Bankrupt Banker

ex-CEO Ronald Ferguson and ex-CFO Elizabeth Monrad — and one worked at AIG.

Five former insurance company executives were convicted today in Hartford, Conn., for deceiving American International Group investors back in 2000, Four led General Reinsurance Corp. — including ex-CEO Ronald Ferguson and ex-CFO Elizabeth Monrad — and one worked at AIG. A federal jury found all five guilty of fraud for a bogus stock transaction that helped AIG add $500 million in phony loss reserves, a key indicator of an insurer's health."This case is about truth, a choice to lie and deception to cover it up,'' Assistant U.S. Attorney Raymond Patricco told jurors in closing arguments. "These five defendants made the choice to lie to AIG's investors and to deprive them of the opportunity to make informed decisions about their stock.'' (Here's the Justice Department's press release.) All could be sentenced to a maximum of 20 years, though sentencing guidelines typically call for lesser terms. They'll learn their fates May 15. The convictions add to the swelling list of big corporate crimes the past few years. The greatest hits include:Days Inn — $100 million bank fraud; PinnFund — $187 million mortgage Ponzi scheme; Brocade Communications — millions in stock back-dating; Enterasys Networks — $97 million accounting fraud; Suprema Specialties — $400 million bank and stock fraud; Tyco — $580 million in theft and stock fraud; WorldCom — $11 billion accounting fraud; Adelphia Communications — $100 million theft and $2.3 billion debt deception; Rite Aid — $1.6 billion accounting fraud; and perhaps the best known case, Enron, which also snared executives from Merrill Lynch. The Bush administration launched the Corporate Fraud Task Force in 2002 in the wake of Enron and WorldCom. Back in November, the Wall Street Journal's Law Blog flagged an American Lawyer analysis of the task force's accomplishments, which asked: "Is there no more corporate crime — or has the Justice Department simply stopped looking for it?"

ex-CEO Ronald Ferguson and ex-CFO Elizabeth Monrad — and one worked at AIG.

Five former insurance company executives were convicted today in Hartford, Conn., for deceiving American International Group investors back ...

Britons involved in tax fraud British government's tax agency said on Monday it too had paid for information on secret Liechtenstein b

A massive tax evasion scandal in Germany has spilled over to other parts of Europe as Berlin vowed to share information on alleged tax evasion centering on Liechtenstein with countries whose nationals may be implicated.Widening the scope of what is already a massive scandal involving hundreds of wealthy German tax cheats sheltering millions in discreet bank accounts in Liechtenstein, the German government said on Monday, Feb. 25, it would provide information to foreign countries whose nationals are involved in the tax evasion affair. "We are going to respond to requests in this regard," German finance ministry spokesman, Thorsten Albig told reporters, adding that Germany would not charge foreign governments for the information. Scandinavians, Britons involved in tax affair? Germany's intelligence service is reported to have paid 4.2 million euros ($6.22 million) to an informant, a former employee of Liechtenstein banking group LGT, for an incriminating list containing the names of hundreds of people who evaded taxes by parking their money in secret bank accounts in the tiny Alpine principality of Liechtenstein. Albig said Berlin bought the information because investigators believed that "it could lead to the return of hundreds of thousands of dollars." Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: It's not just Liechtenstein's scenic beauty that attracts the rich and famous The list is believed to contain the names of more than 700 wealthy Germans as well as well-heeled tax cheats from other nations. The disclosure has prompted a massive investigation in Germany and frayed ties between Berlin and Liechtenstein capital, Vaduz. Germany's Handelsblatt business daily reported that Finland, Sweden and Norway had signaled interest in getting their hands on the list of bank clients. Joining the German crackdown on tax evaders, the British government's tax agency said on Monday it too had paid for information on secret Liechtenstein bank accounts held by British citizens. Media reports said Britain paid a whistleblower 100,000 pounds (132,931 euros, $196,000) for details of Liechtenstein accounts held by 100 wealthy Britons. Unpaid taxes in the affair could amount to as much as 100 million pounds, reports said. The Financial Times reported that Britain had refused two years ago to pay the whistleblower but changed its mind after Germany shelled out money to get similar information. The tax scandal also made waves across the Atlantic as a senior US lawmaker said last week he would launch an investigation into American citizens also believed to have hid assets at LGT. High-profile victim The investigation into the tax evasion scandal, considered one of the biggest in German history, began earlier this month with raids on the home and offices of Klaus Zumwinkel, the high-profile boss of Deutsche Post, Europe's largest postal service, who is suspected of having dodged taxes to the tune of 1 million euros. Zumwinkel has since resigned his post. Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Zumwinkel's fall from grace was rapid Ever since, German authorities have been conducting raids across the country on private individuals for allegedly hiding money in accounts Liechtenstein's biggest private bank, the LGT Group, which specializes in setting up foundations and is owned by Liechtenstein's royal family. The affair has angered ordinary Germans and sparked a heated debate about the ethics and accountability of the country's highly-paid business elite. Anger over "stolen information" Equally, the German government's payment for the incriminating information, which was allegedly stolen from the Liechtenstein bank by the former LGT employee, has come under intense scrutiny. On Monday, the LGT Bank voiced anger at how the "stolen information" was being shared around European capitals. "Apparently, the stolen data material has also been illegally disclosed, directly or indirectly, to other authorities," the bank said in a statement. "LGT regards such methods as being extremely offensive." The affair has also raised questions about banking secrecy laws enjoyed by some European nations. Liechtenstein is one of only three countries on the OECD's tax-haven black-list, alongside Andorra and Monaco. Germany has vowed to broaden efforts to crack down on tax evasion to countries such as Switzerland, Luxembourg and Austria as well. Switzerland and Luxembourg have distanced themselves from the charges. Both of the countries prohibit revealing bank information to the outside world except in criminal matters.

Britons involved in tax fraud British government's tax agency said on Monday it too had paid for information on secret Liechtenstein b

A massive tax evasion scandal in Germany has spilled over to other parts of Europe as Berlin vowed to share information on alleged tax evasi...

Joseph Kuchar pleaded guilty to a felony count of mail fraud on the city of St. Louis' Sewer Lateral Line program,

Joseph Kuchar pleaded guilty to fraud charges in connection with the city of St. Louis' Sewer Lateral Line program, which is funded by a special property tax levy on city residents, U.S. Attorney Catherine Hanaway announced Monday. Kuchar, 44, of House Springs, Mo., operated four construction companies in St. Louis, which participated in the city of St. Louis Sewer Lateral Line Repair program. He made small cash payments to streets department inspectors in order to encourage the inspectors to appear in a timely manner for inspections related to the Sewer Lateral Line Repair Program, thereby avoiding paying his workers for "standing around." Additionally, Kuchar failed to pay prevailing wages to his workers on projects falling under the Sewer Lateral Line Repair program despite representations to the contrary made on the related certified payroll forms. Kuchar admitted with his plea that he underpaid prevailing wages by approximately $60,000 on the program's construction projects. He pleaded guilty to a felony count of mail fraud. Kuchar was indicted in December 2007. Kuchar faces a maximum penalty of 20 years in prison and/or fines up to $250,000 when he is sentenced on May 13.

Joseph Kuchar pleaded guilty to a felony count of mail fraud on the city of St. Louis' Sewer Lateral Line program,

Joseph Kuchar pleaded guilty to fraud charges in connection with the city of St. Louis' Sewer Lateral Line program, which is funded by a...

Steven Law and his father, Lo Hsing Han "Godfather of Heroin"

In 1992, Lo founded Asia World Co Ltd. a company that has received numerous lucrative government concessions, including construction of ports, highways and government facilities, the Treasury said.Law now serves as managing director of the company, and the sanctions were extended to his wife, Cecelia Ng. The Treasury also blacklisted 10 Singapore-based companies owned by Ng, including property firm Golden Aaron Pte Ltd.The Treasury designated two hotel chains owned by Myanmar tycoon Tay Za, who was blacklisted in an earlier round of financial sanctions, the Aureum Palace Hotels and Resorts and Myanmar Treasure Resorts The sanctions have drawn a less than enthusiastic public reaction from Myanmar's southeast Asian neighbors, including Singapore, a key financial center in the region. Impoverished Laos and Cambodia have denounced the U.S. moves.Nonetheless, Adam Szubin director of the Treasury's Office of Foreign Assets control, said some governments in the region were quietly cooperating.Law and his father, Lo, had a history of illicit activities that supported the Myanmar junta. It called Lo as the "Godfather of Heroin" who has been one of the world's top traffickers of the drug since the early 1970s.Steven Law and his father, Lo Hsing Han, who it said was a big figure in the international heroin trade. The Treasury described both men as "financial operatives" of the Myanmar regime.It was the fourth set of sanctions under an executive order issued last year in response to Myanmar's military crackdown against protesters and included a freeze on any assets the firms and individuals may have under U.S. jurisdiction.Myanmar's junta in September crushed the biggest pro-democracy protests in nearly 20 years, killing at least 20 people, according to Human Rights Watch. Western governments say the toll may be much higher."The situation in Burma remains deplorable," U.S. President George W. Bush said in a statement, and called for concerted international pressure on Myanmar to achieve a "genuine transition to democracy."The regime has rejected calls from its own people and the international community to begin a genuine dialogue with the opposition and ethnic minority groups. Arrests and secret trials of peaceful political activists continue," Bush said. The Treasury said Law and his father, Lo, had a history of illicit activities that supported the Myanmar junta. It called Lo as the "Godfather of Heroin" who has been one of the world's top traffickers of the drug since the early 1970s.

Steven Law and his father, Lo Hsing Han "Godfather of Heroin"

In 1992, Lo founded Asia World Co Ltd. a company that has received numerous lucrative government concessions, including construction of port...

