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Saturday 28 February 2009

Dan Wickline, 62, was sentenced to 18 months in prison while his son Chad Wickline, 34, received a 30-month sentence

Dan Wickline, 62, was sentenced to 18 months in prison while his son Chad Wickline, 34, received a 30-month sentence. Both men last July put an end to an ongoing trial by pleading guilty in U.S. District Court in Columbus to a count of conspiracy to commit money laundering. Chad Wickline also pleaded guilty to a count of mail fraud.
The men worked through Liberty Resources, which marketed debt-elimination services over the Internet. Liberty charged a fee to help consumers get out from under credit card debt and they received documents from the business claiming that the debt had been eliminated by the program, the U.S. Attorney’s office said.But when customers stopped paying on their credit cards, thinking their debt was cleared, card issuers sued them for payment. Some filed for bankruptcy, the government said.
As part of Friday’s sentencing, the men are required to pay restitution to victims along with federal income taxes plus interest and penalties on money they received between 2002 and 2006, when the government said the fraud took place.The two were indicted in 2007 following an investigation by the IRS, Postal Service and attorney’s office. Three other people tied to Liberty have since entered guilty pleas and been sentenced.

Harry Markopolos tells 60 Minutes correspondent Steve Kroft about his futile efforts to expose a Ponzi scheme


first television interview, Harry Markopolos tells 60 Minutes correspondent Steve Kroft about his futile efforts to expose a Ponzi scheme that lost investors billions of dollars. Kroft's report will be broadcast this Sunday, March 1, at 7 p.m. ET/PT.
Madoff is currently under house arrest, accused of running what may be the largest investor fraud operation in history. Markopolos, a financial analyst and fraud investigator, says a lot of people had serious doubts about what Madoff was doing. The proof is in the firms that didn't put money in his fund. "I would say that hundreds of people suspected something was amiss with the Madoff operation. If you look at who the victims were not, you'll notice that the major firms on Wall Street had no money with Mr. Madoff," he tells Kroft.

Markopolos tells Kroft there were ample ways the SEC could have figured out that Madoff was a fraud. For example, Markopolos concluded that for Madoff to execute the trading strategy he said he was using he would have had to buy more options on the Chicago Board Options Exchange than existed. All the SEC had to do was talk to people in the options industry, as Markopolos did. "I would talk to the people I had trading relationships with and ask 'Did you have a trading relationship with Mr. Bernard Madoff?' And they all said 'No. We don't think he's for real.'"
Markopolos submitted information on Madoff to the SEC in 2000, 2001, 2005, 2007 and finally last April of 2008. While a case file was opened and the SEC discovered that Madoff had misled them, the governmental watchdog agency never found the fraud. They are not trained to do that, says Markopolos. "What I found from my dealings with the SEC over eight and a half years is that their people are totally untrained in finance," he says. "Most of them are just merely lawyers without any financial industry experience." What SEC staffers are good at, he says, is scrutinizing paperwork required by the SEC. "They can check every piece of paper perfectly and find misdemeanors and they'll miss all the financial felonies occurring…even when pointed to fraud they are incapable of finding fraud, that's how bad they are," Markopolos tells Kroft. In an ironic twist, Madoff once said the SEC was an effective watchdog. In a video of a roundtable discussion he participated in at the non-profit Philoctetes Center in New York obtained by 60 Minutes,
Madoff can be heard saying, "In today's regulatory environment, it's virtually impossible to violate rules. This is something the public really doesn't understand but it's impossible for a violation to go undetected, certainly not for a considerable period of time."

Christopher G. Brooks, 39, was sentenced in U.S. District Court in Seattle for his role in fraudulently netting more than $1.6 million

Christopher G. Brooks, 39, was sentenced in U.S. District Court in Seattle for his role in fraudulently netting more than $1.6 million for him and his wife by participating in 54 fraudulent loan transactions worth more than $27 million.
The scheme of Brooks and his wife, Amani Moss, involved home sellers agreeing to overstate their homes’ sales prices, with the difference between the home’s true sale price and the overstated price going to the couple’s Peachtree Development company.
Government officials said Brooks and Moss would recruit “straw buyers” for the homes, who would be paid up to $10,000. The couple would prepare false mortgage loan statements for the “straw buyers” and submit them to lenders.In one example cited by officials, the couple were involved in sale of a home on 240th Way Northeast in Redmond. The government alleges that Moss provided false information to First Guaranty Financial Corp. on a $1.6 million loan, saying that the buyer earned $101,277 a month. The government alleged that $778,000 of the loan’s proceeds returned to the couple.The pair also participated in transactions in Seattle, Federal Way, Issaquah, Mukilteo, Sammamish, Tacoma, Covington, Kenmore and Black Diamond.“His actions, his behavior, along with many others that jumped on this particular bandwagon to commit fraud, set in motion this chain reaction of economic and financial adversity that spread not only throughout our entire country but to global financial markets as well,” said U.S. District Judge Ricardo Martinez, at Brooks’ sentencing.

Frances M. Flood and Susie Strohm, former executive officers of ClearOne Communications, guilty of all counts charged in the indictment

Frances M. Flood and Susie Strohm, former executive officers of ClearOne Communications, guilty of all counts charged in the indictment (conspiracy, making false statements to an accountant, securities fraud and perjury). Ms. Strohm was convicted of one count of perjury and acquitted on all other charges in the indictment. The trial started Feb. 2. Sentencing is set for May 7 at 2 p.m.
At the time of the conduct alleged in the indictment (2001-2002), Flood was the chief executive officer and president of ClearOne Communications, Inc. Strohm held the position of chief financial officer. She also was controller and vice president of finance. The trial concerned the specific conduct of the two defendants. ClearOne Communications, Inc., was not charged in the indictment.
According to the indictment, in 2001, ClearOne started selling products to distributors in order to recognize revenue at the time of shipment. In order to get distributors to take large amounts of products at the end of quarters or fiscal years, ClearOne made secret promises to distributors that the distributors would pay for the inventory when it was sold rather than under contract terms. The defendants lied to ClearOne's auditors about those promises. Ms. Flood faces up to 5 years in prison for a conviction on conspiracy count; up to 20 years per count for three counts of making false statements to an accountant; up to 20 years per count for two convictions on securities fraud counts; and up to 5 years for perjury. Ms. Strohm faces up to 5 years in prison for the perjury conviction. We are very pleased with the verdict. We believed all along there was criminal conduct involved as set forth in the indictment. The jury sorted through a lot of evidence on different issues and arrived at a verdict that confirmed there was criminal conduct at ClearOne Communications during 2001 and 2002. We appreciate their service in this case

Laura Pendergest-Holt, the first person arrested in the $8 billion Allen Stanford fraud investigation, can walk free once she posts $300,000 bond

Laura Pendergest-Holt, the first person arrested in the $8 billion Allen Stanford fraud investigation, can walk free once she posts $300,000 bond, a Houston judge ruled on Friday.
Pendergest-Holt, the 35-year-old chief investment officer for the Stanford Financial Group who was arrested by the FBI on Thursday, spent the night in a Houston detention center, then faced U.S. Magistrate Judge Mary Milloy in court.
U.S. prosecutors had asked the judge to set bond at $1 million, an amount that Pendergest-Holt's attorney, Dan Cogdell, called "outrageous."
While agreeing it was a serious case, Milloy lowered the amount to $300,000 and ordered Pendergest-Holt, who appeared in court dressed in a dark pants suit and heels, to wear an electronic tracking device after her release.
The tall, slender brunette appeared grim for most of the hearing but occasionally turned in her chair to smile at her husband, equity fund manager Jim Holt.FBI agents had arrested her at Stanford's Houston-based headquarters and accused her of obstructing an investigation by the U.S. Securities and Exchange Commission into what the agency called "massive ongoing fraud" by Stanford Financial Group Chairman Allen Stanford and three of his companies.The developments could signify that prosecutors are closing in on the Texas billionaire, who has dual U.S. and Antigua Barbuda citizenship and has been a prominent sponsor of cricket, golf, tennis and polo events.Under questioning from Pendergest-Holt's lawyer, FBI agent Vanessa Walther said there is no arrest warrant for Stanford and he is believed still to be in northern Virginia, where he was served court papers last week.

Robert Cephas Brown Jr. and 49-year-old Duane Allen Eddings were indicted Thursday on multiple felony charges

55-year-old Robert Cephas Brown Jr. and 49-year-old Duane Allen Eddings were indicted Thursday on multiple felony charges, including mail fraud, wire fraud and money laundering. Authorities say they operated under multiple names, including Trebor Company, and lured investors with promises of high returns. One plan they are accused of offering promised to double investors' money in three months. According to the indictment, Brown spent the money on limousine services, a Ferrari Testarossa and expensive clothes, hotels and restaurants. He also allegedly withdrew more than $3.5 million of investors' money in cash.

Broome County Security Division Case Integrity Unit recently filed criminal charges upon the conclusion of an investigation

Broome County Security Division Case Integrity Unit recently filed criminal charges upon the conclusion of an investigation of several local welfare recipients who received social services benefits they were not entitled to. In the sweep, twenty four people were arrested and charged with various violations of NYS penal law welfare fraud statutes, which identified $161,612 in fraudulent payments made to beneficiaries. Those charged will begin appearing in Binghamton City Court on Monday, March 2nd.
“Many are seeking assistance during these tough economic times,” said Broome County Executive Barbara J. Fiala. “We are entrusted to protect program integrity and ensure hard earned taxpayer dollars go to the people who truly deserve them. Recipients will be held accountable for any aid they received that they were not entitled to.”
The fraudulent recipients were charged for such offenses as failing to disclose income derived from rental properties, undisclosed bank account assets and earned income from various sources while receiving social services benefits. The charges filed on these beneficiaries range from misdemeanors to various felony levels. In 2008, the Case Integrity Unit identified, avoided and recovered nearly 6 million dollars through the fraud detection program lead by the County Security Division.“Our mission is to review applicants for assistance as well as those that have received past assistance to assure the integrity of our social service programs,” stated Director of Broome County Security James D. Dadamio. “Let this serve as a reminder that we will continue to protect taxpayer dollars from being distributed into the wrong hands.”

