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Tag: U.S. Attorney Melinda Haag

  • Ripple Labs’ Settlement Agreement With Feds References Alleged Transaction With Roger Ver, American Expat Known As ‘Bitcoin Jesus’

    From a settlement agreement between the U.S. Department of Justice and Ripple Labs. Red hightlight by PP Blog. Source: U.S. Attorney's Office for the Northern District of California.
    From a settlement agreement between the U.S. Department of Justice and Ripple Labs. Red highlight by PP Blog. Source: U.S. Attorney’s Office for the Northern District of California.

    EDITOR’S NOTE: Will MLM/network-marketing hucksters pushing UFunClub/UToken find any value in the story below?

    Ripple Labs Inc., based in San Francisco, “developed and sold virtual currency known as ‘XRP,’” but didn’t follow the law and “failed to establish and maintain an appropriate anti-money laundering program,” the U.S. Department of Justice said.

    If Ripple’s name sounds familiar, perhaps it’s because the company sued the Rippln MLM “opportunity” in late 2013, alleging trademark infringement. In a statement, the Justice Department makes a veiled reference to that action, something that put Ripple on the radar.

    At some point, Ripple became the subject of a criminal investigation led by the office of U.S. Attorney Melinda Haag of the Northern District of California. The IRS Criminal Investigation Division also participated.

    As the investigation proceeded, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) became involved on the civil front.

    Of particular note in the Justice Department’s news release about a settlement agreement with Ripple that ended the criminal probe was an allegation that a second Ripple subsidiary known as XRP II in late 2013 allegedly “negotiated a $250,000 transaction with an individual who had prior felony convictions for dealing in explosive devices and had been sentenced to prison.”

    Based on information in the Ripple settlement agreement, the government appears to believe this individual is Roger Ver, sometimes described as “Bitcoin Jesus.”

    Ver was convicted in 2002  on charges of selling explosive devices on eBay.

    XRP II appears to have constituted an effort on Ripple’s part to address FinCEN money-laundering concerns, but the subsidiary failed to “follow its own internal ‘know your customer’ requirements,” the Justice Department said.

    “Virtual currency exchangers must bring products to market that comply with our anti-money laundering laws,” said Director Jennifer Shasky Calvery of FinCEN. “Innovation is laudable but only as long as it does not unreasonably expose our financial system to tech-smart criminals eager to abuse the latest and most complex products.”

    From a Justice Department statement on the settlement (italics added).

    Ripple Labs Inc. and its wholly-owned subsidiary, XRP II LLC, formerly XRP Fund II LLC, have agreed to resolve a criminal investigation in exchange for a settlement agreement calling for a series of substantial remedial measures, including a migration of a portion of Ripple’s virtual currency business to a separate entity, the company’s ongoing cooperation in other investigations, an extensive remedial framework to ensure future compliance with federal laws and forfeiture and penalties totaling $700,000.

    NOTE: Our thanks to the ASD Updates Blog.

  • URGENT >> BULLETIN >> MOVING: eAdGear Figures Indicted In California On Conspiracy Charge Of Structuring Transactions To Evade Bank-Reporting Requirements

    breakingnews724TH UPDATE 3:44 P.M. ET U.S.A. Before the SEC announced its civil pyramid- and Ponzi-scheme case on Sept. 26 against eAdGear figures Charles Wang and Francis Yuen, the pair had been indicted on a criminal charge in U.S. District Court for the Northern District of California, the PP Blog has learned.

    Docket records show the indictment was filed under seal Sept. 18. On Sept. 23, prosecutors in the office of U.S. Attorney Melinda Haag requested the seal be lifted. The SEC announced its civil case three days later.

    The specific criminal charge is conspiracy to structure transactions to evade bank-reporting requirements. A grand jury alleged that the eAdGear duo directed two employees to open bank accounts in the employees’ names “for the purpose of using those accounts as nominee accounts in which to conduct structured cash transactions.”

    The FBI is leading the criminal investigation, according to papers filed in the case.

    News of an eAdGear criminal investigation first was reported yesterday by the Wall Street Journal under a headline of “SEC on Lookout for Web-Based Pyramid Schemes.” The PP Blog learned that an indictment had been returned by locating a criminal case number in a Nov. 12 order issued by U.S. District Judge Yvonne Gonzalez Rogers that also referenced the SEC’s civil case. The ASD Updates Blog then located the indictment, which lays out a structuring plot dating back to 2011 involving accounts at multiple banks.

    Separately, the PP Blog learned that police in Taiwan carried out eAdGear-related raids in October. News of the raids first was reported in Taiwanese media, including reports in Chinese.

