Archive for April, 2009

Recidivist Accused of Shaking the Money Tree Again

Thursday, April 30th, 2009

The Securities and Exchange Commission (SEC) has filed an emergency enforcement action, including an asset freeze and appointment of a receiver, in connection with charges that William L. Gunlicks, of Naples, Florida, and his firm, Founding Partners Capital Management Company, defrauded investors by misrepresenting the nature and risks of $550 million in hedge fund investments. (more…)

The Swine Flu and Ponzi-itis

Wednesday, April 29th, 2009

While the CDC is issuing press releases on the Swine Flu, the SEC and CFTC are dealing with Ponzi-itis.  Kevin McCoy, writer for Gannett, wrote a great article outlining the many current Ponzi schemes, appropriately calling the outbreak ”Ponzi-itis.”  (more…)

Financial Scams and the Death of Pontiac

Tuesday, April 28th, 2009

GM has announced that it is laying off 23,000 workers in connection with its killing of the Pontiac line.  Now, this is bad news for all but two classes of American worker - stockbrokers and scam artists.  It is good news for them because many of those 23,000 people will leave GM with substantial savings in the company retirement plan.  They will have to do something with it; reckless brokers and scam artists will have no end of ‘opportunities’ for that money.  (more…)

SEC Tags Broker Who Allegedly Stole From Clients

Monday, April 27th, 2009

The U.S. Securities and Exchange Commission (SEC) has charged Sherman Oaks, California broker Davis A. Williams and a brokerage firm he controlled - Morgan Peabody, Inc. - with selling bogus investments then stealing the money to fund his lavish lifestyle.  Specifically:  (more…)

Financial Fraud Task Force

Friday, April 24th, 2009

Hot on the heels of our post of April 21, 2009, Attorney General Eric Holder, testifying in Congress, said that the Justice Department is considering the formation of a “financial fraud task force.”  As we have covered often, the recidivism rate is high amongst scam artists.  Only aggressive criminal prosecution has any hope of slowing what is now a run away train of investment fraud.  (more…)

At it Again

Thursday, April 23rd, 2009

The U.S. Securities and Exchange Commission (SEC) filed an emergency action against Benny L. Judah and his company, Excel Lease Fund, Inc.  According to the complaint, Judah allegedly raised approximately $40 million from hundreds of investors through a high yield debenture offering which is defined as a certificate of agreement of loans given under the company’s stamp.  Judah began the offer in January 2006 and told investors that their funds would be used to retire an earlier series of debentures and for certain other business purposes. (more…)

SEC Halts Alleged Philadelphia Ponzi Scheme

Wednesday, April 22nd, 2009

The U.S. Securities and Exchange Commission (SEC) has halted an alleged Ponzi scheme operated by a Philadelphia-area investment adviser.  Specifically, the SEC charged Donald Anthony Walker Young, of Coatesville, Pennsylvania, and his company, Acorn Capital Management, LLC (Acorn Capital), with raising more than $23 million by falsely claiming that he would generate returns through trading in public securities.  (more…)

Criminal Authorites Stepping Up Financial Fraud Prosecutions

Tuesday, April 21st, 2009

The number one question I get as a court-appointed Receiver in SEC fraud cases is, When are these guys going to jail?  Because I have no role in determining whether there will be a criminal prosecution, my answer always has to be I don’t know.  But, if a recent case from the U.S. Securities and Exchange Commission is any indication, the Justice Department is stepping up prosecution of financial fraud. In connection with the announcement of final judgments in an SEC Enforcement action, the SEC issued a litigation release detailing the criminal penalties imposed in the TriEnergy Ponzi scheme case, which preyed upon people of faith to the tune of $50 million.  (more…)

How Low Can They Go?

Monday, April 20th, 2009

The SEC has charged Isaac I. Ovid, Aaron Riddle, J. Jonathan Coleman, Stephen Cina, Cory A. Martin, Timothy Smith, and Robert J. Riddle with defrauding elder parishioners of a church in Queens, New York.  The defendants were allegedly lay leaders of the church.  According to the SEC, they sold parishioners investments in two funds - the Logos Fund and the Donum Fund - by promising prospective investors returns as high as 75%.  “Instead of investing the money as promised, the defendants misappropriated millions of dollars to furnish their own lavish lifestyles with purchases of luxury cars (including a Bentley), jewelry, clothing, meals, and expensive foreign travel.” (more…)

What Susan Boyle Can Teach Us About Investor Protection

Friday, April 17th, 2009

People around the world have watched the clip from Britain’s Got Talent, the UK’s counterpart to American Idol.  Give it a look if you haven’t already.  The lesson will be apparent. (more…)