PatrickPretty.com

Tag: Gerald Durand

  • URGENT >> BULLETIN >> MOVING: Alarming New Allegations Surface In Cook/Kiley Scheme; Receiver Accuses Associated Bank Of Aiding And Abetting Massive Ponzi Amid Allegations That Mysterious Jordanian Trader Linked To Fraud Has ‘Disappeared’

    The address of this packaging and shipping store in Minneapolis was used by Crown Forex LLC, one of the firms implicated in the $194 million Trevor Cook/Pat Kiley Ponzi scheme. The court-appointed receiver in the case today accused Associated Bank of ignoring key markers of a scam in progress and of aiding and abetting fraud.
    The address of this packaging and shipping store in Minneapolis was used by Crown Forex LLC, one of the firms implicated in the $194 million Trevor Cook/Pat Kiley (et al) Ponzi scheme. The court-appointed receiver in the case today accused Associated Bank of ignoring key markers of a scam in progress and of aiding and abetting fraud.

    UPDATED 9:56 A.M. ET (JAN. 30, U.S.A.) In a heavily redacted complaint, the court-appointed receiver in the Trevor Cook Ponzi scheme has accused Associated Bank of Green Bay, Wisc., of aiding and abetting the massive caper that has led to jail sentences for Cook and multiple Cook pitchmen. Associated Bank also operates branches in Minnesota, the home state of the $194 million fraud aimed mostly at senior citizens and people of faith.

    Among the extraordinary assertions today by receiver R.J. Zayed is that the bank handed $600,000 in cash to Cook, and then allowed Cook “to stuff the cash into a box and walk out the door under the pretext of buying a yacht.”

    The cash, Zayed alleged, belonged to Cook’s fraud victims — and Associated Bank transferred the funds from an account in the name of Crown Forex LLC to an account controlled by Cook.

    Crown Forex was using an address of a packaging and shipping store in Minneapolis, according to a review of records by the PP Blog. One unredacted exhibit filed today by Zayed showed a photo of the store at 5413 Nicollet Ave. in Minneapolis. Crown Forex LLC purported to occupy “Suite 14,” according to a separate exhibit.

    The Cook/Kiley scheme operated in part by using a regal theme and trading on names that mimicked the names of famous financial firms such as UBS. One of the firms identified in court papers is a bankrupt Swiss firm known as Crown Forex SA.

    Cook, Kiley and a Jordanian trader identified as Shadi Swais discussed the purported Forex program with Associated Bank, according to Zayed.

    But Associated Bank advised the trio that opening an account with the name of Crown Forex SA could raise regulatory concerns in the United States, so the bank recommended “opening an account with a similarly named” U.S. domestic LLC.

    That’s how Crown Forex LLC came into being, apparently using the address of the packaging store, according to court records.

    Even though Associated Bank knew the entity was never registered with the state of Minnesota “or any other governmental authority,” Zayed said, the bank nevertheless permitted the “sham” account to be opened.

    A former bank executive — in an affidavit — claimed he told Kiley that he “must send the documentation to me after he completed a Secretary of State filing for Crown Forex LLC.”

    But the former executive said he “did not remember” to follow-up with Kiley about the absent paperwork. Millions of dollars in investor funds were deposited into the account.

    Crown Forex SA’s role in the fraud was to “pretend” it was a facilitator receiving investor funds and holding them in segregated accounts, Zayed alleged.

    Swiss authorities shut down Crown Forex SA in 2009, just prior to the collapse of the Cook/Kiley fraud.

    “Shadi Swais and others who controlled Crown Forex, SA have disappeared along with millions of dollars of investor funds,” Zayed alleged.

    Not a “single penny” of investor funds ever was transferred directly from Crown Forex LLC to Crown Forex SA, despite assertions that the Swiss firm was the American firm’s facilitator, according to court filings.

    But millions of dollars were transferred to Cook’s personal accounts, Zayed alleged.

  • ‘American Greed’ Producing Episode On Trevor Cook Ponzi Fraud; Seniors, People Of Faith Fleeced By Cook And His Pitchmen

    Trevor Cook
    Trevor Cook

    CNBC’s “American Greed” will be in Minneapolis today to begin filming an episode on the massive Trevor Cook Ponzi scheme that was targeted at senior citizens and conservative Christians and rendered some victims penniless, a source told the PP Blog.

    Cook’s scheme gathered about $194 million. It collapsed in 2009. Money that potentially could go to victims is still missing. The scheme was reminiscent of the AdSurfDaily Ponzi case in that it took various bizarre and disturbing turns.

