BULLETIN: Scott Rothstein, the Fort Lauderdale attorney charged with racketeering last month and disbarred amid allegations he orchestrated a $1.2 billion Ponzi scheme involving bogus legal settlements, is expected to change his plea to guilty.
Category: Uncategorized
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Local Police In California Uncover Ponzi Scheme While Investigating Woman For Unrelated Crime; Ponzi Targeted At Latin Immigrants
Police in Redondo Beach, Calif., say they were investigating Mariana Montes for a separate crime and seeking her arrest on a warrant, but discovered during their probe that she had wiped out investors by running a Ponzi scheme targeting Latin immigrants.Montes, 41, now is jailed on the original warrant, and the Ponzi investigation is proceeding as a separate matter.
Police said the Ponzi was operated through a bogus company known as “Fast Results Investments.†Montes met with individual investors beginning in 2007, and promised clients who invested a minimum of $5,000 returns of 25 percent within 30 to 90 days.
At least 55 victims have been identified in the opening days of the probe, police said today.
Some of the victims “invested their entire life savings or complete retirement account balances,” police said.
“Montes used the investors’ money to purchase designer clothing, a new vehicle and to fund her daily activities,” police said.
Police said their preliminary estimate of $500,000 in losses likely would rise, perhaps significantly.
“It is believed that there are many more victims of Montes’ Ponzi scheme that have not yet been identified,” police said, noting that they already have evidence that Montes was conducting business in Arizona.
Investigators at the Redondo Beach Police Department have established a special telephone line for possible victims. The phone line has information in both English and Spanish.
The Police Department is urging any possible victims of this Ponzi scheme to call 310- 379-2477 Ext. 2332.
Montes is being held in the Los Angeles County jail, on a warrant for “another financial crime” unrelated to the Ponzi scheme, police said. Jail records show the crime was a felony, but the specific crime was not defined.
Bail was set at $572,465.
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DEVELOPING STORY: Family Of Alleged Ponzi Schemer In Canada Targeted With Death Threats; Bullets Fired At Home
Just how far will people go to avoid getting caught or convicted of operating a Ponzi scheme or to reclaim funds lost in a Ponzi scheme — or to send a message that designed to rattle nerves?There have been several recent Ponzi or financial-fraud cases with more than just a hint of violent intent.
Implicated in a massive Ponzi scheme, disbarred Florida attorney surrounded himself with body guards prior to getting charged with racketeering, authorities said. Guns were pulled on multiple occasions, according to media accounts.
Accused Ponzi schemer Jeffrey Lane Mowen is jailed in Utah amid allegations he sought to hire a fellow inmate to kill four witnesses in the case against him. Meanwhile, the FBI said last year that four individuals staged what effectively was the business equivalent of a coup d’état in California, wielding firearms and posing as federal agents to retrieve money purportedly lost in the alleged Kenneth Kenitzer/Anthony Vassallo Ponzi scheme at Equity Investment Management and Trading Inc.
Last month, fleeced Texas investor Christine Cayton was arrested in Texas on charges that she brought a gun to the headquarters of Triton Financial LLC — implicated in an investment-fraud scheme by the SEC — and demanded a refund from Triton principal Kurt B. Barton
Now comes word that bullets were fired in Canada at the home of family members of Tzvi Erez, accused of operating a “printing” Ponzi scheme that gathered $27 million. A school that youngsters in the Erez family attend added security after it received a threatening letter.
Read the Erez story in the National Post.
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North Carolina Man Adds To List Of Alleged Schemers Who Bought Jet Skis With Fraud Proceeds; J.V. Huffman Jr. Also Faces Trial On Weapons Charge
J.V. Huffman Jr. Source: Catawba Country Sheriff's Office It’s not as though alleged fraudster J.V. Huffman Jr. did not have the expensive cars and real estate often associated with Ponzi schemes or financial frauds.
