Posts Tagged ‘Ponzi scheme’
An Indiana financier and former chief executive of National Lampoon convicted of swindling investors out of about $200 million was sentenced Friday to 50 years in prison.
U.S. District Judge Jane Magnus-Stinson sentenced Timothy Durham. Two of Durham’s associates, James Cochran and Rick Snow, were to be sentenced later Friday.
A jury in June found the three men guilty of securities fraud and conspiracy. It also convicted Durham, a major Indiana Republican Party donor who resigned his post at National Lampoon in January, of 10 counts of wire fraud, while Cochran and Snow were convicted on some of those counts.
Prosecutors have said the three stripped Akron, Ohio-based Fair Finance of its assets and used the money to buy mansions, classic cars and other luxury items and to keep another of Durham’s company afloat. The men were convicted of operating an elaborate Ponzi scheme to hide the company’s depleted condition from regulators and investors, many of whom were elderly…
U.S. Attorney Joe Hogsett said none of the three has shown remorse for their crimes and each deserved the life sentence recommended in a probation report.
“Durham has earned a place among the greediest, most selfish and remorseless of criminals,” Hogsett wrote in a sentencing memorandum earlier this week…
The charges against Durham led several GOP politicians, including Indiana Gov. Mitch Daniels, to return hundreds of thousands of dollars in campaign contributions sought by Fair Finance’s bankruptcy trustee.
Any similarity to Bain Capital and other bastions of bullcrap is strictly coincidental. If you believe.
Daylife/Reuters Pictures used by permission
Not exactly his usual chauffeur
The jury of eight men and four women yesterday convicted R. Allen Stanford on 13 of 14 charges including four wire fraud counts and five mail fraud counts carrying maximum penalties of 20 years in prison. No sentencing date has been set…
The founder of Houston-based Stanford Financial Group denied federal government allegations he’d lied to investors about the nature and oversight of the certificates of deposit issued by the bank and sold in U.S. by his securities firm, Stanford Group Co.
Once ranked 205 on Forbes magazine’s 2008 list of the richest Americans, with a net worth of $2.2 billion, Stanford has been jailed as a flight risk since being indicted in June 2009.
The forfeiture trial, which continues today, began about 2 1/2 hours after the jury rendered its verdict. Prosecutors want the panel to decide how much money Stanford must give up now that they’ve said he is guilty.
The funds, now on deposit in the U.K., Switzerland, Canada and Antigua, belong to Stanford bank depositors, Justice Department lawyer Andrew Warren told the jury at the outset of the second proceeding yesterday. “It includes the SocGen slush fund about which you’ve heard a lot about already,” Warren said, referring to money at a Swiss unit of Paris-based Societe Generale SA. “Every single dollar the U.S. is seeking is CD depositors’ money that stems from Mr. Stanford’s crimes and belongs to the victims of his fraud…”
“The forfeiture phase is as important as the conviction,” said former Stanford prosecutor Paul Pelletier, who is now in private practice…“Fifty percent of a prosecutor’s job is to obtain the conviction,” he said. “The other 50 percent is to recover for the victims, and forfeiture goes a long way towards that goal.”
Funds recovered through this process will be returned to Stanford fraud victims. “It’s an absolute given,” Pelletier said. “Not a dime of this money goes to the U.S. treasury…”
Stanford was declared indigent and given a taxpayer- financed defense because all of his assets were frozen by court order in February 2009 when he was sued by the U.S. Securities and Exchange Commission…
The U.S. judge in Dallas overseeing that case appointed a receiver to marshal and liquidate Stanford’s holdings to repay investors. While Stanford waited in jail for his criminal trial to begin, the receiver sold his businesses, boats, six airplanes and stakes in a boutique hotel and golf course.
Stanford also lost the honorary knighthood given to him by the Antiguan government for his economic development efforts there. Antigua’s parliament stripped him of the title in November 2009.
Unlike his peers at Enron, Stanford assets may actually land in reduced quantities [of course] in the accounts of his victims.
The interconnected nature of politicians and pimps like Stanford never seems to end – and isn’t touched in the least by Congress or the Supreme Court. Lehman Brothers paper shuffle hustle, Enron’s scams and thefts, Allen Stanford’s Ponzi scheme were all aided by one or another politician. Whether it was the Parliament of the nation of Antiqua which awarded Stanford a knighthood for good works – or Phil Gramm of Texas removing oversight from Enron while his wife was on the Board of Directors, the country club collusion continues same as it ever was.
Though it is heartwarming to see one of these crooks sent away. It certainly wasn’t common in the days of Bush and Cheney – was it?
Sugarcreek, Ohio – This village is as sweet as its name. Main Street climbs gently from a tidy railroad crossing, past a few gift shops to the simple brick First Mennonite Church…
This postcard from a gentler and simpler America is about as unlikely a place imaginable for the news that broke in September: one of Sugarcreek’s own, a prominent member of what some people here call the Plain Community, was under arrest, accused by federal prosecutors of running a Ponzi scheme that betrayed his neighbors’ trust and wiped out more than $16 million of their savings.
