The Daily Caveat is written by Michael Thomas, a recovering corporate investigator in the Washington, DC-area. [More]
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4/27/2009
Hennessee Group Fined on Bayou Hedge Fund Due Diligence Failures
4/14/2009
Federal Government Background Screeners Admit Fraud
In Case You Were Looking for a Way to Feel Worse About Bernie Madoff
R. Allen Standford Chief Investment Officer Tagged for Obstruction
Financial Crime Suddenly an FBI Priority 1/22/2009
Raul Weil Still a Fugitive
Your Kroll Global Fraud Report For January 2009...
Rash of Disappearing Money Managers Continues with Arthur Nadel
Bernie Madoff and Fraud as Boom-Time Crime
Mark Dreier Does Not Pass Go
Quarterly Kroll Fraud Report Forthcoming
Massachusetts Hits Merrill Lynch With Fraud-Related Charges
BAWAG Trial Sees Nine Sentenced on Charges Stemming from Billions in REFCO-Related Losses
Sam Israel, Undead Fugitive
Michigan-Based Web Fraudster Faces Commuppence
P.O. Box Hedge Fund Crumbles
SEC Puts the Kibosh on San Diego Hedge Fund Manager
5/02/2008
Herbalife CEO Forced to Admit Resume Padding
FBI Directory Says Sub-Prime Investigation Leads to Hedge Fund Doors
Disgraced Bayou Hedge Fund Boss Gets 20 Years
SEC Sues Headstart Advisors
3/24/2008
Churchgoers Make the Best Victims
FBI Mortgage Fraud Probe Expandeth
Enzyte Maker Lives On, Despite Fraud Prosecution
3/04/2008
Hedge Fund Fraudsters Prey on the Faithful
Wharton Biz School Reflects on Corporate Fraud 2/21/2008
Lancer Hedge Fund Crew Charged With Fraud
UBS Issues No Comment on Mortgage Investigation
National Century Fraud Trial Set for Monday
Now Available - Hedge Fund Fraud Insurance
Bayou Financial Co-Founder Gets Four Years on Fraud Charges
The Ethical Corporation Takes Aim at Samsung
Conrad Black Gets 6 and a Half Years 12/09/2007
New Federal Charges in Coupon Company Case
Man Group Hedge Fund Pays $75 Million Settlement to End Fraud Probe
Portos Chief Takes Surprise Plea
Sentencing Delayed on Bayou Hedge Fund Co-Founder
Man Prosecuted for Baywatch Fraud
Haligiannis Facing Extradition to the U.S., Additional Charges in Greece
Hedge Fund Fugitive, Haligiannis, Back Behind Bars
Bayou Hedge Fund Sentencing Update, Also Investor Suit Dismissed
Hammer Drops on National Century
Economan Breaks Down, Hedge Fund Ponzi Scheme Probed
7/05/2007
Bayou Hedge Fund Advisor Pleads Guilty to Tax Evasion
KL Hedge Fund Operator Plead Guilty
MDL Capital Management Founder Has Trial Date Set
Telemarketing Fraudster Indicted
Ponzi Fraudster Linked to Ferris Baker Watts, Advest Brokers
The Case for David Stockman
CA Fingers Founder on Corruption
Menu Foods CFO in a Selling Frenzy Right Before Recall Ammouncement
Currency Trader Faces Maximum Sentence on Fraud Charges
International Outsourcing Services Faces Fraud Charges
Hedge Fund Dinner Scammers Face Charges
2/22/2007
Shady Hedge Fiend Kirk Wright to Pay $20 Million
Refco Indictment Update, Tone Grant
Former Homegold CEO Gets 20 Years
Siemens Division Pleads Guilty in Fraud
CFTC Files Complaint Against Cornerstone Capital Management
Wood River Capital Hedge Fiend to Face Criminal Charges
Actor's Mom (and Hedge Fund Manager) Busted in Fraudulent Trading Scheme
Cendant Execs Skirt Jailtime
Commodities Manager Faces Charges on Phoney Reports
HMC International Fraudsters Agree to Pay Restitution
Recapping Bayou: Analysis of a Hedge Fund Fraud
Peregrine Executives Sentenced in Fraud Probe
BLX Exec Charged with Defrauding Government of $76 Million
12/19/2006
Fannie Mae Execs Facing Suit from Government Oversight Office
In Corporate Scandal, The Road Less Travelled
Skilling Does Not Pass GO, Goes Directly To Jail
Former Cendant Exec Gets House Arrest on Fraud Charges
Would You Invest Your Money in Something Called the Viper Fund?
Hennessee Group Fined on Bayou Hedge Fund Due Diligence Failures
Hennessee Group, a New York-based investment adviser is facing a $800,000 fine from the SEC due to the firm's failure to perform promised due diligence of the Bayou Group hedge fund, once run by eventual death-faking, scooter-riding fugitive from justice, Sam Israel.
Bayou, of course, was one of the biggest hedge fund flame-outs of all time, with many of the fund's major players doing jail time. The SEC complaint details about 40 Hennessee clients who altogether has about $56 million invested inthe Bayou fund.
Hennssee head, Charles Gradante has neither confirmed or denied wrongdoing in the matter. While he hasn't commented on the specifics of his own case, Gradante has submitted a letter to the SEC with a variety of recommendations for how other migh avoid Hennessee's fate.
Amongst Gradante's recommendations - increased reguation of hedge fund borrowing and requiring that third parties, such has Kroll, be hired to conductforencic audits of hedge fund financial statements. More here, via Bloomberg.
-- MDT
Bayou, of course, was one of the biggest hedge fund flame-outs of all time, with many of the fund's major players doing jail time. The SEC complaint details about 40 Hennessee clients who altogether has about $56 million invested inthe Bayou fund.
Hennssee head, Charles Gradante has neither confirmed or denied wrongdoing in the matter. While he hasn't commented on the specifics of his own case, Gradante has submitted a letter to the SEC with a variety of recommendations for how other migh avoid Hennessee's fate.
Amongst Gradante's recommendations - increased reguation of hedge fund borrowing and requiring that third parties, such has Kroll, be hired to conductforencic audits of hedge fund financial statements. More here, via Bloomberg.
-- MDT
Labels: Bayou Group, Fraud, hedge fund, Hennessee, Kroll, Sam Israel
0 Comments.
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Federal Government Background Screeners Admit Fraud
Government reps are making it sound like no big deal - according to a recent report in the Washington Post, since 2007 six investigators working on behalf of the Office of Personnel Management, the agency that heads up background screening for federal jobs, have been charged with making false statements.
Three of the investigators were OPM employees. The three others were employed by government contractors: USIS and Kroll. One of these folks was convicted as recently as last week in Federal court in the District of Columbia. Dozens, if not hundreds of background checks have been admittedly falsified in these cases alone. Tip of the iceberg?
More at the Washington Post.
-- MDT
3/02/2009
Three of the investigators were OPM employees. The three others were employed by government contractors: USIS and Kroll. One of these folks was convicted as recently as last week in Federal court in the District of Columbia. Dozens, if not hundreds of background checks have been admittedly falsified in these cases alone. Tip of the iceberg?
More at the Washington Post.
-- MDT
Labels: background checks, Fraud, Kroll, USIS
In Case You Were Looking for a Way to Feel Worse About Bernie Madoff
Elie Weisel unloads on him in the New York Times.
-- MDT
2/27/2009
“ ‘Psychopath’ — it’s too nice a word for him... Sociopath,’ ‘psychopath,’ it means there is a sickness, a pathology. This man knew what he was doing. I would simply call him thief, scoundrel, criminal."Weisel, who probably needs no introduction, lost his life savings to the Madoff fraud. His charity lost millions as well.
-- MDT
Labels: Bernie Madoff, Fraud
R. Allen Standford Chief Investment Officer Tagged for Obstruction
Laura Pendergest-Holt catches the first criminal charge in the Standford fraud probe. Her arrest comes based on charges of fibbing to the SEC in a February 10th interview. She was also named in the SEC civil suit against various Stanford holdings that was filed earlier this month.
Details at The Chron - where else.
-- MDT
2/11/2009
Details at The Chron - where else.
-- MDT
Labels: Fraud, Laura Pendergest Holt, R. Allen Stanford
Financial Crime Suddenly an FBI Priority 1/22/2009
Raul Weil Still a Fugitive
In case you were wondering...
Meanwhile, legal woes for UBS keep getting deeper.
-- MDT
Meanwhile, legal woes for UBS keep getting deeper.