David Radler to be returned to Canada

David Radler has begun serving a 29-month sentence for fraud, secured in a plea bargain for testifying against his former friend and associate Conrad Black.The transfer would need approval by the Canadian and U.S. governments and, because of Canadian rules, could result in a sentence of as little as six months for Radler. Radler apologized for his actions at his sentencing hearing, saying "I will live my life with this, and I'm sorry for what I've done."The U.S. Bureau of Prisons said Radler surrendered himself at the Moshannon Valley prison in Pennsylvania at 11:30 a.m. ET, but didn't release any further details. <a href="http://3.bp.blogspot.com/_ANNSRoaDZro/R8Mw7dCkmYI/AAAAAAAABeM/QGGrvqrIZSc/s1600-h/ALeqM5jGO4gHBvU18IEQyQWsV6TXWKMR0A.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5171030595117291906" src="http://3.bp.blogspot.com/_ANNSRoaDZro/R8Mw7dCkmYI/AAAAAAAABeM/QGGrvqrIZSc/s320/ALeqM5jGO4gHBvU18IEQyQWsV6TXWKMR0A.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a>The Moshannon prison is operated by Cornell Companies Inc., a Texas-based private corrections company, and houses up to 1,300 low-security "specialized populations like sentenced criminal aliens," according to the U.S. Bureau of Prisons. Security measures include double fences with razor wire, 24-hour patrol and cameras, but the prison also offers several educational and rehabilitation programs to help prepare inmates to return to their communities.While Moshannon is a low-security jail, the two prisons closest to Radler's home are the Ferndale Institution, a minimum-security prison, and William Head Prison, which has maintained grounds and until recently included a miniature golf course. "He is in our custody," said spokeswoman Felicia Ponce.The media executive and former right-hand man in Black's newspaper empire, now inmate 18189-424, will have been fingerprinted, given a medical and mental evaluation and searched as soon as he was admitted.Judge Amy St. Eve had recommended Radler serve his sentence at Moshannon, as requested by his lawyers, when she upheld the 2005 plea bargain in December.With his plea deal "David Radler bought himself certainty," said Jacob Frenkel, a former U.S. prosecutor who has been following the case."By virtue of the fact that Conrad Black was sentenced to six and a half years and David Radler was viewed a central figure in the conspiracy, he likely saved himself at least four years of jail."Radler, 65, was granted a more lenient sentence of 29 months and a $250,000 fine in exchange for testifying against Black and three other executives in a four-month trial last year involving deals made by the former Hollinger newspaper empire.Black and his lawyers fiercely attacked Radler during the four-month trial for choosing to testify, and accused him of lying about Black's role in the fraud scheme to secure his deal with prosecutors.At the trial, Black dismissed Radler's testimony, saying outside of court: "I don't think any jury in the world would convict anybody on the basis of what he said. I repeat my long-standing view that this was never a criminal case - except possibly against him."Prosecutors appeared to agree with at least part of that statement by the end of the trial, distancing themselves from Radler's less-than-stellar testimony and telling the jury they could find Black guilty even if they ignored everything Radler had said.But his testimony was enough to help convict Black, who is slated to begin his own sentence for fraud and obstruction of justice convictions in one week.Black has been free on bail since his own sentencing, and has asked an appeals court to allow him to stay out of prison pending appeal.Prosecutors on Monday called the motion by Black and co-defendants Peter Atkinson and Jack Boultbee a "herculean effort to make what is essentially a sufficiency of the evidence appeal - and a weak one at that - appear to be something else.""Appellants realize the nearly insurmountable task ahead in convincing the court that their sufficiency arguments present substantial questions likely to result in reversal or a new trial," government lawyers said in documents filed with the Court of Appeals Monday.The appeals court is expected to rule on the bail issue sometime this week. It denied an emergency request from Black to remain free on bond during the appeal, saying Friday there was no need for an emergency decision because there was still plenty of time. Radler, for his part, is expected to make an application to be returned to Canada shortly after entering the U.S. system. As part of the plea deal, prosecutors agreed not to oppose his possible transfer to a Canadian prison.His lawyer Anton Valukas, had remained relatively quiet on the possible transfer, but said after the sentencing hearing that he "would try to have him in a facility that is closer to his home" in Vancouver.He said at the time that Radler chose Moshannon because "it's a facility which, I'm told, (hosts) other Canadians and it's a good facility." Valukas wasn't immediately available for comment Monday.

David Radler to be returned to Canada

David Radler has begun serving a 29-month sentence for fraud, secured in a plea bargain for testifying against his former friend and associa...

HSH Nordbank are to sue UBS

Germany’s biggest financial institutions aRE to sue UBS, the Swiss banking giant, claiming it was mis-sold hundreds of millions of pounds worth of sub-prime securities.The action is expected to trigger a wave of similar lawsuits across world financial centres as institutions seek recompense for losses incurred from buying complex financial instruments that are now worth a fraction of their original price. It will also heap further pressure on Marcel Ospel, UBS’s embattled chairman, to resign.Sources familiar with the situation say HSH Nordbank, which has assets of €207 billion (£155.8 billion) and is the world’s largest provider of shipping finance, is to take legal action against UBS to recover up to €500m that was lost in a vehicle, set up six years ago, called North Street 4.At the time, this contained a basket of synthetic collateralised debt obligations, otherwise known as CDOs. Around 70% of the debt was corporate and the rest was exposed to the US sub-prime mortgage market.UBS has also been one of the hardest hit from the fall-out from sub-prime. It has since been forced to write down $18.4 billion from its own exposure to these mortgages.Now it faces action from banks it sold them to. UBS arranged at least nine North Street transactions with a combined value in excess of $15.6 billion. When the German bank approached UBS earlier this decade, it was keen to diversify its investment portfolio. It had excess regulatory capital and wanted exposure to a safe international credit portfolio.But now those close to HSH say it believes UBS sold an investment portfolio that contained substantially higher risk than was explained at the time.It claims the CDOs were mis-sold and mismanaged because UBS substituted products that were put into NS4 without proper explanation to its clients.Sources close to HSH say North Street 4 ended up with 70% of the vehicle being exposed to the American property market and only 30% was corporate debt. UBS declined to comment on the allegations.It is thought HSH intends to mount the legal action in New York, although talks have been going on for several months with UBS in a bid to reach a settlement.Lawyers expect a “litigation boom” in the wake of the sub-prime fall-out. Sue Miller, a financial litigator at City law firm Stephenson Harwood, said that misrepresentation of claims would almost inevitably include claims against individual traders.Other legal experts say action against investment banks that sold these products will drag on for years, and up to $500 billion will have to be written off against the value of sub-prime mortgages. So far the bulk of the pain has been felt on Wall Street, but other financial centres in places like Japan and Korea have yet to admit their losses.

HSH Nordbank are to sue UBS

Germany’s biggest financial institutions aRE to sue UBS, the Swiss banking giant, claiming it was mis-sold hundreds of millions of pounds wo...

ATM fraud, Money disappearing from Barclays Bank customer

“It’s not only people in the Merthyr area affected, it has happened in the Rhymney Valley as well,” said the mum, who is also a Barclays Bank customer, and is warning people to be vigilant.money was withdrawn in Tunisia from Angelina Morkot’s bank account.Angelina, 33, of Aberbargoed had hundreds of pounds withdrawn in Tunisia from their bank accounts without their permission. She discovered £262 had been taken from her account last Friday, when she went to a cashpoint.Alarm bells rang when she saw her balance and learned that the large withdrawal was made in Tunisia two days earlier.She said: “I was told my card had definitely been cloned from an ATM as they had my pin number as well and the money was taken from an ATM in Tunisia. I’ve had the forms to claim the money back and I’ve contacted the police.”A spokeswoman for Nationwide its ATM used by defrauded customers had not been compromised.Barclays confirmed it had “received a number of inquiries which are under investigation with regard to a potential ATM fraud”.

ATM fraud, Money disappearing from Barclays Bank customer

“It’s not only people in the Merthyr area affected, it has happened in the Rhymney Valley as well,” said the mum, who is also a Barclays Ban...

The NatWest Three sentenced to more than three years in jail

The NatWest Three bankers were sentenced to more than three years in jail after pleading guilty to an Enron-related fraud.<a href="http://4.bp.blogspot.com/_ANNSRoaDZro/R8BPhdCkmOI/AAAAAAAABcs/LSZCzDH7GWE/s1600-h/2464A9FBFFCBD57AEA31DAF694CD64.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5170219808371022050" src="http://4.bp.blogspot.com/_ANNSRoaDZro/R8BPhdCkmOI/AAAAAAAABcs/LSZCzDH7GWE/s400/2464A9FBFFCBD57AEA31DAF694CD64.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a>David Bermingham, Gary Mulgrew and Giles Darby, all 45, were extradited to the US under a controversial treaty 20 months ago and pleaded guilty at the US district court in Houston, Texas, in November.Judge Ewing Werlein Jr ordered the trio to all serve 37 months behind bars and pay back a total of 7.3 million dollars (£3.5 million) to the Royal Bank of Scotland, NatWest's owner, when he sentenced them at the US district court in Houston, Texas.The judge said he was impressed by the number of letters he had received which vouched for the "favourable qualities" of the three men. But he said: "To finally regain that respect is going to involve paying back the Royal Bank of Scotland every dollar or, over there, every pound."He added: "I wish you well in your future endeavours and I'm confident we will never see you before a court again." All three defendants apologised in court during the hour-long sentencing.Bermingham said: "My conduct in this matter fell well below the standards expected."He said he wanted to apologise to his wife and children, and to the people who suffered from the consequences of his actions.Darby said: "Clearly a long time has passed since this offence. At the time I didn't realise the implications of what was happening. I failed to take the right course of action and I deeply regret that."Mulgrew apologised "unreservedly" and said his actions "lacked integrity".

The NatWest Three sentenced to more than three years in jail

The NatWest Three bankers were sentenced to more than three years in jail after pleading guilty to an Enron-related fraud. David Bermingham,...

Brokers downgrade of the two biggest U.S. home-funding companies

"The big issue is, 'Where is the subprime problem going to pop up again?'" said Lincoln Anderson, chief investment officer at LPL Financial Services in Boston. Brokers downgrade of the two biggest U.S. home-funding companies signaled the likelihood of further deterioration in credit markets, intensifying fears of a recession in the world's largest economy.Safe-haven U.S. government debt rose on the stock market's decline, and spurred by a fresh round of poor U.S. economic data, the dollar fell to a three-week low against the euro. Data showing growth in euro zone services also underpinned the strength of the single European currency.European shares fell as downbeat results from Germany's RWE (RWEG.DE: Quote, Profile, Research) hit utilities and as fears of a U.S. recession hurt banks. In Japan, shares also fell on fears of a U.S. recession and shares of exporters fell as the yen strengthened.Merrill Lynch recommended investors sell Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research), the largest U.S. home-funding companies, as they face more pain due to further deterioration in financial markets and weakening credit conditions.The downgrades were the latest dismal new for the U.S. financial sector, which is suffering from defaults in the subprime mortgage market and tightening credit markets.

