Posts Tagged With Fraud

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Barclays Agrees to Pay $2 Billion in Civil Penalties to Resolve Claims for Fraud in the Sale of Residential Mortgage-Backed Securities

On March 29, 2018, officials announced that Barclays Capital, Inc. and several of its affiliates agreed to settle a civil action brought in December 2016 in relation to the underwriting and issuance of residential mortgage-backed securities (“RMBS”) between 2005 and 2007.  Barclays agreed to pay $2 billion in civil penalties in exchange for dismissal of the government’s amended complaint.  The complaint alleged that Barclays misled investors about the quality of underlying mortgage loans in 36 ... Continue Reading

Martin Shkreli Sentenced to Seven Years’ Imprisonment for Multimillion-Dollar Fraud Scheme

On March 8, 2018, Martin Shkreli was sentenced to seven years’ imprisonment for committing securities fraud and securities fraud conspiracy.  A jury found that Shkreli, a former hedge fund manager and CEO of the biopharmaceutical company Retrophin Inc., made false representations and omissions to defraud investors.  Shkreli was also convicted, alongside former Retrophin outside counsel Evan Greebel, of illegally attempting to control the price and trading volume of Retrophin’s stock.  In addition to his prison ... Continue Reading

Former CEO of Tech Company Pleads Guilty to Insider Trading

On February 21, 2018, Peter C. Chang, the former President and CEO of Directors of Alliance Fiber Optic Products (“AFOP”), pleaded guilty to insider trading and tender offer fraud.  AFOP, which is publicly traded on the NASDAQ, is a manufacturer of fiber optic components.  As part of his guilty plea, Chang admitted that he traded AFOP stock through brokerage accounts in the names of his wife and brother sold AFOP stock before two public announcements ... Continue Reading

Former Assistant Trader at Chicago Firm Charged with Misappropriating $2 Million in Bitcoin, Litecoin

On February 15, a former Chicago-based trader, Joseph Kim, was charged with fraud arising from his alleged misappropriation of $2 million in cryptocurrency.  Kim is alleged to have covered his own losses in trading cryptocurrency futures by shifting more than $2 million of Bitcoin and Litecoin from the accounts of his employer, Consolidated Trading LLC, to his personal account.  Kim is also alleged to have lied to the company when asked to account for the ... Continue Reading

New Jersey Hedge Fund Owner Convicted of Wire Fraud and Securities Fraud

On February 15, 2018, a jury convicted Nicholas Lattanzio, the owner and manager of the hedge fund Black Diamond Capital Appreciation Fund L.P., of defrauding investors in his hedge fund of over $4 million.  According to the evidence at trial, Lattanzio collected the fees from investors promising to provide future loans and investment opportunities, but instead used the fees for personal expenses. United States v. Lattanzio, 15-cr-446 (D.N.J.)

DOJ Press Release

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New York Man Sentenced to 87 Months for Multi-State Biodiesel Fraud Scheme

On February 6, 2018, Andre Bernard was sentenced to 87 months in federal prison in connection with a multi-state scheme to defraud biodiesel buyers and U.S. taxpayers.  According to court documents and his plea colloquy, Bernard and his co-conspirators fraudulently claimed tax credits for already-credited renewable fuels by using a series of false transactions to transform the fuel back into feedstock in order to produce more renewable fuel.  Between March 2013 and March 2014, Bernard ... Continue Reading

Hedge Fund Manager Charged in Manhattan Federal Court with Scheme to Defraud Investors

On February 2, 2018, Nicholas Genovese was charged with securities fraud and wire fraud for allegedly inducing investments in a hedge fund that he founded, Willow Creek Investments LP, by misrepresenting his credentials and work experience.  Based on these representations, victims invested at least $4 million with Willow Creek.  When investors attempted to regain their investments, Genovese refused to return their money. United States v. Genovese, 18-cr-183 (S.D.N.Y.)