-- MDT
Labels: Fraud, Igor Olenicoff, Raoul Weil, tax evasion, UBS
Your Kroll Global Fraud Report For January 2009...
Rash of Disappearing Money Managers Continues with Arthur Nadel
Recently charged with fraud, Florida hedge fund manager Arthur Nadel has conveniently gone missing. Nadel, late of Scoop Capital, was facing down a $50 million payout due to investors when he opted to bail. Last week he left his wife and the world a note referencing his guilty conscience and a potential suicide. Of course, the suicidal don't often transfer $1.25 million to a secret swiss bank account. Here's the latest on Nadel via the Associated Press.
-- MDT
1/09/2009
-- MDT
Labels: Arthur Nadel, Fraud, Swoop Capital
Bernie Madoff and Fraud as Boom-Time Crime
Here's a great piece from James Surowiecki in the New Yorker (sent in by a regular reader /tipster), which gives a bit of perspective on Bernie Madoff's bad acts and how they fit into the history of those who have taken advantage of investor exuberance.
12/09/2008
And when I say history, I mean like the year 1700. Good stuff.
Labels: Bernie Madoff, Fraud
Mark Dreier Does Not Pass Go
Perpetrating a $100 million dollar fraud, means directly to jail.
--MDT
9/15/2008
--MDT
Labels: Fraud, hedge fund, Mark Dreier, no one loves a lawyer
Quarterly Kroll Fraud Report Forthcoming
Showing that the average company's losses to fraud are up 22% compared to the previous year. Watch this space for the download.
-- MDT
8/07/2008
-- MDT
Labels: Fraud, Global Fraud Report, Kroll
Massachusetts Hits Merrill Lynch With Fraud-Related Charges
Auction rate securities fraud charges, to be exact. According to the Massachusetts AG, Merrill continued talking up ARS to analysts and - worse - advising its customers to buy into ARS, even as Merrill itself was ditching.
Real classy.
-- MDT
7/13/2008
Real classy.
-- MDT
Labels: auction rate securities, Fraud, Merrill Lynch
BAWAG Trial Sees Nine Sentenced on Charges Stemming from Billions in REFCO-Related Losses
Those sentenced notably include former BAWAG CEO, the former hedge fund manager who made the epically ill-advised trades (those Yen derivatives can be a bitch), a former finance chief for an Austrian union and a KPMG auditor.
--MDT
6/17/2008
--MDT
Labels: BAWAG, Fraud, hedge fund, Refco
Sam Israel, Undead Fugitive
The Feds seem all but certain that the Bayou hedge fund founder's suicide was mere window dressing to a disappearing act.
I must confess... I love it when they run. As to why he'd run? If you need a reminder, try Bloomberg. Something to do with starting a 20 year prison sentence, I'd think.
-- MDT
5/13/2008
I must confess... I love it when they run. As to why he'd run? If you need a reminder, try Bloomberg. Something to do with starting a 20 year prison sentence, I'd think.
-- MDT
Labels: Bayou Group, Fraud, fugitive, hedge fund, Sam Israel, suicide
Michigan-Based Web Fraudster Faces Commuppence
No really, I am begging you - stop giving these people your money...
Gregory McNight is not really going to produce those 10-15% monthly returns - and yes, his company Legisi Holdings is really just a scam.
Don't believe me? Ask the SEC. They'll tell ya the same.
I just wish we'd been here sooner so we could have helped these poor chumps. I'd really like to hear from SCAM.com forum Junior Member 5Blade to see how he's doing.
If you're out there 5Blade, give us a holler...
--MDT
5/07/2008
Gregory McNight is not really going to produce those 10-15% monthly returns - and yes, his company Legisi Holdings is really just a scam.
Don't believe me? Ask the SEC. They'll tell ya the same.
I just wish we'd been here sooner so we could have helped these poor chumps. I'd really like to hear from SCAM.com forum Junior Member 5Blade to see how he's doing.
If you're out there 5Blade, give us a holler...
--MDT
Labels: Fraud, Gregory McKnight, Legisi Holdings
P.O. Box Hedge Fund Crumbles
Please stop giving these people your money.
Seriously...
-- MDT
5/06/2008
Seriously...
-- MDT
Labels: CTFC, Fraud, hedge fund, Robert Sucarato
SEC Puts the Kibosh on San Diego Hedge Fund Manager
Plus Money is not exactly a name that would inspire me to invest millions. Sounds like a shady payday loan company and shady it definitely is. The SEC has jumped on Plus Money proprietor, Matthew La Madrid freezing his assets while they sort through his $30 million dollar hedge fund investment fraud.
Labels: Fraud, hedge fund, Matthew La Madrid, Plus Money
2 Comments.
Maybe you should try and get all your facts straight,,,before you start accusing people, you PITOHEAD..
Is that you Matthew? And how did you know my wife's pet name for me?
I always assumed it meant something nice, although my Spanish isn't quite as good as hers (or yours, it seems).
Frankly, if you have "facts" you are welcome to post them here. Or better yet, send them along to the SEC. They're the folks investigating.
And Plus Money is still a bad name for a hedge fund.
-- MDT
Post a Comment
I always assumed it meant something nice, although my Spanish isn't quite as good as hers (or yours, it seems).
Frankly, if you have "facts" you are welcome to post them here. Or better yet, send them along to the SEC. They're the folks investigating.
And Plus Money is still a bad name for a hedge fund.
-- MDT
Links to this post:
Herbalife CEO Forced to Admit Resume Padding
And the ever colorful fraud investigator, Barry Minkow is there to take credit.
Minkow is a bit of a controversial fellow in his own right, with his own crooked past. He's now the grand poobah behind the Fraud Discovery Institute.
You might remember Minkow from his dust-up with USANA a while back.
-- MDT
4/20/2008
Minkow is a bit of a controversial fellow in his own right, with his own crooked past. He's now the grand poobah behind the Fraud Discovery Institute.
You might remember Minkow from his dust-up with USANA a while back.
-- MDT
Labels: accounting fraud, Barry Minkow, Fraud, Herbalife
FBI Directory Says Sub-Prime Investigation Leads to Hedge Fund Doors
FBI director Muller's comments, made the annual American Bar Association Litigation Section conference in Washington, D.C. are sure to ruffle features in some quarters. Like say, BloggingStocks, for one.
-- MDT
4/15/2008
-- MDT
Labels: FBI, Fraud, hedge fund, sub-prime mortgage
Disgraced Bayou Hedge Fund Boss Gets 20 Years
Sam Israel presided over the spectacular $40 million flame-out of the now defunct hedge fund, Bayou Group. Bayou was the hedge fund fraud and failure that really put the subject on the front page - not just the business pages. This week Israel got his comeuppance - a sentence of 20 years and an order to forfeit $300 million to compensate his former investors for their losses.
Now if Israel had that kind of money at hand, doubtless Bayou would still be in business, so who knows whether those bilked by Bayou have any realistic chance of reclaiming their money. Still, the knowledge that Israel (and his previously convicted Bayou co-horts) will be spending a significant number of years behind bars might provide some small solace.
Or not...
-- MDT
4/13/2008
Now if Israel had that kind of money at hand, doubtless Bayou would still be in business, so who knows whether those bilked by Bayou have any realistic chance of reclaiming their money. Still, the knowledge that Israel (and his previously convicted Bayou co-horts) will be spending a significant number of years behind bars might provide some small solace.
Or not...
-- MDT
Labels: Bayou Group, Fraud, hedge fund, James Marquez, Sam Israel
SEC Sues Headstart Advisors
Between 1998 and 2003, through late trading and deceptive market timing, UK-based Headstart Advisors netted illict profits totalling $198 million according to a recently filed SEC suit. Also named in the suit was Najy Nasser, chief investment adviser for Headstart during the time of the bad acts.
-- MDT
-- MDT
Labels: Fraud, Headstart Advisors, hedge fund, Najy nasser, SEC
1 Comments.
To bring you all up to date, her eis a release put out by Headstart last week.....
Press Release: for immediate distribution
Headstart settles 2003 dispute with the SEC
London – 29 June 2009: Headstart Fund Ltd, Headstart Advisers Ltd, an FSA-regulated hedge fund adviser and Mr Najy Nasser, its Chief Investment Officer, today announces they have settled their dispute with the United States Securities and Exchange Commission relating to Headstart’s historic involvement in market-timing from which it disengaged in September 2003 prior to re-focusing on its other trading strategies. This will allow Headstart to concentrate on its core business as an investment adviser to offshore hedge funds and expand the business with the launch of new funds.
