Bankrupt Banker

Norman Hsu used investor funds to compensate sales agents, make political campaign contributions, and support his luxurious lifestyle.

Norman Hsu used investor funds to compensate sales agents, make political campaign contributions, and support his luxurious lifestyle.Hsu is in federal custody awaiting trial after he was indicted in December for mail fraud, wire fraud and violating the Federal Election Campaign Act.His arrest prompted former Democratic presidential candidate Clinton to return $850,000 in contributions last year. A Legal Aid Society lawyer representing Hsu did not immediately return a call seeking comment."As alleged in our complaint, Hsu and his company used investor funds to make significant political contributions to prominent politicians," said SEC enforcement director Linda Thomsen in a statement. "He allegedly then used the veneer of respectability created by his political connections to persuade his investors that the investments he offered were legitimate."The SEC said Hsu presented himself as an international businessman with high-level contacts at overseas businesses, particularly in the Chinese apparel and technology industries. Hsu hosted dinners for investors at expensive four-star restaurants and provided them with invitations to exclusive society functions, such as presidential political fund-raising events, the SEC said.

Norman Hsu used investor funds to compensate sales agents, make political campaign contributions, and support his luxurious lifestyle.

Norman Hsu used investor funds to compensate sales agents, make political campaign contributions, and support his luxurious lifestyle.Hsu is...

Sun Country Airlines filed for bankruptcy

Sun Country Airlines filed for bankruptcy after it ran into a cash squeeze following fraud charges brought against the parent company's ...

Garri Zhigun, his mom Galina Zhigun, and their employee Maryann Furman all face up to 30 years in prison

A man and his mother pleaded guilty to defrauding home lenders of more then $200 million while they ran subprime mortgage broker AGA Capital, now known as Lending Universe. Garri Zhigun, his mom Galina Zhigun, and their employee Maryann Furman all face up to 30 years in prison at their Jan. 5 sentencings.Twenty-six other people have been charged in this mortgage fraud ring, and eight have pleaded guilty, federal prosecutors said. They are accused of lying on loan documents, using straw buyers and coordinating the scam with an attorney, real estate appraisers and loan officers. The defendants got millions of dollars of fees for arranging the dishonest loans, the U.S. Attorney's Office said.AGA Capital operated out of Brooklyn from 2004 to 2006, then changed its name to Lending Universe. Galina Zhigun, 54, was the owner and registered broker; her son supervised the operations and Furman was the office manager. Garri Zhigun also was ordered to forfeit $2.5 million; his mom and Furman must forfeit $1 million apiece.

Garri Zhigun, his mom Galina Zhigun, and their employee Maryann Furman all face up to 30 years in prison

A man and his mother pleaded guilty to defrauding home lenders of more then $200 million while they ran subprime mortgage broker AGA Capital...

Apple and AT&T Mobility's five-year exclusive voice and data service provider agreement for the iPhone violates anti-monopoly provisions

Federal judge in California upheld a class action claiming that Apple and AT&T Mobility's five-year exclusive voice and data service...

Los Angeles brokers charged with securities fraud, alleging they had put their customers at risk by refinancing their homes with subprime mortgages

Securities and Exchange Commission has charged five Los Angeles brokers with securities fraud, alleging they had put their customers at risk by refinancing their homes with subprime mortgages which they could not afford, to fraudulently sell them unsuitable securities."This case demonstrates the SEC's commitment to halting fraudulent sales practices by brokers and others in the securities industry," SEC Division of Enforcement director, Linda Chatman Thomsen said.The SEC has alleged that at a time when investors were already losing their homes in record numbers, these brokers pushed their customers into risky and unsustainable subprime mortgages as a means of financing a fraud.Not only was the whole scheme fraudulent, but the brokers profited by charging commissions at each stage, SEC said in a statement. The SEC would relentlessly pursue unscrupulous brokers and other securities industry professionals who seek to line their own pockets at their customers' expense, it added.The Commission has alleged that the five registered representatives, who worked for World Group Securities Inc, paid themselves high commissions on both the subprime mortgages and the securities purchases.While the customers generally were of modest means, had little prior investment experience, little or no formal education beyond high school and some of them did not speak English fluently or at all, the statement added

Los Angeles brokers charged with securities fraud, alleging they had put their customers at risk by refinancing their homes with subprime mortgages

Securities and Exchange Commission has charged five Los Angeles brokers with securities fraud, alleging they had put their customers at risk...

Helio Castroneves is accused of using offshore accounts to avoid paying taxes to the Internal Revenue Service.

<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiEaREIuHb1DG9GHU7NN0RoG1Nm5OK3jDkqAXA_t9ODy4PS9I7Da7dBrmSF5b5efbERzniu7SRkrEWKAUm-WFLZram0LFGfNiauIX9mElODL4MEVmQN9JnMXykkljpPo36Ox6njG4LEIdUo/s1600-h/helio_castroneves.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5253325700524380370" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiEaREIuHb1DG9GHU7NN0RoG1Nm5OK3jDkqAXA_t9ODy4PS9I7Da7dBrmSF5b5efbERzniu7SRkrEWKAUm-WFLZram0LFGfNiauIX9mElODL4MEVmQN9JnMXykkljpPo36Ox6njG4LEIdUo/s400/helio_castroneves.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a> Two-time Indy 500 champion Helio Castroneves wasn't at Road Atlanta on Friday for qualifying. Instead he was in federal court in Miami facing charges of tax evasion and tax fraud. The Associated Press reports that the Indy Racing League star from Sao Paulo, Brazil, who is expected to participate in today's Petit Le Mans, is accused of using offshore accounts to avoid paying taxes to the Internal Revenue Service. The AP reports that Castroneves, 33, pleaded not guilty to six counts of tax evasion for allegedly failing to report to the IRS about $5.5 million in income between 1999 and 2004. Each count carries a maximum five-year prison sentence. Penske Racing vice president Bud Denker said Castroneves was scheduled to return to Georgia on Friday night and prepare to co-drive the team's No. 5 Porsche with Australian Ryan Briscoe. Briscoe qualified the car first in the LMP2 class and fourth overall for today's race. Denker declined to speculate on what effect the court proceedings would have on Castroneves' relationship with the team.

