News
This page is intended to provide the reader with News relating to fraud and related crime.
Meanwhile both this page and the links on the right side of this page contain some interesting articles about fraud.
June 29, 2009
LENGTHY WHITE COLLAR PRISON SENTENCES
Bernard-Madoff
Bernard Madoff who was sentenced for the largest investment fraud in history, got the maximum 150 years in prison for running a $65 billion (£39 billion) ponzi scheme.
This was not not the longest white-collar sentence to be handed down by the courts – Read on.
1. Shalom Weiss – Sentence: 845 years
Crime: Racketeering, fraud, money laundering and transportation of stolen property
Weiss, a nightclub owner received this sentence in 2000 for his role in a $450m mortgage and insurance scam which cost thousands of Florida pensioners of their life savings.
He stole millions from the National Heritage Life Insurance Company, leading to its collapse.
He fled the US for Austria and as part of the extradition deal agreed with the Austrian authorities a promise was made by the federal prosecutors to make his sentence less severe. But once he was back in the US, a judge over ruled, saying that it was impossible.
2. Keith Pound - Sentence: 740 years
Crime: Racketeering, fraud, money laundering and transportation of stolen property
Mr Weiss’s accomplice served just four of his 740 years before dying in prison.
3. Norman Schmidt – Sentence: 330 years
Crime: Fraud and money laundering
Aged 72 when sentenced in April 2008 for his role in a $56 million investment scam
Schmidt scammed hundreds of investors out of millions of dollars in a classic pyramid investment scheme. The investor’s funds were siphoned off to cover personal expenses and to purchase race cars and the historic Redstone Castle Hotel near Aspen, Colorado.
4. Will Hoover - Sentence: 100 years
Crime: Theft and fraud
Hoover, a financial adviser from Denver, Colorado was convicted in June 2004 of 44 felony counts of fraud, theft and racketeering by defrauding clients out of an estimated $13 million.
5. Frederick Brandau - Sentence: 55 years
Crime: Money laundering, mail and wire fraud
Convicted in 2000 of defrauding, 4,000 people out of $117 million. His victims thought they were investing in life insurance policies owned by terminally ill people. The money they handed over was spent on luxury cars, helicopters and jewels.
6. Daniel Strader – Sentence: 45 years
Crime: Investment fraud
Son of a preacher man, Strader, 37, was convicted of 238 felony counts in 1995 after swindling 57 people by selling investments in properties that didn’t exist.
7. Chalana McFarland – Sentence: 30 years
Crime: Mortgage fraud
McFarland, a real estate lawyer, received a 30-year sentence for heading up a mortgage fraud ring that preyed on banks and other mortgage lenders in and around Atlanta, Georgia.
Dubbed the “queen of mortgage fraud”, McFarland and her associates falsified social security numbers and used fake identities to buy homes that were then quickly resold at artificially inflated prices.
8. Carmen J. Palmieri – Sentence: 30 years
Crime: Elder financial abuse, securities violations and grand theft
San Diego based Carmen J. Palmieri was sentenced in 2004 to 30 years in prison for swindling 191 terminally ill elderly people out of more than $13 million by selling them nonexistent life insurance policies.
9. Eduardo Masferrer – Sentence: 30 years
Crime: Bank and securities fraud
Masferrer, was chief executive officer of Hamilton Bank and sentenced to 30 years in 2006 for his role in a $22 million fraud that caused regulators to shut down the Miami-based bank.
He concealed Banking losses by buying Russian bonds in order to prop up the banks results and earn a hefty bonus. He was also accused of lying to banking regulators in an effort to cover up the scale of the problem.
10. Lance Poulsen – Sentence: 30 years
Crime: Securities fraud, wire fraud and money laundering
Poulsen was the founder of National Century Financial Enterprises, which was a company designed to provide financing to hospitals, nursing homes and other health care providers so they wouldn’t have to wait for insurance payments.
He and his fellow executives then misused investors’ money to enrich themselves.
