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Tag: Jason Bo-Alan Beckman

  • BULLETIN: Pat Kiley, Trevor Cook Ponzi Pitchman, Sentenced To 20 Years in Federal Prison

    breakingnews72BULLETIN: Patrick Kiley, a radio host and conspiracy theorist who warned of “massive, massive chaos” and became a pitchman for the $194 million Trevor Cook Forex Ponzi scheme in Minnesota, has been sentenced to 20 years in federal prison.

    Kiley, 75, now becomes the fifth person sentenced to a long prison term in the epic Cook caper, one of the largest financial frauds in Minnesota history. The others include Jason Bo-Alan Beckman, 43, (30 years); Gerald Joseph Durand, 62, (20 years); and Christopher Pettengill, 56, (90 months).

    Cook was sentenced to 25 years. The defendants each face a restitution order of more than $155 million.

    Like other scams, the Cook fraud traces part of its downfall to a decision to trade on a famous name — in this case, UBS. But the real UBS sued for trademark infringement, prompting Cook and his cronies to adopt other names and immerse themselves in a deeper and deeper sea of incongruity. Conservative Christians were the principal targets.

    Kiley emerged a key Cook rainmaker, but ultimately tried to paint himself a Cook victim, describing Cook as “Pontius Pilate,” the Roman prefect many Christians believe authorized the crucifixion of Jesus.

    At one point, Kiley tried to turn the tables on the CFTC — like the SEC, one of the agencies to sue Cook and Kiley — by asking the judge overseeing the case to sanction a CFTC attorney $1,000 and make the penalty payable to Kiley. Kiley asserted the CFTC lawyer filed an “offensive” pleading. He also contended that SEC recordings of his pitch were filled with “distortions” and that a website bearing his name had been put together by an individual with a high “sleaze factor.”

    Kiley made these assertions, according to court documents, after he earlier had lied while asserting that Cook’s outsized returns were possible because the scheme was borrowing money at zero interest from a bank that complied with Shariah law, which forbids the payment of interest.

    A judge ultimately ordered Kiley to undergo a psychiatric exam and a medical exam, delaying his sentencing until today.

    From a statement today by federal prosecutors (italics added):

    In 2007, when UBS, AG, filed a trademark infringement lawsuit against Cook, Durand, Kiley, and others, the defendants began operating their scheme under other names, including but not limited to those identified by the terms “Oxford” and “Universal Brokerage FX.” They then continued to solicit investors for the currency program, utilizing telemarketing, media spots, and seminars in which they repeated the false representations noted above. Kiley, a Christian radio host, solicited investors for the scam through his radio talk show, which was carried on more than 200 stations across the country. On those programs, he regularly warned listeners to avoid financial ruin by giving their life savings to his company for investment.

    Some of the money linked to the Cook scheme literally was found jammed inside of walls. Other loot was found in a shopping-mall locker.

    Jon Jason Greco was sentenced to 10 months in prison for concealing loot linked to the Cook scheme.

  • 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.

     

     

  • 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.

     

  • 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.

  • 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.

  • UPDATE: Criminal Prosecutors Say Jason Bo-Alan Beckman Stole Nearly $4 Million From Elderly Husband And Wife; Wife A Stroke Victim With ‘Hemispheric Paralysis,’ According To Court Records; Beckman’s Manipulations Amount To ‘Contumacious Disobedience,’ SEC Says

    UPDATE: Facing a margin deficit of more than $10 million and at risk of having his trading account closed in February 2008, Jason Bo-Alan Beckman — a figure in the Trevor Cook Ponzi scheme — sought to address the whopping shortfall and prop up the monumental fraud by stealing about $3.9 million from an elderly couple, federal prosecutors in Minnesota now say.

    Separately, a federal judge has denied Beckman’s bid for the court to release $3,000 for living expenses. Chief Judge Michael J. Davis ruled Beckman could not have the money after receiver R.J. Zayed and the SEC claimed Beckman had failed to repay an earlier loan of more than $5,120 made to him from receivership proceeds and had shown no proof that $1,248 of that sum had gone to pay child-support obligations as required.

    Beckman, 41, has been charged both civilly and criminally, amid allegations he was a central figure in Cook’s $194 million fraud, believed to among the largest in Minnesota history. Victims have complained that Beckman is thumbing his nose at them, and prosecutors say he “has provided shifting and inconsistent rationalizations” for his conduct.