Helio Castroneves is accused of using offshore accounts to avoid paying taxes to the Internal Revenue Service.

Two-time Indy 500 champion Helio Castroneves wasn't at Road Atlanta on Friday for qualifying. Instead he was in federal court in Miami f...

Bermuda Telephone Company ,Yvonne Simmons, 54 and Jacqueline Laidlow, 67 – admitted operating an unauthorised lending scheme.

The swindle involving at least seven employees came to light when two of them – Yvonne Simmons, 54 and Jacqueline Laidlow, 67 – admitted operating an unauthorised lending scheme.15-year fraud resulting in a $1.29 million loss to the Bermuda Telephone Company landed two women with year-long jail sentences yesterday. They were the only people prosecuted, pleading guilty to stealing more than $140,000 from the company during a court hearing last month. Five other employees have been fired but not brought to court.The circumstances of the theft, which involved lax accounting procedures, prompted criticism of BTC by a judge during the sentencing yesterday for letting it go on for so long."You would like to believe that public companies are doing right. You like to know that they are properly managed and you can trust them," said Puisne Justice Carlisle Greaves."You like to know that when you pay your telephone bills or your interest rates our whatever the product is, that you're paying a fair price because the company's managed properly."Detailing the case yesterday, Crown counsel Brett Webber told Mr. Justice Greaves: "Yvonne Simmons and Jacqueline Laidlow were employed by the Bermuda Telephone Company for many years as banking administrators."Together, they controlled the department that was responsible for banking the cash that had been received by the cashiers at the Hamilton office of BTC. They were supposed to account for, and bank the receipts on a daily basis. In September 2005 it was reported that a deposit of $142,233.06 was missing. Following inquiries into where the money had gone, it was discovered that there were no procedures in place to reconcile cash receipts with money that had been banked."As a result, in October 2005 new procedures were installed in an attempt to tighten financial controls. The prosecution's case is that these new measures would have inevitably lead to the discovery of the defendant's role in the loss to BTC of $1.29 million."Mr. Webber said on October 13 2005, Simmons called JoAnne Raynor, the Assistant Vice President of Finance, and told her that she and Laidlow needed to speak to her.During the meeting, Simmons admitted that for the past 15 years, she and Laidlow operated an IOU scheme whereby cash would be loaned to staff for IOU's or post-dated cheques."She had hidden some of the IOU's and others would be torn up and thrown in the trash. She personally borrowed sums of money between $200 and $300 but would pay it back."On October 19, 2005 she wrote a letter of apology to the Chief Executive Officer, enclosing her un-banked severance pay cheque," said Mr. Webber.Laidlow admitted that she also operated the scheme for 15 years and had been covering up the shortages of loans that were made but never repaid."She herself had stolen about $30,000, but she did not know the exact amount," said Mr. Webber, explaining she admitted making false entries in the accounts to ensure that the excel spreadsheet agreed with the summary report.He continued: "As a result of the admissions, the desk and work area of the defendants were searched. IOUs and large quantities of cash were discovered in the drawers of both defendants."The cash totalled $139,783. There was no legitimate reason for the cash to be kept in this manner as it should have been banked."An internal audit by the company revealed a shortfall of $1,292, 940, almost exactly the sum agreed by Yvonne Simmons."Mr. Webber told the court that a KPMG accountant commenced an external audit of the accounts. There was a shortfall of no less than $1.29 million discovered by the internal audit pre-dating April 2005."The scheme depended for its success upon weaknesses in the accounting system that enabled the timing of depositing cheques and cash to be manipulated, and with reconciliations occurring on a monthly basis, there was enough time for large quantities of cash to be held back."He told the court that it was not possible to identify an exact amount of money taken from BTC prior to April 2005 as internal and external audits arrived at different figures. The $1.29 million represents the lowest sum."This is in part due to an accounting system called Virtuoso that had been introduced and then later abandoned several years before."The first charge that the duo pleaded guilty to, conspiring to defraud BTC between December 21 1989 and April 1 2005 was, said the prosecutor "designed to reflect the agreement made between the two defendants to risk BTC's money on an unauthorised and badly monitored private lending scheme" through to April 2005."Save for the amounts the defendants admitted to taking for themselves, the prosecution do not allege this scheme was designed to enrich the defendants personally."Rather, they set out to lend cash dishonestly and were forced to cover up their losses as more people defaulted, and the paperwork became lost," said Mr. Webber."But as things spiralled out of control, the defendants should have called a halt to it, rather than continue."The second charge, stealing $140,0371.85 from the company, relates to the period between April and August 2005, said Mr. Webber "for which there were no excuses regarding the accounting system. In this phase the shortfall was readily identified."Defence lawyer Rick Woolridge said: "These ladies come before you not as young people who made silly mistakes but as people who began their careers at the Bermuda Telephone Company and were indoctrinated into an existing culture of deceit, mismanagement, misappropriation and fraud."He complained that five others had been allowed to pay the company back and were not prosecuted.He said the women were "almost as much victims as they are culprits" and were "not criminal minds" but rather "spokes in the wheel" of a wider enterprise reflecting the culture they worked in at BTC.The IOUs, he said, were for employees "paid a pittance for the service that they did" who spent the money on feeding their children and paying their bills. He begged the judge to consider non-custodial sentences that would enable to women to work with youths at risk of crime.Both women apologised for what they had done, but also blamed others.Laidlow, a mother of three, said two accounting systems made it impossible for them to get the books to balance, and complained about managers who would not help them."No, we wasn't taking for 15 years. We was covering for 15 years but we wasn't taking for 15 years," she told the judge.Simmons said: "It was not 15 years taking for ourselves. It was 15 years of us trying to balance a system, going home, pulling your hair, and not knowing what to do."She said she knew they had not taken $140,000 but had pleaded guilty for their part in the scheme. The women have never been before the courts before.Mr. Justice Greaves said he viewed as "a sad case" and described the pair as "righteous thinking people" without "any real criminal intent."He told them that looking at them in the dock hurt him, especially as Laidlow, at 67, is just two years younger than his own mother.He said that for 15 years at least, BTC allowed itself to be ripped off, "not by one or two employers but it appears that so many must have participated in this programme that it became an epidemic." However, he said that although he had looked hard at imposing a non-custodial sentence, having given the women credit for admitting to the con, there were no exceptional circumstances that would allow him to do so.The laws about embezzling employers, he told the women, were based on the principle that doing so "is to put in danger not only your employer but others in society who may be affected by your acts. Companies crumble, people lose their jobs, people you may not be thinking about".In addition to a one year jail sentence, each of the women must complete 300 hours of community service within six months of their release.In a statement after the case, a BTC spokeswoman said: "In October 2005 BTC discovered irregular activity that had been carried out over a period of years by some long-term employees who had acted together to overcome BTC's system of internal controls over the handling of cash."The full financial impact to BTC of the fraud was recorded in BTC's financial year to 31 March 2006."The subsequent investigation and review by an external forensic auditor resulted in the implementation of a further enhanced internal control framework designed to mitigate the risk of any recurrence of such an event."The staff involved were dismissed and additional follow-up to this incident included strengthening the anti-fraud environment by reviewing controls in a number of related operational areas, and re-emphasising BTC's policy regarding zero tolerance for fraud."