The news media made the obvious comparisons…
But the most intriguing aspect of Monroe Beachy’s story is how different it seems from Bernie Madoff’s — and from almost every other story with a “Ponzi scheme” headline over the years.
While victims of Mr. Madoff’s fraud, like most Ponzi victims, condemned their accused betrayer in court as a monster, many of Monroe Beachy’s investors have said in court that it is more important to forgive him than to recover their money.
While the Madoff case and others like it have inevitably created conflict between longtime investors fighting to keep their fictional profits and more recent investors trying to recover lost principal, some Beachy investors urged that their own share of his estate should be given to those in greater need.
And while Mr. Madoff’s wife and sons instantly became social pariahs in Manhattan, Mr. Beachy’s wife and children remain at his farmstead here, living peacefully with their neighbors…
It became the forum for a rare bankruptcy court battle over religious freedom, with Mr. Beachy’s Amish and Mennonite creditors insisting that the court’s way of dealing with his downfall could not be squared with their faith or with his…They formed their own committee to resolve the crime. There were two confounding contradictions:  all the creditors were not members of their faith and bound by the same methods or conclusions;  we still live in a constitutional republic where civil law takes precedence over religious rote.
Last March, Federal Bankruptcy Judge Russ Kendig in Canton, in the federal courthouse closest to Sugarcreek, ruled that “delegating insolvency proceedings to a religious body” would be unconstitutional…
No part of this story contrasts as sharply with the real Bernie Madoff case as what happened next…
“We are agreed among ourselves to accept your ruling as the will of Almighty God in this matter,” they wrote, after thanking him for considering their point of view so carefully. “If there is anything which we can do as members of the Amish-Mennonite community to facilitate the bankruptcy process and help bring it to a speedy conclusion please do not hesitate to contact any member” of the committee.
Unlike most American flavors of fundamentalist religion, these folks recognize and respect the law of the land over their religious beliefs. They call it God’s Will. An interesting way around the contradictions of their belief system; but, it leaves our constitution intact and doesn’t waste months and years trying to wear down the court system.
RTFA. It is a long and convoluted tale. One not without illustrations of every human frailty – even for folks who assay that frailty results from the supernatural.
Bernard L. Madoff said he never thought the collapse of his Ponzi scheme would cause the sort of destruction that has befallen his family. In his first interview for publication since his arrest in December 2008, Mr. Madoff — looking noticeably thinner and rumpled in khaki prison garb — maintained that family members knew nothing about his crimes.
But during a private two-hour interview in a visitor room here on Tuesday, and in earlier e-mail exchanges, he asserted that unidentified banks and hedge funds were somehow “complicit” in his elaborate fraud, an about-face from earlier claims that he was the only person involved…
In many ways, however, Mr. Madoff seemed unchanged. He spoke with great intensity and fluency about his dealings with various banks and hedge funds, pointing to their “willful blindness” and their failure to examine discrepancies between his regulatory filings and other information available to them.
“They had to know,” Mr. Madoff said. “But the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know.’ ”
While he acknowledged his guilt in the interview and said nothing could excuse his crimes, he focused his comments laserlike on the big investors and giant institutions he dealt with, not on the financial pain he caused thousands of his more modest investors. In an e-mail written on Jan. 13, he observed that many long-term clients made more in legitimate profits from him in the years before the fraud than they could have elsewhere. “I would have loved for them to not lose anything, but that was a risk they were well aware of by investing in the market,” he wrote.
Mr. Madoff said he was startled to learn about some of the e-mails and messages raising doubts about his results — now emerging in lawsuits — that bankers were passing around before his scheme collapsed.
“I’m reading more now about how suspicious they were than I ever realized at the time,” he said with a faint smile.
He did not assert that any specific bank or fund knew about or was an accomplice in his Ponzi scheme, which lasted at least 16 years and consumed about $20 billion in lost cash and almost $65 billion in paper wealth. Rather, he cited a failure to conduct normal scrutiny.
RTFA. Long and detailed, confirming – if I may say – my cynical suspicions about the biggest banks, lending and financial institutions. It all fits in with what I observed on financial streets before the crash that resulted in the Great Recession. Everyone knew what was going on – except the little guys who either believed the checks and balances built into regulation were being observed – or the other little guys suckered in by the Free Market ideological crap that helped Republicans and Blue Dog Democrats deregulate the markets and remove oversight.
Interesting personal stuff in the article. If you’re interested in how criminals think. It can’t be much different from, say, a Bush or Rumsfeld autobiography except that Madoff probably isn’t as committed to self-deception and political deceit.
Daylife/Reuters Pictures used by permission
Bernard Madoff is said to have told fellow inmates that he squirreled away a secret $9 billion which prosecutors do not know about from his $65 billion ponzi scheme fraud.
Madoff, who was jailed last year for 150 years after admitting to orchestrating the historic fraud, is reported to have channelled the funds to three individuals – whose identities remain unknown – shortly before he confessed to his crimes in December 2008. “I think it was personal friends,” one inmate is reported to have said.