    Earlier this month, Cook pitchman Jason Bo-Alan Beckman was sentenced to 30 years in federal prison. Gerald Durand received 20 years. Christopher Pettengill, who cooperated with prosecutors, received a 90-month sentence. Sentencing for Pat Kiley, a conspiracy theorist and former radio host in his seventies, was put on hold, pending the results of medical and psychological exams.

    Cook, the ringleader, received a 25-year sentence in 2010.

    For what the Cook fraud lacked in dollar volume — indeed, it was significantly smaller than Tom Petters’ epic Ponzi fraud in Minnesota — it more than made up for in pure brazenness. Beckman essentially was accused of taunting victims in his court filings after stealing millions from a senior-citizen couple in their late eighties. Durand told a tale about a submersible submarine Cook allegedly bought on eBay for the waters of Canada before moving it to Panama, where Cook purportedly found the conditions to be more sub-friendly.

    Kiley once tried to have a CFTC lawyer fined $1,000 for filing court papers Kiley deemed “offensive.”

    The Cook scheme also had something in common with AdViewGlobal, the collapsed 1-percent-a-day autosurf linked to the AdSurfDaily Ponzi scheme: a tie to offshore facilitator KINGZ Capital Management Corp.

    AdViewGlobal announced its purported tie to KINGZ on May 4, 2009, the same day the Obama administration announced a crackdown on offshore fraud. KINGZ denied any tie to AVG. But the National Futures Association (NFA) established a tie between KINGZ and Cook.

    AdViewGlobal collapsed during the summer of 2009, amid reports that millions of dollars had been stolen. The purported “opportunity” bizarrely declared itself a “private association” operating in Uruguay, apparently in a bid to evade U.S. regulatory scrutiny even though it was conducting business in the United States. Federal prosecutors tied ASD President Andy Bowdoin to AdViewGlobal in 2012. Bowdoin, now serving a 78-month prison sentence, once claimed that prosecutors were “Satan” and compared the U.S. Secret Service to the 9/11 terrorists. His scheme gathered at least $119 million.

    Prosecutors have evidence that suggests at least some of the AdViewGlobal money was deposited in Switzerland. The Cook Ponzi also did business in Switzerland.

    There also is a tie between Trevor Cook and Peregrine Financial Group Inc., the collapsed fraud scheme of Russell R. Wasendorf Sr., now facing up to 50 years in federal prison. Wasendorf once was a member of NFA’s Futures Commission Merchant Advisory Committee

    Peregrine consumed at least $215 million and conducted a scam for two decades, prosecutors said. “[I]n order for the fraud to be effective and sustainable for years, defendant routinely created and used false certifications and forged documents to deceive his customers, his accounting department, his fellow corporate officers, an outside auditor, and multiple regulatory agencies whose core function was to detect and prevent exactly the type of criminal activity defendant perpetrated,” prosecutors said of Wasendorf.

  • STAR TRIBUNE: Ponzi Pitchman Bo Beckman Sentenced To 30 Years; Judge Scolds Trevor Cook’s Key Rainmaker For Wordplay

    recommendedreading1UPDATED 7:52 A.M. ET (U.S.A.) The Star Tribune of Minneapolis/St. Paul is reporting that Jason Bo-Alan Beckman has been sentenced to 30 years in the $194 million Trevor Cook Ponzi scheme and that the sentencing judge scolded Beckman for using the English language as a weapon against investors he harmed.

    Beckman was Cook’s key rainmaker in a colossal scam aimed at senior citizens and people of faith.

    From the Star Tribune (italics added):

    “You have used the English language to do violence to so many,” Davis told Beckman. “It is not a gun. It is worse than a gun.”

    Fellow Cook pitchmen Pat Kiley and Gerald Durand also are scheduled to be sentenced today.

    Beckman’s sentence is five years longer than the term Cook received in 2010.

     

     

  • DEVELOPING STORY: CFTC Seeks Asset Freeze Amid Allegations Of Fraud Against Russell R. Wasendorf Sr. Of Peregrine Financial Group Inc.; Wasendorf Reportedly Attempted To Kill Himself Yesterday; Trevor Cook Ponzi Victims At Risk Of Getting Fleeced Twice

    EDITOR’S NOTE: The PP Blog first became aware of reports about the suicide bid of Russell R. Wasendorf Sr. last night, after being contacted by a reader who was defrauded in the Trevor Cook Ponzi scheme. Wasendorf apparently sought to take his own life on the sparkling Cedar Falls, Iowa, property of Peregrine Financial Group Inc., the company he founded in 1990 in Chicago. A deeply disturbing, multipronged mystery has emerged . . .

