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Tag: B. Todd Jones

  • Prosecution Asks Court To Impose Life Sentence On Jason Bo-Alan Beckman, Pitchman For Trevor Cook Ponzi Scheme; Beckman Says He Should Serve 364 Days And Then Become A Professional Speaker

    “The nature and circumstances of this offense and Mr. Beckman’s history and characteristics, viewed together, cry out for a life sentence. With respect to Mr. Beckman, nothing less than a liberty-ending sentence would reflect the seriousness of this offense, promote respect for the law and provide just punishment. But perhaps most importantly, Mr. Beckman must be locked up for the rest of his life because he is a very dangerous individual who is certain to hurt people if he is ever released.” — From prosecution sentencing memo for convicted swindler Jason Bo-Alan Beckman, a pitchman of the Trevor Cook Ponzi scheme, Dec. 11, 2012

    EDITOR’S NOTE: The $194 million Trevor Cook Ponzi scheme is believed to be the second-largest scam of its sort in Minnesota history, trailing only Tom Petters’ epic, $3.65 billion caper. Cook was sentenced to 25 years. Prosecutors in the office of U.S. Attorney B. Todd Jones now are asking a federal judge to sentence convicted Cook pitchman Jason Bo-Alan Beckman to life in prison — or 411 years. In essence, prosecutors are arguing that Beckman was even worse than Cook, a reprobate drunkard who spent victims’ money on booze, strippers and an enormous mansion, and that Beckman piled on crimes targeted at elderly victims even as he helped Cook steal people into poverty.

    ** _____________________________________ **

    UPDATED 5:20 P.M. ET (U.S.A.) The Trevor Cook Ponzi scheme targeted at senior citizens and conservative Christians never has received the national media attention it deserves. But the Cook case is back in the news today.

    Man, is it ever . . .

    For starters, it became public yesterday that convicted Cook pitchman Jason Bo-Alan Beckman apparently believes he should spend only 364 days in prison “followed by three years of probation requiring 2000 community service hours.”

    While on probation and performing his community service, Beckman contended, he would “devote” himself “to speaking to financial firms and investors about what to do and what not to do.”

    And as an extra carrot for a lenient sentence, “Beckman would arrange for the immediate delivery of a check for $19,000,000 for payment to victims.”

    The Star Tribune of Minneapolis/St. Paul broke the news this morning about Beckman’s apparent belief he could make multiple felony convictions go away with a wrist slap, by using his checkbook as a lure to victims and by turning himself into a professional speaker on the subject of avoiding the perils of intercontinental financial crime.

    One victim who contacted the PP Blog today questioned whether Beckman was having a pipe dream about having $19 million. A court-appointed receiver has been policing up money from the scheme since 2009. Since becoming implicated in the Cook scheme, Beckman has become known for offering up bizarre constructions.

    He “had the temerity to testify that the money he stole from” an elderly couple “constituted his ‘earnings,’” prosecutors said yesterday. And he also divined a construction by which he was the “top ranked” portfolio manager in the United States “based on a Morningstar comparative study,” they asserted.

    To say the prosecution wasn’t impressed by Beckman’s opinion on how justice might best be served perhaps is the greatest understatement in the history of Ponzi-scheme prosecutions worldwide.

    Beckman, 42, deserves life in prison — or, as a technical matter 4,932 months or 411 years, according to prosecutors.

    “Mr. Beckman is a man with no semblance of a conscience who exudes in his conduct and affairs a sense of great entitlement,” prosecutors argued. “Entitlement to make untrue, grandiose claims about himself. Entitlement to groom the trust of vulnerable persons and then to violate that trust. Entitlement to steal his victims’ money and to use it for luxury items for himself. Entitlement to misuse professionals to cloak his schemes with a skein of legitimacy. Entitlement, when caught, to lie to everybody – the press, his victims, hired attorneys, and this Court – doggedly and repeatedly, about what he knew and when he knew it. To all that appears, Mr. Beckman’s entire life has been deeply suffused with sociopathy. In Mr. Beckman’s mind, the rules simply do not apply to him.”

