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Tag: FBI

  • FLORIDA — AGAIN: Postal Inspectors Say Recidivist Felon With 24 Bank Accounts And Undisclosed Criminal History Bilked Investors In $20 Million Scam; James Risher Arrested Before He Could Take Flight To Bermuda

    A recidivist securities felon tied to at least 24 bank accounts had an airline ticket for Bermuda last week but was arrested in Florida  before he could get offshore after scamming investors in a long-running fraud scheme that had gathered $20 million, according to law-enforcement officials.

    Charged in a criminal complaint by the U.S. Postal Inspection Service was James D. Risher, who is associated with firms identified as Jade Asset Group LLC, Managed Capital LLC and Safe Harbor Investments. Risher is accused of mail fraud, wire fraud, money-laundering and conspiracy.

    Risher, 61, of Sanibel, Fla., was released from federal prison on Aug. 14. 2004, according to records. His imprisonment stemmed from 1997 convictions for mail fraud, securities fraud and money-laundering for which he was sentenced to 92 months, with three years’ supervised probation after his release.

    He also has state-level convictions in Georgia from a securities swindle in the early 1990s, according to records.

    The new charges against Risher suggest he embarked on a new swindle in early 2007, perhaps while still on probation for the swindle that led to his 1997 convictions. The FBI, the IRS, the Florida Department of Law Enforcement and the Florida Office of Financial Regulation are assisting postal inspectors in the new probe, which is ongoing.

    One of the keys to Risher’s arrest was a notification that law enforcement received from U.S. Immigration and Customs Enforcement (ICE) that Risher had a plane ticket to fly from North Carolina to Bermuda last week, according to court documents.

    Risher, according to the investigating postal inspector, had been placed on an ICE watch list during the probe and was being monitored for “scheduled travel outside of the country.”

    The investigating postal inspector advised a federal magistrate judge that Risher was a flight risk and may have a bank account in Bermuda, which is located in the Atlantic Ocean about 640 miles from North Carolina. ICE is part of the U.S. Department of Homeland Security.

    Risher had reason to believe  investigators were closing in, according to the postal inspector’s affidavit.

    Fleeced investors were demanding their money, according to the affidavit. Meanwhile, at least two Florida law firms were investigating claims against Risher on behalf of about 150 investors, according to other records.

  • ILLINOIS MAN INDICTED: Edward L. Moskop Accused In Alleged Multmillion-Dollar Ripoff Of Elderly Couple, Friends, Relatives — And The Local VFW Post

    In a criminal case that flowed from an SEC civil action, an Illinois man has been indicted on mail-fraud and money-laundering charges in a case that alleges he stole from elderly clients and the local Veterans of Foreign Wars Post.

    Edward L. Moskop, 63, of Belleville, originally was charged in November 2010 by the SEC, which alleged he ripped off an 88-year-old man and the man’s 84-year old wife.  At the SEC’s behest, a federal judge issued an asset freeze while the probe moved forward.

    Federal prosecutors now say the scheme gathered at least $2.4 million over 20 years, with Moskop also ripping off friends, relatives, insurance clients, people referred to the scheme by attorneys and the VFW.

    Moskop was a recidivist, prosecutors and regulators say. Records show he was banned from associating with National Association of Securities Dealers (NASD) reps for ripping off clients more than 20 years ago. NASD was the predecessor agency to FINRA, the Financial Industry Regulatory Authority.

    Regardless, Moskop continued to do business with other people’s money.

    “Moskop had been barred from association with any member of the NASD and was no longer registered to act as a broker in the securities industry,” the FBI said. “It is alleged that from 1991 to 2010, Moskop persuaded customers to provide him with funds for investment, but instead of making the investment, he kept the funds for his own use.”

    Moskop called the elderly couple he was ripping off his “premium clients,” and he was “siphoning away” their wealth and giving them “forged” documents, the SEC charged last year.

    All in all, the SEC said, Moskop stole nearly $300,000 from the couple by making them believe they had accumulated nearly $600,000 in 16 different investments.