Brokers downgrade of the two biggest U.S. home-funding companies

"The big issue is, 'Where is the subprime problem going to pop up again?'" said Lincoln Anderson, chief investment officer...

hyper-complex credit bubble

hyper-complex credit bubble affecting a dizzying array of little-known but somehow completely intertwined components. No wonder the coverage has been as inconsistent and spotty as, well, the auction-rate market.The auction-rate market? What's that? Really, how many financial journalists knew what the auction-rate market was-or that it even existed-until a few weeks ago? Or a SIV, for that matter? Or a conduit? Or a credit-default swap? Or even bond insurance? This is normally dense, difficult, unglamourous stuff. So we're left with a, well, strange situation. Thanks to the blogosphere, never before has so much media pantingly followed finance. But never before has the media produced so little real information on such a big event. Ask yourself: has any one outlet, online or otherwise, emerged as the go-to source for original insight into our current situation?To be sure, The Wall Street Journal, The New York Times and the Financial Times have dutifully covered many of the individual shoes that have dropped as we fall deeper into an economic quagmire. And in the blogosphere, Portfolio.com's Felix Salmon, for one, has done a decent job providing running commentary on developments and directing his readers to other outlets when they turn up something interesting. But no one seems to be putting it together into a coherent package or explaining how these complex markets and products fit together and why anyone should care about them. Instead, we get general rehashings like Mort Zuckerman's elementary explainer in the Feb. 27 issue of The New Republic. Its headline: "Panic!" A Subprime-Induced Crisis, that spread from the mortgage companies to the largest hedge funds, to the biggest banks…and finally to the plummeting stock markets. A Powerless, Reckless Fed: The Bernanke "Plunge Protection Team" recklessly cut rates as quickly as possible to fight off a possible recession. A Worldwide Credit Orgy: The ECB pumped an astonishing one-half trillion dollars into the global financial system in late December to help alleviate the credit crunch in a single week. An Epidemic of Writedowns: Wall Street's biggest financial firms wrote-down tens of BILLIONS to keep their books in the black. Biggest Banks Crying "Uncle!" Sovereign Wealth Funds (SWFs) from Singapore and China road to the rescue to bailout "too-big-to-fall" banks like UBS and Citigroup. And just yesterday, Qatar officials announced they would pump as much as $15 billion of their Sovereign Wealth Funds to buy distressed European and U.S. bank stocks over the next 12 months. Global Stocks Head One Way — Down: Not to mention, the Dow dropped over 11% since just November 1st. And, we just had the worst January for stocks since 1990.

hyper-complex credit bubble

hyper-complex credit bubble affecting a dizzying array of little-known but somehow completely intertwined components. No wonder the coverage...

Several Australian companies in trouble

So far in this downturn in the United States most of the defaults have been confined to households defaulting on their mortgages and losing their homes. Those defaults are at a record high and the general sense is that there will be more of them this year. That problem has led to a credit squeeze as banks are forced to rebuild their capital bases to cover the subprime mortgage losses. That is now affecting corporate borrowers who have to refinance their short term debt, and we are seeing several Australian companies in trouble because of that. It was a piece about credit default swaps, and how it will be the next subprime-type debacle. The CDS market is getting the wobbles, it seems. In Australia, for example, the spread on Macquarie Group CDSs has blown out from 60 basis points (0.6 per cent over bank bills) in December to 190 basis points today. The same thing is happening across the United States and last week American International Group shocked the market by confessing that its auditor had found a $US3.6 billion mistake in the valuing of its massive CDS portfolio. A credit default swap is a contract under which two parties agree to isolate and trade the credit risk of at least one third-party. Under a credit default swap agreement, a protection buyer pays a periodic fee to a protection seller in exchange for a payment by the seller in the event of default in the reference entity. When a credit event is triggered, the protection seller either takes delivery of the defaulted bond for the par value (physical settlement) or pays the protection buyer the difference between the par value and recovery value of the bond (cash settlement).Basically credit default swaps are insurance policies, as they can be used by debt owners to hedge, or insure against default on a loan. However, because there is no requirement to actually hold any asset or suffer a loss, credit default swaps can be used to speculate on changes in credit spreads. Anyway, towards the end of the NY Times article was the news that the market for CDSs now stands at about $US45 trillion, but that the corporate bonds against whose defaults the swaps were created to protect lenders total just $US15.7 trillion. What on earth does this mean? I was already having enough trouble getting my head around the shadowy, unregulated credit default swap market that is twice the New York stockmarket to begin with. But the idea that the derivatives were three times the value of the debt they are created against was too much. It must mean that a lot of people have bought protection who don’t need it – they just did it as a bet that the company will fail. It’s like short selling a company’s shares. Someone on the other side has bet with you that the company won’t default. It’s like betting on flies crawling up the wall, except without the form guide. So, for example, when car parts maker Delphi went broke in 2005, the credit default swaps on the company’s debt exceeded the value of the underlying bonds tenfold. Those who had committed to deliver bonds in the event of default couldn’t do so, and an arrangement had to be struck that saw the buyers of protection get US$366.25 for every US$1000 they had bought. If the insurance was in their books at $1000, it had to be written down by $633.75. Credit default swaps were invented with collateralised debt obligations in 1995 by Blythe Masters, a 34-year Cambridge graduate who was then the head of JP Morgan’s Global Credit Derivatives group. The CDS market has now grown to be twice the size of the NY stock exchange and it is entirely unregulated. The contract is typically documented under nothing more than a confirmation that references a definition published by the International Swaps and Derivatives Association. The prices are not reported to the public and trades are done in private – there is no CDS exchange. They are valued by the institutions involved (that is, the bookies) using sophisticated computer models. The trade is not overseen by regulators and no one is checking whether anyone can meet their obligations. About a third of swaps are held by banks, according to the banking regulator, the Comptroler of the Currency, some of it to insure against possible default losses among their loan clients and some of it simply to bet against, or for, other banks’ clients. But of course the big explosion in the trade in default swaps and CDOs has come from hedge funds. Only about a third of the credit default swaps were created against a specific corporate debt issuer. The rest are either written against indexes representing baskets of debt from a variety of issuers or against collateralised debt obligations (CDOs) which are pools of bonds that include subprime mortgages as well as corporate bonds. Many CDOs, in fact, act like credit default swaps. The ones that have been sold to now-grumpy Australian municipal councils are created out of thin air and are based on an artificial list of companies, usually a grab-bag US companies that the issuing bank wants to buy insurance against. If four or five of these companies default, then the buyer of the CDO loses its entire investment. It is simply another form of default insurance for banks, but they have been turned into a form of gambling for hedge funds and investors like municipal councils, who should know better. Fear of the unknown is now stalking financial markets. Warren Buffett called all these derivatives “financial weapons of mass destruction” and his words are haunting ordinary investors who haven’t the faintest clue about this unseen “dark matter” that is filling the night sky. During the credit market turmoil of last August, 14 per cent of the CDS trades were “unconfirmed”, which meant one of the counterparties in the resale transactions was unknown, and remained unknown for 30 days. This means insurance has been bought from, or a bet has been made with, an unknown person. Whether that party can meet the obligation in the event of a default is unknown. On second thoughts, it is a fear of the Very Well Known: that is, recession. Recessions have come and gone throughout history, and with them always come some corporate defaults.

Several Australian companies in trouble

So far in this downturn in the United States most of the defaults have been confined to households defaulting on their mortgages and losing ...

HSBC online banking Fraud

News to everyone who uses HSBC online banking: We've heard of four different people who mysteriously had a couple of thousand dollars withdrawn from their HSBC checking accounts this week. When they called the bank to figure out what was going on, they discovered that it's been happening to hundreds of other people. So much so, that the bank's fraud department can't keep up with the reports. A quick Internet search turned up this consumerist.com post on the subject, which explains that it's a widespread problem among online banking users. According to the Website, a fraud investigator told one customer that the bank's "fraud department was so overwhelmed, it was still in the developing stage" of how to handle it. When we contacted HSBC, they acknowledged there was an issue but reassured us: We are ensuring zero liability for our customers and are reissuing ATM/debit cards to those impacted. HSBC has well-established internal security measures to prevent fraudulent activity. We take fraud of any kind very seriously and are continually monitoring customer activity to identify and avert fraud. "I don't what angers me more, the fact that I am missing all this money or that this crook only got charged a $1.50 withdrawal fee!" one customer, who lost nearly $3,000, told us. "They tell me it will take 10 to 20 business days to get my money back in my account. This is not a very impressive turnaround for the 'world's bank.'" So, if you have an HSBC account and use online banking, you should probably check your accounts today

HSBC online banking Fraud

News to everyone who uses HSBC online banking: We've heard of four different people who mysteriously had a couple of thousand dollars wi...

Alan White,Shinder Gangar they falsely told victims that Andrew Lloyd Webber and Sir David Frost were investors.

Alan White, 49, of Edwalton, Nottingham, and Shinder Gangar, 46, of Houghton on the Hill, Leicestershire, had denied conspiracy to defraud. They were convicted after an eight month trial at Birmingham Crown Court. The court heard they falsely told victims that Andrew Lloyd Webber and Sir David Frost were investors. Both the composer and the broadcaster gave evidence at the trial and told the jury they were not involved and had no knowledge that their names had been used. The court heard White and Gangar ran a bogus scheme using new clients' money to fund interest payments to existing customers, meaning there was no underlying trading in investments. They also used victims' funds to buy property, give unsecured loans to acquaintances and pay into other investment schemes. The men ran the accountancy firm Dobb White & Co which had offices in Leicester and Nottingham. They had denied conspiracy to defraud between December 1996 and October 2005 and a charge of conspiracy to commit corruption in 2002. The Serious Fraud Office (SFO) estimated that the total fraud involved sums of more than £100m. Speaking after the hearing, Kwadjo Adjepong, from the SFO, said: "Given that this investigation involved liaison with a number of foreign jurisdictions and the hard work that has gone into bringing this case by the SFO legal team and investigators, and Leicestershire Constabulary's economic crime unit, we are pleased with this result." Both men were remanded in custody. A date for sentencing has yet to be fixed.

Alan White,Shinder Gangar they falsely told victims that Andrew Lloyd Webber and Sir David Frost were investors.

Alan White, 49, of Edwalton, Nottingham, and Shinder Gangar, 46, of Houghton on the Hill, Leicestershire, had denied conspiracy to defraud. ...

Rick Renzi and two of his business associates on charges that include wire fraud, money laundering, insurance fraud and extortion.

<a href="http://1.bp.blogspot.com/_ANNSRoaDZro/R79NP9CkmEI/AAAAAAAABbM/hNH8Hs01XFA/s1600-h/renzi.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5169935833723344962" src="http://1.bp.blogspot.com/_ANNSRoaDZro/R79NP9CkmEI/AAAAAAAABbM/hNH8Hs01XFA/s200/renzi.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a> A federal grand jury in Arizona has indicted three-term Republican Congressman Rick Renzi and two of his business associates on charges that include wire fraud, money laundering, insurance fraud and extortion. Content Read the indictment filed in Rep. Rick Renzi's caseThe 35-count indictment alleges that between December 2001 and March 2002, Renzi embezzled $400,000 in insurance premiums from a company that he owned and transferred the money to his congressional campaign. Renzi transferred ownership of the company, called Patriot Insurance Agency Inc., to his wife in 2004. The lawmaker is also accused of enriching himself by compelling a copper mining interest, referred to as "Company A" in the indictment, to buy a parcel of land from his associate James Sandlin in exchange for his sponsorship of legislation sought by Company A. When negotiations for the sale were stalled, Renzi allegedly told Company A "no Sandlin Property, no bill." Sandlin owed Renzi $700,000 for property and paid $733,000 to Renzi when the sale went through, the indictment alleges. Prosecutors say Renzi failed to disclose the debt and the payment, something that he as a member of Congress is required to do by law. Sandlin, of Sherman, Texas, was also indicted for his alleged role in the property deal. Another Renzi business associate, Andrew Beardall of Rockville, Md., faces charges stemming from the alleged embezzlement of the $400,000 from Patriot Insurance Agency. A statement released by Renzi's attorneys Reid Weingarten and Kelly Kramer was critical of the timing of the charges. On Thursday, Renzi buried his father, Maj. Gen. Eugene Renzi, at Arlington National Cemetery. 2nd McCain Official to Face Federal Charges"We are disappointed that the Department of Justice would not allow a decent amount of time to pass to allow a son to mourn the passing of his father," the statement said. It also stated that Renzi did nothing wrong and will fight the charges. He and his codefendants are scheduled to appear in federal court in Arizona on March 6. Renzi's attorneys also suggested that the prosecution may have been politically motivated. "We fear that the Department of Justice may have allowed the investigation to have been influenced by political considerations, which should never have a place in the administration of justice." News reports of the federal investigation into Renzi last year coincided with the firing of Paul Charlton, the U.S. attorney from Arizona.