Briton Held In US Over Alleged £4.4m Fraud
Thursday May 28, 2009
Robert Tringham, 64, from Knebworth, Hertfordshire charged in the US over alleged £4.4m investment fraud.
Tringham is accused of running a Ponzi scheme through his investment firm First National Bancorp Securities, of Diamond Bar, California in which investors were conned into handing over money which they believed would be held in safe escrow accounts and used to buy bonds.
Instead Prosecutors in California allege that he used the money to buy a new home and Land Rover for his personal use. He now faces 11 counts that could carry a 170-year sentence
The indictment also revealed that he has previously been convicted in the UK of deception, forgery and theft.
A further complaint filed by US regulators last April also alleges that he fraudulently raised at least $6.4m (£4m) from four or more investors over a three year period.
The SEC also claims he repeatedly refused requests from clients to redeem their investments.
7th March 2009
Multi-million-pound City investment fraudster jailed.
Marc Duchesne – described as a ‘Walter Mitty character’ – conned experienced investors into believing their money was safe and then squandered it on luxury cars, chartered jets and cosmetic treatment in a year of frenzied spending.
The 47-year-old posed as the manager of a fraudulent hedge fund company where £15million was deposited in pounds and Euros.
He promised monthly returns of up to 11 per cent but instead frittered away investors’ money on a Rolls Royce Phantom and chauffeur, a Bentley Arnage, several motorbikes and a speedboat for a friend.
His lavish spending sprees included £60,000 on cosmetic dentistry and £22,000 on cigars as he created an ‘aura of financial invincibility’, Southwark Crown Court heard yesterday.
He would spend thousands of pounds at Harrods department store every month.
At the time of his arrest in June 2006, Duchesne was living in a £11,000-a-month penthouse apartment overlooking the Thames in Canary Wharf, with a Ferrari Enzo parked outside.
Over two years, the conman lured in investors by falsely claiming that his bogus hedge fund company, Benchmark Asset Managers, was based in the City and regulated by the Financial Services Authority.
He promised wealthy businessmen from Britain and Europe that their money would be held in non-depletion accounts with Natwest in the UK, where it would be ‘100 per cent safe’.
Only investors could authorise the release of funds, he said.
The businessmen were persuaded to invest up to 1.5million Euros each, after a team of ‘introducers’ touted the scheme.
Duchesne pleaded guilty to conspiracy to defraud between October 2004 and July 2006 at Southwark Crown Court.
Sentencing him to four and a half years’ imprisonment yesterday, Judge Michael Gledhill QC branded him a ‘Walter Mitty’ character who had ‘lived the life of Riley’.
Walter Mitty was a character first depicted in a short story in The New Yorker magazine who created a fantasy life about himself.
The judge said: ‘The targets in this case were very rich people, both in this country and abroad.
‘The vast majority of those funds then paid for your very high lifestyle – living in the best part of London, in the best of flats with valuable antiques furnishing it.
‘By that conspicuous display of wealth, you persuaded others that you were a highly successful investment manager when quite simply it was common fraud.
‘It was rather well done from your point of view in that you lived the life Riley. You lived in very great style and were able to play the part … of a professional conman.’
Duchesne even changed his name from the less exotic Mark Spinks several years ago.
The conman, who ‘wed’ his gay partner while in prison awaiting sentencing, was instructed to come clean about his fraud.
The judge told him: ‘You are fortunate to have a civil partner standing beside you. I hope he knows what you have done and that you
are not holding anything back.’
Duchesne asked for a further offence of obtaining a £50,000 money transfer by deception from a London businessman to be taken into consideration during the sentencing.
In addition to jail he was disqualified from being a director for ten years.
But the judge also branded the investors ‘greedy’ for falling for the scam. He said: ‘If the investors had any common sense at all and were wondering where such high yields could come from, they would be on the alert that this was a scam.
‘The investors at the very least can be tarnished with the adjective ‘greedy’.’
Stephen Winberg, prosecuting, said hedge funds were seen as a status symbol before the financial downturn.
