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Tag: Aubrey Lee Price

  • BULLETIN: Missing Investment Adviser Named In SEC Civil Complaint Yesterday In Atlanta Has Been Charged Criminally In New York

    BULLETIN: Aubrey Lee Price, the missing Georgia man sued by the SEC in an alleged $40 million investment-fraud caper that depleted “substantially all” of the reserves of a bank in Southern Georgia, has been charged criminally in New York with embezzling $17 million from the bank.

    The office of U.S. Attorney Loretta E. Lynch of the Eastern District of New York said Price “disappeared after telling acquaintances that he had lost a large amount of money through trading activities and that he planned to kill himself.”

    He has been missing since at least June 16, prosecutors said.

    Price last was seen boarding a ferry boat in Key West, Fla. The ferry was bound for Fort Myers, prosecutors said.

    “Price has told acquaintances that he owns real estate in Venezuela and Guatemala,” prosecutors said. “Price recently traveled to Venezuela and returned to the United States from that trip on June 2, 2012.”

    After a Price company bought a controlling portion of the bank’s stock in December 2010, he “took on the responsibility of investing the bank’s capital” in early 2011, prosecutors said.

    Although the bank was told Price was investing the bank’s capital in U.S. Treasury securities, “Price fraudulently wired the bank’s funds to accounts that he personally controlled at other financial institutions and provided bank management with altered documents to make it appear as if he had invested the bank’s money in Treasury securities,” prosecutors said.

    The FBI is leading the criminal probe.

    Anyone with information regarding Price’s whereabouts or the alleged crime is urged to contact the FBI’s office in New York at 212-384-1000. Prosecutors said this email address also may be used: ny1@ic.fbi.gov.

    Persons with information on his whereabouts also may contact the Atlanta office of the FBI at 404-679-9000 or the Lowndes County Sheriff’s Office at 229-671-2985, the SEC said yesterday.

  • Raymond Bitar, Full Tilt Poker CEO, Arrested; Gambling Site Linked To THREE U.S. Banks That Failed, Feds Say; ‘The On-Line Casino Become An Internet Ponzi Scheme,’ Top FBI Official Says

    Three vulnerable U.S. banks that processed illegal gambling payments for Full Tilt Poker in exchange for investments in the institutions later failed, federal prosecutors in the Southern District of New York said yesterday. The failures of Sunfirst Bank in St. George, Utah, and All American Bank and New City Bank — both of which were “single-branch” banks in Illinois — allegedly cost the FDIC more than $70 million.

    Now, Full Tilt Poker Chief Executive Officer Raymond Bitar has been arrested in New York. The arrest occurred yesterday upon his return from Ireland, and Bitar, 40, was charged in an 11-count, superseding indictment with lying to players about the security of their funds and other crimes. He’d earlier been charged with gambling, bank fraud, and money laundering offenses.

    News of Bitar’s arrest occurred on the same day the SEC alleged that a Georgia man effectively had gutted a bank in the state as part of a $40 million investment scheme. That man, Aubrey Lee Price,  now is listed as missing. Fraud schemes have contributed to multiple bank failures in the United States.

    In one of three counts that allege Full Tilt’s Bitar committed wire fraud against Full Tilt players, he is accused of lying to participants on an “internet forum” about players’ money being kept separate from corporate funds. Prosecutors said that Full Tilt was using players’ money as its own to sustain the scheme.

    At one point, according to prosecutors, Full Tilt owed players $344 million but had only $145 million “in all of its bank accounts.” At another point, Full Tilt owed players $390 million but had only $60 million on-hand.

    Among the astonishing allegations by federal prosecutors yesterday in the aftermath of an FBI investigation was that Vitar did not halt the Full Tilt Ponzi scheme after the government brought the initial set of charges in 2011. Instead, he continued to operate it offshore and “lured players to continue gambling with Full Tilt Poker by continuing to promise them that their funds were safe. In actuality, [Bitar] was using new customer deposits to pay off some of the backlog of player requests to withdraw funds and to cover the company’s operating expenses, including salary for [Nelson] Burtnick and himself.  In effect, Full Tilt Poker operated what was, by then, nothing more than a Ponzi scheme. When the scheme finally collapsed, Full Tilt Poker was unable to pay players the approximately $350 million it owed them.”