Rick Renzi and two of his business associates on charges that include wire fraud, money laundering, insurance fraud and extortion.

A federal grand jury in Arizona has indicted three-term Republican Congressman Rick Renzi and two of his business associates on charges that...

Major corruption scandal in the European Union

<a href="http://2.bp.blogspot.com/_BmGtgoSmd_o/R77cEir338I/AAAAAAAAADU/S8e3t0i8XwI/s1600-h/zeitungen_a4fd1f.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5169811392856317890" src="http://2.bp.blogspot.com/_BmGtgoSmd_o/R77cEir338I/AAAAAAAAADU/S8e3t0i8XwI/s320/zeitungen_a4fd1f.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a> Last year, three Italian nationals, including a civil servant working for the European Commission were charged with forgery, corruption fraud and forming a criminal organization. In what could become a major corruption scandal in the European Union, a confidential report by the European Parliament's internal auditors says that some of the 784 members of parliament (MEPs) were employing family members while others had registered payments to firms which did not exist. The demand for an investigation was made by Charles Davies, a member of the UK Liberal Democrat party and the parliament's budget control committee. Davies, who was among a handful of MEPs allowed to see the report, perused its contents under supervision and was forbidden from taking notes or making photocopies.Corruption cases at EU institutions are a sensitive issueThe EU's anti-fraud unit, OLAF, which routinely checks internal audits made by the EU's various institutions, will now scrutinize the secret internal study to determine whether there was an abuse of public EU funds.Complied by the EU parliament's internal auditor, the report analyses 167 payments made in 2004 and 2005 to MEPS' assistants. Each member of the European Parliament is granted 16,000 euros ($23,500) a month to pay assistants. While some assistants work in Brussels, other staffers work in their MEP's own country. Parliamentarians pay their staff 140 million euros a year, about 10 percent of the assembly's overall expenditure.News agency AFP quoted an unnamed EU deputy who said, "The auditor found proof that in some cases the listed service provider didn't even exist." Citing another unnamed parliamentary insider, the news agency said the abuses amounted to almost 100 million euros.Davies told EUobserver that his first reaction was "a degree of hysteria given the scale of the abuse that is taking place and given the fact that it has been kept secret."How transparent is the European Parliament?Davies, who contacted OLAF about the report, called the decision to keep the report secret "absurd" and a "travesty of justice." "A parliament committed to openness and transparency has no right to try and keep secret details about how public money is used and misused. And… we are talking about very large sums of money," Davies said. Though the EU Parliament has not commented on the details of the report, spokeswoman Marjory van den Broeke said the audit confirmed that the remuneration system was "too complicated" and had become "very difficult to manage, both for the deputies and for the parliament's administration." The European Parliament's secretary-general is now to propose a simpler system for hiring and administering staff, doing away with the current system which involves at least three different methods for MEPs to put together their team of assistants. Corruption cases at EU institutions are a sensitive issue after a scandal in the late 1990s brought down the entire European Commission. The commission and an assistant to an MEP were charged with forgery. Edith Cresson, a former French Prime Minister who served as research and education commissioner in Brussels from 1995 to 1999, was accused of hiring a dentist from her home town as an advisor, despite being warned it was against EU rules. The scandal eventually led to the collective resignation of the commission and its President at the time, Jacques Santer, in March 1999.

Major corruption scandal in the European Union

Last year, three Italian nationals, including a civil servant working for the European Commission were charged with forgery, corruption frau...

Unwinding of CDOs

``The market is full of rumors of unwinding of CDOs, and the price action suggests that people believe the rumors,'' said Peter Duenas-Brckovitch, head of European credit trading at Lehman Brothers Holdings Inc. in London. ``It sort of has that Armageddon feel, and the market is feeding on itself.'' Everyone knows that homeowners insurance is designed to insure against fires and floods but few are familiar with credit default swaps, arcane financial instruments invented by Wall Street about ten years ago. Credit default swaps (CDS) were designed as “insurance” to reimburse banks and bondholders when companies failed to pay their debts. Credit default swaps have become so popular among banks that the Comptroller of the Currency (OCC), which regulates banks, reports that they are the fastest growing derivatives product in the market, growing 19% from the second quarter to the third quarter last year to $14 trillion in value. The problem is, they are unregulated. Experts contend that, because credit default swaps have proliferated so rapidly, a hiccup in this market could set off a chain reaction of losses in financial institutions that will virtually dry up the banks' ability to lend. The cost of protecting corporate bonds from default soared to a record as investors purchased credit-default swaps to hedge against mounting losses in the $2 trillion market for collateralized debt obligations. This is more than just a tempest in a teapot. Already AIG , the largest insurer in the United States , has had to deal with pricing and risk issues with its independent auditors on some of the credit default swaps it holds. Societe Generale, the French bank that recently reported losses from a rogue trader, also has problems with CDSs. "The purchase of assets originating from asset-management funds invested in credit-type underlyings could continue in the first quarter and, given the situation in the credit markets, lead to further write-downs," the bank warned. Credit Suisse was forced to raise the coupon on a $2 billion note it was offering after reporting writedowns of $1 billion in the first quarter of 2008 dealing with credit-default swaps. All of this must be leading to arguments between the boards of directors and their independent auditors at almost every major bank about the true value and risk of their credit-default swaps. The trouble is, they must have their 2008 reports signed off by their auditors and in the hands of the Comptroller of the Currency by February 28th , for the OCC's year-end report. The problem is, practically no one can get a handle on the true value of their credit-default swaps because they are thinly traded, have huge counter-party risk, are unregulated and are difficult to analyze.

Unwinding of CDOs

``The market is full of rumors of unwinding of CDOs, and the price action suggests that people believe the rumors,'' said Peter Duen...

Fairfax has cashed in some of its CDS gains

Fairfax Financial Holdings Ltd., which has just cashed in on a huge bet against the U.S. bond market, has laid down a wager that the credit crunch will hit Europe with a similar force. The insurance firm yesterday revealed a 2007 profit of $1.1-billion (U.S.), more than quadruple the previous year's results, thanks to its investment in credit default swaps (CDS), which rise in value when market conditions deteriorate. Fourth-quarter profit more than tripled to $564-million. But Fairfax chairman and chief executive officer Prem Watsa is also setting his sights across the Atlantic. Fairfax has invested about $60-million in European CDS in the belief that the lending problems that have struck UBS AG, Credit Suisse Group and other financial institutions may grow more serious."[The losses] are slowly starting to hit the marketplace," Mr. Watsa said. Fairfax's 2007 results were driven by $705-million in investment gains in the fourth quarter from CDS, including those tied to distressed monoline insurers. CDS are similar to an insurance policy against a default on bonds or loans. A buyer such as Fairfax pays a small premium and stands to gain if the borrower defaults, or if the perceived risk of a default grows higher.Before last summer, credit default swaps were inexpensive. In the case of monoline insurance companies, which have run into trouble for backing collateralized debt obligations with too many risky loans in them, an investor could buy swaps for between 1 and 2 per cent - in other words, paying $1-million to $2-million for $100-million worth of credit protection. Today, that same insurance can cost $25-million or more, as the market worries that companies like Ambac Financial Group Inc. and MBIA Inc. will not be able to handle their massive debts.Mr. Watsa said credit risk in the monolines is now "much closer to being fairly priced," so Fairfax sold virtually all of those swaps in January and early February. As of Feb. 15, it still owned credit default swaps worth nearly $1.3-billion.But he said many other assets - including stocks - are still too expensive, particularly if the U.S. has a deep recession. Fairfax's results were also boosted by a strong year in insurance underwriting. The company paid just 94 cents in claims and expenses for every dollar in premiums it received. Analyst Jeff Fenwick of Cormark Securities Inc. said Fairfax's operating fundamentals in the insurance business are strong, even without the CDS gains. The fact that Fairfax has cashed in some of its CDS gains - leaving it at year-end with almost $1-billion of cash - means the company is in a strong financial position for 2008, he said. The shift into European CDS also looks like a good bet, Mr. Fenwick said, because "we've seen the contagion from what's gone on in the U.S. markets spreading around the world."Fairfax stock has moved up sharply recently, rising from about $200 six months ago to more than $300.

Fairfax has cashed in some of its CDS gains

Fairfax Financial Holdings Ltd., which has just cashed in on a huge bet against the U.S. bond market, has laid down a wager that the credit ...

war on tax evasion

Tax evasion has become something of a national pastime in major Western countries, thanks to symbiotic cooperation between legislators and lobbyists. Governments are realizing that there are trillions of dollars percolating around Lichtenstein, Luxembourg, the Cayman Islands, the Bahamas, the Virgin Islands, Jersey, Mauritius, Switzerland, Cyprus, etc.However, the “war on tax evasion” is as stupid as the “war on drugs.” Tax havens have a supply and demand function just like any other product. Intelligent people with capital will always create new havens to the extent that they need them.Getting to the main point: Lichtenstein has found itself dead in the middle of the scope of the German BND intelligence agency, which blatantly violated its extraterritorial mandate to hound the assets of wealthy Germans, by literally infiltrating a Lichtenstein bank and bribing an employee to leak data. Apparently a bunch of Americans’ and other non-Germans’ information was also leaked.

war on tax evasion

Tax evasion has become something of a national pastime in major Western countries, thanks to symbiotic cooperation between legislators and l...

Robert C. Trosten, the former finance chief at the futures trader Refco Inc., pleaded guilty

Robert C. Trosten, the former finance chief at the futures trader Refco Inc., pleaded guilty on Wednesday to helping hide hundreds of millio...

ACA may lose $34 billion on securities they guaranteed

U.S. bond insurers such as ACA may lose $34 billion on securities they guaranteed, Citigroup Global Markets said this month. They are likely...

