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Wisconsin Case Highlights the Limits of Perception

If you do more than set forth to confirm legitimacy, you’ll believe that you’ve done so, even as your money goes up in smoke.

“But I saw their tax returns!” At least one of the victims of the scam described below must have said this when he or she discovered that the investment was a fraud. But creating phony documents is as easy as a few mouse clicks; something any middle high schooler could do. According to the CFTCs release: (more…)

Technology: Every Scamster’s Friend

Your financial future will come down to a single moment in which you either write the fateful check that makes you a pauper or recognize a cleverly disguised scam for what it is.

Forgery is centuries old and will always be with us. In the investment context, phony account statements, order tickets, trade confirmations, analyst reports, invoices, contracts, and financial statements are commonplace. In my time at the SEC, a forger’s tools were scissors, razor blades, tape, glue, typewriters, and photocopy machines. A keen eye looking through a magnifying glass could usually find evidence of the forgery. Not so these days. Technology has made creating passable forgeries easy. A criminal case out of New Jersey shows that the forger’s toolbox looks nothing like what it did even fifteen years ago. According to OrangePatch: (more…)

CFTC Alleges Ponzi in Idaho

There is little to distinguish them from a guy raising money from people for the express purpose of taking it to the Bellaggio.

The U.S. Securities and Exchange Commission isn’t the only federal regulator of investments. The U.S. Commodity Futures Trading Commission (CFTC) has jurisdiction in fraud cases involving commodities. Like the SEC, the CFTC moves quickly to shut down investments that it identifies as Ponzi schemes. The CFTC believes that it has found such case in Idaho. According to the CFTC’s press release: (more…)

More Alleged Free Spending Ponzi Scamsters

Your brain will enjoy thinking about itself.

There’s been an international flavor to the posts this week. The CFTC helps us continue the trend. The CFTC has filed charges against several individuals and related companies, alleging that they ran a Ponzi scheme constructed around supposed foreign currency trading. The CFTC’s press release about the case reads as follows: (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…)

Alexandre Dumas (author of the Count of Monte Cristo) said “Nothing succeeds like success.” He was right, and Glenn Jackson took full advantage of that wisdom. Everything about Jackson’s business, Highland Capital Partners LP, appeared successful. Jackson lived in Tiburon, California just a beach walk away from Sosolito. To get to his offices in San Francisco’s financial district Jackson likely hopped a ferry which passed Angel Island and Alcatraz on its way to Pier 39. That apparent success played a big role in convincing 23 investors to part with $4.3 million, which they believed Jackson would grow through investments in foreign currency contracts. According to marinij.com Jackson allegedly used about two million dollars of that money to maintain that image of success by taking luxury vacations, visiting casinos, and wearing expensive clothing. (more…)

No Honor Among Thieves

There is a food chain in the investment fraud world, and they don’t mind eating their own.

Believe it or not, it isn’t unusual for Ponzi scamsters to fall victim to investment fraud. HoustonPress is reporting that Robert Copeland, serving more than 121 months for taking $45 million from 125 people, lost $10 million to a foreign currency scam. According to the HoustonPress report: (more…)

Another Forex Ponzi Scheme?

We are seeing an uptick in foreign currency scams because the stock market has bounced back from its lows of two years ago.

The Money Wise Guys is a radio show in Kern County, California. Broadcasting from the studios of KERN in Bakersfield, the hosts take calls from investors and answer their questions about investing. I’ve appeared on the show several times, and the hosts always ask me what’s hot in investment fraud. Last week I told them that foreign currency scams are raging. Almost on cue the U.S. Commodities Futures Trading Commission (CFTC) took emergency enforcement action to shut down an alleged ongoing foreign currency scam. According to FuturesMag.com: (more…)

Alpha One Trading System Revealed as a Fraud

There are hundreds, if not thousands, of characters like Watson operating today.

Investors with Robert David Watson of Spring, Texas, believed that they had chosen a winner.  Watson represented that he had developed a foreign currency trading model that he called Alpha One.  He drew investors by telling them that the model had earned good returns since 2000 and had never had a down month. This week, Watson pled guilty to securities fraud and admitted that his entire operation was a fraud.  He stole tens of millions of dollars from scores of investors.  According to  the FBI: (more…)

They Don’t Stop

They are much more dangerous after they’ve been kicked out of the industry.