    In 2011, the SEC memorably described Beckman as guilty of “contumacious disobedience” for his manipulation of victims and the courts. The SEC made the claim after criminal prosecutors asserted that Beckman stole millions of dollars from an elderly husband and wife now in their nineties and tried to make it appear as though the wife — a stroke victim with “hemispheric paralysis” — had become his business partner.

    Beckman sold two life-insurance policies on the woman’s “then 92-year old husband” for about $3.9 million, and then converted “the proceeds of that sale for his own benefit,” prosecutors alleged last year.

    As a companion fraud scheme that flowed from Beckman’s role in the Cook Ponzi, Beckman tried to dupe the National Hockey League in a deal that would make him a part owner of the Minnesota Wild, prosecutors said.

    And even as he was stealing from people now in their nineties and confined to a nursing home while trying to run a scam on the NHL and his own attorneys, Beckman “almost completely wiped out the Arthur W. Quiggle [Family] Trust,” prosecutors said.

    “In 2007, without authorization, he sold $3.4 million of its low-basis, high-dividend paying stock, funneling the proceeds to the currency program,” prosecutors said. “This triggered enormous capital gains within the trust and wiped out most of the trust’s dividend income, which defeated the trust’s purpose of providing income to the Quiggle family. Then, in July of 2008, just weeks after several attorneys warned Mr. Beckman that the currency program was illegal and a likely Ponzi scheme, Mr. Beckman caused the trust to borrow $3.7 million against its remaining marketable stocks and stole all of it. Again, much of it ended up paying off huge deficits incurred in Mr. Beckman’s name at various trading houses to buoy his chances of becoming an owner of the Wild.”

    Beckman is scheduled to be sentenced Jan. 3.

     

  • Government Refuses To Say Whether Return Of INetGlobal Funds Means The Firm Has Been Cleared And The Probe Into Its Business Practices Has Concluded

    UPDATED 9:24 P.M. EDT (U.S.A.) A spokeswoman for U.S. Attorney B. Todd Jones of the District of Minnesota refused to say today whether the government’s probe into the business practices of Inter-Mark Corp. and INetGlobal is over.

    “[W]e never confirm or deny the existence of investigations,” said Jeanne Cooney.

    The firms announced yesterday that prosecutors had agreed to return more than $20 million seized by the U.S. Secret Service in a Ponzi scheme probe in February 2010. Some INetGlobal members instantly seized on the news, claiming the government’s release of the funds validated the company’s business practices as they existed at the time of the seizure.

    Separately, INetGlobal members circulated a statement from Inter-Mark Board Chairman Bob Kinsella. The PP Blog was sent a copy of the statement by an INetGlobal member, under a subject line of “Gov. Releases funds Lets Rock!”

    “Today’s outcome is validation of the Inter-Mark Corporation business model,” the statement quoted Kinsella as saying. “I wonder if any business has been more researched and analyzed as Inter-Mark in the last year. Sales Associates all over the world should have complete confidence in the future of Inter-Mark Corporation.”

    Kinsella was quoted in the Star Tribune newspaper as saying the same thing.

    Cooney had no immediate comment today on Kinsella’s statement that the firm’s business model had been validated.

    But Cooney did say that she believed a claim on the INetGlobal Blog that the firm had been validated had been made in “error” by the company — and that the firm “removed” the claim from its Blog.

    Agreement

    The money is not being released to INetGlobal directly, under the terms of an agreement approved by U.S. District Judge Donovan Frank. Instead, it is being released to attorney R.J. Zayed, who was appointed Temporary Administrator of Seized Funds.

    Zayed, who also is the court-appointed receiver in the Trevor Cook Ponzi scheme, will distribute the funds under judicial supervision to INetGlobal affiliates owed money at the time of the February 2010 seizure.

    Frank gave the government up to 45 days to turn over the money to Zayed. Prosecutors can petition for an extension of time beyond 45 days for “good cause,” according to the order.

