Bankrupt Banker

Andrew Maxwell Parker bought expensive cars as many as 14 cars in less than three years along with four mansions all with taxpayers' money.

"I was but a cog in this big machine," Parker told the judge. "The truth is I'm caught in a system that, like with many agencies in Washington, is defective," the San Antonio Express-News reported Tuesday in its online edition.Andrew Maxwell Parker was ordered by U.S. District Judge Fred Biery on Monday to pay $10 million in restitution, equal to his profits from the scheme, and $494,822 in back taxes. And the judge ordered him to serve three years of federal supervision after he's released from prison.Parker, 41, pleaded guilty in August to wire fraud, conspiracy, tax evasion, money laundering and filing false tax reports and faced up to 10 years in prison, as part of a plea deal.He downplayed his role in the fraud, which happened between February 2003 to November 2006.Bank officials testified Parker exploited Export-Import Bank's medium-term loan guarantee program, forcing the bank to make good on $107 million in loans that went into default.Parker also allegedly caused another $10 million in losses to Vinmar Finance Ltd., a commercial lender in Houston that Parker turned to in 2005 when the Export-Import Bank stalled in issuing loan guarantees to Parker's clients.Prosecutors said Parker bought expensive cars as many as 14 cars in less than three years along with four mansions all with taxpayers' money.The government is keeping his Hummer and one of his mansions. The remaining cars have been leased, sold or registered to relatives or others. His other homes were sold or leased.

Andrew Maxwell Parker bought expensive cars as many as 14 cars in less than three years along with four mansions all with taxpayers' money.

"I was but a cog in this big machine," Parker told the judge. "The truth is I'm caught in a system that, like with many a...

Darin Layne Kracl met with two investors at his Salt Lake County business, Advanced Trading Solutions LLC, charging documents state.

Darin Layne Kracl pleaded guilty in 3rd District Court to one count each of second-degree felony securities fraud and third-degree felony theft. He could face up to 20 years in prison when he is sentenced Feb. 9 by Judge Randall Skanchy. The fraud began in December 2006, when Kracl met with two investors at his Salt Lake County business, Advanced Trading Solutions LLC, charging documents state. Despite not having a trading license, Kracl offered to trade the investors' money in foreign markets. During the next five months, the investors paid Kracl about $6.7 million. When the investors requested to see account statements, Kracl allegedly told the men the information was confidential. Authorities later learned Kracl spent about $2.1 million on unrelated people and companies, $1.7 million on his own investment funds, and $869,000 on vehicles, including a Porsche, court documents state. Investors have recovered about $2 million of their original investment but are still owed $4.69 million, court documents state.

Darin Layne Kracl met with two investors at his Salt Lake County business, Advanced Trading Solutions LLC, charging documents state.

Darin Layne Kracl pleaded guilty in 3rd District Court to one count each of second-degree felony securities fraud and third-degree felony th...

Serge Guerrier Jr., tried to buy the items with fraudulent information

Serge Guerrier Jr., 17, of East 37th Street, acting with three other people who have not been arrested, entered a P.C. Richard store at 307 ...

Money was supposed to come from overseas: a $100 million deal to finance a ski resort in Utah.