    Accounts at JPMorgan Chase, Bank of America and Bank of the West allegedly were used in the Wang/Yuen structuring conspiracy, with Wang further accused of using accounts in his name and in the name of a relative to advance the plot.

    Transaction sums were kept below $10,000 “such that they would not cause the relevant financial institutions to generate a currency transaction report,” according to the indictment.

    “It was also a part of the conspiracy that, after these accounts were opened, [Wang], using funds for eAdGear memberships, made numerous structured cash deposits into these accounts and other accounts,” according to the indictment.

    Yuen, according to the indictment, “caused to be transferred tens of thousands of dollars of the structured cash deposits into a separate consumer loan account at [Bank of the West],” according to the indictment.

    Wang and Yuen both posted bond of $100,000, according to court records. Wang, 52, of  Warren, N.J., may need a Mandarin interpreter, according to the docket of the case.

    Yuen, 53, resides in Dublin, Calif., according to the SEC.

    The Wall Street Journal article includes a statement from HYIP huckster T. LeMont Silver.

  • BULLETIN: American, Canadian Indicted In Alleged Ponzi Scheme Involving More Than $129 Million; Jacquline Hoegel, William Wise Charged In San Francisco

    BULLETIN: Jacquline Hoegel, an American living in American Canyon, Calif., has been charged criminally in an alleged Ponzi scheme that gathered $129.5 million, the office of U.S. Attorney Melinda Haag of the Northern District of California said.

    Also indicted was William Wise, a citizen of Canada. Wise, 62, formerly resided in Raleigh, N.C.  A warrant has been issued for his arrest, prosecutors said.

    Hoegel, 55, made an initial appearance before U.S. Magistrate Judge Carolyn Delaney in Sacramento, and was released on bond, prosecutors said.

    The case flowed from an SEC civil prosecution brought in March 2009. Hoegel and Wise now have been charged criminally with conspiracy, mail fraud and wire fraud for their actions involving the sale of CDs issued by Millennium Bank, United Trust of Switzerland and Sterling Bank and Trust.

    Hoegel also has been charged with four counts of making and subscribing a false tax return, one count of obstruction and one count of false statements, and Wise also has been charged with money-laundering, prosecutors said.

    “The CDs issued by Millennium Bank, United Trust of Switzerland and Sterling Bank and Trust all promised CD purchasers guaranteed rates of returns — sometimes over 16 percent — that were allegedly based on overseas investments,” prosecutors said.  “In fact, CD purchasers’ funds were not used for overseas investments that generated the promised returns; the funds were instead used to enrich Wise and Hoegel and to make interest payments to earlier CD purchasers.”

    When the SEC brought the civil case three years ago, customer losses were estimated at $75 million. More than 1,200 investors were affected by the scheme, which was unraveled by the IRS, the FBI and federal prosecutors in the Northern District of California and the Eastern District of North Carolina, Haag’s office said.

    The 23-count indictment was returned under seal Feb. 21. It was unsealed after Hoegel’s arrest yesterday, prosecutors said.

    In 2009, the SEC said the CDs “purportedly offered returns that were up to 321 percent higher than legitimate bank-issued CDs.”

     

  • Ex-Attorney, 72, Indicted In Alleged Ponzi Scheme; Robert G. Tunnell Jr. Charged With 13 Counts Of Wire Fraud, 7 Counts Of Mail Fraud, 1 Count Of Money-Laundering

    A former San Francisco attorney who resigned from the bar a decade ago while under investigation for stealing $300,000 from his law firm now has been indicted on charges of running a five-year Ponzi scheme that gathered about $10 million.

    Robert G. Tunnell Jr., 72, had been a member of the California Bar for 30 years when he resigned under fire in 2001, according to records. Tunnell has an Ivy League pedigree, graduating from Dartmouth and Harvard Law.

    Federal prosecutors now say that, after Tunnell left the practice of law, he held himself out as a “highly successful investor.”

    In reality, the office of U.S. Attorney Melinda Haag of the Northern District of California said, Tunnell operated a Ponzi scheme from “at least” between January 2006 and June 23, 2011.

    Tunnell’s investment clients consisted “mostly” of friends and family members, who plowed about $10 million into the scheme — only to see Tunnell lose about $7 million of it after he had promised a “safe” and “conservative” approach with “substantial returns,” prosecutors said.

    Some investors received Ponzi payouts from the remaining $3 million, and a bank to which Tunnell owed money also was paid in Ponzi proceeds, prosecutors said.

    Tunnell was indicted on 13 counts of wire fraud, seven counts of mail fraud and one count of money laundering.

    The former attorney “consistently and falsely reported gains to his investors, and even created false documents grossly overstating his assets and net worth,” prosecutors said.