Banking and Finance

    • 5 Jan 2016

    An Insider’s View of the EB-5 Program Extension to September 30, 2016

    by Mona Shah & Omar Hakim The Battle to Reform EB-5: After months of vigorous debates, endless negotiations, constant redrafting, and a frenzy of last minute investor filings, it was much ado about nothing! Congress, never known for efficiency, decided to bow into pressure from many within the EB-5 industry, who believed the pending legislation would be the death knell to the EB-5 program. The program was thus...
    • 16 Nov 2015

    Jury Holds Ernst & Young Liable for Madoff Losses

    A Washington jury has found accounting firm Ernst & Young ("E&Y") liable for at least $10 million of losses suffered by a Washington investment company that invested in Bernard Madoff's infamous Ponzi scheme through a "feeder fund" audited by the firm. FutureSelect Portfolio Management ("FutureSelect"), a Washington-based financial firm, obtained a total verdict of $20 million...
    • 16 Nov 2015

    Supervision of International Bank Branches-A Global Analysis: United States

    by Kathleen Scott 1. How can international banks operate in your jurisdiction? Non-US banks can engage in banking activities in the US through direct offices such as branches, agencies and representative offices or through bank subsidiaries. Branches and agencies can engage in banking activities, with more limited activities permissible for agencies (usually with respect to deposit-taking activities). Representative...
    • 12 Nov 2015

    Criminal Charges Filed Against Co-Founder of "Triple Algorithm" Ponzi Scheme

    North Carolina prosecutors have filed criminal charges against a Michigan man accused of masterminding a massive Ponzi scheme that duped over 10,000 victims out of at least $7 million by telling them he could deliver outlandish returns exceeding 700%. Troy Barnes, 53, was charged with one count of wire fraud conspiracy and three counts of wire fraud in an indictment unsealed today. The charges come after Barnes' accused...
    • 4 Nov 2015

    Let’s Give Title III Crowdfunding a Chance

    It was in many ways the centerpiece of the Jumpstart Our Business Startups (JOBS) Act of 2012. At the signing ceremony all the President could talk about was the idea of “bringing Wall Street to Main Street.” And while the JOBS Act has many other terrific provisions, including the new Regulation D Rule 506(c) and the new Regulation A+, the true statutory crowdfunding in Title III got the headlines. And a growing...
    • 4 Nov 2015

    Trial Begins Friday for 20-Year Old Nightclub Owner Accused of $500,000 Ponzi Scheme

    Trial begins Friday for a Connecticut teenager accused of operating a Ponzi scheme that duped friends and family - including his parents - out of $500,000. Ian Bick, now 20, is facing eleven counts of wire fraud, three counts of money laundering, and one count of making a false statement to law enforcement. Bick has been free on bond since his arrest earlier this year - with one of the conditions of his release prohibiting...
    • 3 Nov 2015

    Ohio Couple Charged With $70 Million Ponzi Scheme

    An Ohio husband and wife face criminal and civil actions on charges that they operated a massive Ponzi and pyramid scheme that is believed to have taken in at least $70 million from nearly 500 victims. An indictment returned by an Ohio federal grand jury charges William M. Apostelos and his wife Connie M. Apostelosa/k/a Connie Coleman, with dozens of fraud charges. Each was charged with 1 count of conspiracy to commit...
    • 2 Nov 2015

    Florida Woman Gets 9-Year Sentence for $25 Million Ponzi Scheme

    A Florida woman whose company promised weekly returns of up to 50% will spend the next nine years in prison after pleading guilty to running an elaborate Ponzi scheme. Jenifer Hoffman, 51, pleaded guilty earlier this year to charges of conspiracy to commit wire fraud and filing a false tax return. She is the last of three defendants to be sentenced for their role in Assured Capital Consultants ("ACC"), with...
    • 30 Oct 2015