Huffman, jailed awaiting trial in North Carolina on Ponzi and weapons charges, had plenty of those, according to William Walt Pettit, the court-appointed receiver. He had an Aston Martin ($100,000+), three Mercedes (nearly $180,000 combined), and a Prevost motor home (insured against loss for $825,000) , for example. And Huffman had at least 14 parcels or properties, including a $765,000 property in North Carolina and multiple interests in time-shares at Walt Disney World in Orlando.
But Huffman also had jet skis, which oddly seem to have become a signature purchase among operators of alleged Ponzi schemes or financial frauds. Disbarred Florida attorney Scott Rothstein, implicated in an alleged $1.2 billion Ponzi scheme, had jet skis.
Affiliate Strategies Inc., a Kansas company under whose umbrella the shuttered Noobing autosurf fell, had a jet ski. ASI is among a number of companies sued by the Federal Trade Commission and the attorneys general of four states for operating a grant-writing scheme.
Florida-based AdSurfDaily, whose president is implicated by the U.S. Secret Service in a $100 million Ponzi scheme, also had jet skis — two of them. Andy Bowdoin told his members that the jet skis (and a lakefront home) were for their benefit, but the statement was met with anger, the jet skis and Bowdoin’s other marine equipment dismissed derisively as “water toys.”
Huffman’s next court appearance in North Carolina has been delayed until Jan. 25. He also faces a civil prosecution by the SEC, which said his Ponzi scheme began in 1991 and operated for 17 years before collapsing.
The weapons charge was added when guards found a razor blade hidden in Huffman’s Bible in his jail cell. Prosecutors said the alleged financial scheme largely was targeted at Lutherans.
SEC investigators said Huffman and his company — Biltmore Financial Group — gathered as much as $25 million from 500 investors. At first, Huffman told investors he operated a mutual fund.
After the 9/11 terrorist attacks and the ensuing volatility in financial markets, Huffman changed his story, telling investors that he pooled funds to purchase and sell safe mortgages that had strong equity positions and were insured, the SEC said.
“Contrary to his representations, Huffman and Biltmore did not invest the funds as represented,” the SEC said. “Instead, Huffman spent investor funds to subsidize his lavish lifestyle. Returns to investors were paid from money invested by new investors. The purported insurance protecting the investments did not exist and much of the principal has been dissipated or used to purchase real estate for Huffman and/or his wife, expensive automobiles or other luxuries.”
In another claim reminiscent of the AdSurfDaily case, the SEC said Huffman dropped famous acronyms such as “FDIC” to get people to invest with him.
North Carolina Secretary of State Elaine F. Marshall is spearheading the criminal prosecution.
“People who are knowledgeable in the investment industry came to us saying that the
promises being made sounded ‘too good to be true,’†she said, after agents arrested Huffman in November 2008. “In most cases, when an investment sounds too good to be true, it usually is.†-
BULLETIN: California Man Sentenced To 90 Years In Prison For Fleecing Elderly Investors In Ponzi Scheme
BULLETIN: Convicted Ponzi swindler Jeffrey Gordon Butler has been sentenced to 90 years and eight months in a California state prison.Butler, 51, of San Juan Capistrano, Calif., was convicted in June 2009 of 693 felony counts, including making untrue statements of material fact in the offer and sale of securities, the offer and sale of unqualified securities, theft from elderly persons, using a scheme to defraud in the sale of a security and filing false tax returns.
Butler’s wife, Peggy Warmath Butler, 49, was convicted of four felony counts of filing false tax returns. She was sentenced today to one year in jail, followed by seven years’ formal probation.
Orange County prosecutors objected to her sentence, saying it was too light.
So many Ponzi victims testified in the sentencing phase of the trial that the process took four days to complete and was interrupted by the holidays. Because so many victims were nearing the end of their life spans, prosecutors recorded their statements on videotape prior to the trial and played them at the sentencing.
At least six victims died during the course of the trial, and 52 victims died prior to the case being brought before the jury.
