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Tag: Richard Dalton

  • URGENT >> BULLETIN >> MOVING: Richard Dalton, Marie Dalton Arrested In Atlanta; Colorado Couple Implicated In Bizarre Ponzi Scheme And Will Be Prosecuted In Denver By Special Government Counsel From Kansas

    URGENT >> BULLETIN >> MOVING: A Colorado husband and wife have been arrested by federal agents in Atlanta and will be returned to Denver to be prosecuted by special government counsel brought in from Kansas, authorities said.

    Why special counsel was appointed to oversee the prosecution of Richard and Marie Dalton was not immediately clear. The allegations in the case, which began as an emergency SEC civil prosecution last year reported on here by the PP Blog, are bizarre. The case may be linked to the mysterious, prime-bank allegations against Larry Michael Parrish of Walkerville, Md., which the PP Blog reported on here.

    Richard Dalton, 65, and Marie Dalton, 60, reside in Golden, Colo. They have been charged with one count of conspiracy to commit mail fraud, wire fraud and interstate transportation of stolen funds, according to the office of U.S. Attorney Barry Grissom in the District of Kansas.

    Parrish’s name was not referenced today in the announcement by Grissom’s office of the prosecution of the Daltons. In March 2011, the SEC described Parrish as a recidivist swindler with a tie to Richard Dalton. Parrish was accused by the SEC of posing as a concerned financial adviser and investment strategist and visiting a dying man in a Colorado hospital.

    The man was suffering from cancer. Parrish assured him that investing with him was safe, that the man’s wife would not have to worry about her finances after his death, that “the investment would provide for his wife for the rest of her life,” the SEC said in March.

    “That money is now gone,” the SEC said. And so is the money from 70 other Parrish investors in three states, about $9.2 million in all, the agency said in March.

    When the Daltons learned they were under investigation by the SEC, Grissom’s office, the FBI and the IRS said today in a joint statement, they discontinued making payments to investors and falsely represented to investors that they could expect payments soon.

    “They also misled investors with false claims that the company’s European trader was switching banks, that the company was liquidating a cache of diamonds to pay investors back, that a plane carrying diamonds had been forced to land in Amsterdam because three engines had gone out and that the company had discovered it was holding 18,000 fake diamonds,” prosecutors said.

    The SEC laid out largely the same fact set in November 2010.

    “This investigation is not over as we are committed to following the money trail,” said Sean P. Sowards, IRS Criminal Investigation Special Agent in Charge. “We will continue to pursue the evidence wherever it leads.”

    The Dalton caper used a “diamond” theme and had an element known simply as “the Trading Program.” It gathered $17 million through a company known as Universal Consulting Resources LLC (UCR)., investigators said.

    “As part of soliciting investors for the Trading Program, Dalton and UCR falsely told prospective investors that their invested funds would be held safely in an escrow account at a bank in the United States, and that a European trader (often referred to simply as ‘the Trader,’ but never known or referred to by name) would use the value of that account, but not the actual funds, to obtain leveraged funds to purchase and sell bank notes,” the SEC charged last year.

  • SEC: Recidivist Huckster Made Bedside Visit To Dying Man, Promised Him ‘Investment’ Would Take Care Of His Wife For ‘Life’; Couple’s Money Plundered In Apparent HYIP/Prime-Bank Hybrid Scheme With Link To Another Swindle

    EDITOR’S NOTE: Make no mistake: America is at risk from an epidemic of white-collar crime. American money is at risk, American prestige is at risk, and national security is at risk — as Americans hatch one fraud scheme after another and recruit other Americans (and citizens of other countries) to help the schemes mushroom. Some of the conduct reads like fiction of the strangest sort. It’s enough to want to make you gag.

    The story below may make some readers angry — and rightly so. It covers allegations against Larry Michael Parrish of Walkersville, Md. Parrish is accused by the SEC of orchestrating a $9.2 million swindle through IV Capital, his mysterious firm incorporated in Nevis, an island in the Caribbean.  The scheme allegedly had the characteristics of a sort of HYIP/prime bank hybrid.  “Programs” that resemble the one allegedly pushed by Parrish are regularly hawked on Ponzi scheme and criminals’ forums such as Talk Gold and MoneyMakerGroup. Because law enforcement has made inroads in educating the public about the dangers of HYIP schemes, the promoters of such schemes now are trying to make prospects believe they are not investing in an HYIP — and millions of dollars continue to vanish into giant, money-sucking sinkholes.

    The alleged Parrish scheme also has a link to another scheme — this one a “diamond-themed” caper, the SEC said.

    Get ready to gag . . .

    Posing as a concerned financial adviser and investment strategist, recidivist securities swindler Larry Michael Parrish of Walkersville, Md., visited a dying man in a Colorado hospital, the SEC said.

