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Tag: Durango Herald

  • Colorado Securities Commissioner Tells Durango Herald: ‘They Want So Badly To Believe In The Tooth Fairy’

    recommendedreading1Joe Hanel, the Denver correspondent for the Durango Herald, has written a series of reports that delves into the symphony of the bizarre surrounding Ponzi schemer Frederick H.K. Baker, who once was immersed in the HYIP world but now is in prison.

    If you’ve been wondering about the psychology of Ponzi schemes — perhaps particularly in the HYIP sphere, where victims may condemn the government for moving against obvious frauds — you’ll find value in the Herald series.

    The first installment is titled, “A man, a plan, a scam.” Part II is titled, “Scammers often earn victims’ trust through shared hopes, dreams, beliefs.” Hanel then delivers Part III, “After the scheme collapses, scammers recede into shadows.” Part IV perhaps has the most memorable title of all, “For a Ponzi payout, call the tooth fairy.”

    Part IV gets its title from a comment by Fred Joseph, Colorado’s securities commissioner. “They want so badly to believe in the tooth fairy,” Joseph told the paper.

    What sparked the comment was a recollection by Joseph that he once had to work hard to convince a resident of the state “not to send $50,000 to Belgium for the promise of getting millions in return,” according to the Herald.

    Here’s hoping the Herald series gets high readership.

    A snippet from Part I of the series (italics added):

    A few million dollars spent the winter in sunny Los Angeles with a company whose president now is on death row. When the law closed in, Baker moved the money to Portugal, placing it in the trust of a company registered in New Zealand, with an address in Panama and directors in the United Kingdom.

    That’s when it disappeared.

     

  • DURANGO HERALD: Attorney Says His Client Was Ponzi Player Who Tried To ‘Scam The Scammers’; E-Bullion’s Name Surfaces In Illustrative Case Of Frederick H.K. Baker, Who Is Sentenced To Federal Prison

    In July 2010, FINRA memorably described the HYIP sphere as a “bizarre substratum of the Internet.” The regulator warned about “online payment systems” that are used for criminal activity, noting that some fraud purveyors discuss subjects such as how to “build a winning HYIP portfolio” and how “to ‘ride the Ponzi’ and get in and out before a scheme collapses.”

    A case brought by federal prosecutors in Colorado against a Utah man could be an eye-opener for fraudsters and their apologists and shills who engage in bizarre and reckless behavior such as that outlined by FINRA and help fraud schemes proliferate to consume millions of dollars.

    Indeed, the Durango (Colorado) Herald is reporting that Frederick H.K. Baker will be going to federal prison for 41 months (see link at bottom of post). Although FINRA’s 2010 Public Awareness Campaign is not referenced in the story, Baker’s case speaks to a number of the issues FINRA raised more than a year ago.

    Compellingly, even Baker’s attorney conceded that his client thought he could “scam the scammers” by knowingly becoming a Ponzi player and adopting a strategy by which he’d get in early, collect his profits — and then get out, according to the Herald.

    “Baker thought he could make money if he got in early,” the Herald reported. “In effect, he was running a Ponzi scheme to invest in other Ponzi schemes . . .”

    The Herald’s story quotes a federal prosecutor who told a federal judge that Baker’s scheme destroyed families and caused financial and emotional heartache for the victims.

    And it also notes that E-Bullion, the shuttered California payment processor whose operator, James Fayed, was convicted in May of arranging the July 2008 gruesome murder of his wife, was used in the Baker scheme.

    E-Bullion also has been referenced in the AdSurfDaily Ponzi case, the Legisi Ponzi case, the Gold Quest International Ponzi case, the FEDI case and other cases. The most recent reference to E-Bullion in the Legisi case, according to research by the PP Blog, occurred on Sept. 22, 2011 — less than three weeks ago.

    An attorney for two individuals claimed in court filings that his clients had used E-Bullion when investing with Legisi and were out $92,094.11. The attorney noted that their claims to a share of proceeds from the receivership estate have been rejected. Other filings list the reason for the rejection as inadequate documentation of the investment. The operators of fraud schemes such as Legisi are infamous for keeping poor records and not entering information in books, a sad reality that can lead to a result of victims of fraud schemes not receiving compensation from restitution pools.

    Read the Baker story in the Durango Herald. The story is compelling because it points out that Ponzi players have more to lose than just money. Baker, according to the story, is now facing some harsh realities and coming to grips with what his descent into the Ponzi darkness truly has cost him and his family.

     

  • Report By Small-Town Newspaper In Colorado Leads To Forex Ponzi Scheme Arrest In Chicago; FBI Nabs Mark Akins After Durango Herald Readers Provide Tips

    A fugitive suspected of helping organize a Forex Ponzi scheme that traded on a claim that a special “algorithm” led to hefty profits has been arrested in Chicago after a small-town Colorado newspaper 1,350 miles away reported he was wanted.

    The Durango Herald, which has a circulation of 9,400 and has received awards from the Associated Press, the Society of Professional Journalists and the Colorado Press Association over the years, reported earlier this month that Mark Akins was wanted for a scheme that allegedly had operated in Durango.

    Akins was accused of being the “gatekeeper” for the scheme, which netted at least $1.2 million and affected 70 investors.

    Also charged in the case was Frederick H.K. Baker of Utah. Baker already has made an initial court appearance in Utah. Akins is scheduled to make an appearance in Illinois next week, the Herald reported.

    After reading the Herald report that Akins was wanted, a woman contacted the newspaper to say she believed Akins was living in Chicago. The newspaper referred her to law enforcement.

    A reader in Chicago, meanwhile, said he contacted the FBI after reading the story, the Herald reported.

    The reader then emailed the paper to report that Akins had been arrested in the Windy City.

    “We saw your article and notified the FBI and he was arrested on Thursday night,” the reader told the newspaper.

    Read the Herald’s first story.

    Read the Herald’s follow-up story about the arrest of Akins.

    Claims of miraculous trading algorithms and fool-proof software are common in the universe of Forex hucksters.

    Robert Mihailovich Sr., a convicted felon, was charged by the CFTC last year with presiding over a Forex fraud that purportedly used a “mass sub-algorithm.” Mihailovich allegedly started the new scam after his release from prison in 2007.

    Enrique F. Villalba was charged last year with presiding over a futures fraud that allegedly used a unique “momentum filter.”

    Earlier this month, Jacob Juma Omukwe was charged in a Forex caper in which it was alleged he used software to trick customers into believing their money was segregated for safety.

    Anthony Eugene Linton was charged in January in a case that alleged he told customers that his miraculous software system let them “profit every time.”