“Many of Jeffrey Butler’s victims had trouble believing that he was capable of stealing their life’s savings,” said Tony Rackauckas, Orange County District Attorney. “He stole more than money from the people who trusted him. Jeffrey Butler also stole his victims’ dignity, independence, and dreams
“By sentencing him to 90 years in prison it means that Jeffrey Butler will spend the rest of his life in prison unable to victimize another person,†Rackauckas said.
See Dec. 16 story.
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Deaf Woman, 64, Says She Lost $5,300 In Noobing Autosurf And ‘Can’t Sleep At Night’; Contacts FBI And San Bernardino Sheriff’s Office For Help
Noobing promoter Jim Beach pitched the program using sign language on YouTube. EDITOR’S NOTE: “Carolyn,” the subject of this story, is deaf. She uses a videophone and a human interpreter. The interpreter served as Carolyn’s voice for the interview, translating the Blog’s questions for Carolyn and her responses.
Here, now, the story . . .
A 64-year-old California woman — “Carolyn” — said she lost $5,300 in the Noobing autosurf. Carolyn is deaf. She described herself as a person of limited means financially, saying her experience with Noobing is keeping her awake at night and that the company simply pretended she did not exist when she repeatedly sought answers.
Carolyn, who lives in the Mojave Valley community of Needles in San Bernardino County, said she was introduced to Noobing, part of the Affiliate Strategies Inc. (ASI) umbrella of companies, in January 2009. The introduction was made by another deaf person who had 18 members in her downline.
Carolyn’s sponsor was in the downline of Noobing promoter Jim Beach, Carolyn said. The sponsor lost more than $6,000 in Noobing, Carolyn said.
ASI was named a defendant in a fraud lawsuit filed by the Federal Trade Commission in July 2009. Neither Noobing nor Beach is a defendant in the FTC action, but Noobing is mentioned in court documents filed by Larry Cook, the court-appointed receiver.
In a preliminary report, Cook said Noobing generated more than $590,000 in revenue in 2008 and and more than $541,000 in 2009 before going offline. He estimated that Noobing was in the hole nearly $550,000 since 2008, and noted that the ASI network of companies “were high revenue/low margin operations which required significant cash in-flows from new victims to meet current trade creditor and consumer refund obligations.â€
Beach used sign language and promoted the autosurf on YouTube, according to web records. Carolyn, who described herself as “fairly new” to the Internet, said she became increasingly worried about the money she had entrusted to Noobing.
On a website deemed “The Official Web Blog” of Noobing, the program was described as a “hit” among deaf people. Noobing, according to the Blog, was promoted at Deaf Expos in Kansas, Missouri, New Jersey and Texas in 2008 “to connect with the often overlooked hearing impaired business community.”
Deaf people “waited in long lines just for a chance to check out Noobing,” according to the Blog.
Beach, whom the Blog described as “Noobing Sales Manager” and a CODA — the child of a deaf adult — traveled extensively to recruit deaf members, according to the Blog.
Carolyn communicated with Beach at least three times in her early days with Noobing in 2009, but he told her he “left the management of Noobing in April 2009,” Carolyn said. He then asked her if she wanted to join a program involving the sale of vitamins. Carolyn declined to join the vitamin program.
Noobing was no help when she called to get answers, Carolyn said.
“Whenever I called Noobing, they would just hang up on me,” Carolyn said, adding that her sponsor also has ceased communicating with her.
She added that she “had to go to a debt counselor.”
“It’s a frustrating road to hoe,” Carolyn said. “It has been very frustrating.”
“It was on my [credit] card,” she said. “I just racked up my debt unbelievably.”
Carolyn provided this URL as an example of a site at which hearing-impaired members discussed and promoted Noobing:
Noobing was popular among members of AdSurfDaily, a Florida company implicated in an alleged $100 million Ponzi scheme. Carolyn said she was not a member of ASD, adding that she has contacted the Internet Crime Complaint Center operated by the FBI, the National White Collar Crime Center and the Bureau of Justice Assistance to complain about Noobing.
She also contacted the San Bernardino County Sheriff’s Department, and will meet with an investigator tomorrow, Carolyn said.