Payments Industry and Police Joint Intelligence Unit (PIPJIU)

Payments Industry and Police Joint Intelligence Unit (PIPJIU) was meant to launch in 2007, when fraud reached record levels in the UK. But it got held up by lawyers representing the different groups forming the new unit: the City of London Police, the MET and APACS, the banking body.The unit's almost ready to roll, said a spokesman today: "All issues regarding PIPJIU have been resolved," he said."There were no showstoppers," he said.However, a source close to the PIPJIU said that the legal issues were still unresolved. Its desire to share information about suspected fraudsters between the police and banks was its biggest problem."Data protection is the problem that's exercising everyone at the moment," he said."There are details to be worked out. There's a lot of work going on to work through this. That's going to take some time," he added.The APACS spokesman would not elaborate on what the issues were, but insisted: "Final documents are now being prepared for sign-off by all parties. We will be making an announcement regarding the launch of the PIPJIU in the next few weeks."The source said there were a "number of issues that need to be overcome in a bi-directional sharing arrangement".By that he meant that the banks were not happy that the data sharing was lopsided: that the police could take more data from the banks than they could give in return.There were also some diverging interests. The banking sector is concerned primarily with mitigating its losses, said the source: "But that agenda will not necessarily be shared by a national fraud centre in terms of priorities."Further, there were talks with the Information Commissioner's Office designed to reassure the unit that there would be no showstopping changes to the legislation under which the unit would operate. They were reluctant to take the ICO's word at face value.The ICO's information sharing team refused to comment, which is unfortunate because this legal minefield is clearly hard enough for the lawyers to navigate. The data sharing rules defined by the Data Protection Act are to change when the Serious Crime Act, which was passed last year, comes into force.It will allow for the private and public sector to share data for the purposes of fraud prevention. Nevertheless, that might not give the fraud unit carte blanche sharing powers.To make matters worse, the government has been making bungles like the HMRC's loss of five million child benefit records. This has got the lawyers all a jitter. "You have got a bunch of legal teams looking at this who are extremely risk averse, but this has just elevated everyone's nervousness," he said. "It's as fine as long as it all goes swimmingly but in the event that something goes wrong, what are the risks?" he added.As the fraud unit will be handling people's financial records, criminal records and intelligence data about mere suspected fraudsters, the risks are clear. It will use the latest pattern analysing and behaviour prediction software of the sort that has a rabid hunger for data and an accepted percentile of mistaken analysis.The PIPJIU's legal shenanigans will also have implications for the Attorney General's Fraud Review, which has been trying since 2006 to establish a similar intelligence unit to share intelligence data across the public and private sectors, the National Fraud Reporting Centre.The APACS spokesman would not elaborate on what issues had held the unit up. He said yesterday that they were to do with its public-private cross-over. But today "categorically refused" it had anything to do with the commercial arrangements. He sidestepped the data protection issue: "I don't know why you are being told data sharing has posed a particular problem," he said, "you will have to go back to whoever told you and ask them." µ

Payments Industry and Police Joint Intelligence Unit (PIPJIU)

Payments Industry and Police Joint Intelligence Unit (PIPJIU) was meant to launch in 2007, when fraud reached record levels in the UK. But i...

Michael Duane Smith convicted of securities fraud in a $50 million Colorado-based investment scam

Michael Duane Smith is listed in a brochure issued by Golf Savings, a mortgage subsidiary of Sterling Savings Bank of Spokane. A spokeswoman...

Lancer Group hedge funds' founder and four other people were charged with defrauding investors out of more than $200 million

Lancer Group hedge funds' founder and four other people were charged with defrauding investors out of more than $200 million by manipulating market prices and overvaluing securities, according to a federal indictment unsealed Wednesday. The grand jury indictment charges former fund manager Michael Lauer and the others with conspiracy and six counts of wire fraud. The indictment said the fraud took place between 1999 and 2003, the year the Lancer Group's assets were frozen by the Securities and Exchange Commission. At the time, the SEC contended that the fraud at three hedge funds managed by Lancer could top $1 billion. The Lancer Group was eventually placed into receivership, with investors filing millions of dollars in claims against the firm. The indictment said the fraud involved manipulation of closing market prices of shell companies based in Boca Raton so that they reached certain fiscal targets. Lauer also allegedly overvalued securities held by the Lancer Group, luring more investors into the funds, and falsified key documents. Lauer, who had offices in New York and Connecticut, was paid more than $40 million in fees from the hedge funds he was managing, according to the indictment. Two attorneys who have represented Lauer in the past did not return telephone calls and e-mails seeking comment. Prosecutors said he was arrested in New York on Tuesday and was being held without bond. Three others accused in the case _ Milton Barbarosh, Laurence Isaacson and Eric Hauser _ were freed on $500,000 bail each after appearing in court Tuesday in Miami. The indictment identified Hauser as the Lancer Group's head trader, Isaacson as chief of some of the shell companies in which Lancer invested and Barbarosh as head of an appraisal firm that provided advice about investments to the hedge funds. Barbarosh also allegedly had financial interests in some of those entities. "We are, of course, asserting Mr. Barbarosh's innocence," said his attorney, Michael Pasano. Attorneys for the others did not respond to telephone and e-mail messages. The whereabouts of the fifth defendant _ Lancer Group manager Martin Garvey _ weren't immediately clear. Court documents in the SEC case listed a past address for Garvey in New Jersey. The charges carry combined maximum penalties of 125 years in prison and fines of more than $1.7 million for each defendant. The receiver appointed by the court in the SEC case to manage Lancer's assets and handle claims from investors reported in 2006 that about $633.6 million should be paid out. Some Lancer assets were sold off, including an auction earlier this month for a Mercedes-Benz C11 race car that brought $2 million.Five individuals who defrauded hedge fund investors of more than $200 million dollars have been indicted on charges of conspiracy and wire fraud, Assistant Attorney General Alice S. Fisher of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida announced today. Defendants named in the indictment, unsealed today in Miami, are Michael Lauer, Martin Garvey, and Eric Hauser, co-owners of management companies which directed the hedge funds, and Laurence Isaacson and Milton Barbarosh, who had financial interests in Boca Raton, Fla.-based “shell” companies in which the hedge funds invested. All of the defendants are charged with one count of conspiracy to commit mail, wire and securities fraud and six counts of wire fraud. If convicted, each of the defendants faces a maximum sentence of 20 years and a $250,000 fine for each count of wire fraud and five years and a $250,000 fine for the conspiracy count. The indictment also seeks forfeiture of their criminal proceeds.According to the indictment, Lauer, as founder and primary manager, formed and directed several hedge funds, collectively known as the Lancer Group hedge funds. From October 1999 to July 2003, Lauer and his co-defendants manipulated the closing market price of thinly-traded shell company securities to falsely inflate the value of the Lancer Group hedge funds. Lauer, Isaacson, and Barborosh identified “shell” companies, including ones owned by Barbarosh, in which the Lancer Group would buy large quantities of “restricted” stock at pennies per share in private transactions. Lauer, Garvey and Hauser next directed brokers to buy a small amount of the same securities for the Lancer Group at a much higher open market price and to make additional small purchases to drive up the price to a closing “target price.” Lauer then falsely valued all of the securities held by the Lancer Group, including those restricted shares obtained for pennies per share, at the much higher closing price, which falsely boosted the 20 percent performance fees paid to the management companies; induced new investors to buy into the funds; and kept existing investors in the funds. To cover up and perpetuate the scheme, the indictment alleges, Lauer also created fake portfolios of the securities supposedly held by the Lancer Group and obtained falsely inflated appraisals of the shell companies through Isaacson and Barbarosh. An indictment is merely a charge. All defendants are presumed innocent until proven guilty.

Lancer Group hedge funds' founder and four other people were charged with defrauding investors out of more than $200 million

Lancer Group hedge funds' founder and four other people were charged with defrauding investors out of more than $200 million by manipula...

Erika Nieves-Abrigo, Bilked money and gifts from people by claiming she was expecting quintuplets

A woman police say bilked money and gifts from people by claiming she was expecting quintuplets also is wanted in Florida on a fraud charge.Erika Nieves-Abrigo, who went by the name Nancy Cantu in Beaufort, was arrested in Gadsden County, Fla., in August, accused of unlawfully collecting welfare benefits worth $2,375 from 1999 to 2000, said Richard Combs, Florida's prosecuting attorney in the case. Combs said Nieves-Abrigo was ineligible for benefits in Florida because she was simultaneously collecting welfare benefits from Georgia. In South Carolina, Nieves-Abrigo and Juan Salvador Solis were arrested last month and charged with obtaining goods under false pretenses. They are being held in the Beaufort County Detention Center each on $25,000 bond. Investigators think the couple fraudulently obtained money and goods worth more than $1,000 through the quintuplets scam. If convicted, they face a maximum of five years in prison.The two are scheduled to appear in court Friday.

Erika Nieves-Abrigo, Bilked money and gifts from people by claiming she was expecting quintuplets

A woman police say bilked money and gifts from people by claiming she was expecting quintuplets also is wanted in Florida on a fraud charge....

Irish Insurance Federation fraud claims of injuries from car accidents.

* A call to the hotline led to an investigation regarding a man who exaggerated the status of his injuries following an accident. While he received an award of €78,000, the federation claims the sum would have been closer to €500,000 without the tip-off. * A case was dismissed after a witness to an alleged incident in which a man suffered serious back injuries was revealed as the sister of the claimant, but using her married name. Irish Insurance Federation regarding its fraud insurance hotline show that in the four years from 2003 to the end of last year, 3,447 cases were reported. Of those, a staggering 1,691 cases — or 49% of the total — were related to claims of injuries from car accidents. Thanks to one tip-off, the federation claims a saving of €2 million was made when someone involved in a car accident and claiming to have been permanently confined to a wheelchair withdrew his claim on the morning of a High Court action, after investigations found he was not disabled. The second highest category of allegedly fraudulent insurance claims related to damage to cars, with 434 cases, or 12% of the total. A further 153 cases (4.4%) related to other motor cases, such as securing insurance with a false driving licence. Cases involving employers’ liability and public liability accounted for 10% of the total. However, the Irish Insurance Federation said it was not in a position to give details as to the number of cases in which a contact made to its hotline resulted in prosecution for fraud. While last year’s tally of 272 new cases was the lowest annual tally since the hotline was established, the federation believes the existence of the phone line works as a deterrent. Examples include:

Irish Insurance Federation fraud claims of injuries from car accidents.

* A call to the hotline led to an investigation regarding a man who exaggerated the status of his injuries following an accident. While he r...

World of Warcraft fraud:UK bank Halifax decided to stop honoring payments made to Blizzard Entertainment

Tired and annoyed with receiving too many fraudulent credit card transactions to pay for World of Warcraft subscription, major UK bank Halif...

Ren Ci Hospital and Medicare Centre

The Commercial Affairs Department (CAD) is the principal white-collar crime investigation agency in Singapore. It safeguards Singapore’s integrity as a world-class financial and commercial centre through vigilant and professional enforcement of the laws. It investigates into a wide spectrum of commercial and financial crimes and is an outfit with its own investigative and intelligence resources in the Singapore Police Force.This indirectly hinted that there are problems in Ren Ci that may possibly lead to some form of criminal offences. Perhaps a better book-keeping process might have kept Ren Ci out of these problems. At worst, they may be reprimanded for certain business decisions they made, but to intentionally hide it is probably a no-no. A Ministry of Health probe into Ren Ci Hospital and Medicare Centre has discovered that a few financial transactions could not be ’satisfactorily explained’. ‘In order to seek greater clarity into these transactions, MOH has referred them to the Commercial Affairs Department for it assistance,’ said the ministry in a statement on Monday. ‘MOH will be seeking the cooperation of Ren Ci’s board and staff to assistant in CAD’s investigation.’ The ministry will continue its subsidies to Ren Ci for its patient care services to ensure that patients continue to receive care and medical treatment and the day-to-day operations remain undisrupted. Ren Ci has been under investigation by MOH since last November following the discovery of some possible irregularities in certain financial transactions involving the charity and other external organisations. Ernst & Young Associates was appointed to conduct the inquiry. The charity had extended interest-free loans, amounting to millions of dollars, to several companies. An audit turned up discrepancies between the amount recorded by the charity as loaned out and that recorded by the companies as borrowed.