Without admitting or denying the allegations, the civil settlement includes payments of $17 million by the defunct Headstart Fund Ltd (domiciled in the Bahamas), $200,000 by Headstart Advisers Ltd and $600,000 by Mr Najy Nasser, the Chief Investment Officer. This settlement will conclude the case brought by the SEC against Headstart Fund Ltd, Headstart Advisers Ltd and Mr Najy Nasser arising from Headstart’s historic market-timing strategy.
Headstart has since September 2003 focused its business on other successful strategies. The Headstart Fund of Funds has returned 65% (or 5.4% average annual net return) since its inception in 1999, whereas most European and US equity markets are down over the same period.
Najy Nasser, Chief Investment Officer of Headstart Advisers Ltd said:
“Headstart is very pleased to have reached a settlement. We responded to US concerns about market timing and immediately ceased this element of Headstart’s business in September 2003. We have since worked hard to build up Headstart’s funds using different strategies. As we equalled or bettered our overall returns against our benchmark, we are especially pleased with what we have achieved.
“We have superb long-term performance against both the market and our peer group and have some interesting plans to grow Headstart’s investment business.”
ENDS
For further information:
M:Communications
Adrian Flook +44 (0)20 7153 1588 / (0)7768 608396 / flook@mcomgroup.com
Caroline Villiers +44 (0)20 7153 1521 / (0)7808 585184 / villiers@mcomgroup.com
Notes to editors:
About Headstart
Headstart Advisers Ltd is a financial services company incorporated in 1990, authorised and regulated by the FSA as an investment adviser to the Headstart family of hedge funds. It advises three hedge funds and a fund of hedge funds with the common mandate of superior returns with lower volatility (risk).
Its two multi-strategy hedge funds, Headstart Global Fund and Headstart Global Aggressive Fund, have respectively made an average annualised return of 7.8% and 12% over the last 10 years.
/continued…
Headstart Fund of Funds, the firm’s flagship fund of hedge funds, also has a good long-term track record and has made an average annualised return of 5.4% over the last 9 years. The firm launched the Limestone Fund Wider Russia SP strategy in 2007 after advising on the emerging market strategy within a multi-strategy mandate for over 18 months. The Limestone Fund has returned 103% year-to-date. The firm has plans to launch other investment strategies as opportunities arise.
The directors of Headstart Advisers Ltd are Najy Nasser and Henry Watkinson. The firm has its office in Chelsea Harbour, London.
For further information on market timing please see the FSA website: http://www.fsa.gov.uk/Pages/Library/Communication/PR/2004/024.shtml
Post a Comment
Press Release: for immediate distribution
Headstart settles 2003 dispute with the SEC
London – 29 June 2009: Headstart Fund Ltd, Headstart Advisers Ltd, an FSA-regulated hedge fund adviser and Mr Najy Nasser, its Chief Investment Officer, today announces they have settled their dispute with the United States Securities and Exchange Commission relating to Headstart’s historic involvement in market-timing from which it disengaged in September 2003 prior to re-focusing on its other trading strategies. This will allow Headstart to concentrate on its core business as an investment adviser to offshore hedge funds and expand the business with the launch of new funds.
Without admitting or denying the allegations, the civil settlement includes payments of $17 million by the defunct Headstart Fund Ltd (domiciled in the Bahamas), $200,000 by Headstart Advisers Ltd and $600,000 by Mr Najy Nasser, the Chief Investment Officer. This settlement will conclude the case brought by the SEC against Headstart Fund Ltd, Headstart Advisers Ltd and Mr Najy Nasser arising from Headstart’s historic market-timing strategy.
Headstart has since September 2003 focused its business on other successful strategies. The Headstart Fund of Funds has returned 65% (or 5.4% average annual net return) since its inception in 1999, whereas most European and US equity markets are down over the same period.
Najy Nasser, Chief Investment Officer of Headstart Advisers Ltd said:
“Headstart is very pleased to have reached a settlement. We responded to US concerns about market timing and immediately ceased this element of Headstart’s business in September 2003. We have since worked hard to build up Headstart’s funds using different strategies. As we equalled or bettered our overall returns against our benchmark, we are especially pleased with what we have achieved.
“We have superb long-term performance against both the market and our peer group and have some interesting plans to grow Headstart’s investment business.”
ENDS
For further information:
M:Communications
Adrian Flook +44 (0)20 7153 1588 / (0)7768 608396 / flook@mcomgroup.com
Caroline Villiers +44 (0)20 7153 1521 / (0)7808 585184 / villiers@mcomgroup.com
Notes to editors:
About Headstart
Headstart Advisers Ltd is a financial services company incorporated in 1990, authorised and regulated by the FSA as an investment adviser to the Headstart family of hedge funds. It advises three hedge funds and a fund of hedge funds with the common mandate of superior returns with lower volatility (risk).
Its two multi-strategy hedge funds, Headstart Global Fund and Headstart Global Aggressive Fund, have respectively made an average annualised return of 7.8% and 12% over the last 10 years.
/continued…
Headstart Fund of Funds, the firm’s flagship fund of hedge funds, also has a good long-term track record and has made an average annualised return of 5.4% over the last 9 years. The firm launched the Limestone Fund Wider Russia SP strategy in 2007 after advising on the emerging market strategy within a multi-strategy mandate for over 18 months. The Limestone Fund has returned 103% year-to-date. The firm has plans to launch other investment strategies as opportunities arise.
The directors of Headstart Advisers Ltd are Najy Nasser and Henry Watkinson. The firm has its office in Chelsea Harbour, London.
For further information on market timing please see the FSA website: http://www.fsa.gov.uk/Pages/Library/Communication/PR/2004/024.shtml
Links to this post:
Churchgoers Make the Best Victims
At least that is what Hamilton Alan Bird had to be thinking when he used his religiously themed "hedge fund," XL Capital Partners swipe their money.
If these investors had done their homework they might have noted that Bird was previously convicted on criminal charges, had a 1991 bankruptcy to his credit and was once busted for practicing an insurance business without a license.
So not only was Bird a known criminal - he was a bad one that kept getting caught. No change to that pattern this time. He's been nicked again and this Friday plead guilty for his hedge funs shenanigans, small solace that might be to the trusting folks whose money he stole.
Already a Bird accomplice, the right reverend pastor pastor Doug Scott of Colorado Springs has been sentenced to 15 years probation and a sizable chunk of community service.
Let's hope that the recidivist, Mr Bird gets substantially more when he goes back before the judge in June.
For More on Bird's guilty plea, click here.
And for a little background on the XL mess, try this article.
-- MDT
3/19/2008
If these investors had done their homework they might have noted that Bird was previously convicted on criminal charges, had a 1991 bankruptcy to his credit and was once busted for practicing an insurance business without a license.
So not only was Bird a known criminal - he was a bad one that kept getting caught. No change to that pattern this time. He's been nicked again and this Friday plead guilty for his hedge funs shenanigans, small solace that might be to the trusting folks whose money he stole.
Already a Bird accomplice, the right reverend pastor pastor Doug Scott of Colorado Springs has been sentenced to 15 years probation and a sizable chunk of community service.
Let's hope that the recidivist, Mr Bird gets substantially more when he goes back before the judge in June.
For More on Bird's guilty plea, click here.
And for a little background on the XL mess, try this article.
-- MDT
Labels: Doug Scott, Fraud, Hamilton Alan Bird, hedge fund, XL Capital Partners
FBI Mortgage Fraud Probe Expandeth
Seventeen firms are now in the line up for further scrutiny from Langley. Meanwhile, California also busts some mortgage fraud heads.
-- MDT
3/11/2008
-- MDT
Labels: Fraud, investigation, sub-prime mortgage
Enzyte Maker Lives On, Despite Fraud Prosecution
I am sure you'll all be glad to hear that.
-- MDT
-- MDT
Labels: Berkeley Premium Nutraceuticals, Enzyte, Fraud
1 Comments.
Someone should be looking into Condie's over sea accounts in Aruba???
Post a Comment
Links to this post:
Hedge Fund Fraudsters Prey on the Faithful
Uta-based Thompson Consulting, Inc. managed to lost $60 million dollars of investor money through its pathetic mismanagement of two hedge funds. Already down, deep in the red based on what the SEC has called "a strategy inconsistent with its representations to investors," Thompson's managers went all in on a complex options trade on the Chicago Board Options Exchange. Needless to say, that blew up in their faces, wiping out 100 well intentioned investors. A slew of civil charges are pending against Thompson and fund managers, Kyle Thompson, David Condie and Sherman Warner. We'll see how it goes from here.
