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Tag: Israel Securities Authority

  • KABOOM! SEC, Feds Target Alleged Money-Laundering Operation In Costa Rica; 6 People From Various Countries Charged Criminally; 7 Charged Civilly In Coordinated Probe Of ‘Pump And Dump’ Schemes

    BULLETIN: Two days after Southern Florida’s top federal prosecutor warned that offshore fraudsters who targeted Americans had no safe haven, six people from various parts of the world who allegedly ran or contributed to a pump-and-dump scheme that used the services of a  money-laundering operation in Costa Rica have been charged criminally, authorities said.

    The SEC, meanwhile, charged seven people civilly. An attorney has been charged both criminally and civilly, the SEC said. The cases were brought in the Southern District of Florida, which has been a hotbed of financial crime.

    Defendants in the cases hail from Costa Rica, Great Britain, Canada, Israel and the United States, according to the SEC. The criminal charges include conspiracy to commit securities, mail and wire fraud; wire fraud; mail fraud; violating the securities regulation laws and obstruction of justice.

    Jonathan R. Curshen, a convicted felon awaiting sentencing in an earlier securities and bribery scheme, has been charged both criminally and civilly in the new case. Curshen, 46, a dual U.S. and British citizen and the one-time “honorary counsel” of St. Kitts-Nevis to Costa Rica, presided over a Costa Rican company known as Red Sea Management Ltd.

    Red Sea “effected fraudulent pump-and-dump schemes on behalf of its clients and laundered millions of dollars in illegal trading proceeds out of the United States to its clients overseas,” the SEC charged.

    Also charged criminally and civilly were attorney Michael S. Krome, 49, of Lake Grove, N.Y; Ariav “Eric” Weinbaum, 37, of an unspecified city in Israel; Yitzchak Zigdon, 47, of Tel Aviv; Ronny Morales Salazar, 39, of San Jose, Costa Rica; and Robert L. Weidenbaum, 44, of Coral Gables, Fla.

    Krome and Weidenbaum (as distinct from Weinbaum) are Americans.

    Weinbaum, according to records, has dual U.S. and Israeli citizenship. He previously lived in Boca Raton, Fla., but now is living in Israel, the SEC said. The SEC alleged that Weinbaum has a “network of operatives he uses to perpetrate pump-and-dump stock manipulations.”

    Zigdon is an “Israeli accountant and the business partner of Weinbaum,” the SEC said.

    David C. Ricci of San Jose, Costa Rica, was charged civilly, and already has settled with the SEC. Ricci is a citizen of Canada who was living in Costa Rica, according to the SEC charging documents.

    “This group of illicit stock promoters sought to hide their scheme behind offshore entities, but their misconduct was exposed by the excellent cooperation of law enforcement agencies here and abroad,” said Cheryl Scarboro, associate director in the SEC’s Division of Enforcement.

    On Feb. 16, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida warned offshore scammers and criminals that the United States would not tolerate crime aimed from abroad at its citizens.

    “International law enforcement cooperation eliminates safe havens for those who cheat American citizens from overseas,” Ferrer said.

    “Curshen directed Red Sea to open numerous nominee brokerage accounts with U.S. and Canadian broker-dealers to enable the firm to engage in coordinated manipulative trading and conceal its illegal activity,” the SEC charged, alleging that Ricci and Salazar had trading authority over the nominee accounts.

    The scheme for which the charges were brought centered on a “sham” company known as CO2 Tech Ltd., which purported to be in the business of reversing global warming, the SEC said.

    Purportedly based in London, the company claimed to have a relationship with Boeing, the aircraft-maker, and traded on the Pink Sheets.

    “There were no communications, correspondence or understandings between CO2 Tech and Boeing,” the SEC said flatly, alleging that CO2 Tech was a “sham” that had no “significant assets or operations.”

    Krome, the lawyer, “issued a fraudulent opinion letter” to enable Weinbaum and Zigdon to advance the scheme, and “Weinbaum hired Weidenbaum” to distribute false information through websites, spam e-mails and fax blasts, the SEC charged.

    “Weidenbaum enlisted a group of stock promoters who then executed illegal ‘matched orders’ with Red Sea’s nominee brokerage accounts in order to ‘jump-start’ the market and increase the price of the stock,” the SEC charged. “As a result of the false media campaign and the illegal matched orders, the market price of CO2 Tech stock increased 81 percent increase in one day and trading volume increased 1,573 percent.”

    Ricci and Salazar sold the stock through Red Sea, and the “coordinated misconduct enabled stock sales at artificially inflated prices for profits of more than $7 million at the expense of unsuspecting investors,” the SEC charged.

    Cooperating in the case were the U.S. Department of Justice, the FBI, and the U.S. Postal Inspection Service, FINRA, the Costa Rican Police, the British Columbia Securities Commission, the Israel Securities Authority, the United Kingdom Financial Services Authority and The City of London Police Department, the SEC said.