Ren Ci Hospital and Medicare Centre

The Commercial Affairs Department (CAD) is the principal white-collar crime investigation agency in Singapore. It safeguards Singapore’s int...

Klaus Zumwinkel, the chief executive of Deutsche Post AG

The chief prosecutor in Munich says tax investigators and prosecutors have conducted a series of raids in and around the city, part of a wid...

Capital Bank International shut down failure to honour requests for withdrawals.

Capital Bank International, a home-grown bank, was ordered to close after government obtained a court order transferring control of the bank to a receiver.The Grenada government has shut down a local bank after a series of complaints from customers over its failure to honour requests for withdrawals. All 12 branches of Capital Bank throughout the tri-island state have been ordered shut and a government notice placed on their doors states that the decision is consistent with the Banking Act and Companies Act of Grenada.The notice was signed by Minister of Finance and Prime Minister Dr Keith Mitchell."This order comes after the failure of Capital Bank in recent months to honour withdrawal requests by its customers, raising questions about the solvency of Capital Bank," said a statement from the government."The failure of the bank to honour withdrawal requests has resulted in at least one lawsuit being filed against the bank."In an application to the court, Timothy Antoine, the permanent secretary in the Ministry of Finance, declared in his affidavit that the insurance policy of Capital Bank was cancelled for non-payment of the premium.He also stated that the Ministry of Finance had received calls from many depositors expressing concerns about their inability to make withdrawals from the bank which began operations in 1997. Receiver David Holukoff walked into the bank's St George's headquarters late Friday in the presence of government officials and a contingent from the Financial Intelligence Unit of the Royal Grenada Police Force.Holukoff is a chartered accountant and a certified fraud examiner, who has been working in the Eastern Caribbean on numerous complex offshore banking and financial institution matters. Government said that based on legal advice, it was forced to safeguard the interests of depositors, and to "preserve confidence in the integrity of the banking system in Grenada".Friday's closure is further bad news for Capital Bank, which has been seeking to end a long-standing dispute with the St Kitts-based Eastern Caribbean Central Bank (ECCB).

Capital Bank International shut down failure to honour requests for withdrawals.

Capital Bank International, a home-grown bank, was ordered to close after government obtained a court order transferring control of the bank...

U.K Police chiefs were being "rewarded for failure''

Police are being paid thousands of pounds in merit bonuses despite running poorly performing forces. Bonus pay-outs vary widely across the country and often do not reflect the success of forces in official Home Office performance ratings. Critics said police chiefs were being "rewarded for failure'' and called for the rules to be tightened. Half the forces in England and Wales are boycotting the bonus scheme entirely, and one chief constable said she and most of her counterparts were "morally'' opposed to it. But three chief officers of Lincolnshire Police, for example, shared a pounds 40,000 bonus last year, despite having their force rated one of the six worst in England and Wales by the Home Office. Yet at Surrey Police, which finished joint top of the performance table, no bonuses were paid after Bob Quick, its chief constable, and his senior colleagues opted out. The scheme, introduced in 2004, covers about 200 police chiefs and would be worth up to pounds 1.5 million if all were paid a full bonus. Now its future will be reviewed by the Police Negotiating Board. Among the 44 forces in England, Wales and Northern Ireland, eight paid bonuses last year, while 20 did not, according to details released under the Freedom of Information Act. The rest would not say. Matthew Elliott, the chief executive of the Taxpayers' Alliance, said: "Under no circumstances should police chiefs be rewarded for failure. The fact that this is clearly happening is very worrying for public security.'' Lincolnshire Police was awarded only seven out of 18 points in the Home Office's annual ratings. The last assessment by HM Inspectorate of Constabulary, in 2006, found the force "poor'' at tackling serious and organised crime and at investigating "volume crime'', such as burglary. Yet Tony Lake, the chief constable, Richard Crompton, his deputy, and Peter Davies, the assistant chief constable, shared a pay-out of pounds 39,885 in 2006/7. All three men received close to their maximum pay-out, which in Mr Lake's case would have been pounds 17,620 on top of a salary of pounds 117,468. Lincolnshire Police Authority, which approved the bonuses, said: "A simple 'league table' approach does not take account of each force's particular challenges nor of any improvement made. Despite being the poorest-funded force, its performance has continued to improve and has been independently assessed as efficient and effective.'' In Britain's biggest force, the Metropolitan Police, which also turned in a mid-ranking performance, 37 eligible officers shared a pay-out of pounds 210,197. Sir Ian Blair, the commissioner, whose salary is pounds 240,813, waived his bonus, worth up to pounds 36,000, for the second year running. North Wales paid pounds 18,297 bonuses despite a mid-ranking performance. Gillian Parker, the chief constable of Bedfordshire, who has opted out of the scheme, said: "Most of us felt, morally, that it was not the right thing to do. "As a public servant, I felt that I must be able to do what I think is right, without anybody being able to say to me that I have only done it because I'm going to get some money out of it.''

U.K Police chiefs were being "rewarded for failure''

Police are being paid thousands of pounds in merit bonuses despite running poorly performing forces. Bonus pay-outs vary widely across the c...

Semyon Mogilevich asking to be freed on bail

Semyon Mogilevich,Semyon Mogilevich has appeared before Moscow City Court asking to be freed on bail. The man is reported to have a number o...

Paid informer got Liechtenstein bank details on a multi-billion-euro tax evasion scandal

The German government said Saturday that it paid an informer to get Liechtenstein bank details on a multi-billion-euro tax evasion scandal that has rocked the country's business elite.After one top company chief resigned and with hundreds of wealthy Germans now reportedly under suspicion, a bank in the principality that has built its reputation on banking secrecy said German authorities were working from a list of its clients stolen by an employee in 2002.Finance Minister Peer Steinbrueck approved the payment to the informant, his department said in a statement, without confirming a Der Spiegel magazine report that five million euros (7.3 million dollars) was handed over.Steinbrueck "was kept informed of the budgetary consequences and gave his approval to the payment" to the secret informed, a ministry statement said.The minister "had no knowledge of the details of the action undertaken nor the accounts and the names," said the statement.Deutsche Post chairman Klaus Zumwinkel resigned on Friday after it was revealed that he was under investigation and authorities have confirmed that hundreds more "high end" wage earners face a similar tax evasion inquiry.Press reports said 900 search warrants had been executed this weekend and that several billion euros could be involved.A finance ministry spokesman said on Friday that the suspects were "especially people whose revenues are at the high end of the scale."Der Spiegel magazine said the scandal came to light after investigators handed over five million euros to an informer who contacted the BND secret service in early 2006. Without naming sources, the weekly said the BND and North Rhine-Westphalia state tax inspectors worked together to verify the documents. It said the payment was made for information on those involved in the tax fraud and secret instructions from Liechtenstein on how to hide the flow of money. Liechtenstein's LGT bank group announced that it appeared the German authorities seemed to be working from a list of its clients stolen in 2002. LGT spokesman Hans-Martin Uehlinger said the list would contain "several hundred names," adding, "we are going to warn all our clients who are on this list." The bank said Friday that "sensitive documents" had been stolen in 2002 by an employee of its subsidiary LGT-Treuhand, who had been tried the following year. The bank thought that all the material had been returned but realised in 2007 that client data might have been "passed on illegally to third parties." The tax fraud has become a national scandal since a prosecutor in the western city of Bochum announced that Deutsche Post head Zumwinkel was suspected of involvement in tax fraud. Zumwinkel left Deutsche Post and also quit as chairman of the supervisory board of Deutsche Telekom. He told Bild newspaper in an interview published on Saturday that he would cooperate with the investigation. The fraud has been widely condemned by German leaders and could be raised in talks when Liechtenstein Prime Minister Otmar Hasler meets Chancellor Angela Merkel in Berlin this week, her spokesman said. Economy Minister Michael Glos called on business leaders to adopt ethical behaviour and get rid of their bad habits, in an interview to appear in the Bild am Sonntag paper Sunday. They should "be aware of their function as a model for society," he said. "Otherwise our social market economy will no longer be credible." Der Spiegel, in its latest edition to appear Monday, quoted Interior Minister Wolfgang Schaeuble as saying, "These people are destroying everything. "When the elite do not understand that they must respect the law, it is serious." "The economic elites are undermining the system," Finance Minister Steinbrueck said in an interview with Die Zeit. LGT's Internet site describes it as "The Wealth and Asset Management Group of the Princely House of Liechtenstein." The principality, along with Andorra and Monaco, is viewed as an uncooperative tax haven by the Organisation for Economic Cooperation and Development because of its banking secrecy.

Paid informer got Liechtenstein bank details on a multi-billion-euro tax evasion scandal

The German government said Saturday that it paid an informer to get Liechtenstein bank details on a multi-billion-euro tax evasion scandal t...

Vishing operates like phishing

Are you one of many who have received an e-mail, text message, or telephone call, purportedly from your credit card/debit card company directing you to contact a telephone number to re-activate your card due to a security issue? The IC3 has received multiple reports on different variations of this scheme known as "vishing". These attacks against US financial institutions and consumers continue to rise at an alarming rate. Vishing operates like phishing by persuading consumers to divulge their Personally Identifiable Information (PII), claiming their account was suspended, deactivated, or terminated. Recipients are directed to contact their bank via telephone number provided in the e-mail or by an automated recording. Upon calling the telephone number, the recipient is greeted with "Welcome to the bank of ..." and then requested to enter their card number in order to resolve a pending security issue. For authenticity, some fraudulent e-mails claim the bank would never contact customers to obtain the PII by any means, including e-mail, mail, and instant messenger. These e-mails further warn recipients not to provide sensitive information when requested in an e-mail and not to click on embedded links, claiming they could contain "malicious software aimed at capturing login credentials."Please beware; spam e-mails may actually contain malicious code (malware) which can harm your computer. Do not open any unsolicited e-mail and do not click on any links provided.A new version recently reported involved the sending of text messages to cell phones claiming the recipient's on-line bank account has expired. The message instructs the recipient to renew their on-line bank account by using the link provided.Due to rapidly evolving criminal methodologies, it is impossible to include every scenario. Therefore, be cognizant and protect your PII. Beware of e-mails, telephone calls, or text messages requesting your PII.If you have a question concerning your account or credit/debit card, you should contact your bank using a telephone number obtained independently such as; from your statement, a telephone book, or another independent means.

