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Tag: Jenny A. Durkan

  • PARTINGS: Ronald C. Machen Jr., Whose Office Led AdSurfDaily Criminal Prosecution, Is Leaving Post As U.S. Attorney For District Of Columbia

    “Serving as the U.S. Attorney for the District of Columbia has been the highest honor of my professional career. I am tremendously grateful to the President, Attorney General Holder, and Congresswoman Eleanor Holmes Norton for placing their trust in me. The men and women of this office are among the most dedicated and talented public servants in the country. I am proud of the work we have done together to achieve justice in the courthouse and to build bonds of trust with the community that we serve. I leave this position confident that my extraordinary colleagues will continue to pursue justice and protect the residents of the District and this great nation.” — U.S. Attorney Ronald C. Machen Jr., District of Columbia, March 16, 2015

    Ronald C. Machen Jr. is leaving his post as U.S. Attorney for the District of Columbia after five years.
    Ronald C. Machen Jr. is leaving his post as U.S. Attorney for the District of Columbia after five years.

    Ronald C. Machen Jr. led many important prosecutions during his five-year tenure as U.S. Attorney for the District of Columbia. The one PP Blog readers are most apt to remember is the criminal prosecution of AdSurfDaily Ponzi-scheme figure Andy Bowdoin.

    Machen, 45, is leaving his post and intends to reenter private practice, the Justice Department said today.

    “During more than five years as United States Attorney for the District of Columbia, Ron Machen has distinguished himself as a skilled leader, a devoted public servant, and a forceful champion of justice on behalf of the American people,” said Attorney General Eric Holder.

    Upon the sentencing of Bowdoin in August 2012, Machen called the huckster “a master of fraud and deception” who cheated “victims out of their hard-earned money and savings with his get-rich scheme.”

    AdSurfDaily gathered $119 million through its Internet-based fraud, a 1-percent-a-day “program” that purported to be in the “advertising” business, not the business of selling securities.

    Machen will leave his post on April 1.  Principal Assistant U.S. Attorney Vincent H. Cohen Jr., 44, will become Acting U.S. Attorney on that date.

    Two assistant U.S. Attorneys and a special agent of the U.S. Secret Service involved in the ASD case were targeted with false liens by Kenneth Wayne Leaming, a purported “sovereign citizen” from Washington state. Leaming was arrested by an FBI Terrorism Task Force and was successfully prosecuted by the office of then-U.S. Attorney Jenny A. Durkan of the Western District of Washington.

    We wish Ronald Machen the best, and we thank him for his service to his country.

  • BULLETIN: Prosecutors Say AdSurfDaily Figure Kenneth Wayne Leaming Was Channeling Cop-Killer Christopher Dorner In Veiled Bid To Intimidate Law Enforcement

    Kenneth Wayne Leaming
    Kenneth Wayne Leaming

    BULLETIN: Federal prosecutors in the Western District of Washington have asked Judge Ronald B. Leighton to sentence AdSurfDaily figure and purported “sovereign citizen” Kenneth Wayne Leaming to 10 years in federal prison, the maximum term under the law.

    Leaming, 57, of Spanaway, Wash., was found guilty March 1 on charges of filing false liens against public officials involved in the ASD case and against federal prison officials, harboring two federal fugitives from Arkansas in a home-business caper separate from ASD, and possessing firearms as a convicted felon.

    In a chilling sentencing memo today, prosecutors said Leaming — during his criminal trial beginning the week of Feb. 25 — was channeling deceased cop-killer Christopher Dorner in the courtroom. Although the memo did not reference Dorner by name, it was clear prosecutors were talking about the former Los Angeles police officer who threatened “unconventional and asymmetrical” warfare against police and went on a killing spree earlier in February that targeted police officers and their family members.

    Dorner’s rampage resulted in the deaths of two officers and the daughter of an officer, sparking other violent confrontations and what has been described as one of the largest manhunts in LAPD history. Dorner himself died violently on Feb. 12. Leaming’s trial began about two weeks later.

    “During the trial, Leaming repeatedly made statements referring to the (then recent) incident in Southern California, where a former police officer had started hunting down and murdering government officials the former officer felt had wronged him,” prosecutors said today. “Leaming would generally say something to the effect that it was better that he engaged in ‘seeking redress’ from government officials by way of liens and other paperwork, as opposed to emulating the former officer and using violence.