2/22/2008
Labels: David Condie, Fraud, hedge fund, Kyle Thompson, Sherman Warner, Thompson Consulting
Wharton Biz School Reflects on Corporate Fraud 2/21/2008
Lancer Hedge Fund Crew Charged With Fraud
Michael Lauer, Martin Garvey, Eric Hauser, Laurence Isaacson and Milton Barbarosh are all facing an assortment of fraud charges in relation to their roles at Lancer Group, a now-bust hedge fund. For more on their, literal, shell-game, check out the South Florida Business Journal.
-- MDT
2/04/2008
-- MDT
Labels: Fraud, hedge fund, Lancer, shell companies
UBS Issues No Comment on Mortgage Investigation
Reportedly, the US Attorney in New York's Eastern District is investigating UBS to determine whether the bank misled investors by inflating the prices of its mortgage bonds. Just the latest firm to be targeted coming out of the sub-prime mess.
-- MDT
1/30/2008
-- MDT
Labels: Fraud, sub-prime mortgage, UBS
National Century Fraud Trial Set for Monday
Call it the sleeper corporate fraud...
National Century Financial Enterprises never got the publicity of a WorldCom, Health South or Enron. But there's nothing minor about the $1.5 billion fraud allegedly perpetrated by company executives prior to National Century's fall in 2002 (the firm declared bankruptcy in 2004).
Two former National Century owners and three execs go on trial Monday in Columbus, Ohio. One exception is former CEO Lance Poulsen. His fraud trial starts in August. But before then he'll have to answer to charges of witness tampering. That trial starts in March.
Here are a few more case-related stats via the AP.
-- MDT
1/22/2008
National Century Financial Enterprises never got the publicity of a WorldCom, Health South or Enron. But there's nothing minor about the $1.5 billion fraud allegedly perpetrated by company executives prior to National Century's fall in 2002 (the firm declared bankruptcy in 2004).
Two former National Century owners and three execs go on trial Monday in Columbus, Ohio. One exception is former CEO Lance Poulsen. His fraud trial starts in August. But before then he'll have to answer to charges of witness tampering. That trial starts in March.
Here are a few more case-related stats via the AP.
-- MDT
Labels: Fraud, Lance Poulsen, National Century, trial
Now Available - Hedge Fund Fraud Insurance
For the high net worth investor who doesn't believe in due diligence, Protean Investment Risks has a product for you.
-- MDT
-- MDT
Labels: Fraud, hedge fund, insurance, Protean Investment Risks
Bayou Financial Co-Founder Gets Four Years on Fraud Charges
James Marquez, co-founder of Bayou Financial, plead guilty in December of 2006 to participation in the $400 million fraud arising from his former firm (Marquez left Bayou in 2001).
Sentenced just this week, Marquez, in addition to spending a little over four years in prison and another two years under supervised release, Marquez is expected to pay over $6 million in restitution.
Two other former Bayou executives, Sam Israel and Daniel Marino have also plead guilty in relation to the fraud.
For further details on the Marquez sentencing, check out CNNMoney.
--MDT
1/09/2008
Sentenced just this week, Marquez, in addition to spending a little over four years in prison and another two years under supervised release, Marquez is expected to pay over $6 million in restitution.
Two other former Bayou executives, Sam Israel and Daniel Marino have also plead guilty in relation to the fraud.
For further details on the Marquez sentencing, check out CNNMoney.
--MDT
Labels: Bayou Group, Daniel Marino, Fraud, hedge fund, James Marquez, Sam Israel
The Ethical Corporation Takes Aim at Samsung
Good overview of the Samsung investigation if you haven't been tuned in.
12/11/2007
Labels: corporate ethics, Fraud, Samsung
Conrad Black Gets 6 and a Half Years 12/09/2007
New Federal Charges in Coupon Company Case
Add wire fraud to the $250 million fraud tab of former executives at International Outsourcing Solutions, the largest coupon company in the U.S. The alleged fraudsters are facing somewhere in the neighborhood of 525 years in prison if convicted. Those kitty litter coupons really add up, right? Get the latest details on the case via Yahoo.
-- MDT
12/06/2007
-- MDT
Labels: FBI, Fraud, International Outsourcing Solutions
Man Group Hedge Fund Pays $75 Million Settlement to End Fraud Probe
MF Global, the NY based hedge fund offering from the Man Group has agreed to pay $75 million to settle charges that the fund helped to hide the $180 million Philadelphia Alternative Asset Management (PAAM) hedge fund fraud (in which founder Paul Eustace was recently charged). The CTFC shut down PAAM in 2005 for hiding its own losses from investors.
-- MDT
11/21/2007
-- MDT
Labels: CTFC, Fraud, hedge fund, Man Financial, Man Group, MF Global, PAAM
Portos Chief Takes Surprise Plea
Michael Mendelson entered an unexpected guilty plea at what was supposed to be a preliminary hearing relating to allegations of fraud at his now collapsed Toronto-based hedge fund, Portus Alternative Asset Management.
Apparently he is, as the judge in the case believes, a changed man and accepted a two year sentence as well as responsibility for his actions.
Mendelson will also be testifying against his former (and quite literal) partner in crime, Boaz Mason. But Mason, perhaps a less transformed individual, won't be showing up any time soon. He fled Canada for Israel to avoid prosecution.
The disintegration of Portus left about 26,000 wondering what had become of the $750 million they had placed in the care of Mendelson and Mason.
The good news is, in this case, investors expect to get back more than 90% of the funds. We'll see how that goes. More on Portus, Mendelson and Mason right here, via the National Post.
-- MDT
11/20/2007
Apparently he is, as the judge in the case believes, a changed man and accepted a two year sentence as well as responsibility for his actions.
Mendelson will also be testifying against his former (and quite literal) partner in crime, Boaz Mason. But Mason, perhaps a less transformed individual, won't be showing up any time soon. He fled Canada for Israel to avoid prosecution.
The disintegration of Portus left about 26,000 wondering what had become of the $750 million they had placed in the care of Mendelson and Mason.
The good news is, in this case, investors expect to get back more than 90% of the funds. We'll see how that goes. More on Portus, Mendelson and Mason right here, via the National Post.
-- MDT
Labels: Boaz Mason, Fraud, hedge fund, Michael Mendelson, Portus
Sentencing Delayed on Bayou Hedge Fund Co-Founder
Bayou Hedge Fund co-founder, James Marquez saw his sentencing hearing was moved to today, November 20th due to "disputed issues of fact." As of this evening nothing notable has come across the wire. But we'll keep an eye out.
If you'd like to recap, here's Marquez's guilty plea from late last year. Bayou, of course, was one of the more notable hedge fund flameouts of the past few years and the one that started putting these stories on the front page, not just the front page of the business section.
-- MDT
If you'd like to recap, here's Marquez's guilty plea from late last year. Bayou, of course, was one of the more notable hedge fund flameouts of the past few years and the one that started putting these stories on the front page, not just the front page of the business section.
-- MDT
Labels: Bayou Group, Fraud, hedge fund, James Marquez
Man Prosecuted for Baywatch Fraud
Even fraudsters should have some pride, right?
This is lame, even by criminal standards.
-- MDT
9/26/2007
This is lame, even by criminal standards.
-- MDT
Labels: Baywatch, David William Port, Fraud
Haligiannis Facing Extradition to the U.S., Additional Charges in Greece
Angelo is really coming home this time, it seems. But before he returns to the states to do his time, Greek authorities apparently have a few new books to throw at him.
-- MDT
9/21/2007
-- MDT
Labels: Angelo Haligiannis, Fraud, hedge fund
Hedge Fund Fugitive, Haligiannis, Back Behind Bars
Angelo Haligiannis is a colorful characters. He, until recently, was also a fugitive, on the run from fraud charges in New York state. Of course, for Haligiannis, on the run included more yachts, cocktails and fancy hotels than your average fugitive.
The former president of hedge fund Sterling Watters, Haligiannis had been arrested just recently by Greek authorities, only to be released prior to extradition to the U.S. Haligiannis was picked up again this week in Greece while passing through a tollbooth. We'll see if he makes it back to the U.S. this time.
-- MDT
8/07/2007
The former president of hedge fund Sterling Watters, Haligiannis had been arrested just recently by Greek authorities, only to be released prior to extradition to the U.S. Haligiannis was picked up again this week in Greece while passing through a tollbooth. We'll see if he makes it back to the U.S. this time.