    The man was suffering from cancer. Parrish assured him that investing with him was safe, that the man’s wife would not have to worry about her finances after his death, that “the investment would provide for his wife for the rest of her life.”

    “That money is now gone,” the SEC said. And so is the money from 70 other investors in three states, about $9.2 million in all, the agency added.

    Because Parrish had had well-documented run-ins with the SEC, a trove of information about him was available online and in public filings. Some of his investors even found it. When they approached him with questions, Parrish lied, the SEC said.

    “When expressly asked by investors, Parrish denied that he was the named defendant,” the SEC charged.

    Although Parrish claimed he’d been running a successful business, he’d been running a Ponzi scheme since 2005, the agency said.

    The scheme began to collapse in June 2009, and the excuse-making began, the SEC said.

    “On August 17, 2009, Parrish wrote to his investors to explain the ‘delay in the payment of past earnings,’” the SEC charged. “The letter claimed that some investors in IV Capital had not paid taxes on earnings which ‘triggered a bank audit for the entire group.’”

    “Interest” payments could not be made until the purported bank audit had been completed and until the investors who purportedly weren’t complying with tax laws came into compliance, Parrish allegedly told investors.

    “As part of its investigation, the SEC did not find — and Parrish and IV Capital did not provide — any evidence that there ever was a bank audit that resulted in Parrish being unable to make payments to the investors,” the SEC said.

    But Parrish held to his cover story for months, the SEC said.

    In October 2009, he told investors that “there were still four members who were out of tax compliance,” the SEC said.

    By December 2009, the SEC said, Parrish was reporting good news to investors: Only three members purportedly remained out of tax compliance.

    Even so, the SEC said, Parrish told investors he faced other challenges. These challenges purportedly included “administrative work and time traveling and meeting with non-U.S. clients.”

    A Phantom Partner?

    In February 2010, two investors scheduled a meeting with Parrish in New York to talk about “missed payments and [the] current status of IV Capital. Parrish and a “purported partner in IV Capital” were supposed to attend the meeting.

    “The night before the two investors were to fly from Colorado, where they reside, to New York, Parrish contacted them to say the purported partner was unavailable to meet. As part of its investigation, the SEC did not find — and and IV Capital did not provide — any evidence that Parrish had any partner in IV Capital.”

    What the SEC eventually discovered was that Richard Dalton, who was running a separate, “diamond-themed”  Ponzi scheme, was acting as an agent for Parrish in the Parrish Ponzi scheme, which was called the “Trading Program.”

    Dalton’s alleged diamond-themed scheme also featured bizarre claims, including assertions that payments were delayed to investors because an airplane the firm used to shuttle diamonds from Africa lost an engine and had to make an emergency landing in Amsterdam.

    Parrish “misappropriated” at least $780,000 in investor funds by awarding himself cash, luxury vacations, a motorcycle, shopping trips, and other extravagances, the SEC said.

    He was not registered with the SEC, and had ignored orders handed down for previous misconduct, the SEC said.

    The nature of his new scheme involved some sort of high-risk trading on a limited basis, and part of the fraud is “presently uncategorizable,” the SEC said.

    “No investor funds remain,” the SEC said. “Parrish and IV Capital’s known bank accounts are empty.”

    Since the collapse of the scheme, “Parrish has virtually disappeared and refused to cooperate with the SEC during its investigation,” the agency said.

  • BULLETIN: SEC Files Emergency Action To Halt Alleged ‘Diamond-Themed’ Ponzi Scheme And Related Fraud In Colorado; Richard Dalton Of Golden Accused Of Running Bizarre Multistate Scheme

    BULLETIN: (UPDATED 7:49 P.M. ET (U.S.A.) A Golden man ran a diamond-themed Ponzi scheme as part of a larger fraud, the SEC has charged in an emergency court action in federal court in Colorado.

    The agency said it filed the lawsuit to halt the actions of Richard Dalton and his company: Universal Consulting Resources LLC (UCR).

    Among the explanations for delayed payments to investors were that an airplane the firm used to shuttle diamonds from Africa lost an engine and had to make an emergency landing in Amsterdam and that the firm ultimately had been sold 18,000 fake gems, according to the complaint.

    Dalton’s age was not immediately clear. Regulators said he lived in Golden, and had been operating the diamond scam and a related fraud dubbed the “Trading Program.”

    UCR “solicited investors for two fraudulent offerings that were generally referred to as the ‘Trading Program’ and the ‘Diamond Program’ and promised returns of between 60% to 120% per year,” the SEC charged.

    “Dalton acted as an unregistered broker-dealer in actively soliciting investors to purchase securities – and commissioning finders and brokers to do the same – and Dalton and UCR offered and sold securities in violation of the registration provisions of the federal securities laws,” the SEC charged.

    The scheme began in March 2007 and operated through June 2010, the SEC alleged.

    Regulators charged that the scheme began to collapse in March and April of 2010.