Managers were allowed to be ’secretive’ about their investment techniques, he said.
He told the court: ‘In the heyday of hedge funds, there were large queues of wealthy people wanting to hand over their money. It was a mark of success to be accepted in a hedge fund.
‘In order to attract customers they needed to create an aura of financial invincibility around themselves.’
When a businessman who lost £470,000 alerted police, Duchesne was arrested and bailed.
He then fled to Switzerland, where he had been previously convicted for a string of frauds and falsifying documents.
Three other men yesterday pleaded guilty to their involvement in introducing investors to the scam.
Thierry Doutrepont, 56, was described by the prosecution at Duchesne’s ‘right-hand man’ and sentenced to two years in jail for making reckless and misleading statements about returns on the hedge fund.
But second-hand car dealer Doutrepont, of Telford, walked free after serving sufficient time while on remand.
Both Duchesne and Doutrepont face confiscation proceedings later this year.
Michael Gallagher, 65, of Walsall, and Edgar Hutton, 64, of New Bosford, Nottingham, who both admitted charges of financial deception, were sentenced to 200 hours’ community punishment and ordered to pay £1,000 costs.
DC Andrew Bonafont, of the Met’s fraud squad, said after the sentencing: ‘Marc Duchesne and his associates touted this fictitious scam across Europe.
‘They persuaded investors to part with vast sums of money, which Mr Duchesne frittered away on himself in a frenzied year of spending, spiriting much of it away from this country. He has never shown any remorse for his actions.’
City fraudster spent millions on life in the fast lane
Thierry Doutrepoint, 56, Michael Gallagher, 65, and Edgar Huton, 64
Justin Davenport
06.03.09
A multi-million-pound City investment fraudster is facing jail today.
Marc Duchesne, 47, promised investors their money was safe and then spent nearly two years squandering it on cars, including several Ferraris, and other vehicles. He is to appear for sentencing today at Southwark crown court after pleading guilty to conspiracy to defraud between October 2004 and July 2006.
Duchesne set up a fraudulent investment company where €12million and almost £3million was deposited. He then splashed out on a Ferrari Enzo, a Rolls-Royce Phantom, a Bentley Arnage and several Humvees and motorbikes. He bought a speedboat for a friend and chartered private planes as well as spending £60,000 on cosmetic dentistry, £22,000 a time on cigars and £1 million on re-fitting his flat.
Duchesne, of no fixed abode, falsely claimed his bogus company, Benchmark Asset Managers, was regulated by the Financial Services Authority and the investors’ money would be held in non-depletion accounts with Natwest in the UK in the name of the investors, who alone could authorise the release of funds.
Scotland Yard said an additional offence of obtaining a £50,000 money transfer by deception from a London businessman will be taken into consideration.
Three co-defendants are also due to be sentenced today. They are Thierry Doutrepoint, 56, Michael Gallagher, 65, and Edgar Huton, 64, who all admitted charges involving financial deception.
March 4, 2009 -
Sunwest Management, a national assisted living management firm, has been accused of defrauding investors out of roughly $300 million in a Ponzi scheme, according to recent reports.
The Securities and Exchange Commission on Monday leveled charges against the Oregon-based company and its founder, Jon Harder. According to the SEC, Sunwest raised $300 million from 1,300 investors between 2006 and 2008. Investors thought they were purchasing partial ownership of one of Sunwest’s facilities, and had been guaranteed an annual return of 10%, reports USA Today. Instead, Sunwest allegedly placed the money in one fund that it used to pay operating expenses, investor returns and other costs. Investors were never informed that many of the facilities they thought they had invested in were actually losing money, according to USA Today.
Sunwest Management had overseen more than 320 assisted living facilities in 34 states during 2007. But as of January of this year, more than 100 have been foreclosed upon, placed in receivership or declared bankrupt. The SEC was denied a petition to freeze Sunwest’s assets and appoint a receiver to salvage some of the investors’ money, but plans to move ahead with a lawsuit, according to USA Today.