Sky Captial Charged for Fraud

According to the New York Times, Sky Capital employees were charged after involving themselves in a $140 million in a fraud scheme taking place between the US and Britain. Other charges included securities, wire and mail fraud. There was $61 million raised from investors between 2002 and 2006. Charges were filed against founder and chief executive Ross Mandell and five others. Read the full story here.

Ex-Johnson Employee Faces Additional Money Laundering Charges

This article in timesnews.net reports that a former ex-Johnson city employee used a fake alleged company to contract with the city on projects that he personally profited from. Danny Lynn Davis was re-indicted on Monday on 83 additional counts of forgery in an extended money laundering case.

Davis used Gray Home Improvements, a non-existent company, to submit low bids on projects that he was in charge of reviewing.

Missouri Fraudster Pleads Guilty to Wire Fraud

According to Infozine.com, Lindsey D. Crawford, 23, of Kansas City, waived her right to a grand jury and pleaded guilty before U.S. District Judge Ortrie D. Smith yesterday to a federal information that charges her with conspiracy to commit wire fraud. Crawford pleaded guilty in federal court to her role in a wire fraud conspiracy involving a scheme between two women to hire a man to assault them. Crawford was hoping to force a higher settlement of her sexual harassment lawsuit against a former employer.

The purpose of the conspiracy was to fraudulently increase damages in the sexual harassment lawsuit filed by Crawford against her former employer, Mercedes-Benz of Kansas City, as well as Soave Automotive Group, Inc., T.E.N. Investments, Inc., and Soave Enterprises, LLC.

Under federal statutes, Crawford is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000.

Kansas City Woman Pleads Guilty to Wire Fraud in Staged Rape, Assault

SEC wants to do a better job of looking for fraud

According to the Times Call of Colorado, the SEC had received a tip to instigate Madoff a few years before his ponzi scheme failed. Now, they're trying to find better ways to detect fraud in advance. The article looks at several things they are doing to monitor and detect fraud better.

- The SEC is trying to improve the handling of tips and complaints that they receive
- Improve the examiners abilities to detect fraud and their knowledge of complex financial productions
- Making sure that a third party can verify all assets

What are other things the SEC can do to improve it's detection of fraud?

Ruth Madoff, No Fraud Charges--Yet

Amir Efrati of the Wall Street Journal reports that, Federal investigators have concluded for now there is no physical evidence that Ruth Madoff, the wife of convicted swindler Bernard Madoff, actively participated in or concealed her husband's fraud, according to two people familiar with the matter. Ruth Madoff, who has been left with $2.5M from the fraudlent fortune that she built up with her husband has been blacklisted from all social events and even her hair salon. Pictures of Madoff riding the subway isntead of her towncar have flooded the internet. But it looks like Madoff will not join her husband in prision, left to, what some may seem a worst fate but being completely shunned by the world.

Former TV Personality Pleads Guilty to Money Laundering

According to this latest article in KansasCity.com Ally Francis has been sentenced to 3 years of probation after being part of a group that defrauded Associated Wholesale Grocers. Ally and co-defendants Aponte Gomez, William Morrison, and Crystal Hall submitted fraudulent invoices requesting payments for services that the wholesale grocer never received. The group obtained more than $652, 549.

Coupon fraud on the rise

According to Dow Jones, coupon fraud has increased significantly over the past year. With the jump of 7 cases of coupon fraud in 2007 to 93 cases in 2008, companies are loosing over $3 million a year due to counterfeit coupons. Some techniques used to make fraudulent coupons: reprinting in-store coupons, smudging bar codes and extending expiration dates. Read the full report here.

Madoff Gets Maximum Sentence for Huge Ponzi Scheme

Jack Healy of The New York Times reports that, a federal judge on Monday turned aside Bernard L. Madoff’s assertions of remorse, calling his investment fraud “extraordinarily evil.” The sentencing came at the end of a 90-minute hearing in which victims of the $65 billion fraud told a packed courtroom that the judge should show no mercy and Mr. Madoff himself stood up from the defense table to acknowledge the damage he had inflicted and express regret.