Money was supposed to come from overseas: a $100 million deal to finance a ski resort in Utah. The wealthy investor on the other end of the telephone line listened closely to three men from Saratoga County, including an attorney, who cast themselves as international financiers with access to billions. The investor, Brent Ferrin, who lives in Park City, Utah, was skeptical. The men making the pitch were speaking in garbled sentences about Latvian banks, Patriot Act restrictions and shadowy European bank executives who, it would turn out, actually lived in Las Vegas. But Ferrin played along. He questioned why the paper work for a major international loan was being handled by a ''personal injury lawyer'' from Saratoga Springs. The attorney, John M. Hogan Jr., jumped in to defend himself.''Let me tell you why,'' Hogan said. ''Because I, I am tenacious. I don't let go of things when I get my hands onto them. I was for, did they say I was an accountant before I was a lawyer? ... And did they tell you that ah, I don't like to lose and that I'm a bulldog? That's what people call me.'' Unbeknownst to Hogan and his partners in the deal, Ferrin was recording every word for the FBI. It wasn't the first time Hogan, 73, a member of a longtime Saratoga Springs law firm, played a role, knowingly or not, in a questionable loan deal, court records show. But like several upstate New York attorneys who figured in recent federal investigations of real estate and mortgage fraud, Hogan was not charged.Indeed, a months-long Times Union examination has uncovered instances in which federal authorities investigated the roles of lawyers and other licensed professionals embroiled in schemes involving mortgage or bank fraud, without bringing charges. It comes as other lawyers and their clients, who have been prosecuted in upstate federal courts, are accusing the Justice Department of being selective in its prosecutions and of failing to pursue potential conspirators due to a mix of whimsical decision-making and limited law enforcement resources. As the U.S. economy is reeling in the wake of years of sloppy mortgage lending, the government's decision to limit its prosecutions has exposed a gap in law enforcement priorities. It also highlights a shift in focus by the FBI and Justice Department toward combating terrorism and child pornography. In June, that issue bubbled up in a federal courtroom in Albany as U.S. District Judge Gary L. Sharpe sentenced two men, Thomas Disonell and Matthew Kupic, to prison for a series of mortgage fraud crimes that could have put them behind bars for much longer than the 24 months they received. Sharpe reacted strongly as the government sought to credit the men for cooperation that was never used to prosecute anyone else. ''This case caused me to crack an eyebrow,'' Sharpe declared on the bench that day. ''How can they do what they did without the complicity of the lawyers that are involved in the closing? ... I'm not oblivious to the fact that the criminal cases filed with the FBI as the investigating agency is almost nil compared to what they were before 9/11. I know where their resources are. And I'm not attacking that one iota. ... But I happen to know that the amount of time and energy invested in white-collar fraud in criminal investigations is not what it was prior to 9/11.'' Andrew T. Baxter, acting U.S. attorney for New York's Northern District, while declining to comment on any specific case, said it is not a matter of being selective. He said that ''attorney-client privilege can make it more difficult to gather evidence.'' ''In investigating a fraudulent scheme, a key issue as to every subject is the strength of the evidence of the knowledge of the fraudulent nature of relevant transactions and the criminal intent of those involved,'' Baxter said. ''The fact that a subject of an investigation is a lawyer or licensed professional may affect our ability to prove knowledge and intent.'' Still, the Saratoga County case and others like it have exposed a trend in which people accused of federal fraud-related charges turned to attorneys and other professionals who, unwittingly or not, allegedly helped them complete their crimes. In 2005, a year after Ferrin recorded his telephone conversation with Hogan, two other men on the conference call that day, Philip Rechnitzer of Clifton Park and Ronald Persaud of Saratoga Springs, were indicted by a federal grand jury in Albany. The indictment accused them of bilking Ferrin and other investors of more than $1.6 million. Persaud's wife, Indranie, his ex-wife, Esther, and their son, Shawn, a student at Albany Law School, also were indicted. The charges allege numerous investors lost money while seeking financing for high-end development projects like theme parks, Caribbean resorts and even a Lake George hotel.The investors have testified in federal court they believed they were dealing with high-powered financiers who had access to billions of dollars in overseas funding, and not a husband-and-wife team from upstate New York who were having financial troubles. In 2004, at a time when Esther Persaud was claiming to be the managing director of at least three overseas banks, she listed her job as an office manager and stated she had $50 cash on hand when she filed for bankruptcy in Albany. Ronald Persaud, whom prosecutors have cast as the ringleader, also filed for bankruptcy that year, claiming assets of under $11,000. It took place at a time when federal prosecutors say he was fabricating official-looking European bank notes purported to be worth billions of dollars and using those, often with local lawyers at his side, to convince investors to give him money to secure multimillion-dollar loans. Defense attorneys in the case say lawyers were integral in the deals. As the ongoing trial of Ronald and Esther Persaud opened two weeks ago, their criminal attorneys cast blame on at least five business attorneys, including Hogan. Their pitch to the jury in Albany is that lawyers approved documents and wire transfers, and handed over the fraudulent bank notes to investors. The only attorney charged in connection with the scheme was William Tessitore, who lost his law license and pleaded guilty to bank fraud Aug. 11, admitting he looted $624,000 from his escrow accounts. Prosecutors agree that the presence of attorneys is exactly why many victims fell for the scheme, but they have been silent on whether any of the other attorneys violated any laws. In their trial briefs and other court filings in the Persaud case, they make clear that ''the subject fraud was advanced through the assistance of attorneys'' and ''attorney accounts were used to receive alleged wire fraud proceeds.'' According to court records in the case, and the testimony of witnesses at Persaud's trial, Hogan played a key role. He served as a point of contact for duped investors and attended at least one purported ''closing'' for a loan in Zurich, Switzerland, that never took place. Also, Hogan's law firm helped Ronald and Esther Persaud file for bankruptcy in 2004. Early that year, Ronald Persaud listed assets of less than $11,000 and his job as a ''mortgage consultant'' while months later he was posing as an overseas banker during conversations with Hogan and investors. The bankruptcy documents make no mention of Persaud's purported work as an international financier. ''Hogan, by virtue of his law license and his status as a member in good standing of the bar, gave the outward appearance of legitimacy to the fraud conspiracy,'' according to a government memorandum filed in Persaud's case. Still, court records and an FBI document shared with the Times Union show Hogan wasn't the only attorney who aided — if unwittingly — in the alleged crimes of Rechnitzer and Persaud. Anthony Ianniello, a well-known real estate lawyer in Clifton Park, handled the closing on a mortgage in which Persaud's wife, Indranie, a $40,000-a-year postal worker, sharply inflated her income on loan documents so her husband could secretly obtain an $890,000 home in Saratoga Springs. Ianniello also set up a partnership through which Persaud purchased a $135,000 Porsche coupe a year after filing for bankruptcy, and with the proceeds of his alleged crimes, according to the indictment. There is no indication that Ianniello knew Indranie Persaud was committing mortgage fraud. Ianniello declined to comment. But the Porsche deal raised suspicions of authorities. A state motor vehicle investigator who examined the Porsche transaction, and Ianniello's files, concluded in a government report that ''the unsatisfactory and illogical explanations provided by the attorney, lead him to the conclusion that the Porsche transaction was 'classic money laundering to hide an asset,' '' according to a memo filed in court by the U.S. Attorney's Office. Ianniello was never charged. Last year, Ianniello was called in for an interview with the FBI and federal prosecutors. He appeared alone. An FBI report detailing Ianniello's responses to questions indicates he gave carefully worded answers about his dealings with the Persauds, for whom he had handled dozens of real estate transactions. The FBI report indicates Ianniello said he was unaware Ronald Persaud and his wife had laundered money through Ianniello's private attorney escrow accounts. ''He also did not know why money would be transferred from Latvia,'' the FBI report states. ''Ianiello advised that he never dreamed there was a Latvian bank involved. ... He did not recall his staff telling him about these transfers. ... He stated that he was busy and preoccupied.'' Both Ianniello and Hogan are listed as witnesses by the government in the ongoing trial of Ronald, Esther and Shawn Persaud in U.S. District Court in Albany. It's unclear whether they will testify. During a conference in court Thursday, U.S. District Judge Thomas J. McAvoy asked prosecutors whether Hogan would be able to testify this week. The judge told the attorneys that based on what has transpired in the courtroom, including new information that Hogan was allegedly a member of the board of directors of at least one of the shell banks controlled by the Persauds in Scandinavia, that Hogan could put himself in legal jeopardy by testifying. ''He's in danger,'' McAvoy told the attorneys, referring to Hogan. Assistant U.S. Attorney Thomas A. Capezza responded that the government had not offered Hogan an immunity deal. ''We will have backup witnesses

Money was supposed to come from overseas: a $100 million deal to finance a ski resort in Utah.

Money was supposed to come from overseas: a $100 million deal to finance a ski resort in Utah. The wealthy investor on the other end of the ...

Harris Steel Scam, the biggest fraud in the history of country’s banking sector.

Harris Steel Scam, the biggest fraud in the history of country’s banking sector. The former president of Bank of Punjab, Hamesh Khan, fled the country after committing the fraud while the bank and other authorities probing the matter are under immense pressure to hush up the issue. Interestingly, Hamesh Khan sneaked out of the country when his name was on the Exit Control List (ECL). Well-placed sources disclosed that Hamesh Khan had committed the fraud in connivance with Sheikh Muhammad Afzal, the Chief Executive of Harris Steels Industries and Company.They used fake NICs, fake company documents and bogus collaterals of the barren and useless land situated at the banks of rivers having no market value. The Internal Audit Report of the BoP has revealed that during the presidency of Hamesh Khan, 23 fictitious accounts were opened and later huge finance facilities were sanctioned to these accounts. Ironically all the 23 accounts were opened on fake NICs and with inadequate securities.“The accounts were opened in the name of fictitious persons carrying fake ID cards. The collateral/security which were provided against the financial facility, sanctioned to the 23 accounts, were bogus, extraordinarily high valued or based on fake evaluation of properties,” sources revealed, quoting excerpts of the report of the internal auditor. Later, the State Bank of Pakistan constituted an inspection team, which conducted the inquiry and confirmed that the loans were sanctioned to the Harris Steels on fake evaluation. Sources said that the SBP inspection team had also reported that Harris Steel is the leading beneficiary of these borrowings as the amount of Rs 9 billion was sanctioned to the Harris Steels and associated accounts. Following the report of its inspection team, SBP directed the BoP management ‘to close the accounts and go for provision’. The top bank management then did not pay heed to the SBP instruction by using delaying tactics, sources added. Then the SBP issued letters to the BoP management stating that these huge loans were sanctioned against the law and the rules and regulations.Even before these 23 accounts were opened, Sheikh Muhammad Afzal manipulated to open three accounts in the BoP in the name of Harris Steels, Haider Steels and Prime Steels in 2005. The directors and guarantors in these three accounts were also bogus and each was carrying three ID cards at a time with different names and address.The Bank of Punjab sanctioned Rs 5 billion loans to Harris Steels, Haider Steels and Prime Steels on the fake documents in 2005. Later, Sheikh Afzal and company opened 23 fresh accounts, as the bank was not in a position to sanction more loans after lending them Rs 5 billion. The bank later sanctioned another Rs 4.5 billion loan to these 23 accounts. With management highly favourable, Sheikh Afzal and company managed to get loans worth over Rs 9 billion in just two years from the BOP, which was unprecedented as the banks never sanction such a huge loan to an unknown company in such a short span of time. The accused, soon after the NAB started investigations, approached the Lahore High Court and filed various writ petitions for quashing the investigation started by the bureau.The LHC in response to these petitions passed an order dated June 18, 2008 that no uncalled harassment should be caused to the petitioners. The source said that during the course of investigation, the NAB arrested bank employees involved in the fraud and conducted numerous raids on the properties owned by the Harris Steels. During the raids, the NAB recovered fake CINCs, property documents and stationery of various fictitious companies from the properties owned by Sheikh Afzal and others