    For 20 years, the couple never cashed out any of their holdings, choosing instead to let their profits roll over and believing their money not only was safe, but also was growing, the SEC said.

    In September 2010, however, the couple noticed a renewal discrepancy — and contacted an investment company at which they believed they had holdings through Moskop. The company told them there were no accounts — and that the firm did not even handle the type of investment product the couple believed they had: certificates of deposit.

    Alarmed, the couple contacted their daughter, who went to work unmasking the scheme. Moskop then manufactured stories on the fly, but the daughter demanded the money be returned to her parents.

    Eventually Moskop sent checks for a small portion of the overall investments, but the checks bounced, the SEC said.

    Alarmed again, the daughter did some more digging and found out that Moskop had ripped off her parents in other investments for even greater sums, the SEC said.

    Moskop operated a firm known as Financial Services Moskop and Associates Inc

     

  • BULLETIN: Feds Say Scott Rothstein IT Associates Created Fake Banking Website; Meanwhile, Attorney Authored Bogus Letter And Another Associate ‘Posed’ As Banker And Plaintiff In Nonexistent Cases

    BULLETIN: Four associates of jailed Ponzi schemer and disbarred attorney Scott Rothstein have been charged criminally by federal prosecutors in Florida with conspiracy to commit wire fraud. The new defendants include an attorney at Rothstein’s defunct Fort Lauderdale law firm, two IT employees of the firm and a Rothstein associate in the nightclub business.

    The charges came in the form of a criminal information, which suggests the defendants are cooperating in the probe and ultimately may plead guilty to avoid the risk of indictment on other charges.

    As has been the case with other Ponzi probes, the details emerging in the Rothstein case read like an impossible work of fiction — but prosecutors say the allegations are true.

    Among the mind-blowing claims:

    • Two IT employees — William Corte, 38, of Plantation, and Curtis Renie, 38, of Ft. Lauderdale — created a bogus web page by copying the legitimate page of TD Bank. “False account balances” were posted on the fraudulent page to make it appear as though Rothstein’s law firm, Rothstein Rosenfeldt and Adler (RRA), had between $300 million and $1.1 billion on deposit at the bank. “[N]o such funds were in the accounts. The false account balances were shown to investors to induce them to invest into the fraudulent investment scheme,” prosecutors said.
    • RRA attorney Howard Kusnick, 58, of Tamarac, wrote a bogus letter that claimed a case had been settled in favor of clients. In reality, prosecutors said, the clients’ funds had been used to prop up the scheme and make Ponzi payments to investors. “[N]o such litigation had been instituted and no such settlement existed,” prosecutors said.
    • Stephen Caputi, 53, of Lauderhill, sometimes posed as a “banker” in meetings with Rothstein clients, and also posed as a “plaintiff” in bogus cases if the need surfaced. Caputi, prosecutors said, posed as a TD Bank employee and handed out false information on account balances to dupes. In a separate meeting with separate dupes, he posed as the the beneficiary of a $10 million settlement agreement to raise “investors’ confidence” in a deal, prosecutors said. Caputi was Rothstein’s partner in a nightclub.

    “The house of cards supporting Scott Rothstein’s elaborate Ponzi scheme continues to crumble,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “As today’s charges confirm, we will follow all leads and continue to bring to justice those who helped Rothstein execute this billion dollar fraud and any other crimes that may have been committed through RAA. The investigation continues.”

     

  • KABOOM! CFTC/FTC Cases Against American Precious Metals LLC Were Part Of Broader Effort By New Task Force Operating In South Florida; Feds, State Throw Down Gauntlet Against Scammers

    Kaboom! It turns out that the cases announced this week against American Precious Metals LLC (APM)  by the CFTC and FTC were part of a geographically localized law-enforcement initiative that sprouted from “Operation Broken Trust,” a major national initiative undertaken last year by the U.S. Department of Justice and partner agencies as part of the interagency Financial Fraud Enforcement Task Force.

    The localized initiative that led to both the CFTC and FTC bringing actions against APM is known as the South Florida Securities and Investment Fraud Initiative. It was created in December 2010 by U.S. Attorney Wifredo Ferrer, the top federal prosecutor in the Miami region.