-- MDT
Labels: Angelo Haligiannis, Fraud, fugitive, hedge fund
Bayou Hedge Fund Sentencing Update, Also Investor Suit Dismissed
A Bayou-related investor suit filed against Hennessee Group, a financial advisory firm has been dismissed. Hennessee was being sued for breach of fiduciary duty by South Cherry Street, LLC, which on Hennessee's say-so had invested $1.5 million with Bayou.
While proprietors of Hennessee, Lee and her husband Charles Gradante claim to have a thorough five-step due diligence process, the folks at South Cherry Street claimed that this was never conducted in the case of Bayou.
The judge found differently, deciding that Hennessee was just another sucker in a group that included the IRS and the SEC. Ouch...
Also, it appears that Bayou badguys Sam Israel and Daniel Marino will be sentenced for their roll in the hedge fund fraud as soon as September.
Further details on Bayou via Reuters.
-- MDT
7/12/2007
While proprietors of Hennessee, Lee and her husband Charles Gradante claim to have a thorough five-step due diligence process, the folks at South Cherry Street claimed that this was never conducted in the case of Bayou.
The judge found differently, deciding that Hennessee was just another sucker in a group that included the IRS and the SEC. Ouch...
Also, it appears that Bayou badguys Sam Israel and Daniel Marino will be sentenced for their roll in the hedge fund fraud as soon as September.
Further details on Bayou via Reuters.
-- MDT
Labels: Bayou Group, Fraud, hedge fund, Hennessee, South Cherry Street
Hammer Drops on National Century
With a new, revised indictment in play, things are looking increasingly bad for the eight former executives of National Century. Bumping up the 27 charges in the initial indictment to a round count of 60, a Columbus, Ohio grand jury things are looking increasingly dark. Before you feel too terribly bad for these folks, keep in mind that the FBI calls National Century the largest corporate fraud case involving a private company that they have ever investigated.
Further details via the Columbus Business Journal.
-- MDT
7/06/2007
Further details via the Columbus Business Journal.
-- MDT
Labels: Fraud, National Century
Economan Breaks Down, Hedge Fund Ponzi Scheme Probed
Albert E. Parish is the Economan. His website is a must-see. He's also the target of a government investigation into his financial management practices, which ended up costing his clients millions. Parish's assets are currently at auction in an attempt to make back some of the money he lost. You can view the items here.
-- MDT
-- MDT
Labels: Albert E. Parish, Fraud, hedge fund, ponzi scheme
1 Comments.
THERE IS STILL SOME HOPE
Many of you who were defrauded by Al Parish, could qualify to recover the tax basis of your remaining investment loss. A seldom used provision of the Internal Revenue Code 165 (C)(2), allows you to offset you loss in the "Year of Discovery", against ordinary income. There is no limit nor any exclusions. Any remaining loss can be carried back three years and/or carried forward. The treatment of this loss is different for each victim.
Tim Kelleher of Securities Fraud Recovery Trust, LLC (SFR Trust) is one of the leading pioneers in the 165 theft loss industry. He was instrumental in the start up and development of JK Harris 165 Services, LLC fraud division and was the founding partner of Investment Fraud Recovery Network, LLC. His efforts have resulted in the recovery of millions in tax refunds to the victims of investment fraud. His expertise and that of his team is sought out by victims of fraud nationwide.
Mr. Kelleher's team of experts stand ready to evaluate your case to determine it's merit inder 165 (C)(2). There is no financial risk to you whatsoever. His group will also support your claim with the IRS for the three year review period, at no additional cost to you. In addition, unlike competition who charge up to twenty-five percent of your recovery, SFR Trust) has a rate of four percent of your loss amount or $5,000.00, whichever is less, regardless of the amount of your loss.
For a complimentary evaluation, please email your contact information to evaluation@sfrtrust.com. One of Mr. Kelleher's experts will contact you within 48 hours to discuss your case with you, or your tax professional.
Post a Comment
Many of you who were defrauded by Al Parish, could qualify to recover the tax basis of your remaining investment loss. A seldom used provision of the Internal Revenue Code 165 (C)(2), allows you to offset you loss in the "Year of Discovery", against ordinary income. There is no limit nor any exclusions. Any remaining loss can be carried back three years and/or carried forward. The treatment of this loss is different for each victim.
Tim Kelleher of Securities Fraud Recovery Trust, LLC (SFR Trust) is one of the leading pioneers in the 165 theft loss industry. He was instrumental in the start up and development of JK Harris 165 Services, LLC fraud division and was the founding partner of Investment Fraud Recovery Network, LLC. His efforts have resulted in the recovery of millions in tax refunds to the victims of investment fraud. His expertise and that of his team is sought out by victims of fraud nationwide.
Mr. Kelleher's team of experts stand ready to evaluate your case to determine it's merit inder 165 (C)(2). There is no financial risk to you whatsoever. His group will also support your claim with the IRS for the three year review period, at no additional cost to you. In addition, unlike competition who charge up to twenty-five percent of your recovery, SFR Trust) has a rate of four percent of your loss amount or $5,000.00, whichever is less, regardless of the amount of your loss.
For a complimentary evaluation, please email your contact information to evaluation@sfrtrust.com. One of Mr. Kelleher's experts will contact you within 48 hours to discuss your case with you, or your tax professional.
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Bayou Hedge Fund Advisor Pleads Guilty to Tax Evasion
Bayou would be the hedge fund whose collapse brought questions about hedge fund transparency from the business page to the front page. The reverberations from the Bayou collapse continue, most recently with the guilty plea on tax evasion from former Bayou financial advisor Burt Kozloff. You can get a look at the terms of Kozloff's plea deal right here, courtesy of the fine folks at the U.S. Attorneys Office, Souther District of New York.
-- MDT
-- MDT
Labels: Bayou Group, Fraud, hedge fund
KL Hedge Fund Operator Plead Guilty
Yung B. Kim one of the three principles of KL Financial, a Florida-based hedge fund plead guilty last week to bilking investors our of $195 million. Kim ran the show along with his brother, John Kim and another man, Won S. Lee. John Kim is already behind bars on a contempt of court charge. Won Lee is still at large. Sentencing for Yung Kim is scheduled for November.
More on the case from the Palm Beach Post.
-- MDT
7/03/2007
More on the case from the Palm Beach Post.
-- MDT
Labels: Fraud, hedge fund, KL Financial
MDL Capital Management Founder Has Trial Date Set
Hedge fund (fiend?) Mark D. Lay, who lost a whole bundle of the Ohio Bureau of Worker Compensation's money now has a trial date. Indicted by a federal grand jury just last month, Lay will face the music on September 4th, when he'll get a chance to tell his side of the "I pissed away $216 million of your money" story. And good luck to him. Further details on the trial here.
-- MDT
6/22/2007
-- MDT
Labels: Fraud, hedge fund, Mark Lay, MDL Capital Management, Ohio
Telemarketing Fraudster Indicted
Between 2001 and 2002 Kyle Kimoto and his co-horts at telemarketer Assail, Inc. (also operating as First Financial Solutions, First Choice Solutions and other generic names) bilked some $43 million from 300,000 or so unsuspecting credit-seekers.
Kimoto and co. made phoney credit offers to hundreds of thousands, collecting an application fee in the process. Kimoto was indicted on one count of conspiracy as well as mail fraud, wire fraud and money laundering. Further details here.
-- MDT
6/18/2007
Kimoto and co. made phoney credit offers to hundreds of thousands, collecting an application fee in the process. Kimoto was indicted on one count of conspiracy as well as mail fraud, wire fraud and money laundering. Further details here.
-- MDT
Labels: Assail, Fraud, Inc., Kyle Kimoto, telemarketers
Ponzi Fraudster Linked to Ferris Baker Watts, Advest Brokers
Accused Ponzi Fraudster, David Dadante, ripped off more than 100 people who altogether invested tens of millions with him, thinking they were placing their money in a blue chip stock fund. In the end, they were only really placing their cash into Dadante's pockets.
Between 1999 and 2005 he blew through nearly $30 million and when he wasn't busy gambling away investors money, prosecutors say that Dadante and two brokers - one from Advest (now part of Merrill Lynch) and one from Ferris Baker Watts - were busy manipulating the stock price of the Georgria-based Innotrac Corporation.
Late last week Dadante was charged with two counts of securities fraud. His two apparent accomplices have not yet been charged or publicly named. Details here.