Harris Steel Scam, the biggest fraud in the history of country’s banking sector.

Harris Steel Scam, the biggest fraud in the history of country’s banking sector. The former president of Bank of Punjab, Hamesh Khan, fled t...

Barclays shunted hundreds of millions of dollars of toxic mortgage assets into two secretive investment vehicles that it had created itself.

Barclays shunted hundreds of millions of dollars of toxic mortgage assets into two secretive investment vehicles that it had created itself. It did this just as the collapse of two Bear Stearns hedge funds last year alerted executives to the extent of the coming troubles in the credit markets, according to a lawsuit. Barclays must decide this week if it will try to persuade a US court to throw out the suit, which alleges that the bank defrauded investors in the two structured investment vehicles "SIV-lites". Both went bust just weeks after the transfers. The bank must file for dismissal by Friday or face a trial. Barclays, under its president Bob Diamond, is now expanding its US investment banking operations aggressively, and the case threatens to hurt its reputation and reveal details of how it responded to the emerging crisis in the credit markets last year. The transfers of toxic mortgage derivatives into its SIV-lites occurred as another division of the bank was facing big losses on its investment in the Bear Stearns funds, which Barclays is now alleging were used by that bank as a dumping ground for toxic assets of its own.Across the world, lawyers have begun to pick through a vast network of inter-connected investment vehicles created during the credit market boom, through which increasingly complex mortgage derivatives were spread around the financial system. Civil lawyers and criminal investigators are looking for evidence deep in the contracts that defined these vehicles and set out the relationships between the banks that created them, the hedge funds that managed them and the investors that bet on them. In the latest case, Barclays is being sued by a French asset manager in a New York court over the collapse of two investment vehicles designed in London and managed out of the tax havens of Jersey and Guernsey. Oddo Asset Management says it lost its $50m (around £30m) investment in two SIV-lites, Mainsail and Golden Key, because of a scheme cooked up between Barclays and its partners.The two vehicles purchased, at face value, several hundred million dollars of mortgage derivatives that had previously been sitting on Barclays' balance sheet and threatened to cause big losses for the UK company.

Barclays shunted hundreds of millions of dollars of toxic mortgage assets into two secretive investment vehicles that it had created itself.

Barclays shunted hundreds of millions of dollars of toxic mortgage assets into two secretive investment vehicles that it had created itself....

Gwendolyn Moyo guilty on all charges in her federal fraud trial

Gwendolyn Moyo guilty on all charges in her federal fraud trial, the third conviction in an international financial scam that brought down former state Sen. Derrick Shepherd, who pleaded guilty and resigned his Senate seat days before the trial began last week.Moyo, a bond broker with two previous convictions who represented herself during trial, displayed no emotion as she sat at a table taking notes while a clerk spent nearly 10 minutes reading the verdict. The jury of six men and six women deliberated for 10 hours over two days before convicting Moyo on 41 counts of fraud, conspiracy and money laundering for selling more than a dozen bogus construction bonds, netting about $2 million in illegal proceeds.Moyo was not allowed to speak to reporters, but she released a one-page handwritten statement saying she respects the jury's verdict but condemns the government for discriminating against her because she is black."This verdict doesn't surprise me whatsoever. After all, this is Louisiana, home of the good ol' boys, " she wrote. "It's just another tragedy in seeking -- not equal justice -- but fair justice when you're an African-American in America."U.S. Attorney Jim Letten noted that nearly all of Moyo's victims were minority contractors and business people."The real irony is that she was not treated differently because she is an African-American, but the people she preyed upon were targeted because they were minorities, " Letten said. "The only people who didn't get a fair shake were the victims who lost millions of dollars to Ms. Moyo and her cronies."Moyo's conviction is sure to sharpen the focus on the alleged roles of U.S. Rep. William Jefferson and his sister, Betty Jefferson, a New Orleans assessor, who are listed as unindicted co-conspirators in Moyo's indictment. Neither has been charged, and Letten declined to say whether the Jeffersons are targets in the ongoing probe.Jurors were universally impressed with the government's case, said jury foreman Danny Keating of Slidell, who attributed the lengthy deliberations to the painstaking task of sifting through hundreds of pages of financial documents to support each charge. "The government was extremely well-prepared, and Ms. Moyo wasn't prepared at all, " he said. "She would have been better served with a trained attorney, but I don't think it would have changed the verdict."Asked whether he could recall a single significant point Moyo made in her own defense during three days of testimony, Keating said, "No, not really."Moyo, who declined a court-offered public defender, had a "standby" attorney to advise her on procedural matters.Moyo drew a rebuke from U.S. District Judge Carl Barbier before jury selection began when she made a show of putting on makeup in court. Moyo cut those antics when the jury was present, but she often seemed befuddled during her rambling cross-examinations, and Barbier continually admonished her to stick to evidence in the case.Moyo, 53, has been held in jail without bond since her arrest a year ago. She faces 15 to 20 years in prison when she is sentenced Jan. 21, according to federal sentencing guidelines.The jury ordered Moyo to forfeit $3.1 million that was obtained by fraud or laundered.Any money collected is to be distributed to the victims, but bank records presented in court show Moyo blew through cash as quickly as she bilked it from a church and numerous small businesses, several of which were shoved to the brink of bankruptcy. She also owes $1.2 million in restitution from a 1989 conviction on similar fraud charges in Arizona. She was convicted again a year later for using fraudulent credit cards to pay $120,000 in legal fees and other expenses related to the first trial, which lasted three months.The phony bonds Moyo sold for $100,000 and up were intended to serve as multimillion-dollar insurance policies that could be cashed if contractors failed to complete major construction projects.The state Department of Insurance began an investigation in the fall of 2006 when it started receiving complaints that Moyo refused to pay off bonds for failed projects.Prosecutors sought to simplify the case by boiling it down to its most basic elements: Moyo was not a licensed bond broker but sold bonds anyway. The fact that the documents were worthless just added a major insult to injury, they said.Moyo, who called no witnesses to testify in her defense, claimed she did not need a broker's license because she acted as an "insurance consultant, " a position not recognized by Louisiana law.Many of the bogus bonds were underwritten by a shell company in Toronto that claimed to have $20 million in cash reserves at a time when the company president was locked out of his office for falling behind in rent payments. Prosecutors said Moyo executed the scam with help from "three dupes, " including two Chinese citizens with student visas and a California retiree whom she had never met in person until he testified against her during the three-day trial.James Zoucha, 67, of Oceanside, Calif., who pleaded guilty Sept. 10 to conspiracy to commit mail and wire fraud, admitted printing phony bonds using a form scanned into his computer. The relatively crude nature of the scheme makes it all the more surprising that three prominent New Orleans area politicians became enmeshed in the case.Shepherd pleaded guilty to conspiracy to commit money laundering Oct. 10, just four days before he was to stand trial with Moyo. The Marrero Democrat, who resigned his 3rd District Senate seat, had been charged with helping Moyo launder $141,000 in ill-gotten gains, keeping $65,000 for himself.