    ** ___________________________________ **

    Russell R. Wasendorf Sr.

    After a reported suicide bid yesterday, Russell R. Wasendorf Sr. is said to be comatose today. Regulators now say that more than $200 million in customer funds is missing from Peregrine Financial Group Inc. (PFG). By law, the customer money was supposed to have been segregated and separately accounted for.

    “The whereabouts of the funds is currently unknown,” the CFTC said today in a court filing in Chicago that accused Wasendorf and PFG of fraud and sought an asset freeze.

    Those alarming words followed on the heels of an emergency enforcement action yesterday by the National Futures Association, which alleged that Wasendorf “may have falsified bank records” to create the impression that PFG had about $400 million in segregated accounts in late June.

    Of the $400 million, $225 million purportedly was held at U.S. Bank.

    But when NFA checked with U.S. Bank yesterday, it learned that only about $5 million was on deposit, according to the emergency filing.

    Wasendorf is a member of NFA’s Futures Commission Merchant Advisory Committee with a term ending in February 2015, according to NFA’s website. He’s now effectively been accused of fraud by the same organization he purportedly served as a committee member.

    Whatever fraud was taking place at PFG, NFA and CFTC now say, appears to date back at least to February 2010. And that fraud, according to the NFA filing, appears to have carried over into both this year and last.

    PFG does business online as PFGBest at PFGBest.com. The website features a photo of PFG’s glistening headquarters building in rural Cedar Falls, Iowa.

    The building near the small city of about 40,000 nestled in America’s heartland, however, may belie the reality at PFG.

    In February 2012, R.J. Zayed, the court-appointed receiver in the Trevor Cook Ponzi scheme case in Minnesota, sued PFG. Among the allegations was that the company turned a blind eye to Cook’s Forex fraud and checkered history with NFA.

    Cook’s Ponzi scheme gathered about $194 million and rendered some investors destitute. About $30 million of that sum was lost in trading accounts at PFG, according to the receiver’s lawsuit.

    PFG, according to the lawsuit, permitted Cook to open, manage and maintain trading accounts “in the face of overwhelming red flags of fraud or insolvency.”

    Cook is now two years into a 25-year prison sentence for his Ponzi scheme, which has led to criminal charges and convictions of pitchmen Jason Bo-Alan Beckman, Gerald Durand and former radio huckster Pat Kiley.

    During the same month Zayed sued PFG, the company agreed to settle an earlier NFA complaint in which it was accused of failing to diligently supervise introducing brokers. One of the respondents in the case was Russell R. Wasendorf Jr., Wasendorf’s son. Wasendorf Jr. is the president and chief operating officer of PFGBest and founded its Forex division, according to the PFGBest website.

    The company agreed to pay $700,000 to settle the case with no acknowledgment of wrongdoing, according to NFA.

    About five months later, Wasendorf Sr. was accused of fraud. Details remain sketchy. It is unclear how much — if any — of the fraud for which he now stands accused is related to the Cook fraud.

    What is clear is that Cook himself  was in trouble at least two prior times with NFA, with the self-regulatory organization alleging in 2005 that he manipulated an elderly woman and caused her to liquidate a $100,000 annuity with which she already was earning an annual return of 8.75 percent.

    Cook told her she could earn more through him, according to the NFA complaint.

    NFA documentation in that case references an entity known as Private Financial Group which, curiously, also used the acronym PFG, the same acronym used by Peregrine Financial Group.

    Cook’s Ponzi scheme was exposed in 2009.

  • RECOMMENDED READING: [BULLETINS]: 3 Trevor Cook Ponzi Scheme Pitchmen Found Guilty

    The Star Tribune and the Pioneer Press are reporting that Trevor Cook Ponzi scheme pitchmen Jason Bo-Alan Beckman, Pat Kiley and Gerald Durand have been found guilty in federal court in Minnesota.

    Read breaking coverage at the Star Tribune.

    Read breaking coverage at the Pioneer Press.

    The PP Blog will have more on the verdicts at a later time . . .