“I feel depressed,” she said. “I feel I’ve been really victimized. It’s hard to make ends meet. I can’t sleep at night; I’m constantly worried over my finances.”
Read an Aug. 3, 2008, story about the litigation against ASI and other defendants. The case largely centers around an alleged grant-writing scheme.
Visit the site of Larry Cook, the court-appointed receiver in the FTC case against ASI and other defendants.
Visit the site of Kansas Attorney General Steve Six, one of four state attorneys general who have joined the FTC in the ASI action.
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Shootout At Lloyd D. George Federal Courthouse In Las Vegas Leaves Court Officer, Shooter Dead; U.S. Marshal Wounded
A gunman opened fire in the Lloyd D. George Federal Courthouse in Las Vegas this morning. Early reports are sketchy, but a court officer is reported to have been killed and a U.S. Marshal wounded.The gunman is reported dead. People in the building are being evacuated, and federal agents are said to be conducting a floor-by-floor sweep. It is believed initially that the gunman acted alone. What motivated the shooting, which occurred just after 8 a.m., is unclear.
“A Deputy U.S. Marshal and Court Security Officer were shot at the Lloyd D. George Federal Courthouse in Las Vegas this morning,” the U.S. Marshal’s Service said. “The gunman was shot by Marshals Service personnel and has been pronounced dead. The Deputy U.S. Marshal is in stable condition at a local hospital. Unfortunately, the Court Security Officer succumbed to his wounds and passed away. We are not releasing any names until next-of-kin notifications are complete. The courthouse is still being secured. We do not know the motive for the shooting at this time and the investigation into the shooting is still underway.”
Two U.S. Senators — Harry Reid and John Ensign — have offices in the building.
“My thoughts are with the victims of today’s shooting and their families,” said Reid. “The law enforcement personnel who protect the courthouse put their lives at risk every day to keep the people who are inside safe and I greatly appreciate their service.â€
Shotgun casings reportedly were found in the lobby of the courthouse.
View on-scene YouTube video in which the shots at the Las Vegas federal courthouse can be heard:
Monitor the Twitter feed of the Las Vegas Police Department, which is advising people to stay out of the area.
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BizAdSplash Now Says It May Be Offline Until Jan. 11; Surf Says It Wishes Members A Happy New Year
UPDATED 12:04 P.M. ET (U.S.A.) BizAdSplash (BAS) now says it may be offline until Jan. 11. “due to the challenges of the transfer of our servers.”A message website visitors see is confusing because it does not state plainly when the autosurf will return. Rather, it says BAS will come back online “on or before January 11th.”
The message is unsigned. BAS, which suspended member cashouts and declared a “crisis” in July because it had overpaid members, later returned. The site appears to have gone offline again Dec. 23, but initially reported that it would return today.
BAS lists its “chief consultant” as Clarence Busby, the former president of Georgia-based Golden Panda Ad Builder, the so-called “Chinese” option for AdSurfDaily members. The U.S. Secret Service seized tens of millions of dollars in a civil-forfeiture case against ASD and Golden Panda assets in August 2008.
After reconciliations, about $14 million was attributed to Golden Panda. More than $65 million was attributed to ASD.
All three of the so-called AdSurfDaily clone surfs that promoted “offshore” locations after the seizure of ASD and Golden Panda’s assets — BAS, AdViewGlobal and AdGateWorld — now have either have gone offline or are existing in unclear forms.
All three of the surfs tried to implement reconfigurations. None appears to have been able to sustain itself in a new form. BAS repeatedly has cited server problems as a reason for its absence.
See Dec. 30 story.
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DEVELOPING STORY: Is It All Over For Surf’s Up? Pro-AdSurfDaily Forum Shows Same Message Former AdViewGlobal Forum Displayed When It Vanished
UPDATED 5:25 P.M. ET (U.S.A.) Has the Pro-AdSurfDaily Surf’s Up forum followed in the footsteps of a Pro-AdViewGlobal forum and disappeared for the ages?The URL for Surf’s Up — http://asdmembers.ning.com — is displaying the same message the AVG forum displayed when it vanished last summer after the controversial autosurf with close ASD ties stopped paying members. Surf’s Up also is known as the ASD Member Advocates Forum.