    “The Administrator shall conserve, hold, and manage the Seized Funds transferred by the United States as part of the Court’s Order, and shall perform all acts reasonably necessary or advisable to preserve the value of the Seized Funds until they are validly distributed to the members of Inter-Mark,” according to the order.

    “If the Administrator is satisfied, in his sole discretion, that the identity of the Inter-Mark member is correct, that the amount due and owing to the member is correct, and that the name, address, government identification documents, and IRS tax forms of that member are proper, the Administrator shall wire transfer from the Seized Funds to that member’s ‘e-wallet’ account with International Payout Systems the amount due and owing to that member,” according to the order.

    Funds that remain after Zayed pays INetGlobal affiliates will be returned to the company, according to the agreement.

    No one has been charged criminally in the INetGlobal probe. Former executive Steve Renner, who denied wrongdoing, was sentenced in 2010 to 18 months in federal prison in an unrelated tax case. He is scheduled to be released in October.

    The firm says it will have an exciting future.

    “InetGlobal will use the remaining funds to launch a new and exciting array of products, many of which have been delayed due to the seizure of the funds,” the company announced on its Blog.  “What working capital was available was used to service the existing business and to pay for the expensive process required to convince the United States government that iNetGlobal’s business is legal.”

    An INetGlobal supporter who emailed the PP Blog this afternoon included a link to the Star Tribune story, which included Kinsella’s comment that the firm had been validated.

    “Wow, it looks like you have some explaining to do,” the sender opined, referring to the Blog’s coverage of the allegations against the firm.

    The sender then imagined a fantasy conversation in which the Blog would say “oh uh uh well uh” — and which he would say in return, “THAT’S WHAT I THOUGHT!!”

  • Second Man With Trevor Cook Tie Charged Criminally In Massive Minnesota Ponzi Scheme; Christopher Pettengill Faces Securities-Fraud, Conspiracy And Money-Laundering Accusations

    A Minnesota man has become the second person with ties to convicted Ponzi schemer Trevor Cook’s Forex scam to be charged criminally.

    Christopher Pettengill, 54, of Plymouth, “knowingly concealed information from investors concerning the foreign currency program sold by Pettengill, Cook, and others,” federal prosecutors said.

    He has been charged with securities fraud, money-laundering and conspiracy to commit wire fraud, the office of U.S. Attorney B. Todd Jones of the District of Minnesota said.

    Cook pleaded guilty in the $194 million caper last year and was sentenced to 25 years in federal prison.

    Jon Jason Greco, 40, of Minneapolis, was charged in March with making false statements to federal agents. Greco was accused of hiding loot from the scheme.

    Pettengill was accused of lending credibility to the scam and encouraging people to invest money.

    “Pettengill allegedly conducted numerous wire transfers during the course of the conspiracy, and on September 3, 2008, he allegedly made a credit card payment of $11,369.19, which was derived from the proceeds of the securities fraud,” prosecutors said.

    He faces up to 20 years in prison, if convicted on all counts.

    The SEC and CFTC sued Cook and former radio personality Pat Kiley in November 2009. Earlier this year, the SEC filed suit against Jason Bo-Alan Beckman, another alleged promoter of the scam.

  • NEWS/UPDATES: Feds Say $900 Million Nevin Shapiro Ponzi ‘Perfect Example Of Greed Run Amok’; Colorado Charges Bela Geczy, Michael Kass With Racketeering In Fraud Case

    The acts of Nevin Shapiro — a Florida man arrested in New Jersey yesterday on charges of orchestrating a $900 million Ponzi scheme — represent a “perfect example of greed run amok,” an FBI agent said.

    Separately, a grand jury in Colorado has charged two men under the state’s organized-crime statute with operating an $18 million securities-fraud scheme that affected at least 270 investors.

    Arrested in Colorado were Bela Geczy, 57, of Longmont, and Michael Brian Kass, 48, of Boulder. Authorities said they orchestrated a massive Ponzi scheme involving domestic and offshore business opportunities.