Texas billionaire R. Allen Stanford, chairman of the Stanford Group, and James M. Davis, the firm's chief financial officer, misappropriated billions

Stanford, chairman of the Stanford Group, and James M. Davis, the firm's chief financial officer, misappropriated billions of dollars of investors' money and falsified the bank's financial statements to conceal the fraud, the agency said in the complaint filed in federal court in Dallas. Securities and Exchange Commission yesterday amended its civil complaint against Texas billionaire R. Allen Stanford to accuse him of conducting a "massive Ponzi scheme" through companies he controlled.
The SEC on Feb. 17 brought civil charges against Stanford, Davis and Laura Pendergest-Holt, the firm's chief investment officer. In an $8 billion investment fraud, investors were lied to about the safety of investments sold by the banks including Antigua-based Stanford International Bank as certificates of deposit and were promised unrealistically high rates of return, the SEC alleged. Pendergest-Holt appeared in federal court yesterday after her arrest Thursday on charges that she obstructed the SEC's investigation of the Stanford scandal by lying about her knowledge of the firm's activities and by omitting key details. During a court hearing, Pendergest-Holt was painted alternately as the scapegoat and as one of the few people who knows where millions of dollars stolen from investors are hidden.
The chief investment officer of troubled Stanford Financial Group was forced to borrow money from her attorney, Dan Cogdell, to post bond to cover her $300,000 bail and avoid spending the weekend in jail. She must wear an ankle monitor as she heads to Dallas for more hearings in her case.

Adding a new dynamic to the scandal, the regulators now say the fraud was a Ponzi scheme, in which early investors are paid returns from money put in by later investors. Investigators allege that Stanford and Davis diverted at least $1.6 billion of investors' money through personal loans to Stanford. Stanford and Davis also invested an undetermined amount of customer funds in speculative, unprofitable private businesses, some of which they controlled, the SEC said in the new complaint. The regulators also say that Stanford faked historical data on other investments, which he then used to lure in more investors for the certificates of deposit. Pendergest-Holt "facilitated" the alleged scheme by misrepresenting to investors that she managed the bank's multibillion-dollar investment portfolio and employed a large team of analysts to monitor it, the SEC said in the filing.
Cogdell said that his client was "set up" by Stanford and Davis. The SEC froze the assets of three of Stanford's companies. FBI agents served Stanford with legal papers last week, and he was ordered to surrender his passport. He has not been charged with a crime.

Stephen Walsh appeared before a federal magistrate this week along with Paul Greenwood.

Stephen Walsh appeared before a federal magistrate this week along with Paul Greenwood. According to charges filed by the Securities and Exchange Commission the men, while operating WG Trading Investors of Greenwich, Conn., were involved in conspiracy, wire and securities fraud. The complaint details actions back to 1996 and said the men promised investors that their money would be invested in a stock index arbitrage strategy.
“Instead, Greenwood and Walsh essentially treated their clients’ investments as their personal piggy bank to purchase multi-million dollar homes, a horse farm and horses, luxury cars, and rare collectibles such as Steiff teddy bears,” the SEC said.

The SEC obtained an emergency court order freezing the assets of Greenwood and Walsh as well as their companies: WG Trading Investors, L.P. (WGTI), which is an unregistered investment vehicle; WG Trading Company, Limited Partnership (WGTC), which is a registered broker-dealer located in Greenwich, Conn.; and Westridge Capital Management, Inc. (Westridge), which is a registered investment adviser located in Santa Barbara, Calif.After appearing in a Manhattan court Feb. 25 the men were released on $7 million bond.Also this week, the University of Pittsburgh and Carnegie Mellon University filed suit against the two men for using a total of $114 million in investments from those institutions. Earlier this month, the National Futures Association was unsuccessful in attempting to audit the actions of WG Trading Investors — an NFA member — and suspended the membership of Walsh and Greenwood. That attracted the interest of the universities, who contacted the Securities and Exchange Commission.Walsh, a 1966 graduate of UB, is listed among its “Donors of Distinction.” In 2001, he pledged $250,000 to the UB athletics department. Later, the basketball office complex inside Alumni Arena was named after Walsh.When asked about his involvement with UB, the university released a statement: “Mr. Walsh has been an inactive member of our foundation board since March 2004. Furthermore, we have a policy that prohibits investing funds with any member of our foundation board.”Walsh was also listed as a former executive with the New York Islanders hockey team in the 1990s.

Sunday 22 February 2009

$8 billion fraud case involving Texas financier R. Allen Stanford


$8 billion fraud case involving Texas financier R. Allen Stanford — with its toxic stew of frozen assets, growing stack of lawsuits and hundreds of furious investors and advisers — is shaping up to be a long-running nightmare that could take years to unravel. Investors' accounts in financial companies controlled by him may remain frozen for more than two years, according to Walter Pagano, head of the forensic-accounting division of Eisner LLP in New York and a former revenue agent with the Department of the Treasury. What's more, the roughly 250 advisers who work for Stanford companies face uncertain futures since they've become ensnared in what the Securities and Exchange Commission described as "a massive, ongoing fraud" in a complaint brought against Mr. Stanford last week. The SEC's civil investigation into Stanford International Bank Ltd. of St. John's, Antigua, and Stanford Group Co. and Stanford Capital Management, both of Houston, "could take more than six months to 27 months on average," Mr. Pagano said. Meanwhile, Mr. Stanford was found Thursday in Virginia, where FBI agents acting at the SEC's behest served him with legal documents. He was not arrested and has not been charged with any crime, though federal agents continue to investigate the case.

A federal court ordered that Stanford's assets be frozen last week and appointed attorney Ralph Janvey of Dallas as receiver. Mr. Janvey, a partner in the Dallas law firm Krage & Janvey LLP, did not return calls seeking comment, but securities attorneys said it is unlikely that he will unfreeze the assets before a thorough investigation is conducted.
Financial-fraud attorney Thomas Ajamie, managing partner for Ajamie LLP of Houston, who represents several Stanford clients, said he does not expect assets to be unfrozen for at least 90 days, "and possibly much longer."Meanwhile, investors have started to file what is expected to be numerous lawsuits against Mr. Stanford, his financial companies and top Stanford executives, including James Davis, a director and chief financial officer of Stanford International Bank and Laura Pendergest-Holt, chief investment officer of the bank and its affiliate, Stanford Financial Group of Houston. Stanford's media relations department referred all inquires to the SEC, which in turn referred calls to Mr. Janvey. Although financial advisers have not yet been named as defendants in the lawsuits, it is possible that they will be, securities fraud attorneys said.
The Stanford advisers' difficulties stem from the sale of certificates of deposit with suspiciously high returns and a proprietary mutual fund wrap program called Stanford Allocation Strategy. According to the SEC complaint, Stanford Group advisers have sold more than $1 billion worth of the mutual funds "by using materially false and misleading historical performance data."
Stanford expanded the mutual fund program, using the false data, from less than $10 million in 2004 to more than $1.2 billion, according to the SEC. That generated more than $25 million in fees, the complaint said.

What's more, the fraudulent performance of the wrap program "was used to recruit registered financial advisers with significant books of business, who were then heavily incentivized to reallocate their clients' assets to Stanford International Bank's CD program," according to the SEC complaint. The unusually high returns of the CDs touted by Stanford were in fact illusory, the SEC complaint alleges. What's more, according to the SEC, investments in the CDs were not placed in liquid financial instruments as promised but rather in illiquid assets such as real estate and private equity. Financial advisers received a 1% commission when they sold the CDs, and they were eligible to receive as much as a 1% trailing commission throughout the terms of the CD. In addition, according to the SEC complaint, Stanford advisers were trained to "provide security to clients" by describing the CDs as liquid investments, when they were not. In 2007, Stanford International Bank sold $6.7 billion worth of CDs to 50,000 customers, according to the SEC.
Asked about the company's Caribbean-based bank product in an interview with InvestmentNews last November, Jason Green, president of Stanford Financial Group's private-client group, described it as a proprietary "time deposit" offered through a Regulation D offering, an SEC form which allows the sale of unregistered securities to accredited investors in the United States under certain circumstances.
The "time deposit" had no Federal Deposit Insurance Corp. insurance, Mr. Green said, but offered "competitive" returns based on a "global portfolio." "It's a good, unique product," he said during the interview.
Stanford clients who filed a class action against a number of Stanford companies last week in U.S. District Court in Dallas were told by their advisers that the CDs were "a very safe vehicle for investment," according to Chris Fonville, an attorney for Fleming & Associates LLP of Houston, which is representing the plaintiffs.

Any Stanford adviser who recommended an investment in a Stanford Bank CD that was "clearly unsuitable under New York Stock Exchange or Finra rules" may face a lawsuit from one of his clients, said James Dunlap, a securities litigation attorney with an eponymous firm in Atlanta. The Financial Industry Regulatory Authority Inc. is based in New York and Washington.