    The CFTC accused APM of running a precious-metals scam. Meanwhile, the FTC opened up a second legal front by charging the company with operating a telemarketing fraud scheme from a boiler room. The effect of the approach is that APM, which both agencies accused of running frauds that had gathered tens of millions of dollars, now has to square off against litigation coming from two different directions.

    Ferrer has warned for months that white-collar fraudsters operating in the region had no safe haven either onshore or offshore.

    In addition to Ferrer’s office, the CFTC and FTC, members of the South Florida Task Force include the FBI, the IRS, the U.S. Secret Service, the U.S. Postal Inspection Service, the SEC, the FDIC, the Florida Office of Financial Regulation and ICE Homeland Investigations.

    ICE is a division of the U.S. Department of Homeland Security.

    “Investors lose billions of dollars annually to fraudulent schemes,” Ferrer said in December, when introducing the new task force. “Some victims — the luckier ones — lose only thousands of dollars. Others lose their entire lives’ savings. While the victims of fraud are financially ruined, the fraudsters live a life of luxury. Together with our law enforcement and regulatory partners, we hope to help put an end to this type of fraud.”

  • UPDATE: Michael S. Goldberg, Ponzi Schemer Who Falsely Traded On Name Of JPMorgan Chase To Dupe Investors, Sentenced To 10 Years In Federal Prison; Caper Included Domain-Name Fraud To Give Investors False Sense Of Security

    Michael S. Goldberg, the Connecticut man who lured investors into bogus deals in part by creating websites that traded on the name of JPMorgan Chase Bank and other companies, has been sentenced to 10 years in federal prison.

    Goldberg, 40, stole more than $30 million from investors over a period of 12 years in a scheme that gathered more than $100 million, U.S. Attorney David B. Fein of the District of Connecticut said. Goldberg was charged last year, and pleaded guilty to three counts of wire fraud in September.

    Elements of the prosecution were brought by the Connecticut Securities, Commodities and Investor Fraud Task Force, an arm of the interagency Financial Fraud Enforcement Task Force created by President Obama in November 2009.

    “As a result of this defendant’s decade-long fraud scheme, many victims lost their homes, retirement security or college savings for their children,” Fein said.

    As is the case in most Ponzi schemes, victims will not emerge with much, Fein said.

    “Despite the best efforts of the FBI and the receiver who has been appointed by the court to recover funds, it is unlikely that most of these victims will ever be made whole,” he said. “The lengthy prison term imposed [May 16] is an appropriate one for an individual who caused financial misery for so many, and should deter others from seeking to prey upon innocent investors.”

    Goldberg, a purported diamond and real-estate expert, used a virtual playbook for fraud, according to records.

    Part of his caper featured domain-name fraud in which websites were created in the name of JPMorgan Chase and others to sanitize his scheme and disarm skeptics, according to records.

    Although Goldberg claimed to buy distressed assets from Chase, no such business relationship existed, prosecutors said.

    If the bogus websites were not enough, Goldberg also “often created false documents and other items to induce investors to believe that his business relationships were legitimate,” the Task Force said.

    Bogus inventories, manifests, contracts, business checks, bank statements, business cards and  company identification cards were part of the scam, the Task Force said.

    And Goldberg did not invest in “diamond contracts” as he purported, prosecutors said.

    U.S. District Judge Robert N. Chatigny ordered Goldberg to pay more than $31 million in restitution and to report to prison on July 18. Various authorities continue to unravel the scam, prosecutors said.

    Read earlier story.

  • URGENT >> BULLETIN >> MOVING: Raj Rajaratnam Guilty In Insider-Trading Case; Sentence Potentially Could Exceed Madoff’s 150 Years

    BULLETIN: Raj Rajaratnam has been found guilty of all 14 counts of conspiracy and securities fraud filed against him in the Galleon Group insider-trading case.

    The verdict came on the 12th day of jury deliberations. It deals a devastating blow to Rajaratnam, but is a major win for prosecutors. The case was brought by the office of U.S. Attorney Preet Bharara of the Southern District of New York.