  • Forex Version Of ‘Mad Men’ Comes To Minnesota: Bo Beckman, Pat Kiley, Gerald Durand Trial Begins This Week; 3 Accused Hucksters Were Associates Of Ponzi Schemer Trevor Cook

    If you’re a fan of “Mad Men,” the award-winning AMC television drama now back on the air after a 17-month absence, you’ve seen the cigarettes, the boozing and the debauchery weekly. (Perhaps not only in the show itself, but also in AMC’s promos for the series, a key element of which is the tagline “DEBAUCHERY IS BACK.”)

    “Mad Men” is a carefully crafted period piece about the advertising business as it existed at the fictional, New York-based Sterling Cooper Draper Pryce agency on Madison Avenue in the 1960s. The show is utterly believable: The audience can’t wait to see what the gifted and self-absorbed fools running the shop will do next. It’s a safe bet, though, that whatever they do will involve a vice.

    Something reminiscent of “Mad Men” is coming to the Minneapolis/St. Paul region this week. Indeed,  the real-life Forex fraud trials of Bo Beckman, Pat Kiley and Gerald Durand are scheduled to get under way Thursday. All three men are figures in Trevor Cook’s $194 million Ponzi caper, believed to be the second greatest financial crime in Minnesota history behind the epic, $3.65 billion fraud of Tom Petters.

    Cook, an aficionado of life’s dark alleys, pleaded guilty two years ago and was sentenced to 25 years in federal prison. In a sense, the Cook case demonstrates that debauchery still is practiced in American business, though perhaps a bit less naturally than in the decade depicted in “Mad Men.”

    We highly recommend this pretrial summary by the Star Tribune, which reports that the government has referenced booze, drugs, strippers and prostitutes in court filings — and a defense lawyer is worried that prosecutors will put on a “stripper-centric” case.

     

  • BULLETIN: Feds Say Bo Beckman, Trevor Cook Ponzi Scheme Figure, Tried To Dupe National Hockey League In Bid To Acquire Interest In Minnesota Wild — And Used Funds Stolen From Elderly Couple And Others To Do It

    BULLETIN: A new indictment has been returned in the case of Jason Bo-Alan Beckman, Gerald Durand and Pat Kiley — all figures in the Trevor Cook Ponzi scheme that allegedly gathered $194 million and one was of the largest financial crimes in Minnesota history.

    Among the stunning new allegations is that Beckman tried to inflate his net worth to dupe the National Hockey League in a bid to acquire an ownership interest in the NHL’s Minnesota Wild franchise and that money stolen from investors — including senior citizens now in their nineties — was used in Beckman’s unsuccessful effort to gain a share of the team.

    Cook, now serving a 25-year prison sentence for ruining investors in his colossal Ponzi caper, provided Beckman $5 million in commingled funds of investors duped by his currency-trading scheme for “use in his bid for ownership in the Minnesota Wild,” according to the indictment.

    During his 2008 bid, Beckman retained local counsel in Minnesota and the services of certified public accountants to assist him in preparing materials for the NHL.

    Beckman’s own attorney, according to the indictment, warned him that the currency program was “riddled with illegalities,” including “the illegal sale of unregistered securities, inadequate or misleading disclosure to [victim investors], both about the products and about the fees, and transactions by unlicensed persons and entities,” according to the indictment.

    The attorney further warned that the currency program needed to be discontinued and that investors’ funds needed to be returned, according to the indictment.

    Regardless, Beckman pressed on, according to the indictment.

    His activities to dupe the NHL have led to two mail-fraud charges for mailings in May and October of 2008, according to the indictment.

    In December 2011, the PP Blog reported that federal prosecutors asserted that Beckman had sought to address a whopping shortfall in a trading account and prop up the monumental fraud by stealing about $3.9 million from the elderly couple.

    The indictment returned yesterday alleges that money belonging to those two victims was part of a commingled pool of funds used to trick the NHL.

    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 in December.

    The woman had suffered a stroke, resides with her husband at an assisted-living facility and suffers from partial paralysis on her left side, prosecutors alleged in December.

    Beckman’s theft of about $3.9 million from the elderly couple also led to a charge of income-tax evasion, according to the indictment.

    The accused schemer knew the money he stole constituted income, but he channeled it through various entities and ignored advice from a tax-return preparer to file return for the 2008 tax year — the same year he tried to dupe the NHL, according to the indictment.

    The indictment also alleges that Beckman filed a false return in 2009 that claimed a Ponzi-scheme loss of nearly $1.5 million.

    Just a year after he was trying to impress the NHL with his purported financial worth and using stolen funds to do it, Beckman claimed his 2009 income was “-6.607,” according to the indictment.