Bermuda Telephone Company ,Yvonne Simmons, 54 and Jacqueline Laidlow, 67 – admitted operating an unauthorised lending scheme.

The swindle involving at least seven employees came to light when two of them – Yvonne Simmons, 54 and Jacqueline Laidlow, 67 – admitted ope...

Bear Stearns toxic debt fraud?

Allegations that Bear Stearns was holding too much illiquid subprime or "toxic debt", at inflated prices with insufficient demand to sustain prices. Instead of full disclosure, Bear Stearns put its own financial interests ahead of its shareholders by issuing misleading assurances that minimized any subprime problems and misstating that the investment bank was liquid and diversified, the claim alleges. It alleges that Bear Stearns violated the Florida Investor Protection Act (FIPA) and the rules of the National Association of Securities Dealers (NASD), the New York Stock Exchange (NYSE) and Federal Securities law. The claim further alleges that there was no real market for Bear Stearns' enormous, high risk, over leveraged subprime holdings at the inflated prices at which they were carried on Bear Stearns' books. Inevitably, the claim argues, inflated values were punctured and the air swept out of Bear Stearns' balance sheet, leaving the South Florida investor holding the proverbial bag.

Bear Stearns toxic debt fraud?

Allegations that Bear Stearns was holding too much illiquid subprime or "toxic debt", at inflated prices with insufficient demand ...

Gerald William Clark,plead guilty to two charges of fraud over $5,000.

Gerald William Clark, 55, appeared in Nova Scotia Supreme Court to plead guilty to two charges of fraud over $5,000.The Bedford man entered not guilty pleas on the remaining offences, including 18 counts of cashing forged cheques and one of breach of trust for allegedly misappropriating funds while he was a treasurer for the Bedford Minor Basketball Association.The Crown will not be offering evidence on any of those charges, which stem from alleged incidents between June 14, 2001, and Oct. 7, 2003.Police began investigating allegations of fraud in December 2004 after an internal review by Basketball Nova Scotia, the Metro Basketball Association and Bedford Minor Basketball showed that close to $150,000 had been moved around or gone missing. Crown attorney Mark Heerema said he anticipates his office will reach a joint recommendation with the defence before Mr. Clark's sentencing on Dec. 4. He would not speculate on what the sentencing recommendation might be. Mr. Clark also came under fire in 1994 for some questionable behaviour during his eight months as chief-of-staff for then-premier John Savage.He quit when Mr. Savage learned of allegations that Mr. Clark secretly gave a fellow Liberal a $35,000 consulting contract for a youth project, while serving as president of the Metro United Way. In the end, the project produced only a five-page report. No charges were ever laid.In another incident, Mr. Clark repaid more than $250 in personal expenses after concerns that he had allegedly misused a government credit card.

Gerald William Clark,plead guilty to two charges of fraud over $5,000.

Gerald William Clark, 55, appeared in Nova Scotia Supreme Court to plead guilty to two charges of fraud over $5,000.The Bedford man entered ...

