Brokerage Founder and Fund Manager Charged With Fraud by SEC

A management company, its principal, a brokerage firm and its founder were charged with fraud in an administrative proceeding initiated by the Commission. In the Matter of John Thomas Capital Management Group LLC, Adm. Proc. File No. 3-15255 (March 22, 2013). Named as Respondents in the proceeding...

Jury Needs Six Minutes to Convict Texas Man of $11 Million Ponzi Scheme

A federal jury needed just six minutes to return with a guilty verdict against a Texas man on trial for a $11 million Ponzi scheme. Gary Lynn McDuff, 58, was convicted of one count of conspiracy to commit wire fraud and one count of money laundering, each of which carry a maximum sentence of 20 years...

Utah Man Pleads Guilty To Running Two Separate Ponzi Schemes

A Utah man agreed to plead guilty for his involvement in two separate Ponzi schemes - while on parole for a previous conviction for a third Ponzi scheme - that took in more than $30 million from investors. Wayne Ogden, of Koosharem, Utah, was convicted earlier this year for his role in one of the...

Ponzi Scheme Defendants Agree to Pay $55M in Investment Club Action

WEST PALM BEACH, Fla. - (Mealey's) A federal judge in Florida on April 24 signed consent orders in which defendants agreed to pay nearly $55 million to end a suit in which the U.S. Commodity Futures Trading Commission (CFTC) alleged that they orchestrated a $28 million Ponzi scheme to defraud...

Defendants In Ponzi Scheme To Defraud Investment Clubs To Pay $55 Million

WEST PALM BEACH, Fla. - (Mealey's) A federal judge in Florida on April 24 signed consent orders in which defendants agreed to pay nearly $55 million to end a suit in which the U.S. Commodity Futures Trading Commission (CFTC) alleged that they orchestrated a $28 million Ponzi scheme to defraud investment...

SEC Secures $2.7 Million Judgment Against Broker and Others

The Commission prevailed on a motion for summary judgment against a brokerage firm, its principle and a former managing director, ultimately securing judgments of over $2.7 million. SEC v. Constantin, Civil Action No. 11-CV-4642 (S.D.N.Y. Filed July 6, 2011). This is one of what may be an increasing...

SEC Charges City and its Underwriter With Fraud

The City of Victorville California, Assistant City Manager Keith Metzler, deal underwriter and broker Newcomb & Dedios or KND and its principle Jeffrey Kinsell were named as defendants by the Commission in a suit alleging fraud in connection with the sale of municipal bonds. The city airport...

Two Investment Frauds Centered on Pre-IPO Shares of Facebook

Fraudulent investment funds purporting to give the public an opportunity to acquire pre-IPO shares of potentially hot stocks such as Facebook have been front and center in the District Court in Manhattan in recent days. In one case a former Oregon gubernatorial candidate and securities law recidivist...

SEC Charges Medical Device Company and its Founder with Fraud

The Commission charged a medical device company and its founder with making false statements regarding the FDA’s refusal to approval a device which is a key component of its business plan. The action was brought against Imaging3, Inc. and its founder Dean Norman Janes. SEC v. Imaging3, Inc., Case...

Federal Regulators: Corzine Misused Funds, ‘Responsible’ For MF Global’s Collapse

NEW YORK — (Mealey’s) The U.S. Commodities Futures Trading Commission (CFTC) on June 27 filed a civil complaint in the U.S. District Court for the Southern District of New York, alleging that Jon S. Corzine, as CEO of bankrupt MF Global Holdings Ltd. (MFGH), is legally responsible for MFGH’s...

SEC Alleges Texas Man Ran $4.5 Million Bitcoin Ponzi Scheme

The Securities and Exchange Commission has filed civil fraud charges against a Texas man, accusing him of masterminding a Ponzi scheme using the virtual currency known as Bitcoin that promised annual returns exceeding 300%. Trendon T. Shavers, 30, was charged with violations of federal securities laws...

UBS To Pay $120 Million To Settle Claims Over Lehman Brothers Securities Losses

NEW YORK — (Mealey’s) In a New York federal court, UBS Financial Services Inc. agreed on Aug 8 to pay $120 million to settle federal securities law claims that it misrepresented the investment quality of certain Lehman Brothers securities it sold before Lehman Brothers filed for bankruptcy...

