Top 10 Ponzi schemes of 2013

ponzi schemesAccording to the  data of Securities Exchange Commission on Ponzi schemes, US investors have lost nearly $441 Million against $1488 million in 2012 to Ponzi schemes in USA. Here are the top 8 ponzi schemes according to the amount quantified by Securities Exchange Commission website. The losses have reduced as compared to the losses in the year 2012.

Name of Ponzi Player Loss in Million Dollars Summary of the Scheme Destination
Cay Clubs Resorts and Marinas 300 Five former executives were charged with defrauding investors into believing they were funding the development of five-star destination resorts in Florida and Las Vegas when they were actually buying into a $300 million Ponzi scheme. Florida
Trendon T. Shavers 60 Trendon and his company Bitcoin Savings and Trust {BTCST} were charged with defrauding investors in a Ponzi scheme involving Bitcoin Texas
Walter Ng, Kelly Ng, and Bruce Horwitz 39 Bay Area real estate fund managers were charged with operating a Ponzi-like scheme in which they solicited and secretly used assets of a new real estate fund to make payouts to investors in an older, rapidly collapsing fund. Bay Area
Mark Morrow and Detroit Memorial Partners 23 Mark and his company issued approximately $19 million in fraudulent promissory notes and selling $4.5 million in equity interests through an investment advisory company that operated as a massive Ponzi scheme. Cincinati
Duncan MacDonald and Gloria Solomon 10 Duncan and Gloria, two executives at a medical insurance company were charged with operating a $10 million Ponzi scheme that victimized at least 80 investors by falsely promoting their start-up venture as a thriving business. Dallas
John K. Marcum – 6 John Marcum falsely touted himself as a successful trader and asset manager to raise more than $6 million from investors. He squandered the money on personal luxuries and other ventures such as a reality TV show, and continued soliciting money from new investors to pay earlier investors’ redemption requests. Indiana
Alvin R. Brown and First Choice Investment 3 The scheme was shut down that targeted seniors, including an elderly investor suffering from a stroke and dementia, by falsely promising high profits from commercial and residential rental properties in California and other Western states. California

Author: Mayur Joshi

Trader found guilty in Apple trading fraud

appleDavid Miller, institutional trader was found guilty in the Apple Trading fraud. On October 25, 2012, the day Apple was scheduled to announce its earnings for the quarter, co-conspirator of David Miller wrote the order in such a way that Miller could later claim he misinterpreted it. Miller would then execute a trade for 1,000 times the number of shares written in the order. If the trade proved profitable, Miller and his co-conspirator would share in the profits. If the trade proved unprofitable, Miller would claim human error, leaving Rochdale holding the losing position.

A former Rochdale Securities trader, the 40-year-old David Miller entered a guilty plea in a Hartford, Connecticut court . In addition to the criminal proceedings, Miller also faces a related civil fraud lawsuit, filed against him by the Securities and Exchange Commission.

On October 25, Miller bought 1.625 million Apple shares ahead of the company’s earnings report, hoping to profit if the stock price went up. Asked by his superiors about the purchase, Miller said that the trade was for a customer that had ordered only 1,625 shares.

Apple’s share prices dropped that day, though — despite the company’s profits being up 25 percent — and Miller and Rochdale were left down $5.3 million. Due to the unsuccessful bet, the suddenly undercapitalized firm ceased operations shortly thereafter, with its staff leaving or being let go in November 2012. In February, the firm asked that the state of Connecticut, the SEC, and other regulators withdraw its registrations.

Prosecutors contend that Miller also defrauded another brokerage when he induced it to sell 500,000 Apple shares, some of it reportedly in hopes of hedging against the Rochdale purchase.

The Federal Bureau of Investigation picked up Miller on wire fraud charges in December.

Source: Reuters

KPMG ex-partner in Insider Trading

kpmgEx-Partner of KPMG was charged with insider trading by Securities Exchange Comission. The comission alleged that Scott London, Ex-Partner of KPMG tipped Bryan Shaw with confidential details about five KPMG audit clients and enabled Shaw to make more than $1.2 million in illicit profits trading ahead of earnings or merger announcements.

KPMG Ex-partner helps friend in Insider Trading

The two men had met at a country club several years earlier and became close friends and golfing partners. London has said that he provided the inside information about his clients to help Shaw overcome financial struggles after his family-run jewelry business began faltering in the economic downturn. In exchange for the illegal trading tips, Shaw paid London at least $50,000 in cash that was usually delivered in bags outside of his Encino,  jewelry store. Shaw also gave London an expensive Rolex watch as well as other jewelry, meals, and tickets to entertainment events.

London, who worked at KPMG for nearly 30 years, recently informed the firm that he was under investigation by the SEC and criminal authorities for insider trading in the securities of several KPMG clients. The firm immediately terminated him.

According to the SEC’s complaint filed in federal court in Los Angeles, London began providing Shaw with nonpublic information in October 2010 and the misconduct continued for the next 18 months. Shaw and London communicated almost exclusively using their cell phones, although on at least one occasion London disclosed nonpublic information in the presence of others during a golf outing.

According to the SEC’s complaint, London was the lead partner on several KPMG audits including Herbalife and Skechers USA, and he was the firm’s account executive for Deckers Outdoor Corp. Therefore, London was able to obtain material, nonpublic information about these companies prior to their earnings announcements or release of financial results.

The SEC alleges that London also gained access to inside information about impending mergers involving two former KPMG clients – RSC Holdings and Pacific Capital. London tipped Shaw with the confidential details. Shaw made nearly $192,000 by purchasing RSC Holdings stock the day before its Dec. 15, 2011, merger announcement. He made more than $365,000 in illicit profits from his well-timed purchase of Pacific Capital securities prior to a merger announcement on March 9, 2012.

Read the SEC Complaint here


FCPA Violations by Philips

FCPA Violations by PhilipsFCPA Violations requires Philips to pay pay disgorgement of $3,120,597 and prejudgment interest of $1,394,581 to the United States Treasury

FCPA Violations by Philips

Since at least 1999, Philips has participated in public tenders to sell medical equipment to Polish healthcare facilities. From 1999 through 2007, in at least 30 transactions, employees of Philips Poland made improper payments to public officials of Polish healthcare facilities to increase the likelihood that public tenders for the sale of  medical equipment would be awarded to Philips.

Representatives of Philips Poland entered into arrangements with officials of various Polish healthcare facilities whereby Philips submitted the technical specifications of its medical equipment to officials drafting the tenders who incorporated the specifications of Philips’ equipment into the contracts. Incorporating the specifications of Philips’ equipment in the tenders’ requirements greatly increased the likelihood that Philips would be awarded the bids.

Certain of the healthcare officials involved in the arrangements with Philips also decided whom to award the tenders, and when Philips was awarded the contracts , the officials were paid the improper payments by employees of Philips Poland.
The improper payments made by employees of Philips Poland to the Polish healthcare officials usually amounted to 3% to 8% of the contracts’ net value.

Koninklijke Philips Electronics N.V. is a Netherlands-based parent of an affiliation of companies that manufacture and supply goods and services related to healthcare,consumer lifestyle,lighting business sectors.