The claims, made in the New York Post, are based on conversations with an inmate who spent time in prison with Madoff. It is the first time since Madoff’s crimes came to light some 19 months ago that there has been any formal suggestion – in spite of numerous rumours – that the former fund manager attempted to hide significant amounts of money from prosecutors and the police.
If true, it could prove to be a significant development for Irving Picard, the court-appointed trustee charged with uncovering Madoff’s secret assets, who is now likely to want to interview Madoff to find out where the money is.
The fellow prisoner also claimed that Madoff told him that the only other person to know of the identities of the three is Frank DiPascali, his former right-hand man, though it is not clear whether he knew money had been passed to them.
Mr DiPascali has pleaded guilty to 10 separate counts relating to the Madoff fraud and is currently working with federal prosecutors from jail to help them widen the case.
Or someone has been watching too much television. Think this might be a promo for the next season of Damages, eh?
U.S. federal authorities are investigating millions of dollars contributed by fraud suspect Allen Stanford and his staff to U.S. lawmakers in the past decade, the Miami Herald reported.
The newspaper said the Justice Department investigation aimed to determine whether the banker received special favors from politicians while he was operating his alleged $7 billion Ponzi scheme centered on fraudulent certificates of deposit issued by his offshore bank in Antigua and Barbuda…
It said Stanford, who has pleaded not guilty and is awaiting a trial set for January 2011, also spent $5 million on lobbying since 2001. It said he successfully lobbied in 2001 to kill a bill that would have exposed the flow of millions into his secretive offshore bank on the Caribbean island of Antigua.
The following year he helped block legislation that would have led to more government scrutiny of his now disgraced Antigua bank, the Miami Herald said…
The Miami Herald said that on the day federal agents raided Stanford’s offices in the United States, February 17, the financier received an e-mail message from Peter Sessions, the chairman of the National Republican Congressional Committee.
The newspaper said the message was found on Stanford’s computer servers and reads: “I love you and believe in you.
“If you want my ear/voice — e-mail,” the Miami Herald quoted the message as saying, adding it was signed “Pete.”
Isn’t it amazing the elasticity of Family Values when dollars are involved.
Would you take money from this man?
Scott Rothstein relished his flashy persona — the spiky hair, the Ferrari, the multi-million-dollar mansion. He was Bronx raised, Fort Lauderdale rich, and the politicians, charities and businesses that accepted his money rarely asked where it came from.
On Tuesday, a Florida judge placed Mr. Rothstein’s law firm in receivership after his partner sued and federal authorities began investigating whether he defrauded investors of up to $400 million with a Ponzi scheme based on selling legal settlements.
Even without criminal charges, the accusations are already leading to panic from Tallahassee to Miami, and what appears to be the largest giveback of donations in the state’s political history.
On Tuesday afternoon, the Republican Party of Florida, which received more than $500,000 from Mr. Rothstein, his wife and his law firm since 2002, said it would place contributions from the most recent election cycle ($148,244) into a victim compensation fund.
Minutes later, the Democratic Party of Florida said it had just refunded a $200,000 donation received two months ago from Mr. Rothstein’s firm, followed by Gov. Charlie Crist’s Senate campaign, which said it would refund $9,600 in donations from Mr. Rothstein and his wife…
In all, election records show that in the last seven years, Mr. Rothstein has contributed to more than 20 Florida lawmakers from both parties; the Republican Party in six states; and a wide range of national leaders, including Senator John McCain, the Republican presidential candidate, and Harry Reid, the Senate majority leader and a Democrat, who received $4,800 in June.
Daylife/Reuters Pictures used by permission
Nobody was more surprised that the Securities and Exchange Commission did not discover Bernard L. Madoff’s enormous Ponzi scheme years ago than Mr. Madoff himself.
After all, it would have been pretty simple, he said in a transcript of a jailhouse interview that is part of a trove of official exhibits released on Friday by the S.E.C.’s inspector general, H. David Kotz.
In the interview, Mr. Madoff said that the young investigators who pestered him over incidentals like e-mail messages should have just checked basics like his account with Wall Street’s central clearinghouse and his dealings with the firms that were supposedly handling his trades.
Those simple steps, he added, could have revealed years earlier that he was running the largest Ponzi scheme ever, a crime that has now dragged the S.E.C. into the worst scandal in its 75-year history. “It would have been easy for them to see,” he added.
The new exhibits consist of 6,157 pages of interviews, letters, e-mail messages, telephone records and other background material gathered during Mr. Kotz’s 10-month investigation of how the commission handled, and mishandled, numerous tips and warnings it received about Mr. Madoff over the years. His full report, released last month, found the agency had received six substantive complaints since 1992 — and botched the investigation of every one of them. He found no evidence of any bribery, collusion or deliberate sabotage of those investigations.
You needn’t worry much about investigators when you know the highest agency of the electorate – the United States Congress – has abdicated any responsibility for oversight. It started in 1994 with Newt’s Contract on America – accelerated and grew through K Street and C street – culminating in the Halliburton Years with Dickie and George W..