    Nelson Burtnick was the head of Full-Tilt’s payment-processing department. He also was charged yesterday in the superseding indictment.

    Prosecutors said Bitar and Burtnick “hired agents to create dozens of phony companies, complete with fake websites, and to open bank accounts using the names of these phony companies as a cover to process payments for Full Tilt Poker.”

    The codes of credit-card transactions were altered to circumvent Visa and MasterCard processing regulations and to dupe banks into processing illegal gambling transactions, according to the superseding indictment.

    To keep cash flowing to Full Tilt, Bitar and Burtnick also found a way to disguise e-checks that relied on “ACH” transactions routed through an electronic network administered by the Federal Reserve. Dummy companies were used to exploit the network, federal prosecutors charged.

    “Bitar and Full Tilt Poker persisted in soliciting U.S. gamblers long after such conduct was outlawed,” said Janice K. Fedarcyk, FBI assistant director-in-charge. “As alleged, Bitar has already been charged with defrauding banks to conceal the illegal gambling. Now he stands accused of defrauding Full Tilt’s customers by concealing its cash-poor condition and paying off early creditors with deposits from later customers. The on-line casino become an Internet Ponzi scheme.”

    Losses to customers involved “hundreds of millions of dollars” while Bitar and Full Tilt owners were paid “over $430 million,” said U.S. Attorney Preet Bharara.

    With yesterday’s arrest “and the new charges brought against him, Raymond Bitar will now be held criminally responsible for the alleged fraud he perpetrated on his U.S. customers that cost them hundreds of millions of dollars,” said Bharara. “The indictment alleges how Bitar bluffed his player-customers and fixed the game against them as part of an international Ponzi scheme that left players empty-handed.”

  • BULLETIN: SEC Says Missing Man Was Mastermind Of $40 Million Fraud In Georgia In Which ‘Substantially All’ Of A Bank’s Reserves Were Misappropriated And Lost In Trading; Persons With Info Asked To Call FBI Or Lowndes County Sheriff’s Office

    BULLETIN: The SEC has gone to federal court in Atlanta, alleging that Aubrey Lee Price masterminded a $40 million investment fraud and that Price might have misappropriated millions of dollars from a “failing” bank in southern Georgia after a company he controlled bought a stake in the bank in 2010.

    The alleged misappropriation involved “substantially all” of the bank’s reserves, which were lost in trading, the SEC said.

    In June, some investors received a 22-page letter attributed to Price in which Price allegedly “admits that he ‘falsified statements with false returns’ in order to conceal between $20-23 million dollars in investor losses,” the SEC said.

    Price, 46, was believed to be living in Lowndes County, Ga., after moving there from Manatee County, Fla. But Price has gone missing, the SEC said.

    “Price raised nearly $40 million from investors and made woeful financial transactions that he hid from them,” said William P. Hicks, associate director of the SEC’s Atlanta Regional Office. “Now both the money and Price are missing.”

    Price managed an unregistered investment fund that went by the name of PFG LLC of McDonough, Ga., the SEC said.

    U.S. District Judge Timothy C. Batten Sr. has issued an asset freeze and temporary restraining order, the SEC said.

    The scheme began in 2008 and affected at least 100 investors in Georgia and Florida, the SEC said.

    “Price purported to invest fund assets in traditional marketable securities, but he also made illiquid investments in South America real estate and a troubled South Georgia bank,” the SEC said. “In order to conceal mounting losses of investor funds, Price created bogus account statements with false account balances and returns that were provided to investors and bank regulators.”

    Price also was associated with an entity known as PFGBI through which the banking investment was made, the SEC said.

    But the “investment in the bank is substantially worthless, as the bank’s cash assets have been substantially depleted and substantially all of the bank’s reserves (including U.S. treasuries and other liquid assets) were misappropriated by Price and lost in trading,” the SEC charged.

    “Goldman Sach’s records document at least $10 million in unexplained funds being transferred by Price from the bank to a trading account at Goldman Sachs,” the SEC said.

    Persons with information on his whereabouts should contact the Atlanta office of the FBI at 404-679-9000 or the Lowndes County Sheriff’s Office at 229-671-2985, the SEC said.