Former MetLife Representative Sentenced

Those impressions are not earned; they are bought with advertising dollars.

What’s in a name? If I asked you to tell me which company is more likely to lead its customers into a Ponzi scheme, MetLife, Inc. or Investments by Steve, LLC, few of you would chose MetLife. That’s the power of a name. Corporations spend millions drilling them into our brains and associating the name with notions of fidelity and trust. But, consider this story about a former MetLife representative. According to (more…)

Beware the Escrow Account

The scamster bag of tricks is bottomless.

The number of investment frauds involving supposed escrow accounts appears to be on the rise. I’ve seen several over the past two years, including one involving a $38 million international hedge fund fraud. Investors were told that their money would sit safely in an escrow account and would not be moved from that account without their consent. Of course, once investor money hit the account the scamsters quickly transferred it out, with the investors none the wiser, until it was too late. Prosecutors in Virginia believe that they have found a scam using a similar ruse. According to (more…)

Beware the Self-Styled Guru

If they know the secrets to making vast wealth through this kind of investing, why don’t they just get on with it?

You’ve seen ads on television that promise to teach you the time-tested secrets of making money in the fill-in-the-blank market. Real estate? Commodities? Foreign currencies? Stocks? There’s a self-appointed guru for every kind of investing. Last week, the SEC filed an enforcement action against one such guru, Freddie Rick, the founder of Long Term-Short Term Inc., d/b/a BetterTrades. According to the SEC’s press release: (more…)

A Very Exclusive Club You Don’t Want to Join

Vigilant investors know that a recommendation on a financial adviser will always be fundamentally different from a recommendation on a plumber, house painter, doctor, or lawyer.

There used to be an exclusive club in the Detroit suburb of Clinton Township. Alan James Watson invited a select group to join. The chief benefit of membership was the right to deposit your assets in the club’s investment account, which Watson managed. From 2004 to 2010 , month after month, the 750 members of the club received account statements showing steady growth. It seemed that Watson had the Midas touch. In actuality, the monthly account statements were as phony as Enron’s balance sheet. According to a press release from the Department of Justice. (more…)

Conspiracy Theorist’s Ponzi Scheme Ends in Convictions

Does the fact that the victims of a certain scam seem unbelievably gullible mean that unbelievable gullibility is a prerequisite for falling for a scam?

Having worked for the federal government, I can tell you that it is absolutely incapable of grand conspiracies. Yet, there are those who believe otherwise, and those who speak with authority in such groups wield incredible power over adherents. According to prosecutors in Virginia, Ronald Wade Smith, Jr. was just such a character, convincing those who held similar beliefs that he was worth $28 billion and that he ran a West Indies securities firm worth $4 trillion. Smith believed that U.S. law did not apply to him because he had not personally signed the U.S. Constitution. Before he pled guilty to 239 counts of federal crimes a mental health review found him competent to stand trial. His guilty plea left two co-defendants to stand trial. According to (more…)

The U.S. Securities and Exchange Commission (SEC) has commenced an enforcement action against a holding company for three registered broker-dealers and an investment adviser. Specifically, the SEC has charged AIC, Inc. and its President and CEO, Nicholas D. Skaltsounis with devising and orchestrating an offering fraud and Ponzi scheme by offering and selling more than $7.7 million in AIC promissory notes and stock. “Also named in the Complaint are AIC’s subsidiary, Community Bankers Securities, LLC (“CB Securities”), a broker-dealer, along with associated stockbrokers John B. Guyette, of Greeley, Colorado, and John R. Graves, of Pensacola, Florida, who was also an investment adviser.” According to the SEC’s press release: (more…)

Three Men Charged with $100 Million Fraud Involving Life Insurance Investments

Vigilant investors insist on a professional due diligence investigation of any unregistered investment. But this is especially important with life settlement investments.

Federal prosecutors have indicted three men in an alleged scheme that has become common.  The scheme involves life insurance settlements in which the owners of life insurance policies receive a cash payout and transfer ownership of the policy to investors who continue making premium payments and receive the death benefit when the insured dies.  While there are, no doubt, people who seek to capitalize on this model legitimately, the field is infested with innumerable con men and bunglers who have, and will, cost investors hundreds of millions in losses.  According to Bloomberg: (more…)

Justice Department Charges Alleged Serial Fraudster with $100 Million Fraud

An article by Nathan Vardi of Forbes details how this is not Abdulwahab’s first brush with the law. The article is well worth reading as a profile of the thousands of characters nationwide whose only occupation is stealing the nest eggs of elderly retirees.

The U.S. Attorney’s Office in the Eastern District of Virginia has charged Adley Abdulwahab (Abdulwahab), Christian Allmendinger (Allmendinger), and David White (White) with defrauding more than 800 investors out of more than $100 million.  According to the Justice Department press release:   (more…)

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