Archive for February, 2008

Give It Up for Sheriff SEC

Friday, February 29th, 2008

Michael West of Australian paper The Age wrote recently on Australia’s spate of corporate scandals and whipsawed securities markets.  West writes:

There is much wailing and gnashing of teeth. Stocks are getting shorted. People are losing money. And the blame game for this billowing spate of corporate trashings is now in full swing. (more…)

Perpetual Motion

Thursday, February 28th, 2008

Perpetual motion machines violate the first law of thermodynamics, the second law of thermodynamics, or both.  But scam artists have and will continue to raise money from investors by telling them that they have invented and engine that produced more energy than it consumes.  The SEC has charged GMC Holding Corporation and its chief executive officer, Richard Brace, with doing just that. (more…)

Another Mortgage Company Official Exposed as a Ponzi Operator

Wednesday, February 27th, 2008

Former Atlanta mortgage company president, Anthony G. Christou, will soon be on his way to federal prison.  A jury convicted him last week of running a $29 million Ponzi scheme through his company, Atlas Mortgage Company.  Christou, 57, raised the money by telling investors that he would use it to underwrite bridge loans to wealthy borrowers.  The jury heard evidence that Christou ran the scheme for two years beginning in January 2004, using about $7 million of the amount raised to feed his gambling habit at casinos from Mississippi to Las Vegas to Atlantic City.  (more…)

SEC Flushes Self-Cleaning Toilet Company

Tuesday, February 26th, 2008

The SEC has charged Clean Care Technologies, Inc. (”CCT”), its former president and principal owner, Edward Klein, and two salespeople, Al Nazon and Anil Varughese, with raising $2.2 million from at least 26 investors by representing that the company owned the rights to a self-cleaning toilet seat.  According to the SEC, the defendants created press releases that reported phony sales numbers, and used those press releases in its sales presentations.  The complaint also alleges that the company paid salesmen exorbitant undisclosed commissions on each sale.  (more…)

Ganger and White Guilty

Monday, February 25th, 2008

We posted last week on the trial of Alan White and Shinder Gangar, two English accountants accused of running a $200 million Ponzi scheme.  On Friday the jury hearing their case found both men guilty. David Robinson of the London Times reports:  (more…)

Supreme Court Gets One Right

Monday, February 25th, 2008

We posted last month on the Supreme Court’s denial of claims against those who secretly help defraud public investors, pointing out that the Court’s reluctance to protect investors may have had something to do with the fact that the claims were presented in a class action complaint, the kind that Congress has steadily tried to rein in.  Wednesday’s decision by the Supreme Court in the case of Larue v. Dewolff, Boberg & Associates, Inc. suggests that investor claims pursued individually, rather than as part of a class, may fair better with this Court.  (more…)

Bedeviling Christians from Playboy to Ponzi

Friday, February 22nd, 2008

The FBI has raided the office of a California company called Christians in Crisis Investment Fund.  Stephen K. Wilson and his wife, Christina Silvas are under investigation for money laundering and running  a Ponzi scheme through that business.    

Silvas had her first fifteen minutes of fame in 2002  when a Christian school that her daughter attended told Silvas to quit her job as a stripper or her child would be expelled from the school.  The flap landed in the national media and got Silvas a photo shoot with Playboy magazine. (more…)

Your Friendly Neighborhood Insurance Agent

Thursday, February 21st, 2008

There’s always a big house and nice car.  Ponzi scheme operators can’t help buying them.  Even so, Michael Duane Smith (Smith) may hold the record for extravagance among Ponzi operators.  He bought not just a house, but a $6.5 million castle in Colorado.  He bought not just a nice car, but a stable of eight high-performance NASCAR racing cars.  Smith now faces 15 years in prison in connection with a Ponzi scheme that collected more than $50 million from 1,000 investors, many of them elderly retirees, nationwide.  (more…)

Rob Yurnesteg, Ph.D.,M.D., J.D., CPA, CFP

Wednesday, February 20th, 2008

The Securities and Exchange Commission (SEC) has charged Ameer Khan, Raquel Kohler and Stephen Ziegler, with anti-fraud violations in connection with the Mutual Benefits Corp. offering fraud and Ponzi scheme that the SEC shut down in May 2004.  Mutual Benefits, headquartered in Ft. Lauderdale, Florida, raised more than $1 billion from more than 30,000 investors worldwide by selling fractionalized interests in life settlements (sometimes called viatical settlements).  (more…)

Elderly Parents At Risk

Tuesday, February 19th, 2008

She trusted him.  He’d been her broker for more than 20 years.  When her husband died in 1999 and she wanted to set up a charitable foundation to benefit the arts, she made the broker an officer and trustee of the foundation.  In 2000, when she entered a nursing home in failing health, she gave the broker her power of attorney, authorizing him to engage in banking transactions on her behalf.  (more…)