Mr. Dunlap is representing Johan Dahler, a Stanford client who filed a civil complaint against the company in Harris County, Texas, district court last week.
The "disproportionately large" commission given to Stanford advisers who sold the CDs may be cited in a complaint brought against them, Mr. Dunlap said.

A 1% commission for the sale of a CD and possible 1% trailing fee is considered unusually high, industry insiders said. One independent registered adviser in Texas, who asked not to be identified, said the amount "is too high. We get a few basis points for that kind of business."
The adviser said Stanford's "bank product" was popular when he interviewed with Stanford Financial Group several years ago. "It sounded like a CD, but it paid 8.5% and was backed up by a bank in the Caribbean. It just didn't sound right," the adviser said. A 1% upfront and trailing commission is "a very, very rich payout for a cash product," said Tim Welsh, president of Larkspur, Calif.-based Nexus Strategy LLC, a wealth management industry consultant. "Typically, the commission is zero or minimal basis points." he said. In addition to potential lawsuits, Stanford advisers likely will have to deal with angry clients who can't get their money and, as Mr. Dunlap put it, "may not be able to get it for a very long time." "Clients are furious," said Rick Peterson, president of an eponymous Houston-based recruiting firm. "They're telling advisers to do your due diligence and find us a respectable home ASAP or we're taking our business elsewhere." Stanford advisers are "utterly shellshocked, according to Tim White, another Houston-area industry veteran. "They are devastated. This is like death for these guys," Mr. White said. The Stanford Financial Group's wealth management unit inspired great loyalty, he said. "They have a lot of pride and an esprit de corps that is difficult to match in the business" Mr. White said. While Stanford advisers may be reluctant to leave the company, they may have no choice, according to Mr. White, who is a partner in executive-recruiting firm Kaye/Bassman International Corp. of Plano, Texas. He has worked with Stanford.
"If the situation is not resolved to the client's satisfaction, then they will be compelled to move [to follow the client]. The client calls the tune in this business," Mr. White said. And to make matters even worse, several attorneys involved in lawsuits against Stanford said they were told that Mr. Janvey, the court-appointed receiver, has instructed Stanford advisers not to talk to their clients for the time being.
"They're in limbo, and that's a tough position for an adviser to be in," Mr. Ajamie said. Comparisons to the Stanford case and the alleged Ponzi scheme run by New York investment manager Bernard Madoff intensified last week when The Wall Street Journal reported that federal prosecutors are investigating whether Mr. Stanford was operating a Ponzi scheme de-frauding investors around the world. "The difference is that Madoff investors came from a close-knit circle, while anyone off the street could walk in and open a Stanford ac-count," Mr. Dunlap said.

Wednesday 18 February 2009

Antiguans expressed shock prime minister said it could be "catastrophic" for the nation.

Antiguans expressed shock on Tuesday at news their top investor, the Texas billionaire Allen Stanford, was charged with "massive" fraud, and their prime minister said it could be "catastrophic" for the nation."The fall-out threatens catastrophic and immediate consequences," Baldwin Spencer, the leader of the tiny twin-island state of Antigua and Barbuda said in a televised address. "There is no need for panic."

Stanford Bank is healthy in Venezuela ?

Venezuela's top banking regulator says Stanford Bank is healthy in the country despite fraud allegations elsewhere that led U.S. authorities to shut down offices and freeze assets.Venezuela's superintendent of banks, Edgar Hernandez Behrens, said Stanford Bank Venezuela is in fine shape and that "the situation is normal." He was seeking to reassure Venezuelan depositors who panicked at the news of fraud allegations and sought to withdraw funds.Hernandez said Wednesday that Stanford Bank Venezuela is not affiliated with Stanford Bank on the Caribbean island of Antigua, where some fraud accusations have centered.The U.S. Securities and Exchange Commission has shut down Stanford Bank, owned by Texas billionaire

Stanford Financial Group sponsors the Stanford St. Jude Championship on the PGA Tour and the Stanford Financial Tour Championship on the LPGA Tour.

Stanford Financial Group sponsors the Stanford St. Jude Championship on the PGA Tour and the Stanford Financial Tour Championship on the LPGA Tour.With its assets frozen and its chairman accused of fraud, will Stanford Financial Group be able to follow through on those sponsorship obligations? Will either tour want the company to remain as title sponsor?PGA Tour commissioner Tim Finchem released a very brief statement today, saying, "We want to categorically state that the PGA TOUR event in Memphis will be played as scheduled this year."So the PGA Tour event in Memphis goes on, regardless of what happens with the title sponsor. The LPGA may be in a trickier spot. That tour's Stanford-sponsored tournament is the season-ending, showcase tour championship.A tour can't cancel it's "tour championship," can it? Yet the LPGA has much shallower pockets than the PGA Tour, and fewer options for finding new sponsorship (if necessary).

In a statement quoted by the Associated Press, spokesman David Higdon said, "The LPGA has been closely monitoring the developments regarding the situation with Allen Stanford and some of his companies. We remain in close contact with our tournament owner of the Houston event sponsored by Stanford Financial, and they will continue to update us on any new developments related to this matter."

Panama's biggest scam to date

latest financial scam perpetrated by the Stanford International bank which has an office in Panama. Although only about 20% the size of the Bernie Madoff pyramid scheme, it has to rank as Panama's biggest scam to date. Obviously this is not a home grown fraud, but unfortunately the fact that it has been operating in Panama will not be good for the Banking commission and Panama's reputation.The history section of the Stanford website has this quote from the father of the founder:"Build the business, step by step, on a firm foundation of hard work, clear vision and value for the client." -Lodis B. StanfordHere is what Bloomberg had to say about the Panama operation.Feb. 18 (Bloomberg) -- Panama's banking regulator said it took over
a local affiliate of Stanford Financial Group after fraud accusations by
U.S. authorities prompted a
"massive withdrawal of funds."
Stanford Bank (Panama) SA was taken over by the government as of 7
a.m. local time today, according to a statement posted on the Web site
of Panama's superintendent of banks. A similar statement was taped to
the door of a shuttered Stanford branch in Panama City.
"I was here yesterday and they said I could come back tomorrow to
close my account," said Marcus Edval, 32, who was trying to withdraw his
entire $50,000 from the bank. "No one knows what's going on."
The Securities and Exchange Commission yesterday accused R.
Allen Stanford of running a "massive, ongoing fraud" through his
Houston-based Stanford Group. Co. In addition to Panama, Stanford has
offices in Antigua, Venezuela, Mexico, Ecuador, Peru and Colombia.
I guess something went terribly wrong with the vision of those running the company today as the SEC closed them down and filed charges of fraud.

Charges filed by the Securities and Exchange Commission (SEC) portray the flamboyant Sir Allen Stanford as the ponzi-master’s offshore equivalent

Charges filed by the Securities and Exchange Commission (SEC) portray the flamboyant Sir Allen Stanford as the ponzi-master’s offshore equivalent, perpetrating a fraud of “shocking magnitude” based on “false promises” and fabricated performance data, primarily through his Antigua-based bank.The central allegation is that Stanford International Bank hoodwinked investors over the safety and liquidity of uninsured certificates of deposit (CDs). It took in some $8 billion, consistently offering rates well above those of big banks—sometimes more than twice as high. Despite assurances that the money was going into liquid securities, much of it was apparently ploughed into sticky assets such as property and private equity.How well these performed is unclear, but the stated returns were suspiciously smooth and impressive: consistently in the low double digits for over a decade, with a loss of just 1.3% last year, when stockmarkets around the world crashed. Unlike Mr Madoff, Sir Allen has not been accused of running a ponzi scheme, although it is possible that large sums have been lost in unwise bets. Hundreds of the bank’s 30,000 clients descended this week on its neo-Georgian headquarters, conveniently located next to the airport of St John’s, the Antiguan capital, demanding their money back. Depositors also besieged Stanford’s smaller, onshore Bank of Antigua, as well as operations in Venezuela and Panama. A big chunk of the client base is Latin American, although Americans reportedly ploughed in as much as $1.5 billion. The SEC says it is, so far, unable to account for the bulk of assets. In total, the group claims to have more than $50 billion “under advisement”.The hoodwinking ran deep, according to the SEC’s complaint. The portfolio was not, as claimed, monitored by a team of more than 20 analysts, but by the sole shareholder himself and his chief financial officer, an old college classmate. Many of the holdings were known only to these two. Among those on the cosy investment committee were Sir Allen’s father and a neighbour with cattle-ranching experience.

Investors can perhaps be forgiven for failing to spot this in-bred governance structure. Other warning signs were more obvious: the implausibly small auditing firm that Stanford used—a trick out of Mr Madoff’s book; the labyrinthine corporate structure; and a stunning lack of transparency. The chief investment officer told staff not to reveal too much about the oversight of investments because it “wouldn’t leave an investor with a lot of confidence”.