    Rajaratnam, 53, once was listed by Forbes magazine as one of the wealthiest men in the United States. Prosecutors said that crime ultimately became his business model. Wiretaps and recordings were used to convict him.

    The Justice Department has said it recent months that tools traditionally used in organized-crime investigation have been helpful in exposing white-collar fraud.

    “Raj Rajaratnam, once a high-flying billionaire and hedge fund manager, is now a convicted felon, 14 times over,” Bharara said. “Rajaratnam was among the best and the brightest — one of the most educated, successful and privileged professionals in the country. Yet, like so many others recently, he let greed and corruption cause his undoing. The message today is clear — there are rules and there are laws, and they apply to everyone, no matter who you are or how much money you have.”

    Insider trading “cheats the ordinary investor, victimizes the companies whose information is stolen, and is an affront not only to the fairness of the market, but the rule of law,” Bharara said.

    Rajaratnam traded illegally in the stock of Goldman Sachs, Clearwire, Akamai, AMD, Intel, Polycom and PeopleSupport, prosecutors said, describing the case as the “largest hedge fund insider trading scheme in history.”

    He potentially faces up to 205 years in federal prison. Sentencing is scheduled for July 29. Prosecutors said he gained nearly $64 million by trading on material, nonpublic information culled from fellow cheaters.

    Rajaratnam remains free pending sentencing. He has been placed on electronic monitoring.

    The SEC provided “extraordinary assistance,” Bharara said. The FBI led the criminal probe and also received praise from Bharara.

  • ‘SURF/HYIP HELPERS BEWARE: Woman Who Helped Tennessee Ponzi Schemer Cover Up Fraud Sentenced To 6 Years In Federal Prison; Donna Jones’ Role In $12.3 Million Caper Outlined By Jailed Boss In Court After Investigators ‘Follow The Paper Trail’

    EDITOR’S NOTE: Although Donna Jones did not run an autosurf or online HYIP fraud, the case against her is instructive. Indeed, prosecutors said, Jones was an insider who was aware of the Ponzi scheme being conducted by her boss, Michael J. Park. And Jones took an active role in the scheme, encouraging customers to invest, hustling cash even as the scheme was unraveling, creating bogus “spreadsheets” and fabricating information given to investors.

    It is common for autosurf and HYIP insiders to solicit funds for fraud schemes, use spreadsheets with bogus or illusory information to reel in and (later) lull prospects, siphon investor funds and simply lie to maintain their ability to keep drinking from a criminal well.

    At least seven federal, state and local agencies became part of an intense probe to reverse-engineer the Park scheme. In the end, Park himself testified against his former employee.

    UPDATED 9:58 A.M. EDT (U.S.A.) A woman employed by a Tennessee Ponzi schemer added $19,000 in new clothes to her wardrobe, withdrew $225,000 in cash and spent more than $300,000 on home renovations, federal prosecutors said.

    Now, Donna Jones has been sentenced to 72 months in federal prison. Jones, 37, of Dickson, Tenn., also was ordered to pay nearly $8.2 million in restitution to victims.

    Jones was the office manager of Park Capital Management Group (PCMG), a Brentwood, Tenn.-based business operated by Michael J. Park. Park, who is serving a 96-month prison sentence, testified about Jones’ knowledge of the scheme at her sentencing hearing, prosecutors said.

    Federal, state and local law-enforcement agencies worked together to expose the fraud, prosecutors said.

    Among the agencies working the criminal probe were the U.S. Attorney’s Office, the FBI, the U.S. Postal Inspection Service, the IRS, the Tennessee Bureau of Investigation and the Brentwood (Tenn.) Police Department. The SEC sued Park in a civil case.

    “Jones repeatedly encouraged people to invest by falsely promising security, growth and inflated returns on their money, but instead the investors lost their savings as part of an elaborate Ponzi scheme,” said U.S. Attorney Jerry E. Martin of the Middle District of Tennessee.