    “This formulation was repeated often enough that the government believes it was a thinly-veiled threat,” prosecutors continued. “Leaming, in essence, engaged in ‘paper terrorism’ against government officials. By these repeated statements, Leaming seemed to be saying that if he was not permitted to engage in that conduct, he may as well resort to violent acts of terror instead.”

    And, prosecutors said today, Leaming has shown no remorse “for any of his actions, and fully intends to continue to pursue the same course of conduct . . .”

    “[T]his is clear from the defense he presented at trial, and in his filings since trial,” prosecutors said.

    As the PP Blog reported earlier this month, Leaming now says Leighton, the judge who presided over his trial, owes him 208,000 ounces of fine silver.

    “Since his conviction, [Leaming] has continued to file numerous, typically incomprehensible and/or nonsensical filings in this and other courts,” prosecutors said in today’s sentencing memo.  “These filings refer to various UCC instruments, typically claim the Court lacks jurisdiction over him based on a willful misunderstanding of the law, and claim that he is being held as a ‘slave.’ Leaming has attempted to sue at least one [Assistant U.S. Attorney] in the International Court of Justice, and filed numerous monetary claims (often claiming that he should be paid in silver) against [Bureau of Prisons] officials, agents, [Assistant U.S. Attorneys,] various judges, and the Ninth Circuit Clerk. He has also filed numerous pro se civil proceedings and appeals in the Circuit. Most recently, he filed complaints with the [Washington State Bar Association] against one of the [Assistant U.S. Attorneys], U.S. Attorney [Jenny A.] Durkan, and this Court.”

    Durkan’s office prosecuted Leaming.

    Leaming, according to court records, also unsuccessfully sought to sue President Obama and Attorney General Eric Holder. Meanwhile, the Congressional Record strongly suggests that Leaming sought to make some sort of claim for purported damages against the United States.

    Leaming also sought to claim spectacular sums from the United States in an unsuccessful lawsuit in the U.S. Court of Federal Claims.

    Prosecutors said today that Leaming “has exploited the ignorance of others for his personal gain for years, taking money from . . . people to ‘help’ them with their legal problems – but in reality he of course did no such thing.”

    Leaming, they said, “has spent much of his adult life engaged in the unauthorized practice of law, in itself a felony offense under state law. In doing so, Defendant variously portrays himself as an expert in law enforcement and/or as some type of legal genius – a ‘lawyer’ but not an ‘attorney’ as he explained at some (rather bewildering) length during the trial. Both self-portrayals are complete and utter fictions.”

    In 2010, Cornell University Law School, Justia.com and Oyez.org removed online profiles of Leaming after he advertised a fee structure of up to $250 an hour and encouraged prospects to “schedule a free introductory consultation.”

    Investigators later identified Leaming as part of a “national” group of “sovereign citizens” operating in Washington state. At the time of his November 2011 arrest, Leaming was found with multiple firearms. Prosecutors said in October 2012 that he was “instrumental in founding the ‘County Rangers,’ the sovereign group’s armed enforcement wing. Members of the County Rangers were issued realistic-looking badges and credentials were required to possess firearms as part of their duties, and held themselves out as law enforcement agents.”

    Prosecutors noted today that Leaming possessed “various items of police equipment, including numerous badges, light bars, and a Crown Victoria sedan modified to appear to be a police vehicle.”

    With respect to his ASD-related actions, prosecutors said this today:

    “[Leaming] took money from the victims of a massive ponzi scheme prosecuted in Washington DC to ‘fix’ their problems. Of course, as the case agent testified, there was nothing to fix – the government recovered almost all of the lost money, and most victims were made whole. Defendant nonetheless took money from these hapless individuals, essentially to interfere with the ongoing prosecution.”

     

  • NEWS/UPDATES: Feds Say $900 Million Nevin Shapiro Ponzi ‘Perfect Example Of Greed Run Amok’; Colorado Charges Bela Geczy, Michael Kass With Racketeering In Fraud Case

    The acts of Nevin Shapiro — a Florida man arrested in New Jersey yesterday on charges of orchestrating a $900 million Ponzi scheme — represent a “perfect example of greed run amok,” an FBI agent said.