Once again, regulators are shuffling uncomfortably in the spotlight. Antigua’s financial regulator has lived down to its reputation for being supine even by Caribbean standards. It gave Stanford a clean bill of health a few months ago (although, contrary to the bank’s claims, it did not perform a full audit). Sir Allen’s local largesse and political connections may have helped here. His knighthood came from a grateful Antiguan government, not Queen Elizabeth.
American regulators have been more assiduous, yet they are still open to charges of foot-dragging. FINRA, which oversees brokers, fined Stanford several times in recent years, including a $10,000 penalty for misrepresenting the “risks and potential benefits” of its CDs. Such a small fine will fuel suspicion that the self-regulatory body is too close to the industry. The SEC began probing Stanford as far back as 2006.Even then, it was arguably late to the game. Law enforcers had been sniffing around Sir Allen since the late 1990s, when he lost his banking licence in Montserrat, another Caribbean island. His group’s murkiness has long alarmed those who looked closely. “There was no excuse for anyone with an ounce of sophistication to invest,” says David Marchant of Offshore Alert, a newsletter. At least one trading partner grew wary long before regulators tightened the noose: in early 2008 Pershing, a Stanford custodian, sought an independent report on its financial health. In December, after being told that this was “not a priority”, it stopped processing the bank’s transfers.The SEC stepped up its probe after its Madoff mis-steps. But a bigger impetus may have been a deeply sceptical report on Stanford’s investment returns, published in January by Alex Dalmady, an independent analyst. The blogosphere picked this up, and within days it was making headlines worldwide. This offers hope for those who despair of the SEC’s bungling, suggesting that in the internet age forensic vigilantes and devil-may-care bloggers can, to some extent, fill the gap left by dilatory regulators and libel-constrained mainstream media

Texas financier R. Allen Stanford disappears


The Texas financier accused of cheating thousands of customers out of $8B is currently missing, federal authorities said.

Federal authorities raided all three of his headquarters but could not find 58-year-old Allen Stanford.CNBC reported that Stanford unsuccessfully tried to hire a private jet from Houston to Antigua. The jet company would not accept his credit card.On Tuesday, the Securities and Exchange Commission filed a complaint against Stanford and three of his companies. The SEC claims that roughly $8 billion of so-called certificates of deposit were sold to investors with promises of "improbable and unsubstantiated high interest rates," the Associated Press reported.In Antigua and Caracas, lines of people gathered outside of banks affiliated with Stanford, according to Reuters.
Panicky depositors rushed to pull money from banks on Wednesday as leaders in the Caribbean and Latin America urged calm, concerned that their slumping economies could be harmed by the fraud case against Texas financier R. Allen Stanford.
Hundreds of people lined up outside two branches of the Bank of Antigua, a Stanford-owned institution that has been flooded with fearful customers since the U.S. Securities and Exchange Commission filed a complaint Tuesday accusing him of an $8 billion fraud."People have to come to get their money," said Rasta Kente, an electrician who joined a line that stretched around the corner at a downtown bank branch. Three security officers allowed only a few people to enter at a time.Many of those waiting clutched portable radios to listen to financial news.
Local regulators said the bank's finances are sound and appealed for calm. The bank, owned by the Stanford Financial Group, one of Stanford's Houston-based financial advisory firms, was flooded by depositors even though it is not part of the U.S. complaint."If individuals persist in rushing to the bank in a panic they will precipitate the very situation that we are all trying to avoid," said K. Dwight Venner, governor of the Eastern Caribbean Central Bank, the banking regulator for Antigua and seven other islands.U.S. regulators on Tuesday charged Stanford, a Texas billionaire who has become one of the most successful businessmen in the Caribbean, and three of his companies of perpetrating a "massive" $8 billion fraud that centered around high-interest-rate certificate of deposits.The U.S. Securities and Exchange Commission froze the assets of Houston-based Stanford Group Company, Houston's Stanford Capital Management, and Antigua-based Stanford International Bank. The latter also has offices in Mexico, Panama, Colombia, Ecuador, Peru and Venezuela.The charges have "profoundly serious implications" for Antigua, Prime Minister Baldwin Spencer said late Tuesday. The regional central bank said it will do "what it takes" to preserve the soundness of the banking system in the twin-island nation of Antigua and Barbuda.Colombian authorities, meanwhile, suspended the activities of Stanford International Bank's local brokerage Wednesday morning to protect "clients and investors," according to a statement from the Colombian Superintendency of Finance.The brokerage posted the equivalent of $3.5 million in losses last year, more than any of the 39 brokerages licensed to trade on Colombia's exchange, and ended 2008 with 21,493 billion pesos, or $8.6 million, in capital, the Superintendency said. Stanford does not operate a retail bank in Colombia.
Regulators in Panama took over branches of Stanford's unit there following a run on deposits Tuesday. The Superintendent of Banks said it was responding to "an isolated event as a consequence of decisions adopted by foreign authorities," and said that it did not reflect "a deterioration in the financial situation of the bank in Panama."

Assets at the bank's four Panama branches, which La Prensa said held $200.8 million in deposits at the end of 2008, are held largely in liquid, fixed-income investments that can easily be converted into cash to cover deposits if necessary, Martinez Stagg said.In Venezuela, where Stanford Bank has 14 local branches and about 15,000 clients, the nation's top bank regulator also urged calm.Banking Superintendent Edgar Hernandez warned that in addition to local depositors, a group of Venezuelans has an additional $2.5 billion in assets in Stanford's Bank in Antigua — fueling reports that some wealthy investors were traveling to Antigua Wednesday to talk to bank officials.In the Virgin Islands, Gov. John deJongh said he is worried the probe will worsen the U.S. territory's flagging economy, potentially costing jobs and investment in local projects.Stanford had pledged to build an office complex on land adjacent to St. Croix's airport.
Stanford, 58, owns a home in St. Croix and operates his businesses from Houston and Antigua. He was knighted in this Caribbean island in 2006 and helped sponsor high-stakes cricket matches
.Forbes magazine has estimated his personal fortune at $2.2 billion.In Mexico, the president of Stanford Fondos, a local mutual fund distributor run by Stanford Financial Group, said its operations have been unaffected by the SEC investigation because that group was not named in the fraud case.
Stanford Fondos managed $49.9 million, in investments for 3,414 clients as of November, according to Mexico's National Banking and Exchange Commission.
In addition to Stanford himself, the civil lawsuit filed Tuesday in federal court in Dallas names as defendants James Davis, the chief financial officer of Stanford International Bank, as well as Laura Pendergest-Holt, the chief investment officer of Stanford Financial Group.While not named in the SEC's civil complaint, regulators said Stanford was aided in running the Antigua-based operation by his father, who lives in Mexia, Texas, and another Mexia resident with a background in cattle ranching and car sales. Davis, who was named in the lawsuit, was Stanford's college roommate.

Bruce E. Hammonds, a former Merrill Lynch & Co. employee in San Antonio got Merrill Lynch clients to invest in a partnership he controlled

Bruce E. Hammonds, a former Merrill Lynch & Co. employee in San Antonio, admitted that for more than two years, starting in August 2006, he got Merrill Lynch clients to invest in a partnership he controlled without the knowledge of the investment giant or the investors who thought the money was going into a Merrill Lynch fund.
The firm fired him in June for co-mingling investor funds with his personal funds and not disclosing the partnership.After his termination, he kept soliciting investors for the partnership, the U.S. Attorney's Office said in a filing with the court.Hammonds used the money for himself and gave some to relatives and business partners, prosecutors said. No one else has been charged in the case, but Hammonds faces up to 10 years in prison when he is sentenced May 29.

U.S. brokerage regulators fined R. Allen Stanford’s firm more than a year ago for misleading investors while selling certificates of deposit

U.S. brokerage regulators fined R. Allen Stanford’s firm more than a year ago for misleading investors while selling certificates of deposit, raising new questions about watchdogs already under scrutiny for missing Bernard Madoff’s alleged $50 billion Ponzi scheme. Stanford Group Co. was fined $10,000 by the Financial Industry Regulatory Authority in November 2007 for distributing marketing material that “failed to present fair and balanced treatment” of the risks associated with CDs. The U.S. Securities and Exchange Commission yesterday filed a civil lawsuit calling the sales by the Houston-based firm a “massive, ongoing fraud.” “From what we know, the problem that led to the fine was a red flag,” said Robert Hillman, a securities law professor at the University of California, Davis. “If you have a red flag of this nature, then you have to do something more than simply levy a fine and close the file.” The SEC accused Stanford of touting “improbable, if not impossible” returns for more than a decade on CDs issued by an affiliated bank in Antigua. The case follows congressional scrutiny of the SEC and Finra, which is funded by the brokerage industry, for missing Madoff’s alleged scheme.

Friday 6 February 2009

nationwide ATM heist late last year netted thieves $9 million in cash in one day

nationwide ATM heist late last year netted thieves $9 million in cash in one day, according to published reports. The coordinated attack stemmed from a computer intrusion at payment processor RBS WorldPay.Atlanta-based RBS WorldPay announced on Dec. 23 that hackers had broken into its database and made off with personal and financial data on 1.5 million customers of its payroll cards business. Some companies use payroll cards in lieu of paychecks by depositing employee salaries or hourly wages directly into payroll card accounts, which can then be used as debit cards at ATMs. RBS said that thieves also might also have accessed Social Security numbers of 1.1 million customers.

New York's Fox 5 cites FBI sources as saying that thieves used the stolen payroll cards recently to withdraw $9 million from ATMs from 49 cities, including Atlanta, Chicago, New York, Montreal, Moscow, and Hong Kong.

Steve Lazarus, a spokesman for the FBI's Atlanta field office, said the withdrawals were carried out by a small army of so-called "cashers," or people who work with cyber thieves and fabricated cards to pull money out of compromised accounts.
"Shortly after midnight Eastern Time on November 8, the FBI believes that dozens of the so-called cashers were used in a coordinated attack of ATM machines around the world.""This was a well-coordinated attack by some pretty computer and network savvy people, even at the lowest levels of cashers taking cloned cards to ATMs," Lazarus said. Lazarus declined to confirm the $9 million figure, but said the amount stolen was indeed "a very substantial amount" over a short period of time in early November. "This was a nationwide coordinated effort, and there were certain aspects of it that were international as well," Lazarus said. "People are out there attacking computers every day. But what sets this one apart is the scope, timing and coordination of the attack."One interesting aspect of this attack is that while the attackers evidently had access to more than a million RBS customer accounts, they were able to haul the loot by repeatedly refueling only 100 payroll cards, Fox News reports. Sources close to the investigation told Security Fix that the criminals used fake payroll deposits to artificially inflate the amount of money on the cards, money that was then drained at ATMs and subsequently replenished with additional bogus payroll deposits. News of the complex ATM heist was little surprise to Ori Eisen, founder of 41st Parameter, a company that consults with banks and retailers to help staunch fraud losses. Eisen said he recently heard from three different clients in the banking sector who told him that some $50 million was lost to ATM fraud in New York City alone over the course of one month last year.