    The court docket in the cases against Geczy and Kass shows two dozen felony counts, including violations of the Colorado Organized Crime Control Act, conspiracy to commit securities fraud, securities fraud by fraud or deceit and securities fraud by untrue statement or omission.

    Like Florida, Minnesota, Washington, New York, South Carolina, California, Michigan and other states, Colorado has been plagued by Ponzi and fraud schemes. No fewer than five major Ponzi or financial fraud probes are under way in Colorado. Records suggest the highly complex frauds involved more than $100 million.

    In New York alone this week, two major financial-fraud cases were filed. The schemes involved in the neighborhood of $101.5 million, according to court filings. Meanwhile, U.S. Attorney Jenny A. Durkan of the Western District of Washington outlined five major Ponzi probes in various states of completion in the Greater Seattle area. These cases involve tens of millions of dollars, according to records.

    At the same time, the main page of the website of U.S. Attorney B. Todd Jones of the District of Minnesota features links to three major Ponzi cases in various stages of investigation. One of the cases is the Tom Petters’ Ponzi case. Petters was sentenced this month to 50 years in federal prison for presiding over a $3.65 billion fraud.

    Jones’ website also includes information on a Ponzi case involving at least $190 million. Trevor Cook pleaded guilty to mail fraud and tax evasion in the fraud earlier this month, and is awaiting sentencing. The website also includes information on the investigation into the business practices of Steve Renner in an alleged autosurf Ponzi scheme case involving tens of millions of dollars.

    Florida/New Jersey Cases Against Nevin Shapiro

    Shapiro, 41, was a prominent Miami Beach businessman. Authorities now say he was operating a Ponzi scheme since 2005 that rivaled the $1.2 billion Scott Rothstein scheme in dollar volume. Rothstein pleaded guilty in his massive fraud case earlier this year.

    Like Rothstein, Shapiro liked to chum around with sports figures and live large, according to records.

    Shapiro used “stolen funds to purchase a pair of diamond-studded handcuffs, which he gave as a gift to a prominent professional athlete,” prosecutors said. He also spent more than $400,000 for floor seats to watch the Miami Heat, a team in the NBA.

    At the same time, prosecutors said, he spent about $26,000 per month on mortgage payments on his $5.3 million residence in Miami Beach, while directing about $7,250 per month for payments on a $1.5 million dollar Riviera yacht and roughly $4,700 per month for the lease of a Mercedes-Benz.

    Viewed on a yearly basis, the payments on the residence, yacht and car alone consumed more than $450,000 — and yet Shapiro’s purported business produced no sales.

    A veteran FBI agent said the case was about naked greed.

    “This case is a perfect example of greed run amok,” said FBI Special Agent in Charge Michael B. Ward. “In pursuit of wealth and a lifestyle he was otherwise unable to attain, Mr. Shapiro allegedly preyed upon unsuspecting investors looking to secure a safe place to maximize their investments.  Instead, their futures have been irrevocably damaged.”

    Although purportedly in the business of buying groceries in a lower-priced market and selling them wholesale in markets in which they would fetch higher prices, Shapiro’s company largely was a mirage that conducted virtually no legitimate business after 2004 and sustained itself by paying investors with the money of other investors, prosecutors said.

    “Nevin Shapiro is charged with tricking investors with false documents and false promises,” said U.S. Attorney Paul J. Fishman of the District of New Jersey. “He spent tens of millions of their money on gambling debts, lavish gifts and a luxury lifestyle built on a house of cards.”

    Authorities gave credit for the Shapiro criminal collar and an accompanying civil action by the SEC to the combined investigative efforts of the Financial Fraud Enforcement Task Force. President Obama formed the Task Force in November 2009.

    Shapiro, prosecutors said, diverted at least $38 million in investors’ funds for his own use, and investors now are out tens of millions of dollars.

