'Bomb detector' maker Jim McCormick faces fraud charges

businessman who sold a bomb-detecting device to 20 countries, including Iraq, has been charged with fraud, Avon and Somerset Police said. Jim McCormick, 55, has been on bail for two-and-a-half years while police examined the sale of the device. A BBC Newsnight investigation in 2010 showed the ADE-651 did not work and led to the British government banning its export to Iraq and Afghanistan. Mr McCormick will appear at City of London Magistrates' Court on Thursday. Avon and Somerset Police said that Mr McCormick would face six charges including producing and supplying the devices, knowing that they were designed or adapted for use in fraud. The device had been sold to a range of Middle-Eastern countries and as far afield as Bangkok. The Iraqi government spent $85m (£52m) on the hand-held detectors which were used at most checkpoints in Baghdad.

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Britain's Serious Fraud Office (SFO) has reopened its investigation into collapsed hedge fund Weavering Capital,

Britain's Serious Fraud Office (SFO) has reopened its investigation into collapsed hedge fund Weavering Capital, just weeks after damages of $450 million were awarded against the fund's manager in a civil case in the High Court.

 

The decision marks a U-turn by the fraud agency after it ended a 2-1/2 year probe into Weavering last September, saying there was no reasonable prospect of conviction.

 

Investors were left with hundreds of millions of dollars of losses when the Weavering Macro fund collapsed during the credit crisis. The fund was found to have more than $600 million in interest rate swaps where the counterparty was a firm related to Weavering.

 

In May this year damages of $450 million were awarded against Weavering Macro's manager Magnus Peterson, after a High Court case brought by the liquidators of Weavering's British operation.

 

Judge Sonia Proudman ruled that the interest rate swaps on which the case centred were a "sham" used to manipulate net asset value figures to give investors the impression the Macro fund was successful.

 

"The (SFO's) director, following a review of the High Court Civil Judgment by Mrs Justice Proudman on the 31 May 2012, has reopened a criminal investigation into Weavering Capital UK," the SFO said in a short statement on its website.

 

The move is another major decision by SFO Director David Green, who took over from Richard Alderman in April and who told Reuters last month the SFO has to "prove itself".

 

Last week the SFO said it would investigate the manipulation of interbank lending rates and last month it dropped its probe of property tycoon Vincent Tchenguiz.

 

The decision last September to end the investigation into Weavering, which raised questions over London's ability to uncover and punish white-collar crime, came just days after a Cayman Islands court awarded damages of $111 million against two of the fund's directors.

 

During its investigation the SFO made two arrests in May 2009, including Peterson.

 

"The decision of the SFO to re-open the investigation is welcomed by Weavering's investors. They and the professional advisers involved in the case will provide every assistance to the SFO," said Jones Day partner Barnaby Stueck, who represented the liquidators in the civil case.

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Organised investment fraud cost Aussies $113m

The Australian Crime Commission has estimated that 2600 Australians have lost more than $113 million due to investment fraud, in the last five years. The findings come in a new report, published yesterday, titled Serious and Organised Investment Fraud in Australia (PDF). The report was put together by Taskforce Galilee, a consortium of 19 government departments, including the Crime Commission, the Attorney-General's Department, the Australian Tax Office, the Department of Human Services and the Australian Communications and Media Authority. In addition to offers for shares in companies, the fraudsters offer green energy investments, new technology shares, lotteries and sweepstakes and foreign currency trading, among others. The report found that most of the operations targeting Australians were based overseas. Many were based in Asia, but were not run in Asia. Those who cold-called victims were generally Australia, English, Scottish, Kiwi or South African. The report stated that the fraudsters commonly used Voice-over-IP, email, phone, mobile phone or SMS to contact victims, and developed fake websites with log-ins that would displace fake balances, to keep the victim investing money in the scam. The victims tended to be male, aged over 35 years, but generally over 50. Small business owners, self-funded retirees and those who are socially isolated were common. The report said that Australian victims were found to be well-educated and computer literate. Home Affairs Minister Jason Clare said in a statement that people could be strung along for months before catching on.