Vishing operates like phishing

Are you one of many who have received an e-mail, text message, or telephone call, purportedly from your credit card/debit card company direc...

Refco Phillip R. Bennett pleaded guilty to all 20 counts

Phillip R. Bennett, 59, of Gladstone, NJ, had been charged in connection with his role in the collapse of the former financial services company, and pleaded guilty to all 20 counts in the superseding indictment against him. He is scheduled to be sentenced on May 20 and remains free on bail pending sentencing. He pleaded guilty to charges of conspiracy, securities fraud, making false filings with the SEC, wire fraud, making false statements to Refco’s auditors, bank fraud and money laundering. Refco was a large, Manhattan-based financial services company that offered securities, derivatives and commodities brokerage services to investors. From as early as the mid-1990s,Refco, which was then privately held and controlled in part by Bennett, sustained hundreds of millions of dollars of losses through its own and its customers’ trading. In order to hide the existence of those losses, Bennett transferred many of them to appear as a debt owed to Refco by Refco Group Holdings, Inc., the holding company that controlled Refco and was in turn controlled by Bennett. Bennett and others directed a series of transactions every year from at least 1999 through 2005 to hide the RGH receivable from, among others, Refco’s auditors, by temporarily paying down the receivable from RGHI over Refco’s fiscal year-end and replacing it with a receivable from one or more other entities not related to Bennett. Thus, at every fiscal year-end and, later, at every fiscal quarter-end, Bennett directed transactions that turned the debt owed to Refco from RGHI into a debt owed to Refco by a Refco customer. Shortly after each fiscal year- or quarter-end, these transactions were unwound, returning the debt to RGHI. The massive debt owed by Bennett’s holding company to Refco was increased not only by losses sustained through its customers’ trading but also through proprietary trading losses accumulated over several years, operating expenses shifted out of Refco Group and into RGHI, and fake foreign exchange and U.S. Treasury security trades carried out for the purpose of increasing Refco’s stated income. In particular, Bennett hid from others, and contributed to the RGHI debt to Refco, among others, the following losses: –At least $90 million in losses sustained by a customerin trading on the Chicago Mercantile Exchange in 1997; –At least $185 million in losses sustained by a group ofcustomers trading in Asian markets in 1997; –At least $40 million in losses from Refco’s own tradingin Russian bonds in 1998. In addition, prosecutors said Bennett caused the following expense-shifting and revenue-padding transactions, among others: –At least approximately $40 million of computer expenses moved out of Refco and into Bennett’s holding company between 1999 and 2002; –At least approximately $38 million in artificial income from inflated interest rates charged on the debt owed by Bennett’s holding company to Refco; –At least approximately $13 million in profits from fake U.S. Treasury notes between Refco and Bennett’s holding company; and –At least approximately $10 million in profits from fake-foreign exchange trades between Refco and Bennett’s holding company.In August 2004, Thomas H. Lee Partners, L.P., purchased a majority interest in Refco, financed by an approximately $1.9billion leveraged buyout transaction. In connection with that transaction, Refco sold approximately $600 million of notes to the public and borrowed approximately $800 million from a syndicate of banks. In August 2005, Refco conducted an initial public offering of approximately $583 million of Refco’s common stock.On Oct. 10, 2005, Refco issued a press release announcing, in substance, that it had discovered that it was owed a debt of approximately $430 million by an entity controlled by Bennett. Following release of this information, the market price of Refco stock plummeted, and Refco’s stock was subsequently delisted by the New York Stock Exchange. Refco Inc. and many of its subsidiaries filed petitions in bankruptcy on Oct. 17, 2005. 2-16-08

Refco Phillip R. Bennett pleaded guilty to all 20 counts

Phillip R. Bennett, 59, of Gladstone, NJ, had been charged in connection with his role in the collapse of the former financial services comp...

Brent Metcalf of Cottonwood, Attorney Graham R. Taylor of Tiburon, Calif., and Certified Public Accountants Stephen F. Petersen of Coalville and Reed

Attorney Dennis B. Evanson has been convicted of tax and fraud charges, according the U.S. Department of Justice. The verdict was announced Wednesday after a two-week jury trial. Evanson was indicted in November 2005 for his involvement in a scheme that used offshore bank accounts and illegal tax shelters to scam the federal government out of more than $20 million in taxes, the news release said. He faces possible jail time and $250,000 in fines. U.S. District Court Judge Tena Campbell set sentencing for May 13. Sammamish, Wash., investment broker Wayne F. DeMeester was accused as a co-conspirator but was acquitted Four others face charges for their alleged involvement in the scheme. Accountant Brent Metcalf of Cottonwood, Attorney Graham R. Taylor of Tiburon, Calif., and Certified Public Accountants Stephen F. Petersen of Coalville and Reed H. Barker of Littleton, Colo., have pleaded guilty to fraud charges. Metcalf also pleaded guilty on Jan. 25 to conspiracy and aiding in the filing of a false tax return. Petersen and Barker pleaded guilty to tax fraud, and Petersen pleaded guilty to aiding in the preparation of a false tax return. Attorneys from the Justice Department's Tax Division and the U.S. Attorney's Office for the District of Utah prosecuted the case, and the Internal Revenue Service Criminal Investigation Department conducted the investigation.

Brent Metcalf of Cottonwood, Attorney Graham R. Taylor of Tiburon, Calif., and Certified Public Accountants Stephen F. Petersen of Coalville and Reed

Attorney Dennis B. Evanson has been convicted of tax and fraud charges, according the U.S. Department of Justice. The verdict was announ...

Child pornography Children are abducted, trafficked, sold to criminals and used as subjects for child sex pornography in many developing countries

Thousands of children are abducted, trafficked, sold to criminals and used as subjects for child sex pornography in many developing countries. French traffickers using charity workers as cover were arrested, charged and convicted in a matter of weeks. Hundreds of thousands of children are sexually abused and the acts are recorded and sold over the Internet. This feeds the appetites of child sex offenders, putting many more children in danger of being abused. It is an insidious abuse of the Internet. The travelling sex abusers prey on these vulnerable children using the Internet as a sex tourist guide to the Philippine sex industry that the government seems to tolerate and encourage. The traveling sex tourists develop their evil appetites while abusing Filipino children and then go back to their own countries and abuse children there all the more. Governments of wealthy tourist-sending countries ought to realize that their children are at greater risk from the Asian sex business, the more they ignore it. This is their problem, too. However, business investment is apparently more important than children. In the Philippines, the proposed antichild pornography law ought to be declared urgent and passed swiftly. Technology makes pornography easily available. Minors and children have the ability and opportunity to access pornography and to be exposed to it. They are vulnerable and unprotected every time they use a computer with an unfiltered Internet connection. By failing to control the Internet Server Providers (ISPs), governments are exposing children to grave abuse. Young people are the prime targets for sexual abusers who contact and groom them over the Internet and eventually try to meet, exploit and sexually abuse your child or grandchild. Every photo of a child being abused is evidence of abuse and there are millions of such photographs available on the Internet. The child is violated over and over as the images are shared. Cyber sex shops are secret dens and are connected live to paying customers through the Internet. With a camera attached, they beam images of children being sexually abused. Paedophiles, thousands of miles away, can order acts of abuse of their choice. Other child sex offenders can join secret Internet clubs if they submit a certain number of child pornography images to the controller. This is an incentive for them to abuse children to make such images. Police cannot infiltrate the networks and clubs because it is forbidden for them to submit such images. Young people who access adult or child pornography on the Internet can be profoundly shocked and damaged by what they see. Parents should be shocked too. Their children are being corrupted and alienated from them. Young people may imitate what they see believing it is reality when, in fact, it is contrived and artificial. They entice young women to act like a depraved individual in a seductive and promiscuous manner. Other advertisers sexualize children and promote dress and behavior where the young girls are displayed as sexually provocative, docile, enslaved or submissive. Many advertisers use women to entice men to buy their products and use sexualized minors to condition the public to accept teenage sex as acceptable. That perverse idea sells more than it seems. Models are getting younger and younger and their sexualized images sell even more products. The brandy advertisement that had the message, “Did you ever taste a 15- year-old?” was widely condemned and eventually removed from Philippine billboards. The industry group with the greatest responsibility for curbing the proliferation of child pornography over the Internet are the Internet Server Providers (ISPs). Many ISPs around the world have installed filters to block these sites and a warning is sent to the people trying to access them. In Sweden, the number of people trying to get child porn over the Internet dropped from 8,000 to 300 a month when they were blocked by a filter and got a warning that their illegal act was being monitored. Customers should only subscribe to an ISP that has filters blocking child porn. Protecting children is the first obligation of responsible corporations, not making money, and our responsibility is to see every ISP has a blocking filter to protect children.

Child pornography Children are abducted, trafficked, sold to criminals and used as subjects for child sex pornography in many developing countries

Thousands of children are abducted, trafficked, sold to criminals and used as subjects for child sex pornography in many developing countrie...

Wall Street wunderkind Seth Tobias vodoo sex and a swimming pool.