William E. McKanry, his son, William C. McKanry, and mortgage broker Paula Enders,, each face a maximum penalty of five years in prison

William E. McKanry, 68, of Warrenton, his son, William C. McKanry, 42, of St. Albans, and mortgage broker Paula Enders, 36, of Florissant, each face a maximum penalty of five years in prison and/or fines up to $250,000 for each count of bank fraud and 20 years in prison and/or fines up to $1 million for each count of mail and wire fraud, according to U.S. Attorney Catherine Hanaway.Between December 2005 and January 31, 2006, the McKanrys’ sold 12 real estate properties through Enders, according to the indictment. The properties are located in Florissant, St. Charles, O’Fallon, Hazelwood, Lake St. Louis, Ballwin, St. Louis City and County, and the total sale price of the properties was $2.7 million.Enders would shop on-line to obtain mortgage financing for all of the 12 properties, prosecutors said. On the loan applications for these properties Enders falsified that the source of the down payments, settlement charges and subordinate finances were to be made by the buyer of these properties, when they were actually made by the McKanrys, prosecutors said. The indictment states that at the closings, Enders received $226,000 above her commission fees as the mortgage broker to buy Foundation Mortgage Inc. On the seller’s settlement statement these monies were falsely represented to be construction rehab costs on the particular properties, prosecutors said. Money would be going to Enders at the closings as construction rehab on these properties when they actually were to be used to purchase Foundation Mortgage.Since the closing on the 12 properties at William C. McKanry’s USA Title, 11 out of 12 properties ended up in foreclosure and were resold for $1.2 million for a loss of $1.5 million, prosecutors said.USA Properties, which William C. McKanry and his father, William E. McKanry operated, provided a list of their "for sale" properties to area brokers and real estate agents. The list identified the particular property address and corresponding "retail value" and "sale price,” according to the indictment.In order to sell the properties, USA Properties was willing to sell these properties below the purported appraised value to buyers, prosecutors said.“This market of favorably priced real estate to which Enders, William C. McKanry and William E. McKanry had access provided an opportunity,” according to the U.S. Attorney’s office. “By matching USA Properties with buyers, they exploited the difference between what USA Properties was willing to take for a property ‘sale price’ and what a prospective investor, induced by special deals, was willing to pay.”

William E. McKanry, his son, William C. McKanry, and mortgage broker Paula Enders,, each face a maximum penalty of five years in prison

William E. McKanry, 68, of Warrenton, his son, William C. McKanry, 42, of St. Albans, and mortgage broker Paula Enders, 36, of Florissant, e...

Michael A. Vallone convicted of participating in a nearly decade-long scheme to market and sell sham domestic and foreign trusts

Michael A. Vallone of Orland Park, Ill., was one of the founders and the executive director of The Aegis Company, now defunct and formerly based in south suburban Palos Hills, which marketed and sold trust packages to some 650 wealthy taxpayer clients throughout the United States. Vallone and five co-defendants were convicted in May of participating in a nearly decade-long scheme to market and sell sham domestic and foreign trusts through a network of promoters, sub-promoters, managers, attorneys and accountants. Vallone and the others essentially diverted income from businesses into sham trusts for clients, hiding hundreds of millions of dollars in income for those clients and resulting in a $60 million tax loss to the United States, making the case one of the largest of its kind, according to Nathan J. Hochman, Assistant Attorney General for the Justice Department's Tax Division; Patrick J. Fitzgerald, U.S. Attorney for the Northern District of Illinois; Eileen Mayer, Chief of the Internal Revenue Service Criminal Investigation Division (IRS-CI); and Alvin Patton, Special Agent-in-Charge of the IRS-CI in Chicago. U.S. District Judge Charles Norgle sentenced Vallone to serve 223 months in prison, followed by three years of supervised release. The judge will rule later on the government's request for forfeiture of more than $4 million, his home and off-shore bank accounts, as well as of the costs of prosecution. Vallone also remains liable for any taxes, penalties and interest owed. In addition to tax fraud conspiracy, Vallone was found guilty of and sentenced on 24 counts of aiding and assisting the filing of false tax returns, three counts of personal income tax evasion, seven counts of mail fraud and two counts of wire fraud. "Today's sentence sends a powerful and unequivocal message to those who seek to evade and help others evade their taxes, that they will be investigated, prosecuted, convicted, and sent to prison for years," said Assistant Attorney General Hochman. "There are numerous variations on abusive trust schemes, but in general, promoters say the trusts are designed to shift income and assets into vehicles that are either not subject to U.S. taxes or will make it impossible for authorities to trace," said IRS-CI Chief Mayer. "However, the financial investigative efforts of IRS special agents continue to unmask these abusive financial transactions for what they really are -- methods of tax evasion." "IRS nationwide has ongoing criminal and civil investigations of abusive trust tax fraud schemes involving both promoters and purchasers. Establishing abusive trusts for the purpose of evading taxes is a crime and one of the worst abuses of our nation's tax system. Today's sentence sends a clear message that there are serious consequences for those who engage in these abusive tax schemes," said Special Agent-in-Charge Patton of the IRS-CI in Chicago. Vallone and his co-defendants were convicted following an 11-week trial. The defendants were indicted in 2004, following a lengthy undercover investigation by IRS agents, code-named "Operation Trust Me," and the seizure of approximately 1.5 million documents, computer files and related materials. Nationwide, the Chicago-based investigation has resulted in convictions of more than 30 defendants and charges against approximately 30 other defendants around the country, including in Florida, Illinois, New York, Ohio and West Virginia. All six defendants were found guilty of one count of tax fraud conspiracy -- specifically, conspiracy to defraud the United States by impeding the IRS in the collection of tax revenue and conspiracy to aid and assist the preparation and filing of false tax returns on behalf of Aegis clients. All six defendants were also found guilty of additional tax offenses, while two of the six were also acquitted on some counts. Sentencing for the remaining defendants will take place at various times in October and November. The other defendants are: Edward B. Bartoli of Clearwater, Fla., a former attorney, who was also one of the founders of Aegis, and its legal director; Robert W. Hopper of Gadsden, Ala., also one of the founders of Aegis and the managing director; Timothy Shawn Dunn of Chesterton, Ind., a certified financial planner, who was a promoter and manager of Aegis trusts, and the managing director of the Aegis Management Company, which he created with Vallone, Bartoli and Hopper; William S. Cover of Naperville, Ill., also a promoter and manager of Aegis trusts, and the president of Sigma Resource Management Inc., which provided management services to purchasers of Aegis trusts; and Michael T. Dowd of Glenview, Ill., also a promoter and manager of Aegis trusts who provided management services to purchasers of Aegis trusts through Aegis and Sigma Resource Management Inc. Two other defendants in this case, David E. Parker of Williamsville, N.Y., an attorney who was the legal director of the Aegis Management Company, and John C. Stambulis of Palos Heights, Ill., an attorney and a trust counsel of Aegis, both pleaded guilty and testified for the government at trial. They are also awaiting sentencing.