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Businessmen Thomas Scragg and Paul Phillips jailed for £34m fraud

Two men who carried out a £34m tax and VAT fraud by laundering cash through the construction industry have been jailed. Thomas Scragg, 56, of Solihull, West Midlands, and Paul Phillips, 60, of Derbyshire, set up numerous companies over five years as part of the fraud. Carl and Anthony Johnson, 49 and 41, from Wolverhampton have also been found guilty of money laundering. The men spent thousands on hotels, homes and expensive cars, police said. Reporting restrictions around the case have now been lifted following the conviction at Birmingham Crown Court on Monday of the Johnson brothers. 'Flaunted wealth' Scragg, from Hockley Heath, was jailed for a total of 17 years following three separate fraud convictions against HM Revenue & Customs (HMRC), one of the longest sentences in UK criminal history for fraud, West Midlands Police said. Phillips, of Glebe House, in Ashbourne, was found guilty of conspiracy to cheat HMRC and money laundering and sentenced to nine years in prison in November 2010, police said. The Johnson brothers laundered £2.4m and "flaunted their wealth for the local Wolverhampton community to see which is what ultimately led to their downfall", police said. They installed state-of-the art security equipment in their homes. Carl Johnson had bulletproof glass put in his home in Bushbury Road and Anthony rebuilt his house on Sandy Lane, installing a cinema room, stables and dog kennels. They also bought a Lamborghini Murcielago, Bentley Continental, Porsche Cayenne and Ferrari Spider, police said. Their assets, including properties worth more than £2m, are now the subject of confiscation proceedings. Continue reading the main story “ Start Quote This was fraud and money laundering on a massive scale” Det Ch Insp Shaun Edwards To carry out the fraud, Scragg and Phillips set up several payroll companies which dealt with construction work. They collected PAYE payments but did not pass them to HMRC. Instead, the cash was passed to a second layer of fraudulent "payroll companies', HMRC said. "These companies were used to channel the money, and provide distance from the fraud, by transferring it to a third layer of fraudulent companies, all dormant, set up purely to launder the funds for cash," the spokesman added. "The workforce would be paid 'cash in hand' without any deductions being made and VAT for work carried out went unaccounted." Det Ch Insp Shaun Edwards said the joint investigation took more than five years. "This was an incredibly long and complex investigation using the combined specialist skills of officers from West Midlands Police, HMRC investigators, the Regional Organised Crime Unit (ROCU), Regional Asset Recovery Team (RART) and CPS lawyers, who have worked extremely hard throughout the inquiry. "This was fraud and money laundering on a massive scale. It deprived the public purse of millions of pounds and Scragg's audacity is shown by the fact he continued the fraud in various guises even after he knew he was being investigated." He said the Johnson brothers were heard to joke "crime does pay" but added that they were likely have plenty of time behind bars to reconsider that opinion.

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Futures Brokerage PFG Best Freezes Accounts Following Discovery Of Accounting Irregularity