SEC Brings Another Investment Fund Fraud Action

Investment fund frauds continue to be a staple of SEC enforcement. This week the Commission filed another of these actions. The defendants are a former representative of a registered investment adviser and a licensed realtor. SEC v. Dearman, Civil Action No. CV-553 (N.D. Okla. Filed August 27, 2013)...

SEC: Claimed Investment Adviser Defrauded Brokers, Investors

The Commission has brought a number of suits against investment advisers, money managers and their affiliates in recent weeks. See, e.g.,SEC v. Falcone, Civil Action No. 5027 (S.D.N.Y.)(recently settled action against Philip Falcone); SEC v. Dearman, Civil Action No. CV-553 (N.D. Okla. Filed Aug. 27...

Management Company Partner Convicted on Multiple Fraud Counts

A partner in an investment management company was convicted following a jury trial on multiple counts of mail and wire fraud as well as securities fraud. The charges stem from a scheme in which most of the $5 million in investor funds raised were siphoned off by the defendant and others for their personal...

Former Hawaiian Political Candidate Gets Four-Year Prison Sentence For $1.4 Million Ponzi Scheme

A Hawaiian man who once served as an Army reservist and former president of the Filipino Chamber of Commerce has been sentenced to four years in prison for masterminding a $1.6 million Ponzi scheme that bilked over 30 investors. Jason Pascua, 39, received the sentence after previously pleading guilty...

Husband, Wife, and Son Indicted in $10 Million Ponzi Scheme

In what is being touted as one of the largest investment scams in Boston since Charles Ponzi's infamous scheme nearly 100 years ago, Massachusetts authorities unveiled additional charges against a husband, wife, and previously-uncharged son for orchestrating a massive Ponzi scheme that allegedly...

TD Bank Agrees to Pay $52.5M to Settle Charges Related to Rothstein Scheme

WASHINGTON, D.C. — (Mealey’s) TD Bank NA on Sept. 23 agreed to pay $52.5 million to settle federal regulators’ allegations that the bank helped attorney Scott Rothstein run a $1.2 billion Ponzi scheme out of his law firm. The Securities and Exchange Commission announced in a press...

NHL Players Defrauded in Series of Investment Schemes

National Hockey League Players were the primary victims of a series of fraudulent investment schemes orchestrated by financial adviser Phillip Kenner and former professional race car driver Tommy Hormovitis. Collectively, the players others lost about $15 million. The court papers charge conspiracy,...

Principals of Investment Adviser Charged in SEC Action

Two principals of an investment adviser were named as Respondents in an SEC administrative proceeding. The action centers on claims that the two men improperly advised their clients to invest in off-shore funds without fully disclosing their affiliation with those funds or the fees they were paid. In...

$1 Billion High-Yield Investment Fraud Leads Three Investment Advisers to Prison

Three former investment advisers – William J. Ferry, a former stock broker and investment adviser; Dennis J. Clinton, a former real estate investment manager; and Paul R. Martin, a former senior vice president and managing director of Bankers Trust – have been sentenced to prison for their...

SEC Files Two Investment Fraud Actions

The SEC brought two investment fraud actions. One centered on defendant Thomas J. Lawler, known as the Reverend Tom, and the sale of administrative remedies or ARs which eliminated the purchaser’s debt while yielding significant profits. SEC v. Lawler, 1:14-cv-02468 (N.D. Ga. Filed July 31, 2014...

The SEC Brings Another Case Centered on the EB-5 Immigration Program

The government’s EB-5 program is supposed to be a win win for everyone. For immigrants seeking admission to the United States it is supposed to provide a path to citizenship if the requirements, centered on the investment of $500,000 or more in select projects, are met. For the U.S. it is a job...

SEC Charged Los Angeles-Based EB-5 Lawyers with Securities Fraud

Los Angeles-based EB-5 attorney Justin Moongyu Lee, and his wife Rebecca Taewon Lee and his law firm partner Thomas Edward Kent were charged by the Securities and Exchange Commission today with securities fraud. Misrepresentation to the Investors The Lees and Mr. Kent raised nearly $11.5 million...

Investment Adviser Pleads Guilty to Wire Fraud Charge

Investment adviser Ismail Elmas pleaded guilty this week to an information charging one count of wire fraud. U.S. v. Elmas, No. 1:14-cr-00358 (E.D. Va.). This action is the latest is a series cases centered on investment frauds in which the adviser or promoter solicits funds from unsuspecting investors...