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Arkansas State Senator Pleads Guilty to Wire Fraud, Money Laundering and Bank Fraud

On January 29, 2018, Arkansas State Senator Jake C. Files pled guilty before Chief U.S. District Court Judge P. K. Holmes III of the Western District of Arkansas to an information charging him with one count of wire fraud, one count of money laundering, and one count of bank fraud.  Files admitted that, between August 2016 and December 2016, he used his government position to obtain state funds, known as General Improvement Funds (“GIF”), through ... Continue Reading

Three Defendants Convicted in Securities Fraud Investigation

On January 26, 2018, federal officials announced that three additional individuals have pled guilty to conspiracy charges in connection with several “pump and dump” and other stock manipulation schemes involving fraudulently registered companies.  According to public statements from the U.S. Attorney’s Office for the Southern District of Florida and court filings, owner of stock transfer agent Manhattan Transfer Registrar Co. (“Manhattan Transfer”) John Ahearn and California attorney Andrew H. Wilson each pled guilty to one ... Continue Reading

Investment Fund Manager Sentenced to Prison for Orchestrating Multimillion-Dollar Fraud Schemes

On January 25, 2018, Diane W. Lamm, a manager of Capital L Financial Group, LLC (“Capital L”) and Aegis Capital Fund, LLC (“Aegis Capital Fund”), was sentenced by U.S. District Judge Frederic Block of the Eastern District of New York to 36 months in prison and ordered to pay restitution in the amount of $15,640,582.46.  Lamm pled guilty to two counts of securities fraud in two separate schemes.  U.S. Attorney for the Eastern District of ... Continue Reading

Former Executive of New York Hotel Company Admits to Stealing over $13 Million from Employer

On January 24, 2018, George Dfouni pled guilty to an information charging him with one count of wire fraud and one count of tax evasion.  Interim U.S. Attorney for the District of New Jersey Craig Carpenito announced that Dfouni, the Chief Operating Officer of a New York-based hospitality company, admitted to embezzling millions of dollars.  According to court filings and statements made in court, from 2007 through September 2015, Dfouni negotiated multiple contracts on behalf ... Continue Reading

Chicago Futures Trader Pleads Guilty to Wire Fraud in Options Trading Scheme

On January 24, 2018, Chicago futures trader Thomas Lindstrom pled guilty to one count of wire fraud before U.S. District Judge Harry D. Leinenweber.  Lindstrom gained $285,000 through his scheme, which caused losses of $13.7 million and led to the folding of the firm where he worked, Rock Capital Markets LLC.  Lindstrom fraudulently made it appear that his trading was profitable by using deep out-of-the-money options on ten-year Treasury Note futures, knowing that these options ... Continue Reading

Five Former KPMG Executives and PCAOB Employees Charged for Fraudulent Scheme to Steal Valuable and Confidential PCAOB Information

On January 23, 2018, an indictment was unsealed in the Southern District of New York against David Middendorf, Thomas Whittle, and Davis Britt, former executives of accounting firm KPMG LLP (“KPMG”), Cynthia Holder, a former employee of KPMG and the Public Company Accounting Oversight Board (the “PCAOB”), and Jeffrey Wada, a former employee of the PCAOB, with conspiracy and wire fraud charges.  Brian Sweet, a former KPMG partner and PCAOB associate, pled guilty to his ... Continue Reading

Securities Broker and Investment Adviser Sentenced for Securities Fraud after Three-Week Trial

On January 18, 2018, U.S. District Judge Andrew L. Carter sentenced Christopher Cervino to one year and one day in prison and Sheik F. Khan to 53 months in prison.  Following a three-week trial, Cervino and Khan were convicted of participating in a securities fraud scheme led by Edward Durante, who pled guilty in August 2016.  Cervino and Khan, along with Durante and other co-conspirators, artificially inflated the market for stock in a publicly traded ... Continue Reading

Former Director of Barclays New York Foreign Exchange Trading Charged for Defrauding HP In Front-Running Scheme

On January 15, 2018, John P. Cronan, Acting Assistant Attorney General of the Criminal Division; Alex G. Tse, Acting U.S. Attorney for the Northern District of California; and Jay N. Lerner, Inspector of the Federal Deposit Insurance Corporation, announced that Robert Bogucki had been indicted in connection with an alleged multibillion dollar front-running scheme at Barclays Capital in September and October 2011.  Bogucki, the former head of Barclays’ foreign exchange trading operation, is alleged to ... Continue Reading

Scott Tucker Sentenced to 200 Months in Prison for Operating Fraudulent Internet Payday Lender

On January 5, 2018, Acting Deputy U.S. Attorney for the Southern District of New York Joan Loughnane announced that Scott Tucker had been sentenced to 200 months in prison for his role in a fraudulent internet payday lending operation.  Tucker, along with attorney Timothy Muir, had been convicted on October 13, 2017, following a five-week trial, of fourteen counts of racketeering, wire fraud, money laundering, and Truth-In-Lending Act offenses.  Muir was sentenced to 84 months ... Continue Reading