Gwendolyn Moyo guilty on all charges in her federal fraud trial

Gwendolyn Moyo guilty on all charges in her federal fraud trial, the third conviction in an international financial scam that brought down f...

Jack Sousa, the owner of the Academy of Driving arrested

<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQsLjcLjg91HiFBuVbHqS_gZP26XynKC58JgPJKIv9U_c44eKeHQjHLsKv_wyOnHkoHzDTbu4WXE1RFJjmOYwwqpW-FUo06kflLBIWDdqsbktnQFJZQCIbE42OlN24MUZxTAxJAgZBOyP0/s1600-h/jack.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5259874487724769778" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQsLjcLjg91HiFBuVbHqS_gZP26XynKC58JgPJKIv9U_c44eKeHQjHLsKv_wyOnHkoHzDTbu4WXE1RFJjmOYwwqpW-FUo06kflLBIWDdqsbktnQFJZQCIbE42OlN24MUZxTAxJAgZBOyP0/s400/jack.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a> Police arrested Jack Sousa, the owner of the Academy of Driving, his wife and three former employees Tuesday on fraud and forgery charges. State police said they handed out learner's permits without parental consent and altered Department of Motor Vehicle documents."We're disappointed that the investigation led to so many charges," said Sousa's attorney, John Droney, in statement. "There are a whole series of technical violations which we haven't had a chance to review and see if they are true or not."State police served a search warrant earlier this year at the school's Watertown and Waterbury locations. Police said they uncovered dozens of forged consent forms."These are Department of Motor Vehicle documents that, in fact, had inappropriate or improper information attached to them," Lt. Paul Vance said. Academy of Driving instructor Jim Thompson said Tuesday he did not know about the charges."I know something's going on, but I wasn't told specifically what was going on," he said.A father dropping off his son for driving lessons also said he was not aware of the charges."I will tell my wife, and she'll take care of it," he said. "Of course we don't want anything that is not kosher or not legal."The DMV also brought nearly 500 charges against the school itself and issued a summons to the owners. A hearing will whether it can stay open. Until then, school said lessons will continue. The Academy of Driving has more than 50 locations. More than 500 students are in training at any one time.

Jack Sousa, the owner of the Academy of Driving arrested

Police arrested Jack Sousa, the owner of the Academy of Driving, his wife and three former employees Tuesday on fraud and forgery charges. S...

Ted Russell Schwartz Murray, owner of Premier Holdings real estate investments, was found guilty by a jury in U.S.

Ted Russell Schwartz Murray, owner of Premier Holdings real estate investments, was found guilty by a jury in U.S. District Judge Vanessa Gilmore's court of conspiracy, fraud and filing false tax returns.Assistant U.S. Attorney Cedric Joubert told jurors that Murray and his two codefendants, who entered into plea bargains and testified against him, stole $67 million from wealthy investors including Norris, Jim "Mattress Mack" McInvale, retired baseball player Vince Coleman and many Houstonians.Murray and his coconspirators promised investors high interest, low fees, quick cash outs and instead stole most of their money, the prosecutor said. "This is not about bad business practices. This is about fraud, deceit, misrepresentation and lies," Joubert told the jury in final arguments.Jurors also heard about Murray dining with Tiger Woods in Scottsdale, Ariz., but failing to hook him as an investor. And he also was the signatory on a letter handed out at Charles Barkley fundraiser roast touting the investment program. They heard about Murray writing off a $29,000 Rolex as "supplies and equipment" on his taxes and also taking deductions for his mother's rent, her spa treatment, casino gambling and buying small boats.The more complicated evidence they heard was about subprime mortgages and commercial loans failing and Murray and his cohorts misrepresenting the failures and continuing to bring in investors who were duped and eventually lost millions.Murray's lawyer Ed Tomko said it was Murray's codefendants, David Isaac Lapin and Jeffrey Carl Wigginton, who ran a subsidiary of Premiere called Lapin and Wigginton Asset Management, who committed all the fraud and Murray didn't know about it. "We are very disappointed in the verdict. We will ask for a new trial and if that isn't successful, I expect he will appeal," said Tomko. The trial started before the major collapse of Wall Street and was interrupted by Hurricane Ike."I don't think the jury seeing the economy collapse because of bad mortgages could have helped us," Tomko said.Murray, who said he's currently supporting himself by trading natural gas and servicing outstanding mortgages, begged the judge to let him stay free on his $500,000 unsecured bond until his March 2009 sentencing. Gilmore said she will allow him a short period of time to get his affairs in order and but is likely send him to prison before his sentencing date.Lapin and Wigginton have both pleaded guilty to one count of conspiracy and testified that Murray kept them in the dark about some of the fraud. They have yet to be sentenced.The men sold investors on groups of subprime residential mortgages and then later on some commercial loans. They called the investments Premiere 72. According to testimony, the business promised: 72-hour liquidity on investments, though they had no pool of cash to keep that promise; first liens on the real estate, though that was not true; 12 percent interest, which was actually paid out of their own investments; and one percent fees, though fees of 25 percent and more were taken.Evidence showed many of the loans the company held were in default and Murray did not tell investors. Instead the company paid investors regular "interest," letting them think it was a return on investments when it was really just pieces of their original investment.Testimony also indicated Murray ran up regular gambling debts at casinos. But he said he did so in part to cash out chips and use the money to give presents to his children and others.