"ATM fraud is spiking," Eisen said. "For New York financial institutions alone to have $50 million in ATM fraud in one month...that's incredible. The thieves are getting a lot more money from the ATMs now than they used to."

Manhattan judge releases indicted Marc Dreier $400 million fraud lawyer.

Manhattan U.S. District court judge releases indicted Marc Dreier$400 million fraud lawyer.

New York, NY Late today a U.S. District Judge in Manhattan released indicted lawyer, Marc Dreier, on a $10 million bond. As reported by Reuters, Dreier, a high profile New York attorney for 30 years, was indicted by a U.S. federal grand jury for securities fraud, conspiracy, wire fraud, misrepresenting hedge funds and investment funds in New York and Canada. Prosecuting attorneys allege Drier orchestrated a $400 million investment fraud.Drier has since pleaded not guilty and has remained in his Manhattan jail cell since his arrest and arraignment on December 7, 2008. The 30 year attorney is the founder of a 250 member firm and posted bail in Canada after he was arrested on similar charges in early December. The judge released Drier to a private security company monitoring his house arrest at his upper East Side neighborhood apartment. His house arrest bill for three months will total over $210,000 and the Harvard Law School graduate is currently barred from using computers.

After being caught by her boss, a company secretary who allegedly defrauded her company of funds shot herself dead

After being caught by her boss, a company secretary who allegedly defrauded her company of funds shot herself dead in their office in Iloilo City, a radio report said late Thursday.Radio dzRH reported that the secretary, identified only as Julie Fe, 27, shot herself in the temple with a .45-caliber pistol while her boss Raymond Coo reported her to the police.Initial investigation showed Coo confronted Julie Fe over the alleged fraud, and went to a police station to lodge a complaint against her.When he returned, he found her bloodied and lifeless body inside the office

Verlin Swartzendruber has pleaded not guilty to 11 felony counts, including wire fraud, money laundering and conspiracy to defraud.

Verlin Swartzendruber has pleaded not guilty to 11 felony counts, including wire fraud, money laundering and conspiracy to defraud. Trial is scheduled for March 9 in Fargo.Defense attorney F. Clinton Broden filed two motions to delay the trial because he believes it conflicts with cases from two other clients. In his second appeal, Broden said he ``desperately requests this court'' to move the trial to June or July.In denying the motions, U.S. District Judge Ralph Erickson said Broden should have enough time to prepare for the Swartzendruber trial and other cases.

Robert Miracle,who allegedly ran a $65 million pyramid scheme involving investments in Southeast Asian oil development

Bellevue businessman who allegedly ran a $65 million pyramid scheme involving investments in Southeast Asian oil development has been ordered held in federal custody by a U.S. magistrate judge after his arrest Thursday morning.Prosecutors allege Robert Miracle, 48, and two Malaysian men used money they took from some investors to pay others, all the while claiming they were helping develop vast tracks of oil-rich land overseas.The 23-count indictment unsealed Thursday alleges they lied to investors, created fake financial statements and ginned-up false news releases to boast of success, when in fact Miracle and his alleged co-conspirators were living a "lavish lifestyle" and using investor funds in risky oil and gas development projects.Miracle was arrested at his Eastside home Thursday morning. He appeared in a gray T-shirt beside his court-appointed lawyer later in the day to hear that he faces a 23-count indictment that could land him in federal prison for decades. He's charged with conspiracy, mail fraud, wire fraud, money-laundering and tax evasion. Nineteen of the charges carry 20-year prison sentences and fines of $500,000 each.Miracle did not enter a plea to the charges. Arraignment is set for Monday, when U.S. Magistrate Judge James Donohue ordered him to appear for a detention hearing.Two other men, both from Malaysia — Mukhtar Kechik and Fahimi Fisal — are also charged. Both are fugitives, and warrants have been issued for their arrests, according to Assistant U.S. Attorney Andrew Friedman.

Friedman said the case is one of the largest federal fraud prosecutions in the state's history, alongside the $91 million Znetix scheme and the $78 million offshore investment-club fraud run by John Wayne Zidar. Znetix founder Kevin Lawrence went to prison for 20 years. Zidar received a 30-year term.

The indictment alleges that Miracle operated a number of companies involved in oil development in Malaysia and Indonesia. The companies included Laramie Petroleum, whose offices were the target of a search warrant executed by criminal investigators from the Internal Revenue Service and the FBI in 2007.The affidavit for that warrant says Miracle was convicted of felony theft in Oregon in 1994, for stealing textbooks at Umpqua Community College in Winchester, Ore. It also states that Miracle has, over the years, represented himself as having worked for the Disney Co. and for NASA, neither of which the government says is true.Court documents say the state Department of Financial Services opened an investigation into MCube, one of Miracle's oil development companies, in 2006. The following year, the state ordered that the companies "cease and desist" from violating state securities laws. They were issued fines and penalties amounting to nearly $200,000.The charges allege Miracle and others represented to investors that they were making money from oil fields in Malaysia and Indonesia, when in fact they were using money from one investor to pay another.Agents seized Miracle's computers in the 2007 search and retrieved e-mails prosecutors say showed that he and the others went to great lengths to hide from employees of the various companies that the oil fields in Malaysia were dry. The indictment alleges they forged financial and production statements.


The charges allege that, of the $65 million reported taken in, about $36 million was paid back out to investors to maintain an appearance that the companies were successful.

Prosecutors allege Miracle took the remainder, more than $28 million, and used it to invest in failed oil and gas developments and to support a lifestyle that included the purchase of a $38,000 two-carat diamond ring, a $27,000 painting and a $77,000 weeklong cruise for 10 members of his family.

Carlos De Graca Lopes was sentenced in federal court Thursday on charges including seven counts of visa fraud and four counts of perjury.

Carlos De Graca Lopes was sentenced in federal court Thursday on charges including seven counts of visa fraud and four counts of perjury. man who was accused of torture while working as a prison warden in Cape Verde has been sentenced to three years in prison for lying about his past when he came to the United States.
The U.S. Attorney's office said Lopes, 46, had been ordered by a Cape Verdean court in 2006 to stay in the country. But he obtained a visa to work in the U.S.Shortly after arriving he was discovered and ordered deported. He then applied to remain in the U.S., but falsely denied before an immigration judge that he had ever been arrested or accused of a crime in another country.

Markku Salminen, who retired from the post of national police commissioner last year, was suspected of tax evasion

District prosecutor's office told the Finnish News Agency (STT) on Thursday that Markku Salminen, who retired from the post of national police commissioner last year, was suspected of tax evasion in failing to declare the repeated use of an official car for commuting and possibly other kinds of non-official travel.
Mr Salminen has denied any wrongdoing."The inquiry has focused on the use of an official car for all kinds of private journeys," said Tapio Mäkinen, the district prosecutor heading the investigation.He added Mr Salminen was suspected of unauthorised use of an offical car during his stint as national police commissioner in 2005-8 and of tax fraud, also related to the use of an offical vehicle, when head of the Criminal Sanctions Agency.In his earlier job Mr Salminen was allowed to use the car for private purposes but was under an obligation to declare such journeys.
Mr Salminen was fined for drink-driving December last year

Maurice D. Brooks Sr.led a lavish lifestyle on the backs of mentally disabled people in Seattle, stealing hundreds of thousands of dollars

Maurice D. Brooks Sr. was paying tuition for his kids at a local private elementary school, owned a Lexus and Lincoln Navigator outfitted with flashy accessories, and vacationed twice a year at "Club Hedonism" in Jamaica.Brooks, who now lives in Texas, where he transferred his Renton-based hypnotherapy business, also was a frequent eBay buyer and had an account on Adult Friend Finder, an online dating service.
In Washington state, he headed a small nonprofit company that was supposed to help people with disabilities sustain themselves with their Social Security checks.
Instead, he led a lavish lifestyle on the backs of mentally disabled people in Seattle, stealing hundreds of thousands of dollars from their government checks and leaving at least one of the victims homeless.On Thursday, U.S. District Judge Orlando Garcia in San Antonio rejected Brooks' request for leniency, sentenced him instead to 78 months in prison and ordered him to pay nearly $309,000 in restitution, a figure the government claimed was conservative.The sentence was 15 months longer than what Brooks' lawyer, Ed Camara, argued for, and even eight months longer than prosecutor Bettina Richardson asked for.Brooks was indicted in Seattle in September. He cut a plea deal in San Antonio in November and pleaded guilty to Social Security representative payee fraud and felony theft of public money. He served as a representative payee for about 750 disabled clients from March 2003 through April 2007, and was supposed to help them use their government checks to pay expenses, such as rent, utilities and clothing. His company, like other representative payees, was allowed to charge a fee of $34 to $68 per client.
In a sentencing memorandum filed by prosecutors, the government claimed Brooks stole the money from more than 200 clients to "pay for a lifestyle far beyond his means and which included payments for luxury cars, automobile accessories for his Navigator and his Lexus, twice yearly vacations to Jamaica's 'Club Hedonism,' private elementary school tuition, Adult Friend Finder services, home mortgage payments, operating expenses for his company, an Arco credit card, hypnotherapy training and purchases of numerous items on e-Bay."
The sentence angered Brooks' relatives, who earlier blamed his "mistakes" on being "overstressed" while being chief executive officer of Professional Payee Services. Brooks, who has a master's degree in psychology, told the judge he understood the severity of his conduct, but that he would use his education and ability to pay back what he stole. The incredulous judge told Brooks he knew Brooks would never pay. Garcia also chided Brooks for what he perceived as lack of remorse
."I can see you're quite remorseful," Garcia told Brooks with sarcasm. "You should forget about hypnotherapy. You need to go into a drama club and get a little more remorseful."Brooks had a hypnotherapist office in Renton under the name Brooks Institute of Hypnosis. An ad for his office offered help for weight management, stress reduction, success motivation, golf and sports enhancement, self-esteem encouragement, overcoming procrastination, smoking cessation, gambling control and other concerns.The ad said he trained at the Kodra School of Hypnosis and American Pacific University and was working toward his doctorate in clinical hypnosis. Camara said Brooks had transferred that business to San Antonio, but records show it was never fully established because of his legal troubles.