Turkish Banker Convicted of Conspiring to Evade U.S. Sanctions against Iran and Other Offenses

On January 3, 2018, Mehmet Hakan Atilla, a citizen and resident of Turkey, was found guilty of conspiring with others to use the U.S. financial system to conduct transactions on behalf of the Government of Iran and other Iranian entities and to defraud U.S. financial institutions by concealing the nature of these transactions.  After a four-week trial before U.S. District Judge Richard M. Berman, a federal jury convicted Atilla on five of six charges in ... Continue Reading

Former Executive Managing Director of Och-Ziff Capital Management Indicted for Defrauding Charitable Foundation and Obstruction of Justice

On January 3, 2018, a ten-count indictment against Michael Leslie Cohen was unsealed in the Eastern District of New York.  Michael Leslie Cohen, a former executive managing director of New York-based hedge fund Och-Ziff Capital Management Group LLC (“Och-Ziff”), was indicted for his alleged participation in a scheme to defraud an Och-Ziff client, a large charitable foundation, by recommending financial investments relating to the African mining sector.  Cohen was charged with one count of conspiracy ... Continue Reading

Former Partner at New York Law Firm Convicted of Conspiring with Martin Shkreli to Commit Securities, Wire Fraud

On December 27, 2017, Bridget M. Rohde, Acting U.S. Attorney for the Eastern District of New York, announced that Evan Greebel had been convicted of one count of conspiracy to commit securities fraud and one count of conspiracy to commit wire fraud, following an 11-week trial before U.S. District Judge Kiyo A. Matsumoto.  At one time a partner at Katten Muchin Rosenman LLP, Greebel served as outside counsel to biopharmaceutical company Retrophin Inc.  In this ... Continue Reading

Former Chairman and CEO of Technology Start-Up Company Kit Digital and Associate Found Guilty of Securities Fraud Related Offenses

On December 26, 2017, after a six-week trial presided over by U.S. District Judge Paul G. Gardephe of the Southern District of New York, a federal jury found Kaleil Tuzman, former chairman and CEO of technology start-up company KIT digital (“KITD”), and Omar Amanat guilty of various securities fraud-related offenses in connection with three separate fraudulent schemes.  First, between in or about February 2009 and in or about June 2012, Amanat, along with Stephen Maiden, ... Continue Reading

High-Ranking Soccer Officials Convicted in Multimillion-Dollar Bribery Schemes

On December 22, 2017, after a six-week trial before U.S. District Judge Pamela K. Chen of the Eastern District of New York, a federal jury convicted Juan Angel Napout and Jose Maria Marin, former high-ranking soccer officials, of racketeering conspiracy and related offenses.  As proved at trial, the defendants and their co-conspirators accepted or agreed to accept tens of millions of dollars in bribe payments in exchange for media and marketing rights to various soccer ... Continue Reading

Former CFO of Florida Financial Services Company Indicted for Accounting, Securities Fraud

On December 20, 2017, John P. Cronan, Acting Assistant Attorney General of the Justice Department’s Criminal Division; Benjamin Greenberg, Acting U.S. Attorney for the Southern District of Florida; and Regina Faulkerson, Inspector in Charge of the U.S. Postal Inspection Service’s Criminal Investigations Group, announced the unsealing of an indictment charging the former CFO of Bankrate Inc. with participating in a securities and accounting fraud scheme.  The indictment, filed in the Southern District of Florida, charged ... Continue Reading

Former New York Investment Broker Admits Accepting Hundreds of Thousands of Dollars in Bribes in Exchange for Stock

On December 19, 2017, a former broker of two New York-based investment banking firms pled guilty to one count of violating the Travel Act for accepting between $550,000 and $1.5 million in cash kickbacks in exchange for arranging more favorable allocations from initial and secondary stock offerings.  According to a criminal information filed in the U.S. District Court for the District of New Jersey, New York resident Brian M. Hirsch accepted numerous kickbacks from three ... Continue Reading

Former CEO and Former Chief Loan Officer of Failed Sonoma Valley Bank Convicted After Trial of Bank Fraud and Other Crimes

On December 18, 2017, three individuals, including the former CEO and former Chief Loan Officer of defunct Sonoma Valley Bank (“SVB” or the “Bank”) were convicted by a federal jury of multiple criminal charges that stemmed from a series of schemes carried out between 2004 and the Bank’s collapse in August 2010.  Former SVB CEO Sean Clark Cutting and former CLO Brian Scott Melland were convicted following an eight-week trial in U.S. District Court for ... Continue Reading