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Tag: Martin B. Feibish

  • SENIOR FRAUD CAVALCADE CONTINUES: Ponzi Schemer, 86, Pleads Guilty; Stephen J. Klos Ripped Off Fellow Senior Citizens, Prosecutors Say

    Stephen J. Klos, an 86-year-old church usher who sold elderly congregants in the Seattle area into a $3 million Ponzi scheme that began in 2004, has pleaded guilty to 10 counts of securities fraud, the office of King County Prosecuting Attorney Daniel T. Satterberg said.

    Klos “met several of victims at his church and told them that he would invest their money but used most of it to repay prior investors and for his personal benefit,” Satterberg’s office said. He faces between 51 and 68 months in prison when sentenced Dec. 28 by Judge Bruce Heller.

    Only four years short of his 90th birthday, Klos now joins a curiously long list of convicted or alleged Ponzi schemers and/or swindlers who were detected or charged after their 65th birthdays.

    Others on the list include Bernard Madoff (New York/Florida); Andy Bowdoin (Florida); Arthur Nadel (Florida/now deceased); Martin B. Feibish (Rhode Island); Richard Piccoli (New York); Anthony Lupas (Pennsylvania); John William “Jack” Cranney (Massachusetts); Pat Kiley (Minnesota); Richard Elkinson (Massachusetts); Edward May (Michigan); John F. Langford (Texas); Hans P. Seibt (Nevada); Louis J. Borstelmann (California); Gerald J. “Jerry” Berke (California/Canada); Richard Horace Mayfield (Colorado); Richard M. Hersch (California); Richard Taft Johnson (Michigan); Julia Ann Schmidt (Texas); Ronald Keith Owens (Texas); James Blackman Roberts (Arkansas); Larry Atkins (North Dakota); Maxwell B. Smith (New Jersey); Judith Zabalaoui (Louisiana); Arthur Ferdig (California).

    NOTE: The list above is incomplete.

  • FEDS: Former California National Guard Base Commander Timothy Melvin Murphy Pleads Guilty To Bilking $2.7 Million In Ponzi And Fraud Caper

    The onetime commander of the California National Guard base in Los Alamitos has pleaded guilty to mail fraud in a Ponzi scheme that defrauded 28 investors of $2.7 million, federal prosecutors said.

    Ret. Col. Timothy Melvin Murphy, 70, of Orange, ran his investment scam through an entity known as Capital Investors Inc., also of Orange, the office of U.S. Attorney André Birotte Jr. of the Central District of California said.

    In pleading guilty yesterday, Murphy admitted that he made materially false promises to clients, offered fraudulent investment opportunities to certain of his clients, and that he created and used a variety of false documents to execute the scheme,” prosecutors said.

    The FBI investigated the case.

    As the probe unfolded, investigators discovered that Murphy sometimes offered “guaranteed” returns, misdirected investors’ money and “created false account statements to mislead his clients into thinking that their money was properly invested and generating the promised income.”

    But the former officer “did not use the clients’ investment funds as he promised he would — an investors got plucked for $2.7 million, prosecutors said.

    Sentencing before U.S. District Judge David O. Carter is preliminarily set for June 25. Murphy faces up to 20 years in federal prison, a substantial fine, a restitution order and supervised probation after getting out of jail, prosecutors said.

    Murphy now joins a growing list of convicted or accused Ponzi schemers in their senior years.

    In Rhode Island yesterday, Martin B. Feibish, 81, of Providence, pleaded guilty to mail fraud in an alleged Ponzi swindle that lasted 10 years and plucked $5 million from a single victim.

    The Orange County Register is reporting that prosecutors believe Murphy’s scam in California began as early as 2001.

    Federal prosecutors in Rhode Island said the Feibish scheme also dated back to 2001.

  • BULLETIN: Rhode Island Man, 81, Ran ‘Self-Contained’ Ponzi Scheme For 10 Years; Martin B. Feibish Pleads Guilty To Defrauding $5 Million From Florida Resident

    BULLETIN: An 81-year-old Rhode Island man ran a “self-contained” Ponzi scheme between 2001 and 2011 and defrauded a Florida investor out of $5 million, federal prosecutors said.

    Martin B. Feibish of Providence now joins a list of senior-citizen Ponzi swindlers. He pleased guilty today to one count of mail fraud and one count of filing a false tax return.

    Feibish, described by the office of U.S. Attorney Peter F. Neronha as an insurance agent, investment broker and creator of two investment companies, potentially faces 23 years in federal prison. Sentencing has been scheduled for June 29.

    Creating “false and fictitious investment schemes” were part of the scam, with Feibish falsely representing that some payments the victim received were “returns on the investor’s investments,” prosecutors said.

    In reality, prosecutors said, “the funds he provided to the investor were actually the result of a ‘Ponzi Scheme’ he perpetrated with the investor’s own money.”

    State records in Rhode Island show that the Department of Business Regulation brought Feibish up on civil charges last year amid assertions he possibly was running a “selling away” scam in which he was hawking investment products not held by the brokerage firm and/or selling products without its knowledge.

    When confronted on Feb. 23, 2011, Feibish allegedly told a colleague he had created a bogus investment vehicle known as “MegaTrust,” describing it as a fraudulent mortgage-backed securities product.

    The investor allegedly had a net worth of $6 million when she began to do business with Feibish.

    Feibish, according to the allegations, kept the investor’s records in a “three-inch thick file” that he produced from “under his desk” when questioned. The huckster allegedly admitted he had forged documents and stolen the investor’s money, blaming his conduct on a gambling problem.