    In recent days, federal prosecutors also have filed charges against more than 100 people associated with Armenian Power, an international organized-crime group with ties to Russia and Armenia.

  • Belize, Israel, Switzerland, Canada And United States Cooperate In Case That Leads To Judgment Against Florida-Based Company Posing As ‘Offshore’ Investment Firm

    EDITOR’S NOTE: Members of Florida-based AdSurfDaily and a closely connected autosurf firm, AdViewGlobal, purportedly based in Uruguay, may find this story particularly eye-opening.

    Play the autosurf or “offshore” HYIP investment games? Buy into the hype that overseas “registration” provides “shelter?” Pose as an “expert” on the Ponzi and HYIP boards and tell your downline members or recruits that new entities you’re promoting learned from the mistakes of companies “stupid” enough to have conducted business from the United States?

    Position yourself as uniquely knowledgeable and use phrases such as “due diligence,” perhaps adding that “offshore” programs are “safe” — unlike those U.S.-based programs that are only asking for trouble?

    You’re going to need some new lines to disarm the doubting customers you’re trying to recruit into your scams so you can pocket commissions based on their misery.

    Indeed, this is a story about a spinoff company that purportedly opened “offshore” after a previous company controlled by the husband of the operator got caught ripping off customers on U.S. domestic soil. Like the U.S.-based company that got caught fleecing clients, the new, “offshore” firm also got caught — and investigators say it was not “offshore” at all.

    In fact, it was operated right from sunny Florida. Both the domestic company and the “offshore” spinoff walked off with the money, investigators said.

    ponziblotterThe U.S. Commodity Futures Trading Commission (CFTC) has announced that it worked proactively with Belize, Canada, Switzerland and Israel in a case that resulted in a judgment against a Belize-registered company operating a commodity-options scam from Hollywood, Fla.

    The company simply vanished one day, taking clients’ money with it, investigators said.

    U.S. District Judge Paul C. Huck of the Southern District of Florida ordered defendants Zurich Futures and Options Inc. and Michele LaBruce — both of Hollywood — to pay more than $5.4 million in restitution and penalties.

    Huck gave them 10 days to do so, saying post-judgment interest will begin to accrue on the 11th day.

    Specifically, Huck found that Zurich Futures was not headquartered in Switzerland and did not have a satellite office in Toronto, as it had claimed. Rather, the company used a “mail drop” and “virtual offices” to reroute mail and telephone calls to southern Florida.

    “At least” 60 individuals sent a total of “at least” $1.45 million to the firm, according to Huck, who entered the findings of fact and conclusions of law when the defendants didn’t even bother to enter a defense.

    “Almost all of the Defendants’ customers lost their money trading through Zurich, while Zurich collected at least $1,357,299 in commissions and fees,” Huck said.

    Despite a claim that Zurich had been in business for a decade and employed only registered and licensed traders, Zurich had been operating for less than a year and had lied about its credentials, Huck ruled.

    In fact, the judge ruled, LaBruce “directed the transfer of funds totaling at least $1,071,199 from Zurich’s bank accounts to herself.”

    CFTC minced no words in describing the Zurich Futures scam.

    “Zurich was nothing more than a Hollywood, Fla.-based sham operation,” the agency said.

    Moreover, the agency added, LaBruce is the wife of Adam Leon, against whom CFTC won a judgment and penalties totaling $2.5 million in a foreign-currency trading scheme known as “Presidential FX Inc.”

    The Presidential FX scam was exposed in 2005. Leon was one of seven people charged criminally in September 2008. The others were Phillip Eric Mickelberg, Mitchell Goldberg, Joseph Marchiano, Donnetta Bass, Danielle Williamson, and Melody Marks.

    Other companies involved in the Presidential FX scam included Emerging FX; Infinity FX; and Noble4X, federal prosecutors said. All of the companies operated from Hollywood.

    During a seven-month stretch between December 2003 and June 2004, CFTC said, 99.1 percent of customers who invested money with Presidential FX lost it.

    Presidential FX was charged civilly by CFTC in August 2005. While the case was still in the courts in January 2006, Leon failed to respond to an order compelling discovery and an order to be deposed. The deadline to respond was Jan. 17, 2006. On that very same day, Zurich Futures was incorporated in Belize, according to court records. On the next day, Jan. 18, 2006, LaBruce was appointed “Attorney-in-Fact” for Zurich Futures.

    On Feb. 17, 2006, Leon stipulated to default through counsel in the Presidential FX case, meaning he abandoned the case.

    Court records suggest Zurich Futures, with Leon’s wife Michele LaBruce in charge, commenced operations in April 2006, just two months after Leon’s default in the Presidential FX case. LaBruce also is named in court documents as a one-time principal in Presidential FX.

    CFTC thanked the international regulatory community for assisting in the Zurich Futures probe.

    “The CFTC gratefully acknowledges the assistance of the Belize Financial Intelligence Unit, the Ontario Securities Commission, the Swiss Federal Market Supervisory Authority and the Israel Securities Authority in investigating this matter,” CFTC said.