    A girlfriend received goods totaling $116,000 from a charge card, which Shapiro used to rack up $640,000 in personal purchases, according to court records.

    The IRS is part of the investigative team in the Shapiro case.

    “Scammers, con artists and swindlers will do and say anything to get you to buy into their scheme,” stated William P. Offord, Special Agent in Charge, IRS-Criminal Investigation.

    Like his investigative colleagues in other Ponzi cases, Offord reuttered the age-old adage:

    “Remember the old cliche,” he said.  “If it’s too good to be true, it probably is.’”

  • Prosecutors Ask Judge For Order To Disqualify INetGlobal Attorney, Saying They May Wish To Cross-Examine Him As Witness In Ponzi Case

    UPDATED 11:31 A.M. EDT (U.S.A.) Federal prosecutors have filed a motion to disqualify attorney Mark Kallenbach as counsel for INetGlobal and related companies, claiming that Kallenbach is attempting to be both a witness in the case and a lawyer for multiple clients involved in a Ponzi scheme, wire fraud and money-laundering probe.

    Kallenbach, prosecutors said, has made himself a subject of cross-examination because of an affidavit he filed last month. They added that wearing two hats in the same case might create a conflict with the Minnesota Rules of Professional Responsibility, a local rule of U.S. District Court in Minnesota and the “Court’s inherent supervisory authority over its bar.”

    “Should Mr. Kallenbach testify, he will be cross-examined,” prosecutors said. “The Court will have to decide whether Mr. Kallenbach’s voluntary assumption of the role of witness works as a waiver of the attorney-client privilege on cross-examination, or whether the government’s cross-examination of Mr. Kallenbach will be limited, in ways it might not be limited if the witness was not counsel to several parties, in order to preserve the privilege.”

    On April 2 — a week ago yesterday — prosecutors said INetGlobal had no attorney of record in the autosurf Ponzi scheme litigation. Kallenbach filed a notice of appearance for the firm and several related companies on Monday, three days after the prosecution’s filing.

    On Wednesday, Kallenbach filed a second affidavit (see subhead below) labeled a supplement to an affidavit he filed March 25.

    Prosecutors responded by saying Kallenbach’s second affidavit “heightens the government’s concern about Mr. Kallenbach attempting to serve as both lawyer and witness” and that he should be disqualified as an attorney for “any of the individuals or companies involved” in the case.

    “This motion is brought because Mr. Kallenbach has made himself a necessary witness in this case,” prosecutors argued. “This is a case in which Mr. Kallenbach conducted his own
    investigation and then voluntarily drew up a lengthy affidavit setting forth his observations.”

    Their claim is based on a 20-page affidavit and 12 additional pages of exhibits Kallenbach filed March 25 — before he entered his notice of appearance as INetGlobal’s attorney in court.

    In his March 25 affidavit, Kallenbach said he conducted an “investigation” and concluded that “Inter-Mark and its subsidiary iNetGlobal and its other subsidiaries are clean, legitimate and profitable businesses.”

    Kallenbach, in the March 25 affidavit, attacked an affidavit for a search warrant by the U.S. Secret Service and also challenged assertions the government made about V-Local, a company related to INetGlobal.

    Prosecutors argued that the affidavit and conclusions Kallenbach described as “true facts” make him a witness. Some of the information was woven into a memorandum of law filed March 25 by Jon Hopeman on behalf of INetGlobal owner Steve Renner, prosecutors said.

    The prosecution motion was filed by Assistant U.S. Attorney John Docherty, one of the prosecutors who handled the Ponzi case against Tom Petters. Petters was sentenced this week to 50 years in prison for operating a $3.65 billion fraud.

    U.S. Attorney B. Todd Jones of the District of Minnesota approved the filing of the disqualification motion. The main page on Jones’ website lists three major Ponzi probes the office has undertaken in recent months, including the Petters’ case, the case involving Minnesota Ponzi scheme figures Trevor Cook and Pat Kiley, and the investigation into the business practices of Renner at INetGlobal.