Ted Russell Schwartz Murray, owner of Premier Holdings real estate investments, was found guilty by a jury in U.S.

Ted Russell Schwartz Murray, owner of Premier Holdings real estate investments, was found guilty by a jury in U.S. District Judge Vanessa Gi...

Tom Petters is not Osama bin Laden, charged with mail fraud, wire fraud, money laundering and obstruction of justice.

"Tom Petters is not Osama bin Laden," said Jon Hopeman, the Minneapolis attorney who was retained three weeks ago to defend Petters against charges of mail fraud, wire fraud, money laundering and obstruction of justice.The charges stem from a stunningly fast investigation into what federal authorities have described as a $3 billion Ponzi scheme, headed by Petters, which attracted investors with promises of high returns through the purchase and sale of consumer electronics that proved to be fictitious.Once one the Twin Cities' best-known entrepreneurs whose holdings include Polaroid, Fingerhut and Sun Country Airlines, Petters has remained in federal custody without bail since his arrest on Oct. 3."Mr. Petters is doing just fine," Hopeman said Wednesday. "He has spent his whole life as a salesman extraordinaire, and he has a very positive outlook."Hopeman reiterated that Petters still believes he is innocent and plans to fight the charges despite guilty pleas from three of his business associates who have agreed to cooperate with prosecutors.Hopeman said he expects a grand jury indictment early next month."Only then are we entitled to see the boxes and boxes of evidence the government took from his business and his home," Hopeman said. "Only then will we know who the witnesses will be." Until then, Hopeman said, "It's like being in a race, but you don't know how far you have to run and what route to take."Petters has spent his time reflecting while sitting in the Sherburne County jail and has taken to reading some religious material and visiting regularly with a pastor, Hopeman said.Much of Petters' business empire has been placed under a receivership. Hopeman described Petters as "mortified" about his companies becoming unstable and about the fact that some employees have lost their jobs in the aftermath of the investigation. Petters also is extremely concerned about his family, his lawyer said.Hopeman released a letter written by Petters' father to Bishop Dennis Schnurr of Duluth over a sermon at a Catholic church in Grand Marais in which the pastor referred to Tom Petters by name as someone who had stolen millions from innocent people.Fredric Petters was attending church at the time. "I never expected to hear such a falsehood from the pulpit of the church that I love," the elder Petters wrote.Schnurr could not be reached for comment Wednesday.Hopeman said he and Petters have been working with court-appointed receiver Doug Kelley to put the various Petters' companies into receivership as well Petters' personal assets. They now will put more attention on the criminal case, Hopeman said.Asked about the three coworkers who last week pleaded guilty, Hopeman said Petters "has some concerns about that.""We'll do a complete investigation of them," Hopeman said.Hopeman said he called several reporters to his office Wednesday afternoon because he felt the need to counteract a serious backlash against his client on the airwaves and the Internet, where bloggers have shown a keen interest in the Petters case."The rush to judgment has been such a tsunami," Hopeman said. Asked why, he said, "It's a spectacular fall from grace and it involves someone going from the board room to jail without much pause in between. The amount of money being talked about would catch anyone's eye, and the economy is a big part of it, too."Hopeman said Petters told him nothing the government does to him will cause more pain than the loss of his son John four years ago when he was murdered in Italy."Right now we wait. For Mr. Petters who is used to facing problems and solving them, this is the hardest thing to do," Hopeman said.

Tom Petters is not Osama bin Laden, charged with mail fraud, wire fraud, money laundering and obstruction of justice.

"Tom Petters is not Osama bin Laden," said Jon Hopeman, the Minneapolis attorney who was retained three weeks ago to defend Petter...

police have raided the headquarters of Microsoft-owned Fast Search and Transfer and charged the firm with accounting fraud.

Norwegian economic crime police have raided the headquarters of Microsoft-owned Fast Search and Transfer and charged the firm with accounting fraud.Police attorney Baard Thorsen told Reuters that evidence was being sought following allegations that Fast inflated its revenues prior to Microsoft’s $1.2bn buyout of the company in January this year."We are raiding Fast's offices now to secure evidence," said Thorsen. "The charge is for accounting fraud."Microsoft confirmed in a statement that the raid had taken place at the company’s offices in Oslo this morning.“Microsoft and its subsidiary FAST Search and Transfer is cooperating fully with the police' enquiries,” said the software giant. “We are not in a position to make any further comments at this time.”Today’s police raid followed a complaint filed by the government Financial Superisory Authority in April.It claimed that Fast had ignored basic accounting and documentation rules by exaggerating its reported revenue by 250m kroner (US$40m)."We are conducting the search based on an order from the Oslo district court. We are going through documents and copying servers, and gathering information and evidence," said Thorsen, according to Associated Press. "There are reasonable grounds for suspicion, and we have to investigate," he said. "This is about manipulating the accounts.

police have raided the headquarters of Microsoft-owned Fast Search and Transfer and charged the firm with accounting fraud.

Norwegian economic crime police have raided the headquarters of Microsoft-owned Fast Search and Transfer and charged the firm with accountin...

Big Dig contractor McCourt Construction,Ryan McCourt was sentenced to two years of probation, a $1,000 fine, and a $100 special assessment

Ryan McCourt of Quincy, Mass., was sentenced to two years of probation, a $1,000 fine, and a $100 special assessment, the U.S. attorney's office said in a statement. Kenneth Hartley of California was sentenced to six months in the custody of the US Bureau of Prisons, two years of supervised release, and a $100 special assessment.The two men had pleaded guilty in July to one count each of conspiracy to make false statements regarding a federal highway project, the US attorney's office said.Prosecutors said that McCourt and Hartley, along with Big Dig contractor McCourt Construction, schemed to overbill the multi-billion-dollar project by falsely categorizing apprentice ironworkers, among other workers, as higher-paid journeymen.Prosecutors have said the workers were paid as apprentices and the company pocketed the difference. The overpayments allegedly totaled $314,494.The scheme by the managers of the company's Claims and Changes Department allegedly ran from 2002 through December 2005. Hartley was the department manager from 2001 through June 2004. McCourt had the same job from about July 2004 through the end of the conspiracy, prosecutors said.The company, which was the main contractor on the Interstate 93 tunnel finishing contract, has pleaded guilty in the scheme and will be sentenced on Nov. 7, prosecutors said.

Big Dig contractor McCourt Construction,Ryan McCourt was sentenced to two years of probation, a $1,000 fine, and a $100 special assessment

Ryan McCourt of Quincy, Mass., was sentenced to two years of probation, a $1,000 fine, and a $100 special assessment, the U.S. attorney'...