    “From that time until at least November 12, 2010, Dalton and UCR have made false and misleading statements to investors to try to lull them into complacency and delay the disclosure of their fraudulent scheme,” the SEC charged.

    The diamond-themed fraud evolved from the initial fraud, the agency alleged. All in all, about 130 investors from 13 states plowed approximately $17 million into the schemes, according to the emergency filing.

    Dalton “funded his personal life at the expense of investors and also transferred more than $900,000 in order to purchase a home in the name of his wife,” the SEC charged.

    The SEC identified Marie Dalton as Dalton’s wife. She is named a relief defendant, meaning the agency believes she received ill-gotten gains from the scheme. Richard Dalton doled out thousands of dollars in cash as part of the scheme, including $936,000 in cash to purchase a home in his wife’s name, $35,000 for cosmetic dentistry, $38,000 for  Toyota truck and $5,000 for his daughter’s wedding, the SEC charged.

    The agency is seeking an asset freeze.

    “[I]n early 2009, UCR began offering the Diamond Program, which Dalton claimed would profit by using investor funds for diamond trading,” the SEC charged. “Similar to the Trading Program, Dalton claimed that investor funds would be safely held in an escrow account. Under the Diamond program, Dalton enticed investors with a guaranteed ten percent monthly return – or 120% yearly return.”

    Commission-based salespeople helped Dalton sell the scam, the agency said.

    “Investors typically learned about UCR’s investment programs from ‘finders’ or ‘brokers’ who were paid commissions by UCR, or from earlier investors who had received what they believed to be monthly distributions of profits from UCR, some of whom also received commissions for bringing in new investors,” the SEC said.

    “According to one investor,” the SEC continued, quoting the investor, “[A]s a result of the consistent returns from this investment, I started telling my friends and family about the investment I had made with Dalton. My friends and family started meeting with Dalton and some of them eventually invested with Dalton.”

    Some investors invested funds from their self-directed IRA retirement accounts, the SEC said.

    “As part of soliciting investors for the Trading Program, Dalton and UCR falsely told prospective investors that their invested funds would be held safely in an escrow account at a bank in the United States, and that a European trader (often referred to simply as ‘the Trader,’ but never known or referred to by name) would use the value of that account, but not the actual funds, to obtain leveraged funds to purchase and sell bank notes,” the SEC charged.

    The diamond-themed scheme operated in similar fashion, the SEC said.

    Read the emergency complaint.

    The complaint includes a reference to a Q&A session the SEC conducted with Dalton while investigating the case.

    Dalton refused to answer the following questions, according to the SEC:

    • Q Has UCR earned a profit in any year between 2007 and 2010?
    • Q How much revenue has UCR earned between 2007 and 2010?
    • Q Is it true that you currently have insufficient money to repay investors the
      outstanding principal and returns they are owed in the [Trading Program]?
    • Q Is it true that some of the money that you raised for the [Trading Program] was used to repay other investors rather than being invested in foreign . . . notes?
    • Q Is it true that some of the money you raised for the [Trading Program] was used for your own personal benefit to cover your personal expenses
      instead of for the benefit of that investment?
    • Q Is it true that the foreign note investment was a Ponzi scheme?
    • Q Is it true the mid-term note investment was a Ponzi scheme?
    • Q Did UCR ever buy any diamonds?
    • Q Have you ever bought any diamonds?
    • Q Has any investor money ever been used as collateral for the purchase of
      diamonds?
    • Q Have you ever engaged a bank to purchase diamonds?
    • Q Do you currently have any diamonds in your possession?
    • Q Do you have diamonds at your home?
    • Q Do you any diamonds in storage?
    • Q Have you moved diamonds to a foreign country?
    • Q Have you ever made any profit from the diamond investment business?
    • Q Isn’t it true that the diamond program is a Ponzi scheme?

    If the SEC’s allegations are true, it means that Dalton and the company were telling tall tales to investors even after the agency had questioned him under oath. Indeed, the agency said, the Q&A session took place in August 2010 — and Dalton and the company made “false and misleading statements to investors” right up until last week.

    Among the claims made as recently as last week was that investors could expect their funds   “soon,” the agency said.

    The “soon” explanation was part of a long-running pattern, and “after ‘soon’ had passed,” Dalton provided “a different excuse for why investors have not been repaid.” the SEC charged.

    One of the excuses was that the “number three engine” on the plane the company used to transport diamonds from Africa went out “and [the plane] had to land in Amsterdam for repair,” the SEC charged.

    Dalton next claimed the company discovered after the plane finally made its way to New York that “18,000 fake diamonds” were included in its cargo.

    He also did not turn over documents, according to the complaint.

    “Dalton produced no documents to the SEC,” the agency alleged. “He provided no evidence that the Trading Program and Diamond Program were legitimate investment programs. UCR did not produce a single accounting record.”