCST investments over the Internet to investors in such states as Connecticut, Hawaii, Illinois, Louisiana, Massachusetts, North Carolina, and Pennsylvania. Shavers posted general solicitations on a website dedicated to Bitcoin discussions, and he misled investors with such false assurances about his investment opportunity as “It’s growing, it’s growing!” and “I have yet to come close to taking a loss on any deal,” and “risk is almost zero.”

http://www.newscastmedia.com/texas-ponzi-scheme.htm

         

Be the first to comment - What do you think?  Posted by Joseph Earnest - July 24, 2013 at 12:48 am

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SEC charges Atlanta-based advisor with defrauding clients

SEC

Newscast Media ATLANTA, Ga—The Securities and Exchange Commission announced charges against a private fund manager and his Atlanta-based investment advisory firm for defrauding investors in a purported “fund-of-funds” and then trying to hide trading losses by creating new private funds to make money to pay back the original fund investors in Ponzi-like fashion.

The SEC is seeking an emergency court order to freeze the assets of Angelo A. Alleca and Summit Wealth Management Inc. and prevent further investor losses, which are estimated to be $17 million among approximately 200 clients.

“Alleca told Summit Wealth clients that he was investing their money in funds, but instead he was rolling the dice in the stock market without success,” said Bruce Karpati, Chief of the SEC Enforcement Division’s Asset Management Unit. “Rather than fess up about his trading losses, Alleca tried a cover up by creating new funds. Instead of winning back the money, he just compounded his fraud by suffering further losses.”

After receiving a tip, the SEC initiated an examination of Summit Wealth. As SEC examiners noticed something was amiss at the firm, they immediately coordinated with SEC enforcement attorneys to gather and assess evidence.

“SEC examiners and attorneys acted swiftly after receiving a tip about possible wrongdoing at the firm, and have mounted an aggressive effort to put a stop to Alleca’s fraud before more investors are harmed,” said William P. Hicks, Associate Director of the SEC’s Atlanta Regional Office.

According to the SEC’s complaint filed late yesterday in federal court in Atlanta, Alleca and Summit Wealth Management offered and sold interests in Summit Fund, which they told their clients was operating as a fund-of-funds – meaning they were investing their money in other funds and investment products rather than directly in stocks and other securities.

Click here to read or download the entire lawsuit.

The SEC’s complaint charges Alleca, Summit Wealth Management, and the three funds with violations of the antifraud provisions of the federal securities laws.

http://newscastmedia.com/atlanta-ponzi-scheme.htm

     
    

Be the first to comment - What do you think?  Posted by Joseph Earnest - September 20, 2012 at 5:52 pm

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SEC charges 14 agents with $415 million securities Ponzi scheme

Securities and Exchange Commission

Newscast Media WASHINGTON, D.C.—The Securities and Exchange Commission has charged 14 sales agents who misled investors and illegally sold securities for a Long Island-based investment firm at the center of a $415 million Ponzi scheme.

The SEC alleges that the sales agents — which include four sets of siblings — falsely promised investor returns as high as 12 to 14 percent in several weeks when they sold investments offered by Agape World Inc. They also misled investors to believe that only 1 percent of their principal was at risk. The Agape securities they peddled were actually non-existent, and investors were merely lured into a Ponzi scheme
where earlier investors were paid with new investor funds.

The sales agents turned a blind eye to red flags of fraud and sold the investments without hesitation, receiving more than $52 million in commissions and payments out of investor funds. None of these sales agents were registered with the SEC to sell securities, nor were they associated with a registered broker or dealer. Agape also was not registered with the SEC.

“This Ponzi scheme spread like wildfire through Long Island’s middle-class communities because this small group of individuals blindly promoted the offerings as particularly safe and profitable,” said Andrew M. Calamari, Acting Regional Director for the SEC’s New York Regional Office. “These sales agents raked in commissions without regard for investors or any apparent concern for Agape’s financial distress and inability to meet investor redemptions.”

According to the SEC’s complaint filed in the U.S. District Court for the Eastern District of New York, more than 5,000 investors nationwide were impacted by the scheme that lasted from 2005 to January 2009, when Agape’s president and organizer of the scheme Nicholas J. Cosmo was arrested. He was later sentenced to
300 months in prison and ordered to pay more than $179 million in restitution. The SEC alleges that the sales agents misrepresented to investors that their money would be used to make high-interest bridge loans to commercial borrowers or businesses that accepted credit cards. Little, if any, investor money actually went
toward this purpose. Investor funds were instead used for Ponzi scheme payments and the agents’ sales commissions, and Cosmo lost $80 million while trading futures in personal accounts.

The SEC’s complaint charges the following sales agents:

* Brothers Bryan Arias and Hugo A. Arias of Maspeth, N.Y., who offered and
sold Agape securities to at least 195 and 1,419 investors respectively. They
received more than $9.5 million combined in commissions and payments.

* Brothers Anthony C. Ciccone of Locust Valley, N.Y. and Salvatore Ciccone
of Maspeth, N.Y., who offered and sold Agape securities to at least 535 and
348 investors respectively. They received more than $17 million combined in
commissions and payments.

* Brothers Jason A. Keryc of Wantagh, N.Y. and Michael D. Keryc of Baldwin,
N.Y. Jason Keryc offered and sold Agape securities to at least 1,617 investors
and received at least $16 million in commissions and payments. He also paid
sub-brokers, including his brother, at least $7.4 million to sell Agape securities
for him. Michael Keryc offered and sold Agape securities to at least 177
investors and received more than $1 million in commissions and payments.

* Siblings Martin C. Hartmann III of Massapequa, N.Y. and Laura Ann Tordy of
Wantagh, N.Y. Hartmann enlisted his sister in his sales effort while he worked
as a sub-broker for Jason Keryc. Hartmann and Tordy offered and sold Agape
securities to at least 441 investors and received more than $3.5 million in
commissions and payments.

* Christopher E. Curran of Amityville, N.Y., who worked as a sub-broker for
Keryc. Curran offered and sold Agape securities to at least 132 investors and
received at least $531,890 in commissions and payments.

* Ryan K. Dunaske of Ronkonkoma, N.Y., who worked as a sub-broker for Keryc.
Dunaske offered and sold Agape securities to at least 70 investors and
received more than $700,000 in commissions and payments.

* Michael P. Dunne of Massapequa, N.Y., who worked as a sub-broker for
Keryc. Dunne offered and sold Agape securities to at least 99 investors and
received more than $1.5 million in commissions and payments.

* Diane Kaylor of Bethpage, N.Y., who offered and sold Agape securities to at
least 249 investors and received at least $3.7 million in commissions and
payments.

* Anthony Massaro of Boynton Beach, Fla., who offered and sold Agape
securities to at least 826 investors and received more than $5.9 million in
commissions and payments.

* Ronald R. Roaldsen, Jr. of Wantagh, N.Y., who worked as a sub-broker for
Keryc. Roaldsen offered and sold Agape securities to at least 159 investors and
received more than $600,000 in commissions and payments.

The SEC’s complaint charges Bryan and Hugo Arias, Anthony and Salvatore Ciccone, Jason and Michael Keryc, Dunne, Hartmann, Kaylor, Massaro, and Tordy with violations of Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint charges all 14 defendants with violations of Section 15(a) of the Exchange Act, and Sections 5(a) and 5(c) of the Securities Act.

http://www.newscastmedia.com/ponzi-scheme.htm

          

Be the first to comment - What do you think?  Posted by Joseph Earnest - June 13, 2012 at 3:47 pm

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