4/16/2007
Between 1999 and 2005 he blew through nearly $30 million and when he wasn't busy gambling away investors money, prosecutors say that Dadante and two brokers - one from Advest (now part of Merrill Lynch) and one from Ferris Baker Watts - were busy manipulating the stock price of the Georgria-based Innotrac Corporation.
Late last week Dadante was charged with two counts of securities fraud. His two apparent accomplices have not yet been charged or publicly named. Details here.
Labels: Advest, David Dadante, Ferris Baker Watts, Fraud, ponzi scheme, securities
The Case for David Stockman
Reagan-era public official and former Collins & Aikman CEO, David Stockman isn't taking his recent indictment on fraud charges lying down. Calling the prosecution "amateur hour," Stockman spoke with the New York Times about how he plans to fight the fraud charges against him, charges that had loomed for months before a formal indictment was finally handed down.
-- MDT
-- MDT
Labels: Collins and Aikman, David Stockman, Fraud, indictment
CA Fingers Founder on Corruption
Ahhhh, Charles Wang, the innovator of the 35 day month... While other CA top brass have already gone down for the count in relation to the wide-spread fraud at the company. Wang, however, has managed to keep bobbing and weaving since retiring in 2000, earning him teflon don status amongst the Silicon Valley set. But that may be changing as CA - the company he founded (but currently hungry to shake off the stink of corruption) comes gunning for him.
-- MDT
4/12/2007
-- MDT
Labels: Charles Wang, Computer Associations, Fraud, Sanjay Kumar, SEC
Menu Foods CFO in a Selling Frenzy Right Before Recall Ammouncement
Very naughty indeed. Dumping his stock before the announcement of the pet food recall... Illegal? Well, given the amount of press this story has received, I'm sure we'll find out soon enough.
-- MDT
-- MDT
Labels: Fraud, Menu Foods
Currency Trader Faces Maximum Sentence on Fraud Charges
Martin Armstrong received a five year sentence this week for his role in defrauding clients of his firm, Princeton Economics International, out of millions of dollars. Armstrong will also pay $80 million in restitution to the victims of his ponzi-style scheme. Armstrong had already been in jail based on a civil contempt order from 2000 relating to his failure to turn over Princeton's assets.
Armstrong's lengthy jail time on the civil contempt charge adds an extra layer of interest to the case as there is apparently no limit to the amount of time he could be forced to remain incarcerated on the contempt charge. Moreover, his fraud sentence will not actually begin until he finishes serving his time for contempt. Quite the pickle, and one that has found Armstrong some support, despite his crimes.
Further details on Armstrong's sentencing and fraudulent activities can be found at the White Collar crime Prof. Blog.
-- MDT
3/14/2007
Armstrong's lengthy jail time on the civil contempt charge adds an extra layer of interest to the case as there is apparently no limit to the amount of time he could be forced to remain incarcerated on the contempt charge. Moreover, his fraud sentence will not actually begin until he finishes serving his time for contempt. Quite the pickle, and one that has found Armstrong some support, despite his crimes.
Further details on Armstrong's sentencing and fraudulent activities can be found at the White Collar crime Prof. Blog.
-- MDT
Labels: Fraud, Martin Armstrong
International Outsourcing Services Faces Fraud Charges
A Federal grand jury in Wisconsin has returned a 25-count indictment against International Outsourcing Solutions, along with 12 individuals charging the group with with a conspiracy to defraud IOS's manufacturer customers.
IOS is the largest coupon clearinghouse for grocery store retailers and manufacturer coupons in the U.S. If you've clipped coupons from your Sunday paper, you know IOS. What you probably didn't know is that coupons are a billion dollar industry.
The Indictment charges that the defendants participated in a multi-million dollar fraud that victimized five Wisconsin companies as well as other companies located throughout the country," said United States Attorney Biskupic.
This IOS indictment alleges that between 1997 and 2006, nine of IOS employees and and two associates of coupon brokerage, Riya Coupon Services, participated in a scheme to submit fraudulent coupons to manufacturers for payment, a $25 million swindle.
Read more on the IOS indictment via the Muncie Free Press, which names all eleven of the indicted folks... See also the FBI press release, from which the MFP article is largely drawn. IOS has responded to the suit, here, on their website.
-- MDT
2/26/2007
IOS is the largest coupon clearinghouse for grocery store retailers and manufacturer coupons in the U.S. If you've clipped coupons from your Sunday paper, you know IOS. What you probably didn't know is that coupons are a billion dollar industry.
The Indictment charges that the defendants participated in a multi-million dollar fraud that victimized five Wisconsin companies as well as other companies located throughout the country," said United States Attorney Biskupic.
This IOS indictment alleges that between 1997 and 2006, nine of IOS employees and and two associates of coupon brokerage, Riya Coupon Services, participated in a scheme to submit fraudulent coupons to manufacturers for payment, a $25 million swindle.
Read more on the IOS indictment via the Muncie Free Press, which names all eleven of the indicted folks... See also the FBI press release, from which the MFP article is largely drawn. IOS has responded to the suit, here, on their website.
-- MDT
Labels: FBI, Fraud, International Outsourcing Solutions
Hedge Fund Dinner Scammers Face Charges
A scenario...
You get some junk mail that offers above-market investment returns and an invite to a steak dinner. You figure, why not. After all, you like steak. But if the guy you dined with was John H. Williams, odds are he conned you into giving him your money, which instead of multiplying as promised he might as well have set a'fire right there at the table.
You see Williams, your host, was funneling your funds to Stephen Chesnowitz, a Canadian hedge fund trader with assets in the Cayman Islands and Canada. Now, actually disclosing that you have no idea how to run or manage a successful investment fund would sort of...impede the cashflow situation. So, rather than inform investors when deals went sour, these guys simply followed the tried and true falsify your financials model while maintaining rich salaries for themselves.
All told, the pair bilked about $9 million out of 150 or so unwitting investors. Williams is facing fraud charges in Maryland, while Chesnowitz is so far sitting pretty north of the border. Maryland is currently reviewing William's financial records, trying to determine where the money when and if any has been squirreled away that might be recoverable for investors.
Further details at The Washington Post.
-- MDT
You get some junk mail that offers above-market investment returns and an invite to a steak dinner. You figure, why not. After all, you like steak. But if the guy you dined with was John H. Williams, odds are he conned you into giving him your money, which instead of multiplying as promised he might as well have set a'fire right there at the table.
You see Williams, your host, was funneling your funds to Stephen Chesnowitz, a Canadian hedge fund trader with assets in the Cayman Islands and Canada. Now, actually disclosing that you have no idea how to run or manage a successful investment fund would sort of...impede the cashflow situation. So, rather than inform investors when deals went sour, these guys simply followed the tried and true falsify your financials model while maintaining rich salaries for themselves.
All told, the pair bilked about $9 million out of 150 or so unwitting investors. Williams is facing fraud charges in Maryland, while Chesnowitz is so far sitting pretty north of the border. Maryland is currently reviewing William's financial records, trying to determine where the money when and if any has been squirreled away that might be recoverable for investors.
Further details at The Washington Post.
-- MDT
Labels: Fraud, hedge fund, John H. Williams, LaJohn Capital, Stephen Chesnowitz
1 Comments.
What's the point of trying to find a few pennies to return to investors while these type of scams are allowed to continue without any regulations or safeguards in place?
Post a Comment
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Shady Hedge Fiend Kirk Wright to Pay $20 Million
Kirk Wright made white a name for himself. Having found his way on to the NFL Player's Union's list of recommended money managers, Wright, as my grandmother would say, fell in butter. He had it good. Only one problem...he was a total phony (well, that diploma from Harvard was real).
Between 1997 and 2006 Wright raised $185 million for his International Management Associates hedge fund management company. The money came from a pool of 500 investors, including many NFL players. Wright lived the high life on their money while giving vague assurances of amazing returns. Later he filed bogus financials to cover his tracks.
When it was clear he was busted, he took flight and played fugitive for a few weeks before coming to his current berth at an Atlanta-area detention center. Wright is awiating trial on multiple fraud counts and could face some lengthly time behind bars.
In the interim U.S. District Court Charles Pannell has levied over $20 million in fines and restitution to be paid back by Wright.
Further details via HedgeCo.
-- MDT
2/21/2007
Between 1997 and 2006 Wright raised $185 million for his International Management Associates hedge fund management company. The money came from a pool of 500 investors, including many NFL players. Wright lived the high life on their money while giving vague assurances of amazing returns. Later he filed bogus financials to cover his tracks.