Angalia Moore has been charged with embezzling $200,000 from a company that helps the mentally ill and another that develops computer software.

Angalia Moore of Northwest Washington was indicted on 12 federal counts of wire fraud, mail fraud and theft in connection with the scheme that lasted from 2002 through early last year, authorities said yesterday.The 54-year-old District woman has been charged with embezzling $200,000 from a company that helps the mentally ill and another that develops computer software.Federal prosecutors said Moore embezzled the funds from Life Stride, a company in the District that provides services to the mentally ill, and Chiliad Publishing. As part of the scheme, Moore stole checks meant to pay the room and board for the mentally ill and transferred Chiliad funds into her personal account, prosecutors said. She held senior financial positions at both companies.

John A. Yanchek pleaded guilty Wednesday to conspiracy, money laundering and making false statements to a bank in connection with a commercial loan.

Authorities say a Sarasota, Fla., lawyer has admitted to participating in an $82.7 million mortgage loan scheme that defrauded seven banks.Federal prosecutors say 49-year-old John A. Yanchek pleaded guilty Wednesday to conspiracy, money laundering and making false statements to a bank in connection with a commercial loan. The most serious offense, making false statements, carries a maximum sentence of 30 years in prison and a $1 million fine.plea agreement says Yanchek and three other men conspired to get commercial loans to cover the purchase of vacant land in Sarasota and Manatee counties. The plan was to obtain loans in amounts that would let the conspirators purchase the property without down payments and then keep the extra money for themselves

Charles and Lynda Wilson set up a fictitious collection agency while he worked as a credit manager for the newspaper

Former Tampa Tribune employee and his wife have been charged with bilking the paper's parent company out of more than $1 million over a period of 10 years.Charles and Lynda Wilson set up a fictitious collection agency while he worked as a credit manager for the newspaper, the Secret Service said. Charles Wilson was responsible for collecting debt from advertisers.Wilsons used the shell agency, CCL Services, to charge Media General (nyse: MEG - news - people ) Inc. collection services, said John Joyce, special agent in charge of the Secret Service's Tampa field office.
In addition, Charles Wilson would divert refund checks to advertisers into his own account.Joyce said the fictitious collection agency was in operation from 1998 to 2008, when the scheme was discovered. In all, the couple received more than $1 million in fraudulent payments.Wilsons turned themselves in to the Secret Service on Thursday and were charged with conspiracy to commit mail fraud. They were each released on $75,000 signature bond.

Chairman Kazutsugi Nami, 75, and other L&G executives arrested Thursday on suspicion of defrauding investors

Japanese police have arrested the chairman of a bedding company on suspicion he swindled investors out of $2.5 billion, in what local media said would be the biggest financial scam in Japanese history.Officers from the Tokyo Metropolitan and Miyagi and Fukushima Prefectural police departments converged on the home of Kazutsugi Nami, 75, chairman of L&G KK, a bedding supplier, on Thursday, arresting him and 20 other people, said an official in the Metropolitan Police Department who declined to give his name, citing policy.
In front of crowds of reporters and TV cameras, Nami denied any wrongdoingL&G, which has been in bankruptcy proceedings since November 2007, originally sold futons and health foods after it was established in August 1987, according to Hirotaka Tanaka, an attorney representing victims of the alleged fraud.A trustee involved in the bankruptcy proceedings, Daisuke Fukuda, said L&G collected ¥226.5 billion, or $2.53 billion, from 50,000 investors between 2001 and 2007. He declined to give further details.Chairman and executives of bankrupt Tokyo-based bedding supplier L&G K.K. were arrested Thursday on suspicion of defrauding investors.Chairman Kazutsugi Nami, 75, and other L&G executives are believed to have collected ¥118 million in total from six clients between July and December 2007 despite knowing they could not pay the promised returns on investments, according to a joint investigation squad of the Metropolitan Police Department and the Miyagi and Fukushima prefectural police forces.Tokyo police said further investigation indicates the suspects collected a combined ¥126 billion from about 37,000 clients from 2000 to 2007.In all, 22 people were arrested, including Nami, who, when questioned by police, denied intending to defraud.Nami and others allegedly promised the investors they would earn a 9 percent dividend every three months on every ¥1 million invested, or 36 percent annually, in order to fraudulently obtain money.They also collected funds by issuing the firm's own "enten" quasi currency, claiming it could be used at company-sponsored bazaars nationwide and Internet markets, the investigation found. The company stopped paying cash dividends in February 2007 and began giving clients enten instead. The company later stopped issuing enten.Established in 1987 by Nami, the company initially sold bedding as well as health products. The investment scheme was begun in 2001, the same year enten began to be issued.After most employees were dismissed in September 2007, police searched L&G's head office, suspecting investment law violations.
Before his arrest, Nami told some 100 reporters Thursday morning: "It was not a fraud. The police have destroyed my businesses. . . . I am a victim of the police investigation."Asked if he is willing to apologize to the investors, Nami said, "No."
One of the investors was eager to see harsh punishment meted out to Nami and the other suspects. She invested some ¥30 million about three years ago, after being told by an L&G employee that her investment would double in three years.
The woman, 65, who runs a restaurant in Hokkaido and borrowed some ¥5.5 million for the investment, said, "I did not believe in the scheme initially, but I trusted it as the company had run its businesses for more than 10 years."It is my fault, but I hope they (the suspects) will face severe punishment," she added.

Ron Parker who made millions in a Jacksonville mortgage-fraud scheme was sentenced to four years in federal prison.




Ron Parker, who ran seminars on real estate investing and marketed hundreds of homes through a Northside office, pleaded guilty last year to a single charge of conspiring to commit fraud in the early part of the decade.Ron Parker who made millions in a Jacksonville mortgage-fraud scheme was sentenced Thursday to four years in federal prison.His lawyer asked a judge to request a cell in the same Panhandle prison where Parker’s brother is already serving time for fraud. Parker also is supposed to pay the government $7 million, intended to represent proceeds of fraudulent deals.Parker, 53, used printed ads and spots on gospel radio to get customers into his business, called Real Estate Trader, near Edgewood Avenue and Lem Turner Road.Parker marketed houses he had agreed to buy cheap from distressed owners or fed-up investors. Without actually buying the houses himself, he convinced others to buy them at a higher price and collected a profit from the difference.Prosecutors said mortgage companies specializing in subprime customers were duped into lending far more than the sales prices of the homes.Many of Parker’s buyers eventually lost the homes to foreclosure and some of the mortgage companies closed or went bankrupt as the subprime lending bubble collapsed nationwide. Some of those companies bundled loans into securities that were sold in massive amounts to banks and investment firms that became part of a widespread economic meltdown.Parker was interviewed by FBI agents in 2004 as part of a fraud probe. Soon after, he called a federal prosecutor and volunteered to hand over $664,000, lawyers said during his sentencing. That counts toward his debt to the government.He agreed informally to plead guilty around the same time, Assistant U.S. Attorney Mark Devereaux said during a hearing.No charges were filed until last year, though, and Parker told U.S. District Judge Timothy J. Corrigan he had reformed his life in the meantime.
“When I became aware of all the legal problems I had, my life took on a different meaning,” Parker told the judge. “I became acutely aware there were things I had done and I shouldn’t have done.”Parker, who now lives in Orlando, said he became a minister.“I am not the same self-centered person I was,” he said.Corrigan sentenced Parker to 52 months in prison, telling him there were inmates there who needed ministry.“I have every reason to believe you’re not that person,” he said, “but you’re still going to have to pay for what that person did.”Corrigan noted that the plea deal Parker made was for one charge carrying a maximum term of five years behind bars. If he had lost at trial, he might have faced up to 17 years, the judge said.Parker has been free throughout the case and was sent home to wait for word when he should report to prison.He’s seeking to be assigned to the federal prison in Pensacola where his brother, Russell Lee “J.R.” Parker, is serving a 13-year sentence for running a similar real estate investment operation.

Sunday 1 February 2009

Royal Mint has reported that the number of counterfeit £1 coins in circulation is on the rise.