    Park advised U.S. District Judge Aleta Trauger that Jones used a “spreadsheet” to keep track of “fictitious” PCMG accounts and that he and Jones “pooled” investor funds and used them as “their own personal bank account,” prosecutors said.

    “This case further demonstrates how effectively IRS Criminal Investigation agents work jointly with our federal and state law enforcement partners in investigating complex financial crimes,” said Darryl Williams, acting special agent in charge of the IRS Criminal Investigation unit in Nashville.

    “IRS Criminal Investigation agents were able to use their expertise to conduct a complex financial investigation, follow the paper trail, and unravel violations of federal law,” Williams said.

    It also was Jones’ idea to use the seal of the Securities Investor Protection Corp. (SIPC) to create the illusion that investing with PCMG was safe, according to Park’s testimony.

    But “PCMG was not a member of the SIPC, and the SIPC provided no protection for PCMG investors,” prosecutors said.

    Jones, who also was accused of concealing the scheme by fabricating documents and soliciting funds to cover shortfalls, pleaded guilty to mail fraud and money-laundering in January.

    Among the documents were IRS 1099 forms, but “none of the funds listed in PCMG investment accounts were ever invested,” according to Park’s testimony.

    It is common in the autosurf and HYIP spheres for purveyors to claim an “opportunity” is legitimate because the company gathers tax information and sends 1099 forms.

    Park also was the subject of a 2008 complaint filed by the SEC, bringing the number of state and federal agencies involved in PCMG-related litigation to at least seven.

    “Park used investor funds, among other things, to help purchase a $1 7 million home, pay for expensive golf memberships, to purchase a Porsche automobile and to purchase a Mercedes Benz sedan worth more than $90,000,” the SEC said in September 2008.

  • BULLETIN: John Bravata, Figure In Alleged ‘Billionaire Boys Club’ Ponzi Scheme In Michigan, Arrested At JFK Airport After Return From Italy

    BULLETIN: John Bravata, who was sued by the SEC in July 2009 in a Ponzi Scheme case that became known as the “Billionaire Boys Club” case, has been arrested at JFK International Airport in New York, the FBI said.

    Bravata was arrested on an inbound flight from Italy, prosecutors said.  He is charged with wire fraud.

    The Bravata civil case has been marked by oddities, including the November 2009 indictment of his defense attorney on charges he was running his own fraud scheme. The attorney, Gregory Bartko, was convicted last year.

    Separately, Bravata was accused in 2009 by the SEC of violating the asset freeze in the civil Ponzi case by taking loans against life-insurance policies. Judge David M. Lawson ordered Bravata to repay the money.

    Now Bravata has been charged criminally. He will be prosecuted in the Eastern District of Michigan.

    From 2006 through 2009, the FBI said, “Bravata knowingly participated in a scheme to defraud investors. Bravata and those working on his behalf made multiple misrepresentations to numerous prospective investors, including misrepresentations regarding how their investment funds would be utilized, the security of funds invested with BBC, and the returns that could be expected by investors of BBC.

    “Bravata also misled investors by telling them that managers of BBC would not earn money unless BBC was profitable,” the FBI said. “He also represented that the managers of BBC did not take fees, commissions, or a salary. In reality, Bravata and others received lucrative compensation from BBC and related entities despite that fact that BBC was never profitable. Bravata also used investor funds to pay for the construction of his roughly 18,000 square foot personal home and to pay for other personal expenses.”

    A California Ponzi scheme in the 1980s also was known as “The Billionaire Boys Club.”

    Bravata’s company is known as BBC Equities LLC.

  • UPDATE: FBI Moves Osama Bin Laden From ‘Most Wanted’ To ‘Deceased’; Terrorist Also Linked To Pre-9/11 Attacks, Agency Reminds Public

    The FBI, which had listed Osama bin Laden as “Most Wanted,” now is listing him as “Deceased.”

    Before and after:

    Source: FBI, prior to May 1, 2011, U.S. operation that resulted in bin Laden's death.
    Source: FBI, May 2, 2011.

    “The mastermind of the attacks on September 11, 2001 that killed thousands of innocent men, women, and children has been killed,” the FBI said today.