Update 3: Russ Wasendorf Sr., the founder and CEO of PFGBest, reportedly attempted to commit suicide this morning outside the corporate headquarters in rural Cedar Falls, company officials confirmed Monday afternoon. Update 2: PFGBest had $400MM in customer segregated funds at the end of April. Is JPMorgan about to "discover" another $400 million in Q2 "profits"? Update: PFGBest Plans 'Several Hundred' Layoffs, Spokeswoman Tells Dow Jones - Dow Jones. Sounds like a good idea in the facec of liquidation Just out from futures broker PFG Best to clients, where the owner's suicide attempt apparently has led to a whole new MF Global spin off. Monday, July 9, 2012   Due to a recent emergency involving Russell R. Wasendorf, Sr., a suicide attempt, some accounting irregularities are being investigated regarding company accounts.  PFGBEST is wholly owned by Mr. Wasendorf.  Therefore, the NFA and other officials have put all funds on hold, and PFGBEST is in liquidation-only status with our clearing FCM.  What this means is no customers are able to trade except to liquidate positions. Until further notice, PFGBEST is not authorized to release any funds.  We will update you as any new procedures are stipulated and with any further information as it becomes available. ... And just as the public trust was storming back into the capital markets. From Reuters: Small U.S. futures brokerage PFGBest told customers on Monday that its funds had been put "on hold" as it investigates accounting irregularities following an apparent suicide attempt by the firm's owner.   The Cedar Falls, Iowa-based broker, which had about $400 million in customer segregated funds at the end of April, said it was in "liquidation-only" status with its futures commission merchant (FCM), meaning that "no customers are able to trade except to liquidate accounts," according to the notice.   It said the National Futures Association (NFA) and other officials had put all its funds on hold.   PFGBest officials were not immediately available to comment. One PFGBest broker verified the letter. A second source familiar with the company said owner Russell R. Wasendorf, Sr., had attempted to commit suicide at the firm's Iowa compound. From WCF Courier: Prominent Cedar Falls businessman hospitalized after suicide attempt   Russ Wasendorf Sr., the founder and CEO of PFGBest, reportedly attempted to commit suicide this morning outside the corporate headquarters in rural Cedar Falls, company officials confirmed Monday afternoon.   Wasendorf was taken to Sartori Memorial Hospital this morning, then later was airlifted to University of Iowa Hospitals and Clinics, where he was in critical condition.   Emergency crews were called to the headquarters shortly after 8 a.m. after employees found a man in a car near the headquarters building, located near the Beaver Hills Country Club.   The National Futures Association, the self-regulating organization of the United States futures industry, has placed PFGBest on a “liquidation only” status due to Wasendorf’s condition. The company is wholly owned by Wasendorf.   The company stated that all funds have been put on hold, meaning customers will only be able to sell off their interests, until future notice.   According to company officials, accounting irregularities are being investigated.   Wasendorf, the founder of PFGBest, an international brokerage firm, moved the corporate offices of the company from Chicago to rural Cedar Falls in 2009. He had started the company in Chicago in 1990.   Wasendorf is a Cedar Falls native who started his business in his hometown. Meet Russell R. Wasendorf, Sr. PFGBEST's Leadership Russell R. Wasendorf, Sr. Chairman and Chief Executive Officer of PFGBEST PFGBEST, the brand that evolved from Peregrine Financial Group, Inc., was incorporated in 1990 and has grown to become one of the largest U.S. non-clearing futures brokerage firms. PFGBEST has a presence in the world’s major financial centers, plus a network of more than 700 branches, introducing brokers, foreign introducing brokers and Commodity Trading Advisors (CTAs) serving customers in 80 countries. The company is an industry leader in technology innovations to benefit online traders and investors. It has multiple proprietary online trading platforms that have been spun off of the original BESTDirect Online Trading system, which was one of the very first to deliver customer orders directly into the Globex trading engine of the Chicago Mercantile Exchange, in 1998. Throughout the 1980s, and 1990s, Russell R. Wasendorf, Sr. invested in technological capabilities to create the BESTDirect Online Trading platform, well before other brokerage firms were engaged in this science. Today, the BESTDirect Online Trading platform continues to be known for its efficiency and reliability, making futures and forex markets more transparent and more easily accessible for all participants. PFGBEST has grown to be a liquidity provider that is completely unbiased and diversified to accommodate trading strategies across a variety of asset classes, including futures, forex, options, securities and precious metals. PFGBEST has a leading position in online futures, forex and options; retail brokerage; forex services for individual and institutional clients; managed accounts; demand-inspired new technologies and investor education. Russell also founded SFO – Stocks, Futures and Options, the Official Advocate for Personal Investors – in 2001. The magazine became one of the most widely-distributed monthly publication specializing in these investments, and today it is completely digital. He is a noted writer and educator, having written or co-written six books about futures and trading. These include: Commodity Trading: The Essential Primer; All About Futures From The Inside Out; All About Commodities From The Inside Out; All About Options From The Inside Out; All About Managed Futures From The Inside Out; and The Complete Guide To Single Stock Futures. In 2007, Russell founded W&A Publishing, a firm that has brought numerous authors to market and developed a reputation as “the trader’s tutor”. In 2009, he purchased the assets of another well-regarded investment publisher, Trader’s Press, and moved the business to Cedar Falls, Iowa. The two were merged under the Wasendorf & Associates, Inc. brand in 2010. Russell is widely recognized as an expert and industry voice in many venues, advocating on behalf of efficiencies for individual investors. He serves on the FCM Advisory Committee of the National Futures Association (NFA). He is one of the original partners in a real estate development company, Avrig 35, headquartered in Bucharest, Romania. Avrig 35 has built some of the most significant commercial buildings in East Europe during the past decade. He sits on the Board of the Peregrine Fund along with notables including Patricia Disney, Julie Wrigley, Lee Bass, Henry Paulson, Jr. and Paxton Offield. The Peregrine Fund is a non-political, science-based organization in Boise, Idaho, which works worldwide to conserve wild populations of birds of prey. He also sits on the President Committee of both the University of Iowa and the University of Northern Iowa. Russell began his career as director of public affairs for the American Soybean Association and is a photographer and cinematographer. After that, he worked with Commodities Magazine from 1976 to 1980 and was Director of the Commodities Educational Institute, an affiliated entity. In 1980, he started Wasendorf & Associates, and he founded the Center for Futures Education. Wasendorf & Associates created an Introducing Brokerage arm – Wasendorf & Son Company – in 1986. Peregrine Financial Group, Inc. was born in 1990 to better serve trading customers. Russell’s philanthropic endeavors are channeled through Peregrine Charities, a private family foundation that he founded in 2004, with a charitable focus on research and cures for rare childhood diseases and help for the families facing these illnesses. He received two honors in 2010: the Patriotic Employer Award, for support of the U.S. National Guard and Reserve and employees who are serving or have served in the military; and, the Treating Capital Award from the Cedar Valley Alliance and the Cedar Falls Chamber of commerce for providing regional opportunities in technology employment and commitment to green practices and sustainability efforts. * * * And while Senior obviously had some problems, as confirmed by his Finra record, his son appears to have had some close encounters with the regulators as well.