    Minnesota’s Ponzi Plague

    Ponzi schemes have plagued Minnesota. The Cook/Kiley case involves at least $190 million and investor losses of at least $139 million, according to court filings.

    Another big case in Minnesota involved Gerard Cellette Jr. Cellette was implicated in a $53 million Ponzi scheme last year by Hennepin County Attorney Mike Freeman.

    Meanwhile, Charles “Chuck” E. Hays pleaded guilty last year to charges in a $20 million Ponzi-scheme case in which the government seized a $3 million yacht.

    Separately, three members of a Minneapolis family were indicted last year on Ponzi and fraud charges. The case became known as the Kalin Thanh Dao case. Dao’s parents also were indicted.

    Dao and her parents pleaded guilty. Prosecutors said money was siphoned from the scheme to pay for gambling in Las Vegas.

    “Investors were promised that their money would be placed in investment programs targeted within specific markets and industries,” prosecutors said. “Investors were also told that Kalin Dao had a ‘partner’ who held a seat on the New York Stock Exchange, had contacts in the emerging Asian markets who had ‘inside’ information, and was associated with various Las Vegas casinos.”

    The Kalin Thanh Dao probe uncovered a web of deceit in which Dao’s father claimed nearly $3 million in losses for businesses owned by his daughter to eliminate his personal tax liabilities, and Dao’s mother claimed to be “single,” the “head of [a] household” — and also claimed a tax exemption for Dao.

    Kalin Thanh Dao was 32 years old and operated at least four companies, prosecutors said.

    “Instead of investing the investors’ funds as promised, Kalin Dao diverted substantial amounts of the funds for her own purposes, including gambling, lulling payments and personal expenses,” prosecutors said. “She also admitted that the fraud was between $2.5 and $7 million.”

    Also on the Ponzi front, AdSurfDaily, a Florida-based company implicated in a massive autosurf Ponzi scheme by the Secret Service in 2008, was popular in Minnesota. Some Minnesota members of ASD were among the staunchest defenders of ASD President Andy Bowdoin.

    The Secret Service referenced the ASD case in filings in the INetGlobal case, saying an undercover agent was introduced to INetGlobal by an ASD member who described the operation as a wink-nod enterprise.

    A federal judge in the District of Columbia has issued three orders of forfeiture totaling more than $80 million in the ASD case. Bowdoin is appealing. His appeal brief cites two other cases filed under seal and suggests that prosecutors subpoenaed at least two attorneys involved in the defense of ASD’s assets to appear at a grand-jury proceeding.

    It is unclear if the attorneys attempted to invoke attorney-client privilege. What is clear is that a federal judge ordered the attorneys to appear and that the order is being challenged in a federal appeals court.

    Kallenbach’s Second Affidavit

    Kallenbach filed a second affidavit April 7. The affidavit asserts that a Renner entity known as V-Media Marketing LLC “borrowed” all of the money that was placed in a bank account at Premier Bank Minnesota in early March, about a week after the Secret Service raid at INetGlobal’s offices in Minneapolis.

    Prosecutors, describing the INetGlobal case as a “major fraud and money laundering investigation,” said $47,400 was deposited into the account.

    “IMC Desperately Needs Working Capital To Pay Its Creditors,” Kallenbach said.

    He also described a webcast he attended April 5 that was “sponsored by one of IMC’s marketing consultants.”

    “At the April 5th Meeting, I learned, amongst other things, that many of iNetGlobal’s new customers have demanded refunds,” Kallenbach said. “The number of customers seeking refunds and the amount of such refunds is unknown. What is known is that as each and every day passes, without iNetGlobal being in business as usual, more of iNetGlobal’s customers will seek refunds.”

    He also asserted that “iNetGlobal’s marketing consultants are clamoring for commission payments that are legitimately due and owing to them,” according to the affidavit. “iNetGlobal has been unable to pay the commissions.”

