PatrickPretty.com

Tag: tax evasion

  • DEVELOPING STORY: Feds Make Major Arrest In Tax Case Linked To Offshore Forex Fraud Scheme Known As Tradex; Arthur A. Ferdig, Who Claimed To Be ‘Taught By Angels,’ Detained On Felony Warrant

    Arthur A. Ferdig

    DEVELOPING STORY: Arthur A. Ferdig, who purported to be “taught by Angels and other wonderful beings of light, including the Christ Energy, Holy Spirit and more,” has been arrested and is listed as “in transit” to an unspecified federal detention facility.

    Ferdig, 70, was indicted under seal in April 2009 for evading taxes on income of more than $6.4 million tied to a failed Forex scheme known as Tradex, which operated in the Caribbean and allegedly gathered more than $100 million before collapsing.

    At the time of the indictment, federal prosecutors in California asked that the charges be filed under seal because Ferdig, a U.S. citizen, was known to spend long periods “overseas,” was believed to be living in California “under a false name” and was considered a “serious” flight risk.

    Ferdig fancied himself “The Bridge” between angels and earthlings. His non-Forex product lineup included “Angel Tears,” defined on his website as “an all-natural, bio-trace  mineral tincture developed to enhance  human health and vitality.”

    A federal magistrate judge has ruled Ferdig indigent, and a public defender has been appointed.

    The case against Ferdig, who called his online followers “Truth-Seekers,” remained sealed for more than a year as investigators sought his arrest. That arrest occurred at an unspecified location on June 27, 2010. Ferdig was arraigned in West Palm Beach, Fla., according to records.

    He is listed as “in transit” to an unnamed federal detention facility, according to the Federal Bureau of Prisons. Prosecutors said he had not filed a tax return for at least 15 years and owed nearly $2.5 million in taxes for the 2002 calendar year.

    Wire transfers to “shell companies” were used to evade the taxes, according to the indictment.

    Ferdig claimed to have met his first angel, Metatron, on Sept. 22, 2002, while Ferdig was peering over rocky sea cliffs in Negril, Jamaica. He later met Gabriel, Michael, Uriel, Ezrael, Ariel, Raphael, Muriel, Bethany “and other wonderful and loving angels and spirits of light,” according to his website.

    NOTE: Make sure you read this story from September 2009 in Wired UK. (It very well may blow your mind.)

    Visit the Tradex liquidator’s site. (You’ll find case documents there. They, too, may blow your mind. Although Tradex purported to have millions of dollars under management, missives to investors were signed “The TRADEX Management and Staff” or “The Tradex Management.” Here is the first report by the liquidator,  a serious document that shows just how bizarre Ponzi investigations can become.)

  • BULLETIN: Steve Renner, Operator Of INetGlobal Autosurf, Sentenced To 18 Months In Federal Prison In Tax Case Tied To His Money-Services Business

    Steve Renner

    UPDATED 6:57 P.M. EDT (U.S.A.) The operator of the INetGlobal autosurf has been sentenced to 18 months in federal prison for income-tax evasion.

    Steve Renner also was ordered by U.S. District Judge Donovan Frank to cooperate with the IRS “in the assessment and payment of taxes still due,” federal prosecutors said.

    Renner was convicted in December of four felony counts of tax evasion after a six-day jury trial. The case stemmed from his operation of Cash Cards International (CCI), a payment processing company.

    He was not taken into immediate custody after today’s sentencing and perhaps has “several weeks” before he is scheduled to report to prison, said Jeanne Cooney, a spokeswoman for U.S. Attorney B. Todd Jones.

    Cooney added that the IRS is in the process of determining how much money Renner still owes to the government, which is why Donovan ordered him to cooperate with the agency.

    Even with his sentencing today, Renner’s legal troubles are not over. In February, the U.S. Secret Service said there was probable cause to believe he was operating an international Ponzi scheme through INetGlobal and affiliated companies.

    Federal prosecutors have seized about $26 million in a probe into INetGlobal’s business practices. Renner has not been charged in the case, which prosecutors described as a “major” money-laundering investigation.

    In the tax case, prosecutors said Renner diverted customers’ money held by CCI “to pay his living expenses as well as to make personal investments in coins, oil wells, art, stamps, and vintage musical instruments.

    “He also used client funds to promote his blues-rock band, ‘Stevie Renner and the Renegades,’” prosecutors said.

  • BULLETIN: Trevor Cook Charged Criminally With Mail Fraud And Tax Evasion In Alleged $190 Million Ponzi Case In Minnesota

    BULLETIN: Trevor Cook, the reputed head of a $190 million Ponzi scheme in Minnesota, has been charged criminally with mail fraud and income-tax evasion.

    Cook, 37, previously had been charged civilly by the SEC and the CFTC. The criminal charges filed today came after a probe by the FBI and the IRS Criminal Investigations Unit, working with the regulatory agencies.

    Prosecutors alleged Cook filed a false tax return in 2009, failing to report report taxable income of at least $5.2 million “upon which there was tax due in the amount of at least” $1.8 million, prosecutors said.

    Cook was charged via a criminal information, rather than an indictment. Such charging documents sometimes mean a defendant is negotiating with prosecutors.

    Prosecutors said Cook was “aided and abetted by others” in a scheme that fleeced at least 1,000 people “out of at least $190 million by purportedly selling investments in a foreign currency trading program,” prosecutors said.

    “In reality,” prosecutors continued, “he was diverting the money provided him for other purposes, including making payments to previous investors; providing funds to Crown Forex, SA, in an effort to deceive Swiss banking regulators; purchasing ownership interest in two trading firms; buying a real estate development in Panama; paying personal expenses, including substantial gambling debts; and acquiring the Van Dusen Mansion in Minneapolis.”

    The mansion has been sold by R.J. Zayed, the court-appointed receiver in the civil case. Zayed also has sold large-screen TVs and automobiles linked to the scheme, including a Rolls-Royce.

    Prosecutors said the Cook case was being tackled by the Financial Fraud Enforcement Task Force, which President Obama formed late last year.

    U.S. Attorney B. Todd Jones of  the District of Minnesota made the announcement of the criminal charges against Cook.

    Cook has been in jail since January as a result of a contempt of court order in the civil case, which was brought by the SEC and the CFTC.

    Former Christian radio host Pat Kiley also was charged in the civil case.

    The narrative of the Cook story occasionally has played out like a James Bond movie, with references to a submarine, an island retreat, Faberge eggs and foreign currency purportedly acquired by Cook with fraud proceeds.

    A real-estate agent ventured to Cook’s island in Canada during the winter on a snowmobile to get the lay of the land, according to court filings.