Michael A. Vallone convicted of participating in a nearly decade-long scheme to market and sell sham domestic and foreign trusts

Michael A. Vallone of Orland Park, Ill., was one of the founders and the executive director of The Aegis Company, now defunct and formerly b...

Warren Kyle Foote faces up to five years in prison after entering guilty pleas to reduced securities fraud charges

<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtJ18YX8bAo-sFITCFwG0x8Dou-o2EI5CiZvZKqoTq_Z0SNowsxlzGX1nkYP0DFaeGO4sbe_ozCP90QT3KLptg9dmz3veU5hhz_9a23vtVPXvb48AF9WcqOVNCLt3ze5RgPywXY-WqAXGC/s1600-h/foot.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5253048594952756370" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtJ18YX8bAo-sFITCFwG0x8Dou-o2EI5CiZvZKqoTq_Z0SNowsxlzGX1nkYP0DFaeGO4sbe_ozCP90QT3KLptg9dmz3veU5hhz_9a23vtVPXvb48AF9WcqOVNCLt3ze5RgPywXY-WqAXGC/s400/foot.jpg" style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" /></a> Warren Kyle Foote, faces up to five years in prison after entering guilty pleas to reduced securities fraud charges. The 28-year-old Salt Lake City man embarrassed Westminster College last year after pledging $3.4 million to help establish the private school's Institute for New Enterprise at the very time his alleged scams were unraveling. The small private school publicized the gift, which Foote's victims say he used to build trust - even though he never gave a cent to the college, which he attended briefly a decade ago. The Utah Attorney General's Office charged Foote with eight second-degree felony counts, including theft and a pattern of unlawful activity, involving six victims whom Foote is accused of cheating out of thousands of dollars. Foote pleaded guilty to five third-degree felony counts, exposing him to prison time when Judge Deno Himonas sentences him Jan. 2. Later this month, Foote is to appear in court to resolve bad-check charges brought by county prosecutors. In late 2006 and early 2007, Foote was posing as an altruistic entrepreneur who had made a fortune in "hard money" lending when he approached several potential investors with supposedly risk-free ventures, the fraud charges say. He touted his Westminster gift with one victim as proof of his success and philanthropic intentions. Susen Sawatzki is a magazine editor who interviewed Foote for an article about his electronic billboard company Red Outdoor. Afterward, Foote offered her opportunities to make easy money in some hard-money deals. Foote held himself out as a millionaire who co-owned California's Deerfield Ranch Winery and was developing a high-rise project in downtown Salt Lake City. Sawatzki declined his investment offers, but Foote did persuade her to put up a $50,000 short-term loan, which she financed thorough a home-equity loan, to help another investor close a real estate deal. She entrusted the money to Foote on his promise that he would secure the loan with an interest in the property. Later, Sawatzki tried repeatedly to get Foote to produce documentation of the transaction, but he put her off. After the loan was due, he paid her with checks that bounced, according to the charges. Foote finally produced documents, which an investigator later suspected of being faked, since the property described in mortgage documents did not match the address Foote provided, and of bearing forged signatures. Foote grew up in Clearfield, the youngest of five, and the family moved to Taylorsville when he was a teenager. He attended Westminster for a semester after high school, but never earned a college degree. Both his parents died of cancer and he remains estranged from his siblings, according to a sister. Foote went on an LDS Church mission and was invited to join a Utah chapter of Rotary International, the conservative service organization. He used his Rotary connections to build trust with two other victims, court documents allege.

Warren Kyle Foote faces up to five years in prison after entering guilty pleas to reduced securities fraud charges

Warren Kyle Foote, faces up to five years in prison after entering guilty pleas to reduced securities fraud charges. The 28-year-old Salt La...