Royal Mint has reported that the number of counterfeit £1 coins in circulation is on the rise.In a routine sampling of British coinage, the Mint found one in forty of the coins to be faked, the highest proportion since their introduction in 1983.In terms of value, faked £1 coins could therefore account for £37.5 million of cash in circulation.The increase represents a worsening of the situation in September of last year, when one in fifty of the coins were found to be the work of forgers. It also represents a 26% rise on 2007. Northern Ireland had the highest proportion of fakes at 3.6%, followed by the South East, with 2.97%.The majority of the counterfeits will not work in vending machines but are otherwise difficult to detect, even by bank counting machines. The Royal Mint’s head of corporate affairs, Martin Cragg, says work is underway with banks, the Post Office, the police and the vending industry to remove the coins from circulation.Consumers are being reminded that it is a criminal offence to use a counterfeited coin, so someone discovering a forgery should not attempt to spend it. Anyone wishing to establish the credentials of a genuine £1 coin can consult the website of the Royal Mint, which contains details of design and specification.The Mint’s sampling process is based on 15,481 coins supplied by banks and post offices from 31 locations across the UK.

F.B.I. slashed its criminal investigative work force to expand its national security role after the Sept. 11 attacks

Federal Bureau of Investigation is struggling to find enough agents and resources to investigate criminal wrongdoing tied to the country’s economic crisis, according to current and former bureau officials.Cuts at the Bureau The bureau slashed its criminal investigative work force to expand its national security role after the Sept. 11 attacks, shifting more than 1,800 agents, or nearly one-third of all agents in criminal programs, to terrorism and intelligence duties. Current and former officials say the cutbacks have left the bureau seriously exposed in investigating areas like white-collar crime, which has taken on urgent importance in recent weeks because of the nation’s economic woes.The pressure on the F.B.I. has recently increased with the disclosure of criminal investigations into some of the largest players in the financial collapse, including Fannie Mae and Freddie Mac. The F.B.I. is planning to double the number of agents working financial crimes by reassigning several hundred agents amid a mood of national alarm. But some people inside and out of the Justice Department wonder where the agents will come from and whether they will be enough.
So depleted are the ranks of the F.B.I.’s white-collar investigators that executives in the private sector say they have had difficulty attracting the bureau’s attention in cases involving possible frauds of millions of dollars.

Since 2004, F.B.I. officials have warned that mortgage fraud posed a looming threat, and the bureau has repeatedly asked the Bush administration for more money to replenish the ranks of agents handling nonterrorism investigations, according to records and interviews. But each year, the requests have been denied, with no new agents approved for financial crimes, as policy makers focused on counterterrorism.
According to previously undisclosed internal F.B.I. data, the cutbacks have been particularly severe in staffing for investigations into white-collar crimes like mortgage fraud, with a loss of 625 agents, or 36 percent of its 2001 levels.
Over all, the number of criminal cases that the F.B.I. has brought to federal prosecutors — including a wide range of crimes like drug trafficking and violent crime — dropped 26 percent in the last seven years, going from 11,029 cases to 8,187, Justice Department data showed.
“Clearly, we have felt the effects of moving resources from criminal investigations to national security,” said John Miller, an assistant director at the F.B.I. “In white-collar crime, while we initiated fewer cases over all, we targeted the areas where we could have the biggest impact. We focused on multimillion-dollar corporate fraud, where we could make arrests but also recover money for the fraud victims.”But Justice Department data, which include cases from other agencies, like the Secret Service and Postal Service, illustrate the impact. Prosecutions of frauds against financial institutions dropped 48 percent from 2000 to 2007, insurance fraud cases plummeted 75 percent, and securities fraud cases dropped 17 percent. Statistics from a research group at Syracuse University, the Transactional Records Access Clearinghouse, using somewhat different methodology and looking only at the F.B.I., show an even steeper decline of nearly 50 percent in overall white-collar crime prosecutions in the same period.In addition to the investigations into Fannie Mae and Freddie Mac, the F.B.I. is carrying out investigations of American International Group and Lehman Brothers, and it has opened more than 1,500 other mortgage-related investigations. Some F.B.I. officials worry privately that the trillion-dollar federal bailout of the financial industry may itself become a problem because it contains inadequate controls to deter fraud. No one has suggested that a quicker response would have averted the mortgage meltdown, but some officials said a faster reaction might have deterred more of the early schemes that seized on loose federal lending regulations. “They were very late to the game,”

J.V. Huffman Jr. will appear in Superior Court on Monday for an administrative hearing.

J.V. Huffman Jr. will appear in Superior Court on Monday for an administrative hearing.Huffman, 45, of Claremont, was indicted by a grand jury on Dec. 8 on four felony counts of securities fraud and four felony counts of obtaining property by false pretense.
Huffman is accused of lying to neighbors, family and friends for 17 years, telling them he bought and sold securities as he took millions of dollars from them to pay for his lavish lifestyle in a Ponzi scheme.
According to U.S. Securities and Exchange Commission documents, about 500 people invested $25 million with his company, Biltmore Financial Group Inc., beginning in 1991 and ending Nov. 7 with his arrest. He is in jail under a $1 million secured bond.
While Huffman's been in jail, a receiver, appointed by the court, is investigating Huffman's assets.Thus far, he has uncovered more than $4 million in assets, including 14 properties, 10 vehicles, a boat, artwork, jewelry, cash and more.

Gordon Grigg's company, ProTrust Management charged Grigg and his firm with securities fraud

Davidson resident Steve Wieland has prayed with Gordon Grigg, invited the former Charlotte resident into his home and trusted him enough to let Grigg's company invest his life savings.But last month, Wieland said, he began to get suspicious about the types of investments Grigg said he was making. He called a friend of his who also had invested with Grigg's company, ProTrust Management of Nashville, Tenn., who shared his concerns.Then Wieland heard from the U.S. Securities and Exchange Commission. This week, the agency charged Grigg and his firm with securities fraud, alleging they defrauded at least 27 clients out of $6.5 million by claiming to have invested their money in securities that do not exist.The SEC also obtained an emergency court order freezing their assets. The case is one in a recent series of alleged financial frauds by investment advisers both locally and nationally. Experts have said that a slumping stock market and increased scrutiny by investors has led to the exposure of investment fraud.Wieland, 59, a disabled former pilot who flew for US Airways for 25 years, said he lost $252,000, the bulk of his life savings.
“You read about this happening in the newspaper. But when it happens to you, you go, ‘Oh my God, how do I recover,'” Wieland said. “I can't. I'm done.”Grigg, 46, lived in Mecklenburg County from at least 1984 to 2000, records show. His attorney, Mark Pickrell, said in an e-mailed statement to the Associated Press that his client “agreed to entry of the temporary restraining order requested by the SEC, and he looks forward to working to resolve these matters as quickly as possible.”
The SEC complaint alleges that Grigg and ProTrust:Falsely claimed to have invested client money in fictitious securities known as “private placements.” Private placements are legitimate forms of investment for securities that don't have to be registered with the SEC.Created false and fraudulent account statements reflecting client ownership of the non-existent securities.Claimed that clients could invest in government-guaranteed debt as part of the federal Troubled Asset Relief Program, and that they had invested client funds in TARP. But there is no program that allows people to buy debt guaranteed by TARP.Falsely claimed to have partnerships and other business relationships with several of the nation's top investment firms, including Goldman Sachs and Morgan Stanley. The alleged fraud started in 2003.Grigg holds himself to be a financial planner but is not licensed or registered with any state or federal agency to offer or sell securities, to be registered with any broker-dealer or to be associated with any investment adviser.ProTrust also was subject to a cease and desist order in North Dakota in 2006 for allegedly selling nonexistent securities, records show.The SEC said Grigg and ProTrust allegedly “preyed upon investors' desire for safety by claiming associations with reputable investment firms and the government's TARP program.”The SEC has power to file charges in civil court, and has been talking with the Special Inspector General with TARP, which has investigative authority and can work with other agencies to file criminal charges in cases. A spokeswoman for the Special Inspector General declined to comment about the Grigg case.As for Wieland, he doesn't know what he will do next. He has diabetes and back-related disabilities.“I gave my money to a ‘friend' instead of doing my research,” Wieland said. “Never do that. I don't want anybody else to lose any more money.”

His heart wasnt in it charged a cardiologist from the southern Chicago suburbs with bilking Medicare and insurance companies out of more than $13 mill

Federal authorities have charged a cardiologist from the southern Chicago suburbs with bilking Medicare and insurance companies out of more than $13 million for care they say he never provided. According to U.S. Attorney Patrick Fitzgerald's office, 49-year-old Dr. Sushil Sheth faces as long as 10 years in prison and a $250,000 fine for one count of health care fraud. Fitzgerald's office alleged Friday that Sheth received $13.4 million between January 2002 and July 2007 in fraudulent reimbursement for high levels of cardiac care that the office says the doctor never performed. The (Tinley Park) SouthtownStar contacted Seth Friday at his Burr Ridge home and he denied the allegations. Sheth is affiliated with several hospitals in the southern suburbs and allegedly used his hospital access to obtain patient information.

Paymentech credit card numbers given by the pastor had been stolen from its computer system, Westdale Florists had been scammed out of $22,000.