Kevin Scott O’Brien, the central figure in the multimillion-dollar Greenbrier County cattle and banking scandal, say it’s not the “typical fraud case

Kevin Scott O’Brien, the central figure in the multimillion-dollar Greenbrier County cattle and banking scandal, say it’s not the “typical fraud case” and many of his victims’ losses were “unintended.”O’Brien, 28, pleaded guilty to one count of mail fraud in February which prosecutors say included sophisticated Ponzi schemes and phantom herding — the selling of cattle to more than one buyer — to cheat more than a dozen victims of more than $5 million in less than one year.“His family is well regarded in the community. His scheme succeeded, in part, because he traded on his family’s reputation,” Assistant U.S. Attorney L. Anna Forbes wrote in a presentencing memorandum. “Some of the victims were banks; a few were relatively wealthy people; but several were just hard-working folks who did business the way it always had been — with a firm handshake and an expectation that the defendant would do what he said he would do.”Defense lawyer Rodney Smith said in his presentencing memorandum to the court that O’Brien began acquiring cattle while still attending Greenbrier East High school, and by the age of 23 was operating a cattle broker business in the county.“He (O’Brien) initially profited by raising cattle and engaging in relatively small cattle deals,” Smith wrote. “When an opportunity presented itself to engage in cattle deals with well-established cattle brokers in the Greenbrier Valley, Mr. O’Brien, against his father’s advice, embraced the opportunity.”Smith said O’Brien participated in several large cattle deals “with cattle dealers around the country,” but “due to poor business decisions ... by 2005, at the age of 25, he soon found himself deep in debt and unable to meet financial obligations.“To keep his business afloat and pay creditors, Mr. O’Brien began engaging in illegal conduct, including ‘kiting’ checks and selling a group of cattle to more than one buyer,” Smith wrote. “For a short period of time, (his) illegal conduct allowed him to remain in the cattle business ... by March 2006, however, (his) tenuous financial situation collapsed.”Smith said an investor stopped payment on a big check and a First National Bank account was frozen to recover funds owed on outstanding loans, thus pushing him into “financial ruin.” “Mr. O’Brien’s illegal efforts to prolong the life of his business resulted in debts that far exceeded his assets, and he had no viable option other than to file for bankruptcy,” Smith wrote. “(His) conduct can be distinguished from ‘typical’ fraud cases because even though the losses were foreseeable, the vast majority of the losses suffered by the victims were unintended.”Smith then argued O’Brien continued cheating people in order to be able to pay back the other people he was already cheating. “He engaged in most of his illegal conduct to allow him to continue to be a cattle broker with the hope that he could pay his investors and make a living,” Smith wrote. For these reasons and others, according to Smith, O’Brien’s prison term should be less than the eight to 10 years that’s been recommended by his probation officer and agreed to by the U.S. Attorney’s Office.Smith also cites O’Brien’s cooperation in helping convict former First National Bank president Charles A. Henthorn and former FNB board president G. Thomas Garten.Henthorn pleaded guilty to taking $9,700 in bribes from O’Brien and Garten pleaded guilty to aiding and abetting those bribes earlier this year.O’Brien wore a tape-recording device when speaking to Henthorn to gain evidence against him for prosecutors.His client has already paid a steep price for his criminal conduct, Smith wrote, by losing respect in his small community, disappointing loved ones and suffering tremendous financial losses of his own that will have a life-long effect.Furthermore, Smith said, O’Brien will never be able to operate the same type of scams again because of his newfound notoriety.“Because (his) criminal prosecution has received a tremendous amount of media coverage in his community, it is highly improbable that individuals will place the trust in him necessary to engage in the same criminal conduct upon his return to the community.” A new twist to the case may also decrease O’Brien’s prison term. Documents filed by the United States last month indicated O’Brien has given evidence which could possibly produce more indictments in this complicated case.O’Brien, along with Henthorn and Garten, is scheduled to be sentenced Friday by U.S. District Judge Thomas E. Johnston in Beckley.O’Brien’s multimillion-dollar bankruptcy cases continues to play out in federal bankruptcy court.

Kevin Scott O’Brien, the central figure in the multimillion-dollar Greenbrier County cattle and banking scandal, say it’s not the “typical fraud case

Kevin Scott O’Brien, the central figure in the multimillion-dollar Greenbrier County cattle and banking scandal, say it’s not the “typical f...

Neulan Midkiff, the minister, will serve more time than the fraud's ringleader.

Sentenced Forest Lake minister to 15 years in prison for his role in a multimillion-dollar pyramid scheme Thursday, but he wasn't happy about it. Davis, Minnesota's chief federal judge, upbraided the U.S. Justice Department for its handling of a case in which Neulan Midkiff, the minister, will serve more time than the fraud's ringleader.Terrence Correll, architect of the Ponzi scheme that bilked 519 people of up to $390 million, received a 12-year term.Under the sentencing guidelines, Davis said, "the more you steal, the better off you are." Midkiff, 66, wept as he apologized for his part in the scheme, although he said that he did not realize at the time he was committing fraud.Davis expressed doubt. "You can't hide behind being an unsophisticated person," he said. Midkiff was blamed for at least $18 million lost in the scam."This is such a difficult sentence," said Davis, recalling the testimony of victims who were ruined by the venture. "I heard all the pain and agony."But he called it "absurd" that under sentencing guidelines, Midkiff faced significantly more prison time than the leaders of Enron and WorldCom faced for larger crimes.Davis criticized the Justice Department for having the cases tried in different states. Correll pleaded guilty in Atlanta."It could have been handled in Minnesota," Davis told Assistant U.S. Attorney Timothy Rank.While longer than Correll's, Midkiff's sentence was shorter than it could have been. Sentencing guidelines called for 27 to 33 years. "And that would be totally inappropriate," Davis said.Midkiff was convicted in August of 21 counts of mail and wire fraud and tax evasion. His partner Jerry Watkins has pleaded guilty to fraud and testified against Midkiff.

Neulan Midkiff, the minister, will serve more time than the fraud's ringleader.

Sentenced Forest Lake minister to 15 years in prison for his role in a multimillion-dollar pyramid scheme Thursday, but he wasn't happy ...