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The Libor fixing scandal is set to explode across the continent in the coming weeks as it emerged that German regulators have launched an intensive probe into Deutsche Bank

The Libor fixing scandal is set to explode across the continent in the coming weeks as it emerged that German regulators have launched an intensive probe into Deutsche Bank – one of the City's biggest employers – over the affair. BaFin, the country's financial watchdog, is said to have moved its existing investigation into the bank to the status of a "special investigation process" – indicating potential serious breaches. The results are expected by the middle of this month, Reuters reported, citing multiple sources. While the UK's Financial Services Authority never names which London-based institutions it is investigating, news of the advanced BaFin probe could indicate a coordinated investigation. Deutsche is a big player in the City, to the extent that its new boss, Anshu Jain, was drawn from the London investment banking side of the business. While it is not known what the outcome of the Deutsche investigation will be, Barclays will be relieved when other banks begin to be named, shamed and fined. Its decision to go first with a settlement backfired with the political and media storm of the past week and a half. While it was known that Deutsche was among the many banks being investigated over rate fixing, so far it has only admitted it had received subpoenas and requests for information like all the banks submitting their rates to the Libor authorities. Meanwhile, on the continent, the authorities which calculate the European version of Libor, known as Euribor, will be holding a conference call tomorrow in response to allegations about possible fraudulent manipulation of the rate by banks. Euribor-EBF is made up of the national banking associations of all the euro area countries. Across the world, the scandal has led to outrage and calls for more transparency in the way Libor is arranged. This is despite the fact that, at the moment, banks are barely using the rate. The huge influx of lending from central banks, from the Bank of England and the Federal Reserve to the Bank of China, have flooded the markets with cash, making interbank lending fairly irrelevant. Tony Crescenzi, at the giant investment group Pimco, told Bloomberg: "No one is bigger than the market. The enormity of the liquidity operations of the central banks has got so great that any attempt to manipulate an interest rate has got to be futile." But Mr Crescenzi joined the chorus of leading figures calling for Libor reform and transparency.

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Serious Fraud Office launches Libor investigation

The Serious Fraud Office (SFO) has confirmed that it has formally launched a criminal investigation into the rigging of inter-bank lending rates. Earlier this week, it said it was considering whether prosecutions would be possible. An SFO spokesperson confirmed that a dedicated case team had now started work. Its involvement follows an investigation by US and UK regulators into the manipulation of Libor. That resulted in a record fine for Barclays, who last week agreed to pay £290m in penalties after its traders tried to rig inter-bank lending rates, sometimes working with staff at other financial institutions. Regulators are continuing to look into possible rate manipulation at other banks, while the US Department of Justice is carrying out its own criminal investigations. The SFO would not say whom it is investigating. Its short statement said only: "The SFO Director David Green QC has today decided formally to accept the Libor matter for investigation." Continue reading the main story Serious Fraud Office Independent government agency established in 1988 Deals with complex, high value fraud cases Average length of case is 4-6 years Carries out investigations in England, Wales and Northern Ireland. In Scotland, this is done by the Crown Office's Serious and Organised Crime Division The Libor affair, described by the prime minister as a scandal, has led to the resignation of three of Barclays' most senior executives in a matter of days, including chief executive Bob Diamond. He appeared before MPs on the Treasury Select Committee this week, when he called the behaviour of those responsible for Libor rigging at the bank "reprehensible". Regulators in the UK and the US found that Barclays staff had tried to affect rates over a number of years, first for profit and then to reduce concerns about how much it was being affected by the financial crisis. The SFO is responsible for investigating allegations of serious and complex frauds. It considers whether to prosecute using a number of criteria, including whether it is a matter of public concern, and whether the value of any fraud is more than £1m.