Prosecutors in Oklahoma are learning first hand that investment fraudsters don’t stop, even after they’ve been caught red handed.  The case involves Mark Trimble, a former hedge fund manager, currently serving a prison sentence for diverting investor funds to himself.  Prosecutors learned recently that, even after he’d been barred from trading in commodities, Trimble convinced at least one investor to let him trade on his behalf.  According to NewsOK: (more…)

CFTC Halts Allegedly Fraudulent Commodities Pool

The U.S. Commodity Futures Trading Commission (CFTC) is on the investment cop squad which halts ongoing scams and brings investment fraudsters to justice.

Most of our posts involve cases commenced by the U.S. Securities and Exchange Commission (SEC), state securities regulators, and federal prosecutors.  But not every investment fraud involves what the law defines as a “security.”  Oftentimes, Ponzi schemes spring from commodities investments.  The U.S. Commodity Futures Trading Commission (CFTC) is on the investment cop squad which halts ongoing scams and brings investment fraudsters to justice.  As an example of the importance of the CFTC’s role comes word that the CFTC has shut down what it believes to be an ongoing Ponzi scheme in Michigan.  According to the CFTC’s press release:

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CFTC Charges Staten Island Man with Commodities Pool Ponzi Scheme

If Congress continues to resist funding the CFTC to a level commensurate with its mission, investors will be at increased risk of losing their nest eggs to Ponzi schemes.

In a case that reminds us why it’s a bad idea to take investment advice from your brother-in-law, the U.S. Commodity Futures Trading Commission has charged Jeffrey Shalhoub of Staten Island, NY, and his company, Jeff Shalhoub Investments (JSI) of Long Island City, NY with robbing $300,00o from his in-laws and his former wife’s friends.  According to the CFTC’s press release: (more…)

CFTC Halts $1 Million Fraud

A license is no guarantee of ethical behavior, and there is much more investigation to do before handing your nest egg to anyone.

The U.S. Commodity Futures Trading Commission (CFTC) has halted what it alleges is a fraudulent commodity pool scam that has raised more than $1 million from 28 investors.  According to the CFTC’s press release: (more…)

CFTC Halts Alleged $50 Million Ponzi

With the first baby boomers turning 65 this year and many looking to recoup investment losses from the stock market swoon of 2008, many will be lured into foreign currency and gold scams that tout a successful track record and promise steady returns.

The SEC is not the only regulator on the hunt for investment fraud.  Every year, the U.S. Commodities Futures Trading Commission files emergency enforcement actions to shut down alleged ongoing scams.  The CFTC filed such a case last week. According to the CFTC, Robert J. Andres and Winsome Investment Trust (Winsome), both of Houston, Texas, Robert L. Holloway of San Diego, California, and US Ventures LC (USV) of Salt Lake City, Utah engaged in a scam that robbed 243 investors of more than $50 million.  According to Hedgeweek.com: (more…)

CFTC Charges California Man with Running Decade-long Scam

Smart investors understand that Ponzi scamsters can make their schemes look like anything.

The Commodity Futures Trading Commission (CFTC) has charged Scott Bottolfson with operating a Ponzi scheme that cost 30 investors more than $11 million.  According to a story in the North Country Times: (more…)

CFTC Shuts Down Alleged Forex Scam

Investing in a cleverly disguised scam guarantees a negative 100 percent return. The search for good returns must, therefore, begin with an investigation to gauge the fraud risk.

Last week, the U.S. Commodity Futures Trading Commission (CFTC) charged Ronald E. Satterfield of Charleston, South Carolina, his  companies, Graham Street Forex Group, LLC and Shore-2-Summit Financial, LLC, and Nicholas Bos of Ludington, Michigan., with raising more than $3.3 million from more than 70 investors through a fraudulent foreign currency (forex) Ponzi scheme.  According to the CFTC’s press release: (more…)

CFTC Finds Alleged Ponzi in Ohio

Investment schemes involving supposed trading in foreign currency are always out there.

Most of the enforcement cases we report on come from the U.S. Securities and Exchange Commission (SEC) or state securities regulators.  But the U.S. Commodities Futures Trading Commission (CFTC) also has an effective enforcement division on the lookout for investment fraud.  This week the CFTC announced an enforcement action against what it believes to be a multi-million Ponzi scheme operating on both sides of the U.S./Canadian border.  The CFTC’s press release reads, in part: (more…)

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