    President Obama addressed the American people late last night to inform them that the United States had carried out an operation in Pakistan after assembling actionable intelligence over the past several months.

    “Tonight, I can report to the American people and to the world that the United States has conducted an operation that killed Osama bin Laden,” the president said last night.

    The FBI noted today that bin Laden had carried out other attacks.

    “Well before the events of 9/11, bin Laden had openly declared war on the U.S. and was committed to killing innocents,” the agency said. “His al-Qaeda group was responsible for the 1998 bombings of the U.S. Embassies in Dar es Salaam, Tanzania and Nairobi, Kenya. The attacks killed over 200 people. Bin Laden was indicted for his role in planning the attacks and added to the FBI’s Ten Most Wanted Fugitives list.”

  • BULLETIN: U.S. Man Extradited From Argentina Sentenced To 40 Years In Jail; William L. Walters Will Serve His Time In Colorado State Penitentiary

    William L. Waters: Charged by state prosecutors in Colorado, extradited from Argentina by the FBI, prosecuted in Douglas County District Court — and sentenced to 40 years in state prison.

    BULLETIN: A Ponzi schemer who fled the United States and was extradited from Argentina has been sentenced to 40 years in state prison, Colorado Attorney General John Suthers announced.

    William L. Walters, 46, was brought back to the United States by the FBI, which worked closely with Colorado authorities to bring him to justice, officials said.

    “This sentence underlines our commitment to vigorously pursue and prosecute cases of financial fraud that victimize Coloradans,” Suthers said. “Our thanks to the FBI for helping us to ensure that justice delayed did not result in justice denied for Mr. Walters’ victims.”

    Walters was caught after the FBI “tracked” him and INTERPOL “flagged” his passport, investigators said. An Argentinean court approved Walters’ extradition last year.

    Victims of the scheme, which gathered $23 million, hailed from nine U.S. states.

    The Walters’ case destroyed a common myth that “offshore” landing spots shelter Ponzi schemers from prosecution. The Colorado Division of Securities assisted in the probe.

    Walters also was ordered to pay $9.5 million in restitution. His next landing spot is the Colorado Department of Corrections.

  • BULLETIN: Suspect Captured In Colorado Pipe-Bomb Case; Earl Albert Moore Nabbed By Boulder Police Department; Records Show He Was Released From Federal Prison Less Than Two Weeks Ago

    CAPTURED: Earl Albert Moore: Source: FBI.

    BULLETIN: A man who spent time in federal prison for bank robbery and is believed to have left a pipe bomb and two propane tanks at a Colorado shopping mall last week has been captured by the Boulder Police Department at a grocery store, the FBI said.

    Earl Albert Moore, 65, had become the subject of a nationwide manhunt. Records show that Moore was released from federal prison only 13 days ago. The FBI described him prior to his capture as “armed and dangerous”  with “an extensive criminal background.”

    The bomb was found at Southwest Plaza Mall in Jefferson County on April 20, a week after Moore was released from prison. Because the date the bomb was found coincided with the anniversary date of the 1999 massacre at nearby Columbine High School, the public initially feared the two events may be linked.

    In a brief announcement today, the FBI did not comment on any motive for the mall incident. Officials have described the case as one that involved the attempted placing of a “destructive device.”

    The FBI provided updates over the weekend, including Easter Sunday. The agency said yesterday that “there has been no discovery, at this point, of any connection between the Southwest Plaza Mall” and the Columbine case.

    Twelve students and one teacher were killed at Columbine on April 20, 1999. At least two dozen people were injured in the attacks by students Eric Harris and Dylan Klebold, who placed propane bombs in the school and armed themselves with guns.

    Harris and Klebold committed suicide after carrying out the attacks.

    Although the FBI — as of the time of this post — has not spoken to Moore’s motive, it is a virtual certainty that his prison record will be studied for any clues about the mall incident. He has used several aliases, including John Lindzy, Earl Buchanan, Morelli Buchanon, Donald Morelli and Gary Steele, the FBI said.