Surf’s Up received the official endorsement of ASD in November 2008, just days after a pivotal court ruling went against ASD.
“This social network has been taken offline by its owner,” the Surf’s Up site now says. Although there is an additional note that “It’s likely that the owner will bring it back online shortly,” the AVG site had the same note and never returned.
Other autosurfing-related sites hosted on ning.com have displayed the same message — never to return.
The note on Surf’s Up began to appear at some point today today. A “Page Not Found” message is found in the upper-left corner of the screen. The precise time the site went offline is unclear.
Also unclear are why the site went offline and who took it offline.
At one point, Surf’s Up had moderators in common with the AVG site. Recently, though, the Surf’s Up Mods who maintained the AVG forum have made few — if any — appearances on Surf’s Up.
The AVG forum debuted in the early days of AVG’s existence. References to AVG began to appear online in December 2008, less than a month after a Nov. 19, 2008, ruling by U.S. District Judge Rosemary Collyer that ASD had not demonstrated it was a lawful business and not a Ponzi scheme at an evidentiary hearing it requested.
AVG said it was headquartered in Uruguay. Members promoted it as a safe, offshore alternative to ASD that was outside the jurisdiction of U.S.-based regulators and law-enforcement agencies. Some participants later said Bowdoin was the silent head of AVG.
AVG suspended members cashouts in June 2009.
Surf’s Up made news during the Christmas holiday by publishing holiday greetings from ASD President Andy Bowdoin, implicated in an alleged $100 million Ponzi scheme. The forum also published a third-party note in which Bowdoin purportedly asked members for help in obtaining video of ASD “rallies” that might be helpful to his case.
Some ASD members said they were shocked that Bowdoin appeared to be addressing members as though it was business-as-usual for the embattled firm, which may owe members millions of ad impressions. Federal prosecutors said the surf engaged in wire fraud, money-laundering and the sale of unregistered securities — all while operating a massive Ponzi scheme.
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Better Business Bureau Revokes Accreditation Of Speed Of Wealth After SEC ‘Green’ Ponzi Action; Firm Experiences ASD-Like PR Disaster In Wake Of Allegations
The accreditation of a Colorado company implicated in an alleged $30 million “green” Ponzi scheme by the SEC has been revoked by the Denver/Boulder branch of the Better Business Bureau.BBB now gives Speed of Wealth a rating of “F” — the worst possible score on a scale of “A+” to “F” — and says the accreditation was revoked because the company did not comply with BBB standards.
Speed of Wealth’s BBB accreditation was revoked on Dec. 16, precisely one month after the SEC accused the firm of selling a Ponzi scheme for Philadelphia-based Mantria Corp. A rating for Mantria was not immediately available. The BBB of the Mid-Atlantic region, Metro Washington, D.C., and Eastern Pennsylvania says on its website that the organization is in the process of updating its report on Mantria.
Under “Government Actions” in Speed of Wealth’s BBB listing, the organization summarizes the SEC allegations against Speed of Wealth and Mantria and provides links to the SEC’s charging document and news release in the case (emphasis added):
On November 16, 2009 the U.S. Securities and Exchange Commission “SEC” filed a complaint with charges against Mantria Corporation, Troy B. Wragg, Amanda Knorr, Speed of Wealth LLC, Wayde M. McKelvy, and Donna M. McKelvy alleging that they are involved in perpetrating a $30 million Ponzi Scheme, which they persuaded more than 300 investors nationwide to participate in purported environmentally- friend[ly] investment opportunities.