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Woman who jumped 35 floors to death at Las Vegas hotel had been sought for fraud

 woman wanted on fraud and theft charges jumped 35 floors to her death at a Las Vegas hotel just as two criminal investigators entered her room to arrest her, according to law enforcement documents. A search warrant released Friday shows investigators from the Secretary of State Office’s Securities Division forced their way into Elizabeth DeMaria’s room at the MGM Grand on Tuesday and saw her throw a laptop computer off the balcony before jumping herself. 13 Comments Weigh InCorrections? Personal Post Gallery Olympic track trials, Democrats protest House contempt vote, health-care ruling and more in the day in photos: News and feature images from around the world. DeMaria, 46, was charged in 2010 with 11 counts of fraud and 11 counts of theft. She was accused of conning nine victims out of $200,000 by telling them they were investing in a media company called The Vegas Channel. Authorities say she allegedly bought luxury items for herself instead. After tracking her to the resort, the investigators knocked and announced their intent to serve a bench warrant for her failure to show at a court-mandated May 10 status check when she was out of jail on bail. A female voice could be heard in the room, but requests to open the door were ignored. After she jumped, police were called to the scene, and a white stone ring and a brooch were found in the room. The remains of the computer were recovered, and will be examined for evidence of fraudulent materials and activity. Documents found on the bed referred to Secretary of State Ross Miller and Clark County Sheriff Doug Gillespie, the Las Vegas Review-Journal reported (http://bit.ly/MxG7LH ). Also found was a U.S. passport under the name Lisa Victoria, the name she used to check into the MGM Grand. “The passport could be used for international travel, thereby implicating consciousness of guilt,” investigators said in their search warrant. “The passport is evidence of a violation of federal law and contraband.” Investigators said DeMaria had been renting the room since the day she failed to appear in court. While staying at the MGM Grand, she posted “disparaging blogs about witnesses related to her criminal prosecution,” according to the warrant. While DeMaria insisted investor funds were only used to develop the media company, authorities say her bank records show the money was deposited into an account under the name Luxury Lifestyles Las Vegas. She withdrew about $125,000 in cash from the account, according to records.

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Dykstra agrees to plead guilty to bankruptcy fraud

Former New York Mets outfielder Lenny Dykstra has agreed to plead guilty to three counts stemming from a bankruptcy fraud case in Los Angeles, federal prosecutors said Thursday. Dykstra will plead guilty to one count each of bankruptcy fraud, concealment of assets and money laundering, said Thom Mrozek, a spokesman for the U.S. attorney's office. Dykstra faces up to 20 years in federal prison. It's not immediately known when his next court date will be. Dykstra, who bought a mansion once owned by hockey star Wayne Gretzky, filed for bankruptcy three years ago, claiming he owed more than $31 million and had only $50,000 in assets. Prosecutors said that after filing for bankruptcy, Dykstra hid, sold or destroyed more than $400,000 worth of items without permission of a bankruptcy trustee. Court documents said Dykstra gave false and misleading testimony under oath about what he did with some of the items he took from his home. Dykstra said he put an oven, sconces and chandeliers into a storage unit, but prosecutors said he ended up selling the items for $8,500. He also hid baseball gloves, balls, bats and other memorabilia from the bankruptcy court and creditors and sold them last year for about $15,000, court documents show. Dykstra is currently serving a three-year prison sentence after pleading no contest to grand theft auto and providing a false financial statement. He also was sentenced this year to nine months in jail after pleading no contest to charges he exposed himself to women he met on Craigslist. A phone message left for Dykstra's deputy federal public defender, Christopher Dybwad, was not immediately returned.

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