Archive for January, 2008

They Can Run, But They Can’t Hide

Thursday, January 31st, 2008

They can run, but they can’t hide.  Unfortunately, they can spend all your money while they are on the run. 

According to federal authorities, Charles Nolon Bush, 68, of western Washington, ran a Ponzi scheme for four years, between 1998 and 2002, promising investors high yields and giving them the illusion of profits by using money invested by later marks to make payments to earlier marks.   Bush operated under several company names, including Hulaman Management Services, Global Dominion Financial Services, and Cornerstone Institute. (more…)

Hedge Fund Case Highlights Danger to Baby Boomers

Wednesday, January 30th, 2008

No recent case better highlights the danger facing baby boomers than this one. 

According to the U.S. Securities and Exchange Commission, Coadum Advisors, Inc. of Holladay, Utah sold four separate investment funds, raising a total of $30 million from at least 150 investors.   Thomas Repke of Salt Lake City and James Jeffery of Belleville, Ontario were the people behind the companies.

According to the SEC, Repke, Jeffery, Coadum and related companies fraudulently promised investors “no risk” returns of between 2.5% and 8% per month, and created account statements showing that investors were earning those returns when in fact none of the investments made any money.  The SEC also alleged that the defendants “borrowed” $3 million in investor deposits to pay the monthly returns that they had led investors to expect, in classic Ponzi fashion. (more…)

Montana Operates Texas Ponzi

Tuesday, January 29th, 2008

According to federal prosecutors in the Southern District of Texas, Mark Montana ran a Ponzi scheme for five years, from 1999 to 2004, ultimately netting more than $10 million.  Operating through a company called M&M Financial, Montana used money from later marks to pay off earlier marks in classic Ponzi fashion.  (more…)

Lesson from Societe Generale

Sunday, January 27th, 2008

One guy.  $7.14 billion in losses for one of the biggest banks in Europe.

CNN reports that the scandal at Societe Generale has led France’s largest bank to seek $8.02 billion in ‘additional capital.’  Jerome Kerviel, 31, who allegedly started it all, had been working at Societe since 2000 and had a good understanding of the company’s processing and control procedures. (more…)

The Ponzi Epidemic

Saturday, January 26th, 2008

WSBT in Detroit reports:

A suburban Detroit man was in court to answer charges of running a so-called Ponzi scheme.

Fifty-two-year-old Raymond Joseph of Bloomfield Hills was arraigned Thursday on two counts of wire fraud, two counts of transportation of stolen money or property, and nine counts of monetary transactions in criminally derived property. (more…)

Beware the ‘Black Money’ Scam

Friday, January 25th, 2008

There is a new scam brewing across the pond.  If it hasn’t landed on U.S. shores yet, it soon will.  The scam goes by the name of the “Black Money Scam.”  Investors buy worthless pieces of dyed paper shaped like currency and having approximately the same weight and texture. 

This is London reports: (more…)

Pastor Sentenced for Scams Advertised on Craigslist

Friday, January 25th, 2008

Corey Pritchett of Sandy, Oregon called himself a pastor.  According to Oregon prosecutors he used Craigslist to bilked at least nine low low-income people out of $43,000.

KGW News, Portland, reports: 

At least nine victims have been identified.  In one scheme, Pritchett told investors he would use their money to flip houses but used the money for his own business and personal use instead. (more…)

Why Aren’t These People in Prison?

Thursday, January 24th, 2008

Following a series of posts about scam artists who pick up where they left off after serving a prison sentence for fraud, comes a case that reminds us that many scam artists go from scam to scam without ever facing a criminal prosecution. 

They’re at it again.  The SEC alleges that Gerald H. and Marie A. Levine (the Levines) have misappropriated $1.4 million raised through fraudulent sales of shares in bogus penny stock companies: Avitech LifeSciences, Inc., Biomaxx Systems, Inc., Evolution Global Capital Partners, Inc., Green Machine Development Corp., and Xiiva Holdings, Inc.     (more…)

SEC Halts Alleged Ponzi Scheme Targeting the Elderly

Wednesday, January 23rd, 2008

When the SEC began investigating Bryan Behrens of Omaha they found a bus painted in Nebraska Cornhusker red and a Cadillac Escalade parked in his driveway.  They think that he may have used money swindled from elderly investors to buy those rides.

KETV in Omaha reports that the SEC believes Behrens raised $6.5 million in a securities fraud he ran through a company called National Investments, Inc., and spent $3.5 million on his lavish lifestyle.  The SEC claims that Behrens sold his elderly victims promissory notes, promising them monthly interest payments, but instead paid them from amounts invested by later marks in classic Ponzi fashion. 

Listen to the Victims

Tuesday, January 22nd, 2008

In August, Michael Schneider pleaded no contest to 173 felony counts of burglary, embezzlement, elder financial abuse, grand theft and forgery.   Operating through a company called the California Plan, Schneider told his elderly investors that he used their investments to fund mortgages on real estate throughout the San Francisco Bay area.  What he didn’t tell them was that he was running a $43 million Ponzi scheme and that any ‘return’ they received came from money invested by later marks.

Brandon Bailey of The San Jose Mercury News covered Schneider’s sentencing hearing.  Bailey reports:   (more…)

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