Click below view the entire press release and the complaint from the “SEC”:
http://denver.bbb.org/Storage/33/Documents/9-16-09%20SEC_Complaint_Speed%20of%20Wealth.pdf
http://www.sec.gov/news/press/2009/2009-247.htm
PR Disasters Mark Speed Of Wealth, AdSurfDaily Cases
Speed of Wealth’s website now throws a server error and appears to have been disabled. In a column in the Denver Business Journal last month, reporter Renee McGaw said she attempted to email Wayde McKelvy, a Speed of Wealth principal, to get his comments on the SEC action.
McGaw reported that her email to McKelvy resulted in a steady stream of pitches to join wealth-building programs.
“YOU MUST START YOUR OWN BUSINESS Renee!†McKelvy exclaimed to McGaw in one email. “What You Have Been Taught About Building Wealth is DEAD WRONG!â€
The Denver Post also wrote about the Trump Network emails from McKelvy in the wake of the SEC action. A college professor interviewed by the newspaper said words such as “amazing,” “unbelievable” and “phenomenal” used by McKelvy to describe the Trump Network should be considered red flags.
The emails demonstrated that a crisis affecting one company can bring an unwanted spotlight on wholly separate brands. Indeed, the Denver Post reported that it contacted the Trump Network for comment on McKelvy’s emails. The calls were not returned.
Even the names of President Obama, former President Bill Clinton and Secretary of State Hillary Clinton became part of the Mantria/Speed of Wealth story. The companies used a video that included images of Obama, the Clintons and other politicians and media figures in promotional materials.
Meanwhile, the McKelvy emails were reminiscent of the experiences reporters had when they tried to contact Florida-based AdSurfDaily for comment after federal prosecutors seized tens of millions of dollars from the firm amid Ponzi allegations in August 2008.
Like Speed of Wealth, ASD also has a rating of “F” from the BBB, which cites government actions against the autosurf firm. Unlike Speed of Wealth, ASD has unresolved consumer complaints, according to the BBB.
Reporters who called ASD got a recording featuring the voice of ASD President Andy Bowdoin. Bowdoin, whom prosecutors later said had “followers,” intoned in the recording that that God was on the company’s side.
Thirteen months later, Bowdoin told an audience listening to a conference call that his ongoing legal fight against the government was inspired by the story of a former Miss America who now operates a Christian organization. The PP Blog contacted both the Miss America Organization and the Christian organization for comment.
The Miss America Organization did not return the call; the Christian organization, Salem Family Ministries, responded by saying it had no comment, except to say it did not recognize Bowdoin’s name. The Secret Service transcribed Bowdoin’s remarks in the conference call and presented them to the federal judge hearing the forfeiture cases against the firm.
Companies in legal crisis can lose the PR war quickly if their initial actions lead to more questions than answers. Within days of the federal action against ASD, Bowdoin invoked “Satan,” comparing the U.S. Secret Service to the 9/11 terrorists who killed nearly 3,000 people.
In a Nov. 19 conference call with participants, McKelvy described the SEC allegations as “ridiculous,” but at the same time acknowledged he possibly sold securities without a license, according to the Denver Business Journal.
But in the same conference call — just days after the SEC action — McKelvy also said he was turning his attention to the Trump Network, an MLM opportunity. The comment — and the emails Speed of Wealth sent out to promote the Trump Network — led to more headlines in newspapers, forums and Blogs.
Read Speed of Wealth’s BBB report.
Read ASD’s BBB Report.
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2009 Ends With Ponzi Clawbacks In Nadel Case, Demands By Fleeced Investors In Bolze Case For Politicians To Return Tainted Campaign Donations
EDITOR’S NOTE: There is a link at the bottom of this story to a report filed by Burton Wiand, the receiver in the Arthur Nadel Ponzi case in Sarasota, Fla. We encourage readers to read the document in its entirety. The Nadel case is not yet a year old. Nadel, who turned 77 today and is a onetime attorney, was disbarred in 1982 for taking money from a trust fund to pay off a loan shark, a fact allegedly hidden from investors. Nadel allegedly also employed an unlicensed accountant.