Madoff's lawyers had asked for only a 12 year sentence, due to the age of Mr. Madoff, claiming that they may only have, statistically, 13 years left to live.

The ruling by judge Denny Chin may feel only like a bandage to the deep wounds that Mr. Madoff has inflicted on his victims.

Madoff Sentenced to 150 Years for Ponzi Scheme

Former Health Club Owners Found Guilty of Credit Card Fraud

According to this latest article in Fitness Business Pro, Sean Corriveau, former manager and president of Elite Fitness Inc. has pleaded guilty to fraudulent credit card use, in which he will be forced to pay a $14,000 restitution and serve a 30-day jail sentence.

Corriveau used an unauthorized credit card to purchase $14,000 worth of carpeting for his gym and also accepted prepaid memberships, which was another violation.

Madoff's Attorney Requests a 12 Year Prison Sentence

According to this article in CNN Money, Madoff's lawyer has requested a 12-year prison sentence for Bernard. His attorney, Ira Lee Snorkin, stated in his request that Madoff is currently 71 years old and has a life expectancy of only 13 more years. Snorkin believes that a sentence of 12 years for a non-violent crime is sufficient. There is much criticism though coming from the families affected. Many of those families believe that Madoff should serve the remainder of his years in prison.

Texan Ponzi Fraudster Indicted

According to the New York Times, R. Allen Stanford, the Texas billionaire accused of running a multibillion-dollar Ponzi scheme, and at least four others, including an Antiguan official, have been indicted in the fraud case, a federal prosecutor said Friday morning.

In February, the Securities and Exchange Commission shut down Mr. Stanford’s financial operations, while filing a civil suit accusing him and two other senior executives of committing a fraud it characterized as a “massive Ponzi scheme.”

The suspected fraud involved billions of dollars of certificates of deposit issued by Stanford International Bank on Antigua. The instruments paid unusually high returns and were marketed around the world, particularly in the United States and Latin America.

For more information, visit the original article referenced.

Texas Financier, 4 Others Said to Face Indictment

Madoff's sons sued

According to the Wall Street Journal, Richard I. Stahl and Reed Abend, two former employees who worked on with Madoff, sued his sons for over $1.7 million. They charge that the sons, Mark and Andrew Madoff, knew about the Ponzi scheme for a long period of time. Read the full article here.

Legal Money Laundering

This article in the Huffington Post highlights how Republican Jim Bunning might have found a "legal" way to launder money. It is not legal to accept money for signing baseballs, but Jim Bunning, ex-baseball pitcher, has set up a foundation that pays himself a total of $155,000 a year in profits from signing baseballs. His foundation donates less than $20,000 a year to charities. The post gives us this definition of money laundering:

a financial transaction scheme that aims to conceal the identity, source, and destination of illicitly-obtained money.

Even though technically it is legal, do you think the government should step in to regulate this?

Fraud Hits NYTimes Your Money Columnist

Matthew Weitzman, a U.S. money manager who ran a financial planning firm, has been arrested on charges of defrauding clients of more than $6 million by stealing from their accounts, authorities said Wednesday, Reuters reported.

According to Ron Lieber of the New York Times (his financial advisor was Matthew Weitzman), The Securities and Exchange Commission accused him (Weitzman) of looting client accounts of at least $6 million and using them “as his personal piggy bank.” It accused him of spending the money he took on a multimillion-dollar home, luxury cars and a share in a horse. Mr. Weitzman agreed to settle the claims without admitting or denying the accusations, though the S.E.C. is unsure about how much money his clients will get back.

For an interesting read, check out Lieber's piece on what its like to be defrauded by a financial advisor--sadly, Lieber is not alone.


An Adviser (Mine) Is Charged With Fraud

Man Convicted for Using Trojan Virus for Money Laundering

This article in About highlights how Alex Mineev of New Hampshire has pleaded guilty to charges of money laundering after his scheme of using trojans to steal victims' assets. After credentials and logins were stored in the trojans, he used this information to wire the funds into a separate account in Russia. He faces a possible two year prison sentence and restitution that ranges from $40,000 to $120,000 USD.