First emails arrived at Westdale Florists on Friday, January 2.They were from Rev. Benjamin Wallace, pastor at Christ the King Cathedral in Ghana.His church was celebrating its anniversary and he wanted to order 50 gift baskets and wreaths from the small Hamilton flower shop and have them shipped to Ghana.What’s more, the good reverend provided all the money up front — around $6,700, including shipping fees. The funds went into the store’s bank account without a hitch.Wow, thought store owner Rosanna Yeomans, what a great start to the new year.And the news got even better over the next four days.The congregation had collected more money and the reverend had ultimately gathered enough funds to buy 500 wreaths and 300 gift baskets. Without fail, every email and every phone call ended with a “God bless you” from Rev. Wallace.You can probably guess where this story is headed.There was no Rev. Wallace, no church in Ghana and by the time an Amsterdam bank realized the credit card numbers given by the pastor had been stolen from its computer system, Westdale Florists had been scammed out of $22,000.It’s a cautionary tale that highlights the growing global nature of fraud in an electronic age.Weeks later, with only a slim chance of recovering any of her lost money, Yeomans is struggling to keep her store afloat.“Every day I wake up and think `What’s going to happen today?”‘ said Yeomans. “I had my little pity party and nights of crying myself to sleep.“This isn’t going to stop me.”Yeomans knows what you’re thinking.
With the benefit of hindsight, she said, it’s a lot easier to spot the signs of the scam.“I know,” Yeomans says sheepishly. “Now I know.”“Everyone is looking at me and wanting to give me a slap on the back of the head, like `Didn’t you know?’ Well, no, I didn’t.”She’s still smiling, although it’s a bit difficult these days.Even though she’s the victim in this story, Yeomans is embarrassed.She’s also not being treated like the victim by the financial agencies that she thought were supposed to protect her from fraud.The store’s bank account has been frozen, credit card companies have red–flagged her shop and she says Paymentech, the payment processing company for credit card providers, is threatening to send a collection agency after her.“In spite of the fact that they approved everything,” said Yeomans. “In spite of the fact that I did everything I was supposed to do.“That’s what’s frustrating,” she added. “Now the banks don’t want to deal with me even though it’s not my fault, and the credit card companies aren’t going to deal with me.”A spokesperson for Paymentech did not respond to requests for an interview.Hamilton police have launched an investigation but with little hope of success. Even if they tracked down the fraudster, Hamilton police have no jurisdiction in Ghana.“This kind of fraud is so easily done,” said Det. Const. Randy Drumm of the major fraud unit. “She has not benefited in any way. In fact, she went so far as to wait until the money was in her account.”Rev. Wallace’s first order was a little unusual, but not unprecedented for a flower shop.Westdale Florists is part of a wire service and has an Internet presence, so orders come in from around the globe or get shipped to overseas destinations routinely. What’s not typical, however, is for an order to originate in a far–off destination and also get shipped back there.But one of Yeoman’s suppliers here told her that the cost of product is so high in Africa that it can be cheaper to purchase something in Canada or the U. S. and then pay for the shipping.The first order came to about $6,700, including about $1,500 for shipping.The gift baskets would include chocolate, cookies, pretzels, candy, all wrapped in cellophane with a bow on top.Wallace said he’d forward the shipping fees to Yeomans and then she had to transfer the shipping money by Western Union to John Freeman, owner of a company called ATS Shippers in Ghana.Freeman indicated in an email to Yeomans that the shipping fees had to be sent fromCanada because “due to technical problems that we’re facing in our credit card department, we only accept payments via Western Union and it is our company policy that a full payment must be made before pickup can be scheduled.”The reverend sent Yeomans half a dozen credit card numbers, along with their expiry dates. Most important, he also sent the three–digit security codes that appear on the backs of credit cards, a key feature that financial institutions require to establish that the card numbers are legitimate.He told Yeomans each card had a $1,500 limit, so he needed to split the payment among several cards.
The transactions all went through and the money appeared in the store’s bank account.
Yeomans then wired the shipping fees via Western Union to ATS Shippers. She was startled to discover that she needed to provide two pieces of picture identification to Western Union to transfer anything over $1,000, but at the other end the money could be picked up by someone just using a code word that had been agreed upon by the two sides.Drumm, the detective, has managed to track down the Western Union depot in the Ghanaian capital of Accra where the money was transferred, with no luck.
“They had nothing for me,” said Drumm. “The person who picked up the money showed no ID, no nothing.”The reverend then expanded his order, adding another 150 wreaths and 250 gift baskets. That added about $16,000 to the order, including $2,650.09 for shipping.Once again, the credit card numbers were approved, once again the money was deposited, and once again Yeomans wired the shipping fees to ATS Shippers.She even contacted her bank manager because she had noticed that all of the credit card numbers started with the same 12 digits, with only the final four differing. She was told that was typical for an organization that might have multiple cards attached to one expense account.Yeomans began purchasing the products needed to make the baskets, then worked through the weekend. At home, she made 300 bows in the evenings.
By the close of business Tuesday, January 6, the reverend’s order had grown to 500 wreaths and 300 gift baskets worth $44,000, including shipping — all of it paid up front.That night, however, she received a call at home from her bank manager. Some red flags were starting to show up.He’d done some checking and he couldn’t find a Christ the King Cathedral in Ghana, nor could he find any evidence of a Rev. Wallace.
When Yeomans arrived at her shop the next morning, there was an email waiting for her from the fraud detection branch of Amsterdam–based banking giant ING Direct.
The credit card numbers being provided by Wallace had been hacked from ING’s computers. The transactions were fraudulent.“This is kinda when I got hit in the stomach,” said Yeomans.“Reverend” Wallace did not respond to an email request for an interview.Yeomans ultimately lost $16,000 in shipping fees that she wired to Ghana, as well as another $6,000 that was spent on products that can’t be returned. And Paymentech wants all $44,000 back — even though it allowed the credit card transactions in the first place.She’s now turned the fight over to a lawyer, and hopes her shop can stay in business.“If I come out even — no further ahead, no further behind — I’m happy with that,” said Yeomans.“And lesson learned.”

Ronald Schongar of Clifton Park, N.Y., pleaded guilty to one count of mail fraud

Ronald Schongar of Clifton Park, N.Y., pleaded guilty to one count of mail fraud in U.S. District Court in New Haven on Friday. He had been indicted in 2006 on three counts of mail fraud and two counts of wire fraud. Schongar operated Microb Phase, a company hired by the school districts to remove mold from their buildings. Prosecutors say Schongar claimed he applied a certain product, but that he had no authorization to use or advertise it. Authorities say he is expected to be sentenced to between four and 24 months in prison when he is sentenced April 17.

MBilling, MB Moon Park, MB Hot Planet, and PHE Subscription fraud involves electronic drafts against a checking account ranging in amount from $24.95

ProPay, Inc. has recently become aware of what appears to be a very large and widespread international fraud scheme involving unauthorized electronic checks (ACH). The scheme has affected millions of people including, unfortunately, a small number of individuals who may be or have been ProPay account holders. To be clear, after internal and external analysis and investigation, ProPay is extremely confident that the stolen bank information came from other sources and not from ProPay.The fraud scheme mentioned above involves an electronic draft against a checking account ranging in amount from $24.95 – $39.99. The charge appears on the affected individual's checking account statement under one of a variety of names which may include MBilling, MB Moon Park, MB Hot Planet, and PHE Subscription. The business supporting these names represents itself to victims as a third-party billing service, generally billing on behalf of a purported adult website.

Hearing of the foreign currency scam case against Munaf Kalia, Haneef Kalia and Javed Khanani.

Tribunal for Prevention of Electronic Crimes adjourned till February 2, the hearing of the foreign currency scam case against Munaf Kalia, Haneef Kalia and Javed Khanani. The adjournment came on the request of Deputy Attorney General Aamir Raza Naqvi who stated that in view of his busy schedule the, government appoint a new lawyer as Special Public Prosecutor (SPP). The defense side lead by Dr Faroogh A Nasim and Shaukat Hayat opposed the adjournment and maintained that it was merely a tactic to delay the trial and the hearing in bail plea filed by the accused who remained in custody for the past 45 days. The state has no case to prove against our clients, they pleaded.The court providing another last chance to the Prosecution put off the hearing till February 2. The accused were charged with illegal banking, fraud, illegal money transfer, cheating and violating restrictions placed on foreign exchange dealing.

Susanna and Anna Venter were each found guilty on 62 counts of fraud, while the third sister Lourentia Palland was found guilty on 56 charges.

Susanna and Anna Venter were each found guilty on 62 counts of fraud, while the third sister Lourentia Palland was found guilty on 56 charges. Three sisters who created fraudulent salary advice and bank statements to obtain credit from financial institutions were found guilty by the Bellville Commercial Crimes Court on Friday.
The three created fake salary advice slips and falsified bank statements in order to obtain loans fraudulently, and to purchase a new car. The multiple fraud charges against the three involved about R700 000. The charge sheet, compiled by prosecutor Jannie Knipe, said the saga began when Susanna Venter launched an educational institution named Tourism Awareness, Training and Education (Tate) in Stellenbosch, in 1998. Venter's sisters and friend helped in the business. About three years later, the focus of the business shifted to corporate training, management and skills development, which led to the registration of a close corporation named Brainwave Projects 220, trading as Tate. In 2001, Susanna Venter entered into a loan scheme with Multilend, and the three women, acting in common purpose, created a fictitious human resources development officer to liaise with Multilend. The three women each obtained personal long-terms loans from Multilend, pretending to be Tate staff members, and created false salary advice slips.
The business experienced cash-flow problems, which led the three woman to fraudulently obtain additional short-terms loans from Multilend - not only for themselves but for non-existent staff members as well.
These fraudulent loans formed the basis for the first 10 counts. On counts 11 to 56, the three, now operating as International Hospitality Institute, similarly obtained fraudulent loans from Future Finance. Three additional counts related to credit fraudulently obtained at Cape Consumers. On these charges, the two Venters were found guilty on all three, while Palland was convicted of one only. The Venters alone were also found guilty on two more fraud charges involving loans obtained from Proteafsg and Cash Centre, as well as the purchase of a Nissan Almera at CMN Nissan with the use of false documents. Magistrate Amrith Chabilall postponed the case to March 4 for sentencing.

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