When it was clear he was busted, he took flight and played fugitive for a few weeks before coming to his current berth at an Atlanta-area detention center. Wright is awiating trial on multiple fraud counts and could face some lengthly time behind bars.
In the interim U.S. District Court Charles Pannell has levied over $20 million in fines and restitution to be paid back by Wright.
Further details via HedgeCo.
-- MDT
Labels: Fraud, hedge fund, Kirk Wright, NFL
Refco Indictment Update, Tone Grant
Tone Grant, former owner of Refco, plead not guilty in January to charges of conspiracy, fraud and money laundering. Grant stands accused to of helping to hide the collapsed derivatives trading firm's enormous losses and assisting those who wanted to pass off the company to unwary investors.
The activities that lead to Refco's final, scandal-ridden explosion weren't exactly uncharted territory for a company that had for years walked close to the edge. According to the Chicago Tribune:
Grant was followed at Refco by Phillip Bennett, who managed to convert the $300 million in losses under Grant's tenure into $720 million in debt, which he managed to hide rather effectively for a time. In 2005, Refco actually seemed poised to go public with an enormous public offering, but reality intruded. The gig was up and the house of cards came crashing down.
-- MDT
2/09/2007
The activities that lead to Refco's final, scandal-ridden explosion weren't exactly uncharted territory for a company that had for years walked close to the edge. According to the Chicago Tribune:
Refco was the subject of 142 regulatory actions, the most of any futures trading outfit, according to a Bloomberg News analysis. The Commodity Futures Trading Commission came after it repeatedly, in some of its most prominent administrative cases of the 1980s and 1990s.For a full accounting of Tone Grant's tenure at Refco (1981-1998), his legal woes and how he fits into the scandal that followed the company's demise, check out the full article from the Tribune.
Fellow trading executives say Refco flouted industry standards like no other firm, tossing aside the rulebooks, taking on the diciest accounts and fighting back against regulators that tried to intervene.
Refco traces its origins to a one-time poultry wholesaler who served time in prison for selling substandard chickens to the military. Ray Friedman eventually won a pardon and with his stepson, Thomas Dittmer, opened the forerunner of Refco around 1969.
Grant was followed at Refco by Phillip Bennett, who managed to convert the $300 million in losses under Grant's tenure into $720 million in debt, which he managed to hide rather effectively for a time. In 2005, Refco actually seemed poised to go public with an enormous public offering, but reality intruded. The gig was up and the house of cards came crashing down.
-- MDT
Labels: Fraud, indictment, money laundering, Phillip Bennett, Refco, Tone Grant
Former Homegold CEO Gets 20 Years
The former chief executive of bankrupt mortgage lending company, Homegold, one Ronald Sheppard was sentenced this week to 20 years on charges of conspiracy, securities fraud and obtaining property by false pretenses. He had faced a potential maximum of 25 years in the case.
Homegold had attempted to cover large losses by funneling in cash from a subsidiary. $275 million and 8,000 defrauded investors later the company collapsed. Four other Homegold execs have already been convicted. Former chairman John Sterling Jr. has been indicted and is awaiting his turn at bat.
Check here for further details on Sheppard, who claims to be a victim in all this. That's a hard pill to swallow when you picture him shredding all those documents to cover his own ass.
-- MDT
Homegold had attempted to cover large losses by funneling in cash from a subsidiary. $275 million and 8,000 defrauded investors later the company collapsed. Four other Homegold execs have already been convicted. Former chairman John Sterling Jr. has been indicted and is awaiting his turn at bat.
Check here for further details on Sheppard, who claims to be a victim in all this. That's a hard pill to swallow when you picture him shredding all those documents to cover his own ass.
-- MDT
Labels: Fraud, Homegold, John "Jack" Sterling. Jr., lending, Ronald Sheppard
Siemens Division Pleads Guilty in Fraud
No, not THAT Siemens division. In this instance we're talking about Siemens Medical Solutions, USA, which has of late been embroiled in its own share of scandal. The Siemens unit has agreed, as a part of a plea deal, to pay $2.5 million in fines and restitution in penance for shady dealings surrounding Siemens Medical's acquisition of contract to supply radiological equipment to Illinois' John H. Stroger Jr. Hospital. Details on Siemen's scam here.
-- MDT
2/06/2007
-- MDT
Labels: Fraud, minority owned company, Siemans Medical, Siemens
CFTC Files Complaint Against Cornerstone Capital Management
New York-based hedge fund, Cornerstone Capital Management and company executive Joseph Profit (oh come on - he made that name up!) are facing fraud charges from the Commodity Futures Trading Commission. The CTFC complaint, filed in the Georgia Northern District Court accuses Profit and Co. of concealing material information from the National Futures Association and defrauded investors by missrepresenting potential rates of return.
Further details via Hedgeweek. You can check out Cornerstone's NFA suspension here as well as the CTFC press release here.
-- MDT
2/02/2007
Further details via Hedgeweek. You can check out Cornerstone's NFA suspension here as well as the CTFC press release here.
-- MDT
Labels: CFTC, Cornerstone Capital Management, Fraud, hedge fund, Joseph Profit
Wood River Capital Hedge Fiend to Face Criminal Charges
John H. Whittier, the former head of defunct hedge fund Wood River Capital Management was arraigned in New York this week on charges stemming from the $88 million securities fraud he perpetrated on investors in 2004 and 2005. The SEC originally filed civil charges against Whittier and WRC back in October 2005. Whittier could serve as much as 20 years on each count.
-- MDT
-- MDT
Labels: Fraud, hedge fund, John Whittier, Wood River Capital
Actor's Mom (and Hedge Fund Manager) Busted in Fraudulent Trading Scheme
Directors Financial Group, an Illinois hedge fund operated by Sharon Vaughn has been ordered to distribute its assets to investors - some $25 million - based on an SEC complaint filed last March.
The SEC accused Vaughn of defrauded clients in the by investing in a fraudulent prime-bank trading scheme, noting that Vaughn failed to perform adequate due diligence and neglected to disclose her trading strategy to investors. She followed this up by withholding and then submitting fraudulent documents to the SEC.
-- MDT
1/30/2007
The SEC accused Vaughn of defrauded clients in the by investing in a fraudulent prime-bank trading scheme, noting that Vaughn failed to perform adequate due diligence and neglected to disclose her trading strategy to investors. She followed this up by withholding and then submitting fraudulent documents to the SEC.
In addition to the order to dispense DFG's assets Vaughn will also pay a $200,000 penalty. The U.S. Attorney's Office for the Northern District of Illinois has also put forth indictments for the two promoters who sold Vaughn on the dodgy bank trading scheme in the first place.
Interestingly, Sharon Vaughn is the mother of actor Vince Vaughn.More here on Vaughn, via Financial Alternatives.
-- MDT
Labels: Directors Financial Group, Fraud, hedge fund, homeland security, Sharon Vaughn, Vince Vaughn
Cendant Execs Skirt Jailtime
Anne Pember and Casper Sabatino, both former Cendant financial execs received sentences this week based on their their prior pleas. Both were spared jailtime and instead received probation, two years apiece. Apparently they were quite contrite (and helpful to the prosecution). Another helpful fellow, former Cendant CFO, Cosmo Corigliano, is expected to be sentenced later this week. Look for another wrist slapping, as Corigliano was a key source for the prosecution.
-- MDT
-- MDT
Labels: Anne Pember, Caspar Sabatino, Cendant, Cosmo Corigliano, Fraud, sentencing
Commodities Manager Faces Charges on Phoney Reports
The Commodity Futures Trading Commission has filed a case against Anthony Ramunno, Jr., CEO of Roswell, Georgia-based Renaissance Asset Management. Ramunno and Renaissance have been barred from destroying any documents.
Investors had become suspicious that the pool of investment dollars under Ramunno's care wasn't quite the $32 million Renaissance claimed. An audit of the firm only identified about $4million and according to the CFTC complaint, Ramunno subsquently contacted the FBI offices in Atlanta and admitted committing fraud.
Further details here.
You can aslo read the CFTC press release or check out the online complaint (pdf).
-- MDT
1/26/2007
Investors had become suspicious that the pool of investment dollars under Ramunno's care wasn't quite the $32 million Renaissance claimed. An audit of the firm only identified about $4million and according to the CFTC complaint, Ramunno subsquently contacted the FBI offices in Atlanta and admitted committing fraud.
Further details here.
You can aslo read the CFTC press release or check out the online complaint (pdf).