<a href="http://4.bp.blogspot.com/_ANNSRoaDZro/R7HoINCklAI/AAAAAAAABP4/-4BYeiMtoU0/s1600-h/amd_madamsimbi.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5166165475207713794" src="http://4.bp.blogspot.com/_ANNSRoaDZro/R7HoINCklAI/AAAAAAAABP4/-4BYeiMtoU0/s400/amd_madamsimbi.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a>The state attorney's office on Monday shot down tabloid-fueled talk that Wall Street wunderkind Seth Tobias was drugged by his wife and left to die in the swimming pool of their Jupiter home. "Based on the evidence available at this time, including the autopsy and toxicology reports, there is no indication of criminality in the death of Mr. Tobias," Assistant State Attorney Mary Ann Duggan wrote in a letter to Jupiter police. The drowning death of hedge fund guru Seth Tobias is entering the supernatural realm. Tobias' former employee, Bill Ash, now alleges that Tobias' widow, Filomena, hired a voodoo priestess to put a spell on Seth before his death. "[Filomena] believed in dark rituals and would put curses on people that she didn't like," claims Ash, who has asserted that Filomena plotted to kill her wealthy 41-year-old husband because he was going to divorce her. Ash contends that Filomena spent "over $100,000" on a woman he identified as Madam Simbi M'Arue, also known as "Mama." Besides casting curses, Ash says Filomena asked Mama to "remove evil from [the Tobias] homes and bring more money and sex to [Filomena]."According to Ash, Mama told him Filomena had paid her $18,000 "to put a curse on me recently so I would die before [I was able to testify against Filomena]."We couldn't reach the alleged spell-caster, whom Ash says "is afraid to come forward."Filomena's attorney (and ex-husband) Jay Jacknin declined to comment on the curse-casting claim, which he branded "nonsense." Jacknin vigorously denounced Ash's allegation that Filomena admitted to Ash that she'd drugged Seth by putting sleeping pills into his pasta, then lured him into the pool of their Jupiter, Fla., home with the promise he could have "kinky sex" with a male stripper named Tiger. Jacknin maintains his client had nothing to do with Seth's death.On Tuesday, a Palm Beach County judge denied a motion by Filomena's legal team to block Ash from testifying in next month's probate hearings into Seth's estate.Tobias' brothers have tried to get Ash to testify under oath that Filomena hastened Seth's death so that they could prevent her from claiming his $25 million fortune. Ash's attorney, Debra Opri, says, "Seth Tobias' money has never been my client's motivation," but promised Ash would testify as soon as a final toxicology report is in. "That's nonsense," counters Jacknin. "What is he waiting for - to fit his story to the report?" Jacknin contends that attorneys for Filomena and the brothers have tried repeatedly to depose Ash "so he won't come into court at the last minute to make more outrageous statements. I want to prove him to be a liar." Ash denied claims that he'd been looking for money from the brothers or the tabloid media. He did claim Filomena offered him $100,000 not to testify - and that she sent him a $15,000 Franck Muller watch, which Opri is keeping as evidence. "It's a total lie," says Jacknin, who also denies Ash's claim that the attorney sought to coach his testimony. <a href="http://1.bp.blogspot.com/_ANNSRoaDZro/R7HoIdCklBI/AAAAAAAABQA/YTpYmQL5iF0/s1600-h/seth.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5166165479502681106" src="http://1.bp.blogspot.com/_ANNSRoaDZro/R7HoIdCklBI/AAAAAAAABQA/YTpYmQL5iF0/s400/seth.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a>Duggan's one-sentence wrap-up of the investigation stands in stark contrast to the volumes that have been written and said by celebrity gossip columnists, bloggers, society watchers and reporters worldwide.Since Tobias was found floating facedown in the swimming pool of the home he shared with his wife, Filomena, reports of the circumstances surrounding his death and the state of his marriage have made print and broadcast news from London to Los Angeles to Australia. Tales of drug use, kinky sex and marital discord propelled a family fight for the hedge fund manager's millions to the world's newspapers and television screens. Gary Dunkel, an attorney who represents Tobias' widow in the probate battle, said the saga is regrettable. <a href="http://1.bp.blogspot.com/_ANNSRoaDZro/R7HoIdCklCI/AAAAAAAABQI/GrDHzExyWhk/s1600-h/vodo.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5166165479502681122" src="http://1.bp.blogspot.com/_ANNSRoaDZro/R7HoIdCklCI/AAAAAAAABQI/GrDHzExyWhk/s400/vodo.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a> <a href="http://2.bp.blogspot.com/_ANNSRoaDZro/R7HoItCklDI/AAAAAAAABQQ/U70jviIHtFo/s1600-h/wife.bmp"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5166165483797648434" src="http://2.bp.blogspot.com/_ANNSRoaDZro/R7HoItCklDI/AAAAAAAABQQ/U70jviIHtFo/s400/wife.bmp" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a> Tobias was known as a shrewd self-made millionaire who dispensed financial advice on CNBC's Squawk Box.Now, as a result of stories that surfaced as part of the family fight, he's known as a cocaine-loving party boy who got his kicks watching male strippers and engaging in gay sex."It's sad," Dunkel said. "His brothers seem intent on dragging their brother, Seth Tobias, through the mud." The stage for the fight was set, in a large part, because the man who dispensed financial advice did little of his own financial planning. He didn't have a pre- or postnuptial agreement with Filomena and didn't update his will after he married her in March 2005.Under Florida law, that meant the will he signed in 2004, giving each of his four brothers 15 percent and each of his parents 10 percent of his estimated $25 million estate, was null and void. Instead, Filomena, 41, would get it all. Shortly after his Sept. 4 death, his half brothers Sam and Spence Tobias went to court, claiming Filomena, known as Phyllis, shouldn't get a dime under the state's "slayer statute." The law prohibits someone from inheriting money from someone he or she killed.They then filled the court file with allegations from Billy Ash, who told them and any reporter who would listen that Filomena confessed to him that she fed her husband a combination of cocaine and sleeping pills to kill him. He further said she told him she enticed Tobias into the pool at their $3 million home in the exclusive Bear's Club by promising him sex with a male stripper known as Tiger.With a felony record and arrests in Florida on a variety of charges, including prostitution and writing bad checks, Ash wasn't the best source of information. After traveling to California to interview him, police concluded as much."He's been completely discredited," said Mike Edmondson, a spokesman for the state attorney's office.Though the medical examiner found Tobias had cocaine, alcohol, caffeine and Ambien, a prescription sleeping aid, in his system when he died, Edmondson said that doesn't mean someone drugged him."People die all the time with alcohol and drugs in their system," he said. Before they began the war with Filomena, the brothers suggested her husband died from a heart attack. However, the medical examiner ruled he drowned, Edmondson said. James Pressly, who represents the brothers, didn't return a call for comment. In addition to Ash's statements, in court papers he has raised questions about what he said were conflicting stories Filomena gave about her husband's death. He also filed the transcript of vicious obscenity-laced text messages she sent her husband in March 2006. "Drop dead and rot in hell," she wrote in one exchange. That was the month Seth Tobias filed for divorce, saying he was fed up with her insatiable spending habits. She countered that she had caught him in an affair and was sick of his insatiable appetite for drugs. Ultimately, they reconciled. However, Pressly claimed in court papers, in the weeks before his death Seth told Filomena they were through. He told close friends that he was afraid of his thrice-divorced wife because she often erupted in violence. In February 2006, she was arrested outside Cucina restaurant in Palm Beach after slapping him across the face. Days later, the domestic battery charge was dropped.All of that ugly history, however, doesn't make any difference now, Dunkel said.As part of the probate fight, Pressly has conducted a probe parallel to the police's.However, Dunkel said, unless Filomena Tobias is charged with a crime in connection with her husband's death, there is little chance the brothers can win the probate fight."I've never seen a case where someone maintained a slayer statute case when the person wasn't at least arrested," he said. Still, he acknowledged, it's not over yet. "They have a civil case," he said. "Until they drop it, I guess it's still going on."

Wall Street wunderkind Seth Tobias vodoo sex and a swimming pool.

The state attorney's office on Monday shot down tabloid-fueled talk that Wall Street wunderkind Seth Tobias was drugged by his wife and ...

Convicted Robert J. Lucas Jr., of Lucedale, chief executive of Big Hill Acres Inc., and the two others of 41 charges, including conspiracy.

convicted Robert J. Lucas Jr., of Lucedale, chief executive of Big Hill Acres Inc., and the two others of 41 charges, including conspiracy. Lucas, his daughter, Robbie Lucas Wrigley, an Ocean Springs real estate agent; and M.E. Thompson, a professional engineer from D’Iberville, were accused of selling lots in Vancleave in a wetlands area with unworkable septic systems. In December 2005, U.S. District Judge Louis Guirola sentenced Lucas to nine years in prison. Lucas, Wrigley and Thompson also were ordered to pay more than US$1.4 million to mitigate west Jackson County wetlands. The 5th U.S. Circuit Court of Appeals recently upheld the convictions, rejecting the defendants’ arguments that evidence did not show a violation of the Clean Water Act. Defendants made misrepresentations that directly contradicted inspecting buyers’ observations,” the 5th Circuit said. Wrigley misrepresented the dryness of the site, for example, when buyers noticed wetlands and wetlands vegetation and questioned her about the wetlands.” Lucas’ two corporations were sentenced to five years’ probation and were subject to the US$1.4 million restitution and more than US$5 million in fines. Thompson, who designed and certified septic systems at the Big Hill Acres subdivision in Vancleave, and Wrigley, who sold the wetlands lots, were sentenced to seven years and two months in prison. Federal prosecutors said the defendants knowingly polluted federally protected wetlands and area waterways by installing underground septic systems that malfunctioned in saturated soil; thwarted state and federal health and environmental regulators; and defrauded residents into buying uninhabitable land. Defendants’ attorneys argued there was no proof that area waterways were polluted by the septic systems. They also said the defendants complied with regulators. They argued the mobile home park did not flood during Hurricane Katrina and said homeowners there were selling lots at a profit. “The government presented evidence that defendants, despite warnings from agencies that they were installing septic systems in saturated soils, advertised the lots as ‘high and dry’ and, when asked by owners if there were wetlands on the property, responded that there were none,” the judges said. The ruling was issued by three 5th Circuit judges — Patrick E. Higginbotham, Jerry E. Smith and Priscilla Richman Owen. The decision was written by Higginbotham.

Convicted Robert J. Lucas Jr., of Lucedale, chief executive of Big Hill Acres Inc., and the two others of 41 charges, including conspiracy.

convicted Robert J. Lucas Jr., of Lucedale, chief executive of Big Hill Acres Inc., and the two others of 41 charges, including conspiracy. ...

Trafficking of illegal immigrants could have been the source of the large sums of money

As the trial by jury against a 43-year-old woman and her 23-year-old daughter charged with money laundering continued on Tuesday, the Prosecution focused its attention on the criminal record of their respective husband and father.Carmen Butler and her daughter Stephanie are being charged with depositing large sums of money into a bank account despite they knew the cash was coming from criminal activities, thereby getting involved in money laundering. According to the police investigations, the cash was coming from the criminal activities carried out by Charles Butler, their respective husband and father, who is well-known to the police. Money came from various criminal activities While taking the witness stand, police inspector Paul Vassallo told the Court that Charles Butler was involved in various criminal activities and had been found guilty of theft and falsification. Moreover, the police inspector went on, he had been found guilty of trafficking illegal immigrants in Italy and homicide during one of the trips. The inspector insisted that the trafficking of illegal immigrants could have been the source of the large sums of money. Carmen Butler had asked for social benefits The Court also heard the testimony of an official at the Foreign Affairs Ministry who was involved in the extradition process of Charles Butler to Italy, where he was wanted over human trafficking charges. He recalled how Carmen Butler had talked to him twice over her husband’s case and had asked for social assistance while he was in Italy the face the charges. Caught trafficking illegal immigrants Police superintendent Neville Xuereb told the Court that Charles Butler and Carmelo Buhagiar had been arrested on August 18, 1998 when they were found aboard a boat with six illegal immigrants. The Italian Court had found the two men guilty of human trafficking and given them a suspended sentence. According to the immigrants, they had paid $850 each for the trip. Jailed for 22 years over homicide Following an incident in which an illegal immigrant died in Italian waters, a request had been made for Charles Butler’s extradition to Italy while he was receiving medical treatment in the UK, inspector Sandro Zarb told the Court. The inspector added that the man was wanted over human trafficking and homicide charges, and was eventually sentenced to 22 years imprisonment after he was found guilty in 2006. Investigated over thefts Superintendent Carmelo Bartolo said that Charles Butler had been involved in at least two thefts, one of a vehicle and another of various items. The stolen vehicle had been sold to a Gozitan dealer, who told the police he had purchased it from Charles Butler and Emanuel Buhagiar.

Trafficking of illegal immigrants could have been the source of the large sums of money

As the trial by jury against a 43-year-old woman and her 23-year-old daughter charged with money laundering continued on Tuesday, the Prosec...

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