Tom Petters was charged with mail fraud, wire fraud, money laundering and obstruction of justice

Petters Group Worldwide had $2.3 billion in revenue in 2007. The company has investments in dozens of companies; Polaroid is among its other well-known holdings. Tom Petters was arrested Friday on federal counts of fraud, money laundering and other charges, more than a week after FBI agents raided his home and offices for an alleged multimillion-dollar investment scheme.Petters, 51, was charged Thursday with mail fraud, wire fraud, money laundering and obstruction of justice, the U.S. Attorney's Office said in a statement. Petters, who was arrested without incident about 10 a.m. at his suburban Wayzata home, was due in federal court at 3 p.m. Charging documents weren't immediately on file in federal court.An FBI affidavit filed last week alleged Petters and some associates were involved in schemes since the mid-1990s that defrauded investors of as much as $100 million. One of Petters' associates was recorded as saying the scheme could've totaled $2 billion in fraudulent funds, the document said.The scheme was tied to Petters Co. Inc., a unit of Petters Group.According to the affidavit, Petters and some associates lured potential investors by creating false purchase orders, telling investors that PCI was purchasing merchandise from smaller vendors and then reselling the products to larger stores such as BJ's Wholesale Club and Sam's Club."The purchase orders and other documents in support of the transactions are entirely fabricated," the affidavit said. "Petters uses these documents to induce investors to invest money." Jon Hopeman, Petters' attorney, has said Petters denies any wrongdoing. Hopeman didn't immediately return a call Friday about Petters' arrest. On Monday, Petters resigned as Petters CEO and chief executive, saying the "events of the last few days" made it impossible for him to continue as leader.His home and offices were raided last week as part of an FBI search of nine properties and two vehicles. Authorities seized financial documents, computers, cash, credit cards, watches and pill bottles from Petters' home and offices.The FBI affidavit said the scheme helped fund Petters' other business ventures and lavish lifestyle. A second defendant was also charged with Petters on Thursday.Larry Reynolds, 67, of Las Vegas was arrested by FBI agents Friday in Los Angeles.The FBI affidavit said Reynolds was recorded as saying that he had known about the fake purchase orders for years and that he estimated the amount of fraud to be "in excess of $2 billion." The affidavit said Reynolds was with a company called Nationwide International Resources Inc., one of the smaller companies allegedly involved in the scheme. Authorities said Reynolds told investors his company was selling large amounts of merchandise to PCI - as depicted in false purchase orders.Reynolds got investors to give money to NIR, then he gave the funds to Petters, minus a commission for himself, the affidavit said.Another Petters associate, Robert White of Excelsior, was charged Tuesday. According to the charging document in U.S. District Court, White created false purchase orders in order to lure investors - and received millions for his efforts. Sun Country Airlines, a unit of a Petters subsidiary, has already seen fallout from the investigation.The carrier warned its employees on Thursday that they should be prepared for potential major layoffs or even a shutdown as early as Dec. 1. But the airline said it issued that letter to comply with legal requirements, and that it has no plans to shut down or slash its work force.Still, the airline is having cash-flow problems. Earlier this week, Sun Country told employees that half their pay would be deferred until after the first of the year. This is the slow season for the airline and it normally would have taken a short-term loan from its parent company, but the company said that's not an option now.

Tom Petters was charged with mail fraud, wire fraud, money laundering and obstruction of justice

Petters Group Worldwide had $2.3 billion in revenue in 2007. The company has investments in dozens of companies; Polaroid is among its other...

Charles Elliott Fitzgerald, 48,was ordered to pay $42.7 million in restitution at his sentencing today in federal court in Los Angeles

Charles Elliott Fitzgerald, 48,was ordered to pay $42.7 million in restitution at his sentencing today in federal court in Los Angeles. Fitzgerald was the seventh person to plead guilty in the investigation, U.S. Attorney Thomas O'Brien said in a statement. Three other defendants are awaiting trial and one has agreed to plead guilty, O'Brien said. This is not a case about deregulation or exploiting loopholes,'' U.S. District Judge Dean D. Pregerson said at today's hearing. ``This is a case of good old-fashioned lying and cheating.'' Fitzgerald fled to the Pacific island nation of Samoa in 2003, after he was sued by two of the banks he defrauded, O'Brien said in his statement. He was deported in 2006 and has been custody since then. Fitzgerald and the co-conspirators obtained inflated mortgage loans on homes in Beverly Hills, Malibu and other wealthy communities in Southern California, using falsified purchase contracts and appraisals. Lehman Brothers Bank funded more than 80inflated loans from 2000 into 2003, O'Brien said. Bernard Rosen, Fitzgerald's lawyer, said in a phone interview that he had hoped for a 10-year sentence, the statutory minimum.

Charles Elliott Fitzgerald, 48,was ordered to pay $42.7 million in restitution at his sentencing today in federal court in Los Angeles

Charles Elliott Fitzgerald, 48,was ordered to pay $42.7 million in restitution at his sentencing today in federal court in Los Angeles. Fitz...

Switzerland’s tax authorities, , are expected to hand over confidential data on wealthy American clients of UBS to the Justice Department