    Separately, a grand jury in Colorado has charged two men under the state’s organized-crime statute with operating an $18 million securities-fraud scheme that affected at least 270 investors.

    Arrested in Colorado were Bela Geczy, 57, of Longmont, and Michael Brian Kass, 48, of Boulder. Authorities said they orchestrated a massive Ponzi scheme involving domestic and offshore business opportunities.

    The court docket in the cases against Geczy and Kass shows two dozen felony counts, including violations of the Colorado Organized Crime Control Act, conspiracy to commit securities fraud, securities fraud by fraud or deceit and securities fraud by untrue statement or omission.

    Like Florida, Minnesota, Washington, New York, South Carolina, California, Michigan and other states, Colorado has been plagued by Ponzi and fraud schemes. No fewer than five major Ponzi or financial fraud probes are under way in Colorado. Records suggest the highly complex frauds involved more than $100 million.

    In New York alone this week, two major financial-fraud cases were filed. The schemes involved in the neighborhood of $101.5 million, according to court filings. Meanwhile, U.S. Attorney Jenny A. Durkan of the Western District of Washington outlined five major Ponzi probes in various states of completion in the Greater Seattle area. These cases involve tens of millions of dollars, according to records.

    At the same time, the main page of the website of U.S. Attorney B. Todd Jones of the District of Minnesota features links to three major Ponzi cases in various stages of investigation. One of the cases is the Tom Petters’ Ponzi case. Petters was sentenced this month to 50 years in federal prison for presiding over a $3.65 billion fraud.

    Jones’ website also includes information on a Ponzi case involving at least $190 million. Trevor Cook pleaded guilty to mail fraud and tax evasion in the fraud earlier this month, and is awaiting sentencing. The website also includes information on the investigation into the business practices of Steve Renner in an alleged autosurf Ponzi scheme case involving tens of millions of dollars.

    Florida/New Jersey Cases Against Nevin Shapiro

    Shapiro, 41, was a prominent Miami Beach businessman. Authorities now say he was operating a Ponzi scheme since 2005 that rivaled the $1.2 billion Scott Rothstein scheme in dollar volume. Rothstein pleaded guilty in his massive fraud case earlier this year.

    Like Rothstein, Shapiro liked to chum around with sports figures and live large, according to records.

    Shapiro used “stolen funds to purchase a pair of diamond-studded handcuffs, which he gave as a gift to a prominent professional athlete,” prosecutors said. He also spent more than $400,000 for floor seats to watch the Miami Heat, a team in the NBA.

    At the same time, prosecutors said, he spent about $26,000 per month on mortgage payments on his $5.3 million residence in Miami Beach, while directing about $7,250 per month for payments on a $1.5 million dollar Riviera yacht and roughly $4,700 per month for the lease of a Mercedes-Benz.

    Viewed on a yearly basis, the payments on the residence, yacht and car alone consumed more than $450,000 — and yet Shapiro’s purported business produced no sales.

    A veteran FBI agent said the case was about naked greed.

    “This case is a perfect example of greed run amok,” said FBI Special Agent in Charge Michael B. Ward. “In pursuit of wealth and a lifestyle he was otherwise unable to attain, Mr. Shapiro allegedly preyed upon unsuspecting investors looking to secure a safe place to maximize their investments.  Instead, their futures have been irrevocably damaged.”

    Although purportedly in the business of buying groceries in a lower-priced market and selling them wholesale in markets in which they would fetch higher prices, Shapiro’s company largely was a mirage that conducted virtually no legitimate business after 2004 and sustained itself by paying investors with the money of other investors, prosecutors said.

    “Nevin Shapiro is charged with tricking investors with false documents and false promises,” said U.S. Attorney Paul J. Fishman of the District of New Jersey. “He spent tens of millions of their money on gambling debts, lavish gifts and a luxury lifestyle built on a house of cards.”

    Authorities gave credit for the Shapiro criminal collar and an accompanying civil action by the SEC to the combined investigative efforts of the Financial Fraud Enforcement Task Force. President Obama formed the Task Force in November 2009.

    Shapiro, prosecutors said, diverted at least $38 million in investors’ funds for his own use, and investors now are out tens of millions of dollars.

    A girlfriend received goods totaling $116,000 from a charge card, which Shapiro used to rack up $640,000 in personal purchases, according to court records.

    The IRS is part of the investigative team in the Shapiro case.