Matthew John Rhodin has been granted $100,000 bail on fraud charges, but will spend the weekend in jail as he needs time to come up with the money

<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEheuFb3ck1TwPojBCYQQAJt7TwhQr_2ucgr_Guq3PMLDy32FN_zb9EsCZJ7nAtg55I_AXU0c4JSdyBv20mJuaQnCv8QC_FAyPr7b8UmpG2rURwdZBTmYQx20mA7E5b9n0ICa6Nt2wUDbQaj/s1600-h/470rhodin,0.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5258277082080590626" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEheuFb3ck1TwPojBCYQQAJt7TwhQr_2ucgr_Guq3PMLDy32FN_zb9EsCZJ7nAtg55I_AXU0c4JSdyBv20mJuaQnCv8QC_FAyPr7b8UmpG2rURwdZBTmYQx20mA7E5b9n0ICa6Nt2wUDbQaj/s400/470rhodin,0.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a> Matthew John Rhodin, boyfriend of model-turned-television personality Charlotte Dawson, has been granted $100,000 bail on fraud charges, but will spend the weekend in jail as he needs time to come up with the money.Rhodin, 42, appeared in Sydney's Central Local Court today after he was arrested by police in his Kings Cross luxury apartment yesterday morning.He faced three charges including two counts of using a false instrument with intent and one of making a false statement to obtain money. high-flying boyfriend of Australia's Next Top Model judge Charlotte Dawson has denied charges relating to a $7.35 million (NZD$8.1 million) fraud and must post a $100,000 (NZD$164,046) surety before he can be released on bail.However, Ben Clark, lawyer for Matthew John Rhodin, 42, told Sydney's Central Local Court on Friday that his client was not in a position to post the required surety.Rhodin, of Rushcutters Bay in Sydney's east, is accused of providing an inflated property valuation and using two false leases to secure the loan.He pleaded not guilty to two charges of using a false instrument with intent and one charge of making a false statement to obtain money.Dressed in jeans and a long grey t-shirt, with the words Morning Glory written across it, Rhodin clasped his hands together after instructing his lawyer to apply for bail.In granting bail, Magistrate Jane Culver imposed strict conditions, ordering Rhodin to report to Kings Cross police station twice a day, stay away from international departure ports, surrender his passport and provide the $100,000 surety.Ms Culver said the police facts revealed a strong prosecution case and a "very strong likelihood of a significant custodial sentence"."There are some features under the bail act which would suggest this man is a possible flight risk," she said.Officers arrested Rhodin at his luxury apartment at 6.55am yesterday (AEDT) following a three-month investigation.Police allege he used a phantom lease and property valuation to obtain a loan for a commercial property on Darlinghurst Road, Darlinghurst, last year.The vendor of the property agreed to sell it to Rhodin's company NR Marketing for "well below" the estimated value, according to a police statement of facts tendered to the court.Rhodin allegedly submitted an online application to the Commonwealth Bank of Australia for a $7.35 million loan in October 2007 in which he included a $10.5 million (NZD$11.7 million) independent valuation of the Darlinghurst property.Police said he used false lease documents to substantiate to the bank that the property, which contained three vacant floors, would return $385,000 (NZD$427,649) rental income per year between July 2007 and July 2013.But Rhodin's company defaulted last December after failing to make the first repayment of $45,000 (NZD$50,000).Rhodin has recently been spotted at social functions with Dawson, a former model who now stars on the Seven Network reality modelling television show.He is required to appear at Downing Centre Local Court on December 11.

Matthew John Rhodin has been granted $100,000 bail on fraud charges, but will spend the weekend in jail as he needs time to come up with the money

Matthew John Rhodin, boyfriend of model-turned-television personality Charlotte Dawson, has been granted $100,000 bail on fraud charges, but...

Ronald Dale Cole,pleaded guilty to two counts of odometer tampering.

Ronald Dale Cole, 55, pleaded guilty on May 30, in U.S. District Court in Atlanta, to two counts of odometer tampering.Cole bought high-mile...

Kermit Hall, one of the owners of the Kingsley Trust, was convicted of wire and mail fraud charges involving the theft of investor funds

Kermit Hall, one of the owners of the Kingsley Trust, was convicted of wire and mail fraud charges involving the theft of investor funds, U.S. Attorney Catherine Hanaway said Friday.Hanaway said in a release that Kermit Kingsley Hall and Joseph G. Cooper, who operated the Kingsley Trust from offices at 5494 Brown Road in Hazelwood, Mo., allegedly solicited investments in the Kingsley Trust based on false representations about the safety of investments in the trust.The trust’s Web site falsely described investments in the trust as “guaranteed deposits that post annual rates twice the norm” and contained the assertion that they erase the guesswork with “principal guarantee,” according to Hanaway. Kingsley Trust brochures falsely stated that “deposited amounts are guaranteed with interest benefits locked in at the time of deposit.”“Instead of investing victims’ funds, Hall and Cooper used approximately $345,000 of their funds to purchase a vehicle, pay personal expenses, attorneys’ fees and give money to relatives; and none of the victims’ money was actually invested,” Hanaway said in a statement.Hall, 58, of San Luis Obispo, Calif., was convicted of on one felony count of mail fraud and two felony counts of wire fraud in a four-day trial before U.S. District Judge E. Richard Webber. Hall’s sentencing has been set for Jan. 9, 2009.Cooper, 51, of Florissant, Mo., previously pleaded guilty to related charges and awaits sentencing.Each fraud count carries a maximum penalty of 20 years in prison and/or fines up to $250,000.

Kermit Hall, one of the owners of the Kingsley Trust, was convicted of wire and mail fraud charges involving the theft of investor funds

Kermit Hall, one of the owners of the Kingsley Trust, was convicted of wire and mail fraud charges involving the theft of investor funds, U....

Darkmarket enabled fraudsters to buy and sell credit card details, and learn how to convert them into cash, was shut down

online criminal forum that was used by thousands of fraudsters to buy and sell stolen credit card and bank details has been shut down following a two year FBI-led undercover operation.The Dark Market site was used by cyber criminals around the world to buy and sell credit card data, user names and passwords, as well as equipment for carrying out financial crimes. The FBI - which shut the site down earlier this month - says at its peak Dark Market had over 2500 registered members. The FBI infiltrated the forum, gathering intelligence on leading criminals before teaming with other agencies to identify the fraudsters. Around 56 people have been arrested following co-ordinated raids carried out in the US, Germany, Turkey and the UK.Britain's Serious Organised Crime Agency (Soca) arrested 11 people in London, Manchester and Leicester as part of the investigation into the Dark Market Web site. Soca says sites like Dark Market are closely guarded and inaccessible to most Web users as they operate on an exclusive membership basis and by invitation only. The sites use breaking-news style updates on the latest compromised personal information. Sharon Lemon, deputy director, e-crime, Soca says the people involved in this kind of activity are not technical experts but "thieves with keyboards". "They have a certain arrogance - they think they are untouchable," she says."The message today is that no-one should feel confident that these forums are a secure place to operate," adds Lemon. "While some suspects remain at large in the UK and overseas, Soca and its partners will continue to identify these individuals and bring them to justice." Soca says further arrests are expected both in the UK and abroad as the investigation continues.The operation against the Dark Market forum also prevented $70 million in losses through the seizure of compromised victim accounts, says the FBI.Says Shawn Henry, assistant director, cyber division, FBI: "In today's world of rapidly expanding technology, where cyber crimes are perpetrated instantly from anywhere in the world, law enforcement needs to be flexible and creative in our efforts to target these criminals."Leads in many of these investigations take us to the online world of Internet forums, where criminals go to engage in the business of selling and trading innocent person's credit card numbers and other personal information."Henry says the arrests "are a good demonstration of the coordination taking place today between the FBI, the Serious Organised Crime Agency, and other law enforcement agencies around the globe". Sixty people across the globe have been arrested in connection with the "Darkmarket" website, including Britons from Leicester, Manchester, Humberside, South Yorkshire and London.The international forum that enabled fraudsters to buy and sell credit card details, and learn how to convert them into cash, was shut down by the Serious Organised Crime Agency (Soca).The site allowed criminals to exchange information on how to commit online fraud, as well as offering the sensitive data contained on the magnetic strips of credit cards.Soca said one of the people arrested had spent £250,000 buying personal data on the site, which could have been used to make £10m from identity fraud.Police used international crime specialists to infiltrate the website and identify its users.A spokesman said: "People were exchanging information about how to commit online fraud."(The site) enabled a whole range of criminal activities, from how to go about stealing data to how to make the best use of it once it had been stolen."The website had been in operation for three years and could only be accessed by invitation.Greg Day, security analyst from McAfee, told Sky News Online the arrests were a "great step forward", but added that as numbers of online shoppers grow, identity theft is a growing problem."We spend more of our lives now in the digital world - and so do criminals," he said."On the high street, we understand the risks and take steps to manage them."Online there are different risks and people need to be prepared to deal with them appropriately."Mr Day added online fraud is becoming increasingly difficult to stamp out.He said: "It's much harder to really understand the true origins - to infiltrate and co-ordinate these raids on a global basis - which is what we have to do with cyber threats."What's very significant about this case is that it was a syndicate that stole the information, educated people on how to use it and then converted it into cash.