-- MDT
Labels: Anthony Ramunno, CFTC, Fraud, Rennaisance Asset Management
HMC International Fraudsters Agree to Pay Restitution
The SEC has announced that Bret Grebow and Robert Massimi, the dynamic duo behind the defunct Philadelphia-based HMC International hedge-fund-slash-ponzi-scheme have agreed to pay restitution to their former investors in order to settle pending charges relating to their misuse of investor funds. Details here.
-- MDT
1/25/2007
-- MDT
Labels: Bret Grebow, Fraud, hedge fund, HMC Internationa, ponzi scheme, Robert Massimi
Recapping Bayou: Analysis of a Hedge Fund Fraud
Lets go back to last fall and recall the implosion of hedge fund, Bayou Group. The failure of this multi-million dollar fund sent shockwaves through the business media and was one of the key factors in raising the profile of hedge fund fraud in the press. Heck, it even prompted Risk Magazine to give a call to The Daily Caveat for a brief interview.
Law.com has a post-game analysis of the Bayou collapse from Jeff Marwill, a partner in the bankruptcy practice of Jenner and Block. Marwill charts the organization of the Bayou entities, what went wrong and how investors were made to eat the losses. Bayou Group subsequently declared bankruptcy and Marwill is uniquely qualified to comment on the aftermath as, in April '06 , he was appointed the federal equity receiver responsible for aiding investors in recouping some of the $450 million lost in the Bayou Fraud.
Interesting reading. And as always, when it comes to investing - do your homework.
-- MDT
1/15/2007
Law.com has a post-game analysis of the Bayou collapse from Jeff Marwill, a partner in the bankruptcy practice of Jenner and Block. Marwill charts the organization of the Bayou entities, what went wrong and how investors were made to eat the losses. Bayou Group subsequently declared bankruptcy and Marwill is uniquely qualified to comment on the aftermath as, in April '06 , he was appointed the federal equity receiver responsible for aiding investors in recouping some of the $450 million lost in the Bayou Fraud.
Interesting reading. And as always, when it comes to investing - do your homework.
-- MDT
Labels: Bayou Group, Fraud, hedge fund, Jeff Marwill, Jenner and Block
Peregrine Executives Sentenced in Fraud Probe
Michael Danny Whitt makes eight Peregrine Systems execs who've plead guilty in relation to the accounting fraud that afflicted the one-time jewel fo the San Diego-area software industry. Peregrine first acknowledged its problems back in 2002 and before the year was out the troubled firm was on the road to bankruptcy. Its remnants were purchased by Hewlett Packard. In case you are keeping score the other seven guilty pleas in the Peregrine case belong to:
-- MDT
1/11/2007
Douglas Stephen PowandaSeveral other Peregrine execs (some big fish among them) have plead NOT guilty, but you can look those up y'selves!
Ilse Cappel
Jeremy Crook
Steve Spitzer
John Burnham Benjamin
Richard T. Nelson
Matthew Gless
-- MDT
Labels: Fraud, Jeremy Crook, Peregrine Systems, SEC
BLX Exec Charged with Defrauding Government of $76 Million
Patrick J. Harrington, former executive vice president of the now defunct Business Loan Express is facing charges that he, along with 18 others, defrauded the Federal government of $76.8 million in small business loans. Taxpayers (that's you and me) are likely to end up paying the tab. Harrington's indictment, issued last month was unsealed earlier this week.
The Detroit Free Press has more on the scheme, and their article alludes to six earlier indictments involving Harrington that lead into the current investigation and pending prosecution. While Harrington's attorney is claiming that his client is taking more than his share of the blame, the U.S. Secret Service and the Inspector General's Office of the Small Business Administration have i.d.ed Harrington as the common denominator is all six indictments.
-- MDT
The Detroit Free Press has more on the scheme, and their article alludes to six earlier indictments involving Harrington that lead into the current investigation and pending prosecution. While Harrington's attorney is claiming that his client is taking more than his share of the blame, the U.S. Secret Service and the Inspector General's Office of the Small Business Administration have i.d.ed Harrington as the common denominator is all six indictments.
-- MDT
Labels: BLX, Fraud, Patrick Harrington, Small Business Administration
1 Comments.
Pat Harrington is a really great guy who made a mistake. We ALL make mistakes. He has 6 children and is paying for his wrong choices, as he should. How about everyone pray for him and his family as they go through this tough time.
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Fannie Mae Execs Facing Suit from Government Oversight Office
A suit of this kind had been expected since at least September. The Office of Housing Enterprise Oversight, in a fit of holiday cheer, filed 101 charges against Fannie Mae formers, ex-CEO, Franklin Raines, ex-CFO, Timothy Howard and ex-controller, Leanne Spencer. OHEO would like to recover as much as $215 million from these folks for their part in Fannie Mae's recent financial shenanigans (a $6 billion overstatement, for starters).
-- MDT
12/14/2006
-- MDT
Labels: Fannie Mae, financial overstatement, Franklin Raines, Fraud, Leanne Spencer, Timothy Howard
In Corporate Scandal, The Road Less Travelled
Rentway... here's a company that back in 2000 was booming, at least according to what folks on the outside thought. Unfortunately, on the inside, some people knew better. When faults - fraud, really - were discovered in the company's accounting CEO, William E. Morgenstern faced a tough decision - gloss it over or take it to the board. Did they start shredding? Not exactly:
Details here, via an engrossing article at TheLedger.com.
-- MDT
12/13/2006
Rent-Way’s board made a decision within days of detecting the fraud — Mr. Morgenstern called the Securities and Exchange Commission and revealed everything. The company would turn over documents typically protected by attorney-client privilege, he said. He then invited the S.E.C. to set up an office at Rent-Way’s headquarters to conduct an on-site investigation.How did it all work out for Rentway?
Details here, via an engrossing article at TheLedger.com.
-- MDT
Labels: Enron, Fraud, pre-trial agreements, Rentway, SEC, Worldcom
Skilling Does Not Pass GO, Goes Directly To Jail
Jeff Skilling, the former Enron chief exec, had been anticipating the possibility of a reprieve from jail time while he awaited the outcome of his appeal on fraud charges. It was not to be. The same court that signaled the possibility of bail for Skilling has snatched it away. He may report as soon as today to the Federal pen where, barring reversal on appeal, he'll be serving some or all of a 24 year sentence.
-- MDT
12/11/2006
-- MDT
Labels: appeal, Conviction, Enron, Fraud, jail, Jeff Skilling
Former Cendant Exec Gets House Arrest on Fraud Charges
In addition to the ten year prison sentence and more than $3 billion in fines and restitution former Cendant vice Chair, E. Kirk Shelton has otherwise been facing, he has now been placed under house arrest while he awaits the outcome of his appeals. Shelton was previously convicted on a variety of charges relating to his role in artificially inflating Cendant's revenues by some $500 million. When the fraud was discovered back in 1998, Cendant's value dropped by $14 billion in a single day. Ouch.
More here.
-- MDT
11/29/2006
More here.
-- MDT
Labels: Cendant, Conviction, E. Kirk Shelton, Fraud
Would You Invest Your Money in Something Called the Viper Fund?
How did The Daily Caveat miss this one? In early November the SEC put the kibosh on a group of California-based hedge funds run by a gentleman named Edward Ehee. Ehee was the proprietor of several funds, including, the Compass West Fund, the Viper Founders Fund, and the Viper Investments.
Shockingly, or perhaps not so, the SEC has seized the funds assets, alleging that Mr. Ehee diverted client funds to cover a variety of personal expenses, including car payments (any question about what he drives?). While Ehee's funds essentially ceased any kind of legitimate operation back in 2002, as recently as this year he was still peddling phony financials and convincing trusting souls to hand over their money for him to manage.
But no longer.
You can download the SEC's compliant here and the link above leads to their press release.
And of course, being a few days late, but unable to pass on the story, will teach me not to read Dealbreaker daily.
-- MDT
Shockingly, or perhaps not so, the SEC has seized the funds assets, alleging that Mr. Ehee diverted client funds to cover a variety of personal expenses, including car payments (any question about what he drives?). While Ehee's funds essentially ceased any kind of legitimate operation back in 2002, as recently as this year he was still peddling phony financials and convincing trusting souls to hand over their money for him to manage.
But no longer.
You can download the SEC's compliant here and the link above leads to their press release.
And of course, being a few days late, but unable to pass on the story, will teach me not to read Dealbreaker daily.
-- MDT
Labels: Dealbreaker, Edward Ehee, Fraud, hedge fund, SEC, Viper
1 Comments.
I knew this dirt bag. Justice comes for those who wait.
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