    More States Looking to ‘Go Green’ In Spite of Banking Woes

    by Rich Ehisen This Tuesday, Ohio voters will go to the polls to decide whether to legalize recreational and medicinal marijuana use. But even if the Buckeye State becomes the 24 th (along with the District of Columbia) to legalize some form of marijuana, it will not solve one of the most significant problems facing the burgeoning legal weed industry: the lack of access to banking services that virtually all other...
    • 28 Oct 2015

    Rothstein "Independent Asset Verifier" Gets 30-Month Sentence

    A south Florida investment advisor who once served as a financial advisor to convicted Ponzi schemer Scott Rothstein has been sentenced to a 30-month term for his role in the scheme. Michael Szafranski, 37, received the sentence from U.S. District Judge Dimitrouleas after previously pleading guilty to a single wire fraud conspiracy charge. Szafranski had originally faced a dozen fraud charges when he was indicted earlier...
    • 23 Oct 2015

    After Failed Suicide Attempt, Ex-Biglaw Lawyer To Plead Guilty To $5 Million Ponzi Scheme

    A former Biglaw lawyer who was charged with operating a $5 million Ponzi scheme after surviving a Ponzi scheme will reportedly plead guilty to fraud charges. Charles Bennett, a former lawyer at renowned law firm Skadden Arps Slate Meagher & Flom LLP, was arraigned from his hospital bed late last year on charges of wire fraud and securities fraud after an NYPD diver rescued him from the Hudson River. He also faced...
    • 21 Oct 2015

    Madoff Victims Who Lost $1.1 Million or Less Will Soon Be Fully Repaid

    The court-appointed bankruptcy trustee for Bernard Madoff's massive Ponzi scheme is seeking to make a sixth distribution to Madoff's defrauded victims that, if approved, would fully repay victims with losses of $1.1 million or less. Trustee Irving Picard has scheduled a hearing for November 18, 2015 over whether his proposal to make a collective distribution of approximately $1.5 billion may move forward. Combined...
    • 15 Oct 2015

    After Mistrial, Feds Will Retry Cay Clubs Founder In November

    Authorities are hoping that Fred Davis Clark's good luck streak has finally run out. The founder of Cay Clubs, which has been accused by civil and criminal authorities of operating a massive $300 million Ponzi scheme that duped scores of investors with promises of lucrative returns through timeshare leasing, is set to stand trial in early November after a previous federal jury deadlocked and a mistrial was declared...
    • 14 Oct 2015

    Bank Hit With $72 Million Judgment for Role in $100 Million Ponzi Scheme

    An Ohio-based bank was tagged with a $72 million judgment - ballooning to nearly $83 million with accrued interest - for its role in providing banking services to a notorious Ponzi schemer who committed suicide as authorities closed in. Huntington Bank, a publicly-traded company with hundreds of branches concentrated on the east coast, was found liable for the return of over $72 million in fraudulent transfers it received...
    • 12 Oct 2015

    Tribal Nations to Take Cannabis Cash?

    According to Bloomberg, the Native Americans are getting ready to accept cash earned by cannabis growers and sellers who are not able to deposit it in regular banks due to the still federally illegal nature of what they are doing. The report indicates that only about 220 of the 7600 American banks accept cannabis cash. For others, the compliance hassles just don’t seem worth it currently. The hope of one Anthony...
    • 9 Oct 2015

    Operation Choke Point: Lawsuit Against Federal Bank Regulators Survives Motion to Dismiss, Proceeds to Discovery

    by Camden R. Webb A federal court in Washington DC has ruled that a lawsuit against federal bank regulators challenging “Operation Choke Point” may proceed. Operation Choke Point is a program begun by the United States Department of Justice that was designed to “choke off” banking services to persons who were engaging in illegal activities, such as money laundering. According to the original...
    • 8 Oct 2015

    Supreme Court Rejects Time-Based Damages for Madoff Victims

    The U.S. Supreme Court refused to hear an appeal over whether victims of Bernard Madoff's historic Ponzi scheme were entitled to an inflation-based upward adjustment of their losses, freeing approximately $1 billion for future distributions to victims and bringing finality to an appellate court's decision earlier this year dismissing such an adjustment. Trustee Irving Picard indicated in a statement issued today...
    • 6 Oct 2015