Among other things, the Wiand document shows that unwinding a Ponzi scheme is a monumental undertaking. At the same time, the document may leave some readers scratching their heads and asking how on earth any person actually could advocate for Ponzi schemes — and yet such advocacy occurs on a daily basis in the bizarre world of autosurf and HYIP Ponzi schemes, where so-called “leaders” get paid for recruiting people into Ponzis.
Here, now, the story . . .
Arthur Nadel turns 77 today. He is jailed in New York. Burton Wiand, the court-appointed receiver in the alleged Arthur Nadel Ponzi scheme involving at least $350 million, has identified at least 85 investors who received more than they paid in and is working to identify more.
Clawbacks have begun in earnest, with the winners offered a choice of settling for 90 percent of the total they received and returning the money or being sued for 100 percent and paying lawyers to defend them in the lawsuits.
Meanwhile, fleeced investors in a separate Ponzi case in Tennessee are demanding that politicians who received campaign donations from the Dennis Bolze Ponzi scheme return the money so it can be used to compensate victims.
Bolze, 61, of Gatlinburg, Tenn., pleaded guilty Nov. 10 to all counts against him, and is awaiting sentencing. He was accused of wire fraud and money-laundering in a $21.5 million scheme.
WATE reported that Bolze gave money to a number of politicians.
Beyond the Bolze case, it is clear that substantial sums of Ponzi money made its way into the coffers of local, state and national politicians in various jurisdictions. It is equally clear that there is no uniform approach to returning the money. Some politicians have said they’ve spent the money. Others have said they donated it to charity after Ponzi allegations surfaced. Still others have returned money.
Unlike fleeced Ponzi investors who receive tainted largess directly, politicians’ ill-gotten gains may come indirectly from a polluted money stream linked to a Ponzi. There are allegations in Florida, for instance, that disbarred Fort Lauderdale attorney Scott Rothstein provided campaign donations from Ponzi proceeds, while at the same time paying lawyers in his now-shuttered, 70-attorney firm from Ponzi proceeds. It is possible that some of the Ponzi money paid to attorneys also made its way into the political process.
Elsewhere in Florida, there are allegations that Andy Bowdoin, president of Quincy-based AdSurfDaily — itself implicated in a Ponzi scheme — donated at least $5,500 to the National Republican Congressional Committee (NRCC) — before the alleged ASD Ponzi scheme was exposed in August 2008.
Meanwhile, the Miami Herald reported that Allen Stanford, implicated in an alleged $7 billion Ponzi scheme, also donated to politicians prior to the scheme being exposed. Like the Rothstein case, politicians in both major U.S. political parties received donations.
Nadel Clawbacks
In the Nadel case, Wiand estimated that the winners received at least $39 million in fictitious profits — ill-gotten gains from the scheme. He has settled with 26 investors to date, meaning that at least 59 potential clawback cases remain to be resolved. The number could increase because Wiand still is working to identify winners.
The Sarasota Herald Tribune reported that six of the 26 settled clawback cases were settled in the final two weeks of 2009. One investor agreed to return $207,000 in fictitious profits by making four payments over the next three years.
This chart from Burton Wiand's court filings in the Arthur Nadel case shows that the hedge funds purported to have recorded more than $272 million in gains between 2003 and 2008, when the funds actually lost more than $18 million. In 2007, the funds purported to have gained more than $54 million, but actually lost nearly $25 million. The SEC approved the 90 percent settlement figure, Wiand said. He added that the window was closing on the discount deal.
In a November court filing, Wiand said that “those who do not settle with the Receiver should anticipate that litigation will be commenced in the immediate future” and that the discount “will no longer be available.”
It appears as though two groups of clawback targets exist: a group of 85 who received letters and were offered the discount, and a group of an unknown size that will receive settlement letters soon.
Wiand said the group of 85 represented about $16.2 million in fictitious profits from the scheme. The other group represents about $22.8 million.
Read Wiand’s interim receivership report in the Nadel case.
See Nadel story in Sarasota Herald Tribune.
See Bolze story from WATE.