Switzerland’s tax authorities, under pressure from a growing United States investigation into the Swiss bank giant UBS, are expected to hand over confidential data on wealthy American clients of UBS to the Justice Department, two people briefed on the matter said Tuesday. The move would represent a significant shift in Switzerland’s banking secrecy laws, whose tradition dates to the Middle Ages. UBS began handing over data on hundreds of American clients with offshore private banking accounts to the Swiss taxing authority starting in August, these people said. The delivery to the Justice Department, expected to take place within several months, would place American client names in the hands of federal prosecutors seeking to build criminal cases against wealthy Americans they suspect of tax evasion. UBS, the world’s largest private bank, is under a widening federal investigation into whether it helped up to 20,000 wealthy American clients illegally evade taxes by stashing $20 billion in overseas accounts that were not declared to the Internal Revenue Service. UBS declined to comment, saying only that it is cooperating with the investigation. In July, a federal judge in Miami approved a Justice Department request seeking to force UBS to turn over certain client names. The summons is thought to be the first to a foreign bank.Swiss law makes disclosure of client data or names a crime unless the Swiss authorities think that the client has committed a serious crime, like money laundering or tax fraud. Unlike in the United States, Switzerland does not consider tax evasion to be a crime, though both countries have largely similar definitions of tax fraud.Under pressure in recent months from the Justice Department, Switzerland’s justice ministry, taxing authority and banking regulator have adopted the view that some American clients of UBS may have committed tax fraud.Justice Department officials hope to prove that the American clients committed fraud and engaged in tax evasion by concealing their ownership of offshore assets, in part by creating sham entities and then filing I.R.S. forms that falsely claimed the entities were the owners of the accounts.United States law requires American taxpayers, including trusts and partnerships, to report all financial accounts held in a foreign country if their total value exceeds $10,000 during the year. Not doing so can result in a penalty of up to 50 percent of the amount in the account at the time. In a new tactic, the Justice Department is focusing on failure by UBS’s American clients to file those reports.The investigation is being aided by a former top UBS private banker, Bradley C. Birkenfeld, who pleaded guilty in June to helping a client, Igor Olenicoff, a property developer, conceal about $200 million in offshore accounts that were undeclared to the I.R.S. Both men, who are United States citizens, are cooperating with the investigation. As part of the inquiry, the I.R.S.’s criminal division is scrutinizing 12 wealthy American clients of UBS and of LGT, a private bank in Liechtenstein, and is likely to send some of those cases to the Justice Department for prosecution, according to two people briefed on the matter. In addition, about 100 clients of LGT, and of UBS are under active investigation by the I.R.S.’s civil division, but their names have not been referred to the criminal unit for further scrutiny. The I.R.S. and the Justice Department declined to comment on Tuesday. The 100 client names and data came from a former LGT employee, Heinrich Kieber, who in 2002 stole company data on 1,400 worldwide clients and later turned it over to the I.R.S. and other countries. UBS gave the client records to the Swiss taxing authority after being urged to do so by the Swiss banking industry regulator known as the EBK. The Swiss “are taking the view that the client, not UBS, is mostly to blame,” one of the people briefed on the matter said.The data includes account names, assets, contact information, records of foreign entities incorporated for the purposes of hiding assets and client authorizations of trades. Under Swiss law, the Swiss taxing authority is required to inform UBS clients of any disclosures. American clients can appeal to the Swiss tax authority not to turn over the data to the Justice Department, a process that can take weeks or even months.

Switzerland’s tax authorities, , are expected to hand over confidential data on wealthy American clients of UBS to the Justice Department

Switzerland’s tax authorities, under pressure from a growing United States investigation into the Swiss bank giant UBS, are expected to hand...

Sydney couple is facing more than 90 charges each over a string of ATM frauds that netted tens of thousands of dollars.

SYDNEY couple is facing more than 90 charges each over a string of ATM frauds that netted tens of thousands of dollars.The 22-year-old man and 37-year-old woman were arrested on September 22 outside a bank on Military Road, Mosman, in the city's north, police said today. Police allegedly found them with $4000 in cash, three blank ATM cards and a number of ATM withdrawal slips. A search of their nearby car allegedly uncovered another $18,000 in cash, 40 blank cards, withdrawal slips and disguises. The pair originally faced two charges each over the arrest, but further investigation revealed the couple's fraud was much bigger than first thought. Police have located a number of bank accounts opened by the couple, with one containing $112,000 that has been frozen by the New South Wales Crime Commission. Officers also seized 54 blank debit cards containing the details of legitimate banking customers. Police allege the couple accessed the accounts by fraudulently obtaining customer PINs. The pair now face an additional 91 charges each over the massive fraud. They were refused bail in Central Local Court yesterday, and will reappear in the same court on November 27.

Sydney couple is facing more than 90 charges each over a string of ATM frauds that netted tens of thousands of dollars.

SYDNEY couple is facing more than 90 charges each over a string of ATM frauds that netted tens of thousands of dollars.The 22-year-old man a...

SUPERMARKET Asda has launched a fraud inquiry after High Wycombe customers reported their card had been used illegally after visiting the store.

SUPERMARKET Asda has launched a fraud inquiry after High Wycombe customers reported their card had been used illegally after visiting the store. The retailer today promised customers at its Cressex store would get their money back after the fraud, which one customer said saw £1,400 withdrawn from ATM machines in the US and Pakistan. About half a dozen chip and pin machines were removed as part of the investigation at the Holmes Farm Way store. A statement from ASDA said: “We are aware of the situation and can confirm we have had a number of customers contact the High Wycombe store to say they've had fraudulent activity on their credit or debit cards and we are currently investigating this in conjunction with the banks and the police. “At Asda the safety and security of customer data is of utmost importance to us. Importantly, any innocent customer who is the victim of any type of card fraud is protected by the Banking Code, which means that they will not lose out financially. “As with all their financial transactions, customers always need to be extra vigilant when they use their credit or debit cards and should always report anything suspicious or strange to their bank or credit card provider.” It said: “Customers can be assured that we are taking all the necessary steps to ensure the continued safety and security of customer data. “As with all issues around card security we work very closely with all the relevant authorities to ensure that everything possible is done to mitigate fraudulent activity and to continue to develop technology to stay ahead of fraudsters.” One customer, who wished to remain anonymous, said he had had £1,400 stolen from US and Pakistan through more than 25 withdrawals. He said his mother had also had £300 stolen after shopping at the store.