Darkmarket enabled fraudsters to buy and sell credit card details, and learn how to convert them into cash, was shut down

online criminal forum that was used by thousands of fraudsters to buy and sell stolen credit card and bank details has been shut down follow...

World Group Securities Inc. charged with securities fraud

The brokers -- Guillermo Haro, Kederio Ainsworth, Jesus Gutierrez, Gabriel Paredes and Angel Romo -- worked out of Los Angeles. The SEC alleges the five paid themselves high commissions on both the subprime mortgages and the securities purchases. The customers generally were of modest means, had little prior investment experience, and had little or no formal education beyond high school. Some of the investors did not speak English fluently or at all.Securities and Exchange Commission has charged five California brokers who worked for Duluth, Ga.-based World Group Securities Inc. with securities fraud, alleging they put customers at risk by refinancing their homes with subprime mortgages that they could not afford in order to fraudulently sell unsuitable securities.The SEC alleges the brokers sold unsuitable securities to customers, primarily variable universal life policies (VUL). Most investors who bought these securities lacked the cash or income to do so, but were urged by their brokers to raise the money to pay for the purchases and the monthly payments required for these products by refinancing their fixed-rate mortgages into subprime adjustable-rate negative amortization mortgages. Each defendant was a mortgage broker and a registered representative and collected compensation from the mortgage refinancings and the sales of securities. The brokers allegedly misrepresented the expected returns from the securities, the liquidity of VULs, the nature of the VULs, and the terms of the new mortgages while failing to disclose material facts about the products. The defendants also allegedly falsified client account forms and order tickets relating to the securities sales.

World Group Securities Inc. charged with securities fraud

The brokers -- Guillermo Haro, Kederio Ainsworth, Jesus Gutierrez, Gabriel Paredes and Angel Romo -- worked out of Los Angeles. The SEC alle...

Wayne A. Hicks, 52, in a negotiated plea agreement with federal prosecutors, pleaded guilty in Fayetteville to conspiracy to defraud

Wayne A. Hicks, 52, in a negotiated plea agreement with federal prosecutors, pleaded guilty in Fayetteville to conspiracy to defraud the federal government of income taxes.According to the U.S. Attorney's Office, the alternative banking system, known as The members were involved in the so-called Patriot Movement and were generally anti-government and did not pay federal taxes. Some schemed to overthrow the federal government, according to prosecutors.Hicks promoted the alternative banking system at seminars and membership grew from about 800 in January 2005 to 3,000 members by April 2007, according to prosecutors.Hicks, who operated the Liberty Tree restaurant in Berryville, is also associated with the "Liberty Dollar," an alternative currency. Americans for Lawful Financial Independence and Information operated out of an office in Berryville and maintained several bank accounts, according to prosecutors. Services included bank-like accounts and the use of electronic money orders to pay bills and transfer funds. Members were not required to provide Social Security numbers and were able to get out of the traditional banking system, conceal their financial transactions from the IRS and avoid paying taxes.Members would deposit money into their accounts by mailing deposits or by wire transfers. They would access their accounts at a Web site and by printing digital money orders that could be used just like traditional checks.Membership was by invitation only, new members had to be referred by an existing member, according to prosecutors. That arrangement allowed the system to operate for several years without government detection.Hicks promoted the scheme at Pinnacle Quest International seminars in Mexico, on anti-government Web sites and through a newsletter with a built-in e-mail system, according to prosecutors. Pinnacle Quest International provided speakers who would present various schemes and information on how to avoid paying federal income taxes. Hicks maintained bank accounts at Bank of the Ozarks, Bank of Eureka Springs, Security Pacific Bank and ANB Financial for short periods of time to house accounts, according to prosecutors. Each bank became suspicious of the financial transactions being conducted and asked Hicks to close the accounts.Money in the accounts was co-mingled and the only way to know who the money actually belonged to was through the records Hicks maintained at his business location. Those records were seized by the IRS on May 10, 2006, according to court records. Hicks has since provided additional records, including transactions from May 10, 2006, through April 2007. Hicks admitted the last tax return he filed with the IRS was for the tax year 1992 and he agreed he owes taxes on income he received from 2003 through 2006. Hicks will be sentenced at a later date. He is free on $10,000 bond but was required to turn over his passport and restrict his travel to parts of Arkansas and Missouri, unless given prior approval from the U.S. Probation Office.Hicks faces up to five years in prison, a fine of up to $250,000 or both. He may also be required to pay restitution.There have several related lawsuits filed involving Hicks and the scheme. The Arkansas Securities Department issued a cease and desist order against Hicks and MYISCIS on Feb. 23, 2007.N.R. Smith, LLC won a default judgment, alleging fraud, conversion and fraudulent transfer of funds against Hicks for $607,663, interest of $79,612 and costs of $850.JP Morgan Chase Bank won a default judgment against Hicks, MYICIS and another person who was never located for $157,559, plus interest and attorney fees, alleging fraud.Another case, seeking a $1 million lien against Hicks was stayed after ANB Financial went into receivership May 9.A Web site was created in October 2007 aimed at recovering funds deposited with Hicks and then frozen by the government.

Wayne A. Hicks, 52, in a negotiated plea agreement with federal prosecutors, pleaded guilty in Fayetteville to conspiracy to defraud

Wayne A. Hicks, 52, in a negotiated plea agreement with federal prosecutors, pleaded guilty in Fayetteville to conspiracy to defraud the fed...

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