    Lawyers Seek Approval to Distribute Clawback Recoveries to Ponzi Victims

    Victims of one of the largest Ponzi schemes uncovered in Ohio could soon receive a partial return of their losses based on efforts by attorneys to "claw back" fictitious profits paid to some investors. Attorneys representing victims of Glen Galemmo's $35 million Ponzi scheme are set to appear in a Cincinnati federal court next week to seek approval to distribute over $3 million recovered in "clawback"...
    • 5 Oct 2015

    Self-Described "Idiot" Charged With $1.5 Million Ponzi Scheme

    A New Jersey man was charged with multiple violations of federal securities laws for operating what authorities allege was a Ponzi scheme that duped investors out of over $1.1 million. William Wells, along with his company, Promitor Capital Management, LLC ("Promitor"), was named in a complaint filed in a New York federal court by the Securities and Exchange Commission. The Commission is seeking disgorgement...
    • 30 Sep 2015

    Banker Tied to Rothstein's Massive Ponzi Scheme Will Plead Guilty

    Just before his trial was scheduled to begin next month, a former TD Bank vice president will plead guilty to a wire fraud conspiracy charge related to his relationship with convicted Ponzi schemer Scott Rothstein. Frank Spinosa, 54, is scheduled to plead guilty to a single count of wire fraud conspiracy on October 8, 2015. Spinosa had been scheduled to stand trial next month, where he could have been sentenced to dozens...
    • 25 Sep 2015

    Victims of $200 Million Ponzi Scheme Set to Recover 9% of Losses

    Nearly six years after a raid by the Federal Bureau of Investigation uncovered a $200 million Ponzi scheme masterminded by Tim Durham, a bankruptcy trustee tasked with recovering funds for scheme victims has announced his intention to make a first distribution representing 8% - 9% of victim losses. Victims of Fair Finance Company ("Fair Finance") will share a collective $18 million distribution, the bankruptcy...
    • 24 Sep 2015

    CFPB Highlight Mortgage Complaints in Third Monthly Complaint Report

    by Barbara S. Mishkin The CFPB has issued its September 2015 complaint report, the third in its new series of monthly complaint reports. The new report spotlights mortgage complaints and complaints from consumers in the Denver, Colorado metro area. General findings include the following: • As of September 1, 2015 the CFPB has handled 702,900 complaints nationally, including 25,732 complaints in August...
    • 23 Sep 2015

    Texas Man Admits to $4.5 Million Bitcoin Ponzi Scheme

    In what is widely believed to be the first Ponzi scheme involving virtual cryptocurrency Bitcoin, a Texas man pleaded guilty to one count of securities fraud in a scheme that raised nearly $5 million in Bitcoin from investors who were promised astronomical annual returns of over 3,500%. Trendon Shavers, who turned 33 today, entered the plea before U.S. District Judge Lewis Kaplan. Shavers is scheduled to be sentenced...
    • 22 Sep 2015

    North Carolina Bank Sued by Victims of $40 Million “Black Diamond” Ponzi Scheme

    Four years after settling allegations by the U.S. Department of Justice that it turned “a blind eye to criminal conduct occurring under its nose,” a North Carolina bank is facing a lawsuit from victims of a $40 million Ponzi scheme who claim that the bank allowed the scheme to thrive. CommunityOne Bank (“CommunityOne”), based in Asheboro, North Carolina, was named in a lawsuit filed by 30 victims...
    • 21 Sep 2015

    Hollywood Filmmaker Charged With $21 Million Ponzi Scheme

    A California man and woman were arrested by authorities on charges that they masterminded a $21 million Ponzi scheme that pitched large returns in exchange for financing movie productions. Michelle Kenen Seward, 42, and Dror Soref, 75, were arrested by authorities with the California Department of Insurance last week. According to arrest records, Soref is being held on $2.7 million bail pending a September 28th court...