SUPERMARKET Asda has launched a fraud inquiry after High Wycombe customers reported their card had been used illegally after visiting the store.

SUPERMARKET Asda has launched a fraud inquiry after High Wycombe customers reported their card had been used illegally after visiting the st...

Northwater Capital Management Inc, said that two of its publicly traded funds contain an investment that was the victim of fraud.

Northwater Capital Management Inc, which manages money for institutional and retail investors, said on Tuesday that two of its publicly trad...

Count Alfons Mensdorff-Pouilly,raids were carried out at the request of the SFO investigating allegations of bribery

Investigators from the Serious Fraud Office arranged for the agent, Count Alfons Mensdorff-Pouilly, to be raided in Austria. Austrian prosecutors said the raids were carried out at the request of the SFO investigating allegations of bribery and money laundering. The Austrian police seized a quantity of documents from the home and office of Mensdorff-Pouilly, who has been accused of receiving millions of pounds from BAE for promoting deals. He is the Viennese laird of a Scottish castle.The SFO's investigations into BAE have been controversial as the government stopped its inquiry into Saudi arms deals. Critics have alleged that the government is soft on BAE and has placed the company above the law and effectively made it immune from prosecution - an accusation denied by ministers. Attention has turned to other cases of alleged BAE bribery which the SFO has been investigating. Critics have been sceptical about the prospect of any progress in these investigations. However the SFO has promised to pursue and complete its investigations into alleged BAE corruption in countries including Tanzania, Romania, and South Africa. The SFO has been investigating corruption allegations in a BAE deal in the Czech Republic. The US Department of Justice is also understood to be investigating the Czech deal as part of its inquiries into the British company.US officials have alleged for many years that the Czech deal was corrupt. Mensdorff-Pouilly, who bought Dalnaglar castle in Perthshire, is one of three agents who allegedly handled corrupt payments in the joint Anglo-Swedish deal in which the Czech Republic agreed to lease Gripen fighter planes for £400m in 2004. Documents obtained by Swedish state television identified secret payments of more than £4m from BAE and alleged that the money was used to pay bribes. According to the documents, BAE agreed to pass the 55-year-old count up to £40m if the aircraft sale was achieved. It is alleged that in the end, a smaller sum was paid through a Panama-registered company when a smaller contract was signed.Today, Gerhard Jorosch, spokesman for the Austrian prosecutors, told the Guardian: "We searched the premises of Mr Mensdorff-Pouilly at the direct request of the SFO last Wednesday". He added that the SFO is investigating alleged bribery and money-laundering in the sale of Gripen fighter jets to Hungary and the Czech Republic. He added :"Quite a lot of documents were seized and transmitted to the SFO. The SFO and Austrian prosecutors are studying the material". It is understood that two of the count's business associates were also raided. Harald Schuster, the count's lawyer, said he denied all wrongdoing. "The Serious Fraud Office does not have anything concrete. They are fishing for something else."Last year, the count denied receiving offshore payments when the Swedish TV programme was broadcast. He said his company, MPA, had been paid since 1992 for consultancy services in eastern Europe.Mensdorff-Pouilly, the husband of a prominent Austrian politician, was interviewed last year over the corruption allegations. In a separate controversy he was named in 1995 on a tape recording which alleged that he was the conduit for secret payments from BAE to party funds in Austria in return for sales. He was acquitted for lack of evidence. According to an Austrian press report today, the raids were also carried out at the request of Swiss prosecutors who are investigating BAE over alleged money-laundering. The Swiss prosecutors would not comment. Also under scrutiny is a 2001 deal in which the Hungarian government agreed to lease 14 Gripen planes. The SFO declined to comment. BAE said: "BAE Systems continues to fully cooperate with the ongoing SFO investigation. As this is a continuing criminal investigation, it would be inappropriate for us to comment on its substance."

Count Alfons Mensdorff-Pouilly,raids were carried out at the request of the SFO investigating allegations of bribery

Investigators from the Serious Fraud Office arranged for the agent, Count Alfons Mensdorff-Pouilly, to be raided in Austria. Austrian prosec...

Syracuse-based Penn Traffic operates or is the supplier to more than 200 supermarkets in New York state, Pennsylvania, New Hampshire and Vermont

Syracuse-based Penn Traffic operates or is the supplier to more than 200 supermarkets in New York state, Pennsylvania, New Hampshire and Vermont, including 1Quality Market outlets in Western New York.The SEC alleged that Penn Traffic carried out the accounting fraud over multiple reporting periods, and failed to file certain required financial reports with the SEC or filed reports that did not fully comply with SEC regulations.According to the federal agency, Penn Traffic agreed to settle the SEC’s charges without admitting or denying the allegations. The SEC imposed no fines or monetary penalties against the company.Penn Traffic intentionally inflated its operating income and other financial statements by approximately $10 million by prematurely recognizing promotional allowances in a scheme that lasted for nearly three years, from fiscal year 2001 through at least the fourth quarter of the 2003 reporting period.Another complaint alleges a separate scheme from at least the first quarter of 2000 through the first quarter of 2003 involving Penny Curtiss, Penn Traffic’s wholly-owned bakery manufacturing subsidiary that has since closed.

Syracuse-based Penn Traffic operates or is the supplier to more than 200 supermarkets in New York state, Pennsylvania, New Hampshire and Vermont

Syracuse-based Penn Traffic operates or is the supplier to more than 200 supermarkets in New York state, Pennsylvania, New Hampshire and Ver...

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