    “Scammers, con artists and swindlers will do and say anything to get you to buy into their scheme,” stated William P. Offord, Special Agent in Charge, IRS-Criminal Investigation.

    Like his investigative colleagues in other Ponzi cases, Offord reuttered the age-old adage:

    “Remember the old cliche,” he said.  “If it’s too good to be true, it probably is.’”

  • 4 Ponzi Probes Spotlighted In Seattle; Cases Involve ‘Phony Business Plans’ With Sports Tickets, Point-Of-Sale Machines, Oil Fields, Aircraft Parts

    EDITOR’S NOTE: If you’re keeping a “Bubba Blue” notebook on the various ways to serve up a Ponzi scheme — as opposed to shrimp — these Ponzi investigations in Washington state might deserve an entry. The story below encapsulates four major cases. It also includes a link to the charging document in the Rhonda Breard Ponzi case, a fifth major probe in the Seattle area. The Breard case is not summarized below. We’ll publish a separate story on it in the future.

    Two new Ponzi schemes have emerged in Greater Seattle, and two other cases continue to be untangled, federal prosecutors said. The four cases combined involve more than $80 million, according to records.

    James Liddell, 55, of Seattle, remains at large after being indicted last week. Prosecutors said Liddell was indicted for a scheme in which he persuaded 13 investors to hand over a total of $3 million for his purported business of refurbishing point-of-sale machines and selling them to a drug-store chain.

    Liddell operated a company known as Payright Merchant Services, and showed investors “forged sales agreements and purchase orders” to pull off the scheme, prosecutors said.

    No machines were ever bought or sold to the Seattle retailer, and there were no contracts for any such sales, according to the indictment. Some of the money was used to pay “returns” to earlier investors, but Liddell used $1.2 million for his own benefit, prosecutors said.

    Read the Lidell indictment.

    Separately, Lorenzo V. Molina Jr., 49, of Sammamish, was indicted in a Ponzi case in which he is accused of telling investors his company rehabilitated aircraft parts through third-party vendors and sold the parts at a profit to airlines.

    Molina formerly worked for Boeing, but his purported parts business was a sham that gathered $3.6 million from investors duped by fraudulent documents, prosecutors said.

    About $1.7 million was returned to investors, but Molina “used the rest of the money for things such as a grand piano, private school tuition for his children, horses and real estate in Issaquah, Maple Valley, Fall City and Arizona,” prosecutors said.

    Western Washington’s top federal prosecutor said the Molina and Liddell schemes worked because they were targeted at friends and neighbors.

    “As these indictments demonstrate, Ponzi schemes are not limited to financial advisors,” said U.S. Attorney Jenny A. Durkan. “Investment brokers such as Bernie Madoff and Rhonda Breard make headlines, but in these cases it was literally ‘the guy next door,’ who bilked friends and neighbors. Each took in millions for a purported business plan, and then fraudulently used the money for his own benefit.”

    Read the Molina indictment.

    Durkan provided updates on two other Seattle-area cases.

    Kevin A. Halverson, 51, of Bothell, was indicted in February on charges of running a Ponzi scheme involving “high profile” sports tickets and tickets for other major events. Venues for the ticketing scheme included the Super Bowl, the Indianapolis 500, concerts and shows in Las Vegas, according to court records.

    The scheme collected $10 million. Prosecutors said Halverson “purchased a small number of tickets to make the business appear legitimate, but primarily used investor money to pay off earlier investors in the manner of a typical Ponzi scheme.”

    Read the Halverson indictment.

    Meanwhile, the Robert Miracle Ponzi scheme case also is proceeding, with sentencing set for October. Miracle, 49, of Bellevue, has pleaded guilty to mail fraud and tax evasion in a scheme involving Indonesian oil wells.

    “Miracle represented to investors in his companies that they were making money from oil field development and services on oil and gas fields in Indonesia,” prosecutors said. “In fact, the proceeds of later investors were used to pay off the investments of earlier investors.

    “Between September 2004 and October 2007, Miracle took in more than $65.3 million and paid out $36.7 million as dividends to investors. The remaining [money] — some $28.6 million — was used in part for efforts to develop oil and gas on fields in Indonesia, as well as to pay for a lavish lifestyle for Miracle and his cohorts,” prosecutors said.