    Kallenbach’s filing also suggested that, through negotiations, a little more than $1 million has been returned to INetGlobal and that the sum was now considered “unrestricted” cash. The affidavit did not disclose specific details about the negotiations

    In the March 25 affidavit,  Kallenbach argued that INetGlobal had no cash to operate.

    “At the time I signed my March 25, 2010 Declaration, I believed it to be true that iNetGlobal had no unrestricted cash meaning cash available for working capital. I have since learned that as a result of negotiations in which I was involved, on March 22, 2010 iNetGlobal netted approximately $220,000 from the return of restricted cash. As of the time my March 25, 2010 Declaration was prepared, I was unaware that this money had been returned to iNetGlobal.

    “After my Declaration was signed, approximately $795,000 of restricted cash was made available to iNetGlobel for working capital after close of business on March 25, 2010,” Kallenbach said. “As of today [April 7], iNetGlobal’s unrestricted cash is approximately $1,015,000. I arrive at this sum by adding $220,000 and $795,000 to reach $1,015,000.”

    Prosecutors said that, because Kallenbach has become an “essential witness” subject to cross-examination by the prosecution and direct examination by the INetGlobal side, there is a question about “whether Mr. Kallenbach’s clients can be provided constitutionally effective assistance.”

    “The government did not bring this situation about,” prosecutors contended. “[T]he government has not subpoenaed Mr. Kallenbach, or raised questions about whether he, and only he, can testify as to certain facts.

    “This is a case in which Mr. Kallenbach conducted his own investigation and then voluntarily drew up a lengthy affidavit setting forth his observations. Nor may Mr. Kallenbach, at this juncture, announce that he will henceforth act only as an advocate, because the choice to be a witness was made when the affidavit was filed.”

  • BULLETIN: Trevor Cook Charged Criminally With Mail Fraud And Tax Evasion In Alleged $190 Million Ponzi Case In Minnesota

    BULLETIN: Trevor Cook, the reputed head of a $190 million Ponzi scheme in Minnesota, has been charged criminally with mail fraud and income-tax evasion.

    Cook, 37, previously had been charged civilly by the SEC and the CFTC. The criminal charges filed today came after a probe by the FBI and the IRS Criminal Investigations Unit, working with the regulatory agencies.

    Prosecutors alleged Cook filed a false tax return in 2009, failing to report report taxable income of at least $5.2 million “upon which there was tax due in the amount of at least” $1.8 million, prosecutors said.

    Cook was charged via a criminal information, rather than an indictment. Such charging documents sometimes mean a defendant is negotiating with prosecutors.

    Prosecutors said Cook was “aided and abetted by others” in a scheme that fleeced at least 1,000 people “out of at least $190 million by purportedly selling investments in a foreign currency trading program,” prosecutors said.

    “In reality,” prosecutors continued, “he was diverting the money provided him for other purposes, including making payments to previous investors; providing funds to Crown Forex, SA, in an effort to deceive Swiss banking regulators; purchasing ownership interest in two trading firms; buying a real estate development in Panama; paying personal expenses, including substantial gambling debts; and acquiring the Van Dusen Mansion in Minneapolis.”

    The mansion has been sold by R.J. Zayed, the court-appointed receiver in the civil case. Zayed also has sold large-screen TVs and automobiles linked to the scheme, including a Rolls-Royce.

    Prosecutors said the Cook case was being tackled by the Financial Fraud Enforcement Task Force, which President Obama formed late last year.

    U.S. Attorney B. Todd Jones of  the District of Minnesota made the announcement of the criminal charges against Cook.

    Cook has been in jail since January as a result of a contempt of court order in the civil case, which was brought by the SEC and the CFTC.

    Former Christian radio host Pat Kiley also was charged in the civil case.

    The narrative of the Cook story occasionally has played out like a James Bond movie, with references to a submarine, an island retreat, Faberge eggs and foreign currency purportedly acquired by Cook with fraud proceeds.

    A real-estate agent ventured to Cook’s island in Canada during the winter on a snowmobile to get the lay of the land, according to court filings.