    The SEC chose a different phrase to describe Beckman’s alleged manipulations of victims and the courts: contumacious disobedience. (See definition below.)

    In shocking new allegations, criminal prosecutors said 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.

    He told neither the wife nor the husband about the sale, but later claimed that the woman — described by prosecutors as “C.O.” — had become an investor in Oxford Private Client Group, an advisory firm controlled by Beckman that allegedly fed Cook’s Ponzi.

    “Put differently,” prosecutors alleged, “Beckman now claims that C.O., who was a stroke victim in her eighties, knowingly contributed millions of dollars to the Oxford Private Client Group capital so that she could become Beckman’s partner in high finance.”

    The woman, prosecutors said, resides with her husband at an assisted-living facility and suffers from partial paralysis on her left side.

    She “can transfer herself from one place to another only with significant assistance,” prosecutors said.

    Prosecutors interviewed the woman at the facility last month and now are seeking court approval to take her formal deposition at the facility and preserve it for trial, saying it was “doubtful that she would be able to give live testimony in a federal courtroom without great hardship to herself.”

    Prosecutors argued that she was a “critical witness” who’d told them that “Beckman arranged for the purchase of the life insurance policies” on her husband’s life in 2005, telling the couple that he would sell the policies “at a substantial profit.”

    But Beckman “subsequently told her that the policies had no value,” prosecutors said. “She reported that Beckman did not tell her that he sold the policies or that their sale had generated almost $4 million in proceeds. She reported that she certainly did not give Beckman permission to use the proceeds. Perhaps most importantly, she reported that she never purchased an interest in the Oxford Private Client Group. On this point she was unequivocal.”

    In successfully arguing against the release of funds to Beckman, the SEC said his victims “face a dire situation.”

    “The Court has already accommodated Beckman by ordering that some of the limited, frozen funds be advanced to him,” the SEC argued. “Beckman has returned the Court’s leniency with contumacious disobedience.”

    See definition of “contumacious” here.

  • URGENT >> BULLETIN >> MOVING: Pat Kiley, Jason Bo-Alan Beckman, Gerald Durand Indicted In Trevor Cook Ponzi

    URGENT >> BULLETIN >> MOVING: UPDATED 7:02 P.M. EDT (U.S.A.) Former radio host Pat Kiley and two others have been indicted criminally in the $194 million Trevor Cook Ponzi scheme, federal prosecutors in Minnesota said this afternoon.

    The others are Jason Bo-Alan Beckman, 41, and Gerald Joseph Durand, 60. Kiley is 73.  He formerly hosted the “Follow The Money” radio program.

    All three defendants were charged with wire fraud, mail fraud, conspiracy and money-laundering. Kiley and Beckman previously had been charged civilly, but the Cook case took a dramatic turn with the filing of criminal charges. Cook already is serving a 25-year term in federal prison.

    Read the indictment.

  • BULLETIN: Christopher Pettengill Pleads Guilty In Trevor Cook Ponzi Scheme

    BULLETIN: Christopher Pettengill, a figure in the $194 million Trevor Cook Ponzi scheme, has pleaded guilty in Minneapolis to securities fraud, money-laundering and conspiracy, the FBI said.

    Read Breaking News coverage in the Star Tribune, which is reporting that Pettengill says he has been cooperating with federal investigators since January.

    Pettengill, 54, of Plymouth, Minn., was charged criminally on June 13. He potentially faces up to 20 years in federal prison.

    Cook is serving a 25-year sentence. Pettengill conceivably could be sentenced to a prison term shorter than 20 years, depending on his level of cooperation and his ability to persuade a federal judge that he deserves less time behind bars.

    Part of the Cook scheme traded on the acronymn UBS, a famous financial company, according to court records.

    It is common in the fraud universe for hucksters and criminals to leech off the brands of famous companies and to use famous names to sanitize fraud schemes.

    The Cook scheme also traded on the name “Oxford.” Some of the money ended up in  a company known as Crown Forex, which had a regal theme.

    Cook, former radio host Pat Kiley, and Jason Bo-Alan Beckman have been sued by the SEC. Cook and Kiley also confront a lawsuit from the CFTC.

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

     

  • 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.