Posts Tagged With Fraud

Subscribe to Fraud RSS Feed

Former Comptroller of Mortgage Lender Charged with Bank Fraud and Wire Fraud

On December 14, 2017, John Reimer, the vice president and comptroller of a mortgage lending institution, was charged with bank fraud and wire fraud for his alleged participation in a scheme to defraud several financial institutions.  Then-Acting U.S. Attorney Joon H. Kim announced the unsealing of Reimer’s indictment and said that Reimer allegedly “defrauded several other financial institutions of more than $12 million, falsified documents, kept funding for mortgages that never closed, and even acquired
Continue Reading

Chicago Investment Manager Charged with Eight Counts of Wire Fraud

On December 12, 2017, John R. Lausch, Jr., the U.S. Attorney for the Northern District of Illinois, announced the unsealing of an indictment charging Shawn Baldwin with eight counts of wire fraud.  Baldwin, an investment manager based in Chicago, is alleged to have made false statements regarding his financial connections and professional qualifications to potential investors.  Baldwin allegedly told investors that their money would be invested in various stocks and funds, but actually used investors’
Continue Reading

Volkswagen Senior Manager Sentenced to 84 Months in Prison for Role in Conspiracy to Cheat U.S. Emissions Tests

On December 6, 2017, Oliver Schmidt, former general manager of Volkswagen AG’s (“VW”) U.S. Environment and Engineering Office, was sentenced to 84 months in federal prison in connection with the so-called “Dieselgate” scandal involving the use of software designed to cheat U.S. emissions tests.  German national Schmidt previously pled guilty to one count of conspiracy to defraud the United States, to commit wire fraud, and to violate the Clean Air Act, as well as one
Continue Reading

Two Men Plead Guilty to Conspiracy to Defraud Investors in Publicly Traded Fuel Cell Company

On December 1, 2017, Joon H. Kim, then-Acting U.S. Attorney for the Southern District of New York, announced that George Doumanis and Emanuel Pantelakis had each pled guilty to one count of conspiracy to commit securities fraud in connection with a scheme to defraud investors in Terminus Energy Inc., a publicly traded penny stock.  From 2008 to 2014, Doumanis and Pantelakis made misstatements to investors regarding Terminus, including that Terminus had developed a fuel cell
Continue Reading

Former New York Law Firm Partner Pleads Guilty to Conspiring to Defraud Two New York Law Firms

On November 20, 2017, Keila Ravelo, a former law firm partner, pled guilty to conspiring to defraud two New York law firms.  Ravelo pled guilty to an indictment charging her with one count of conspiracy to commit wire fraud and one count of tax evasion.  From 2008 through July 2014, Ravelo and her husband, Melvin Feliz, conspired to defraud two law firms by forming two limited liability companies which purported to provide litigation support to
Continue Reading

Chicago Investment Adviser Charged with Fraud for Allegedly Stealing More Than $5 Million from Clients

On November 15, 2017, Acting United States Attorney for the Northern District of Illinois Joel R. Levin and Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation Jeffrey S. Sallet announced the filing of an information charging Daniel Glick with one count of wire fraud.  Glick, who owned three accounting and financial services firms, was charged with lying to clients and forging checks and other documents in order to misappropriate client funds
Continue Reading

Former Partner at International Law Firm Pleads Guilty to Insider Trading

On November 10, 2017, Walter C. Little, a former partner at an international law firm, pled guilty to conspiracy to commit securities fraud.  Between February 2015 and May 2016, Little used his position at the firm to access material nonpublic information relating to a client’s anticipated delisting from the NASDAQ exchange, clients’ involvement in M&A transactions, clients’ anticipated earnings announcements, and a planned securities offering.  With this information, Little made securities trades and shared that
Continue Reading

Former Chief Financial Officer of American Realty Capital Partners Sentenced for Accounting Fraud

On November 8, 2017, Brian Block, the former Chief Financial Officer of American Realty Capital Partners (“ARCP”), was sentenced to 18 months in prison for inflating a key metric used to evaluate the financial performance of publicly traded REITs in ARCP’s filings with the SEC.  Block was convicted by a jury in June, following a three-week trial before U.S. District Judge J. Paul Oetken.  According to the indictment and evidence presented at trial, Block and
Continue Reading

Day Trader Indicted in Computer Hacking and Securities Fraud Scheme Targeting Online Brokerage Accounts

On November 8, 2017, a federal grand jury in Brooklyn returned a four-count indictment charging Pennsylvania resident Joseph P. Willner with conspiracy to commit wire fraud, conspiracy to commit securities fraud and computer intrusions, securities fraud, and conspiracy to commit money laundering.  According to the indictment, Willner and others conspired to hack into the online brokerage accounts of numerous victims and to place unauthorized trades in those accounts between September 2014 and May 2017.  Willner
Continue Reading

Hedge Fund Chairman Sentenced to 30 Months in Prison for Conspiracy to Commit Securities and Wire Fraud

On November 7, 2017, Nicholas Mitsakos was sentenced by Judge Denny Chin to 30 months in prison and two years of supervised release for conspiracy to commit securities fraud and wire fraud.  Mitsakos, who had pled guilty on May 25, 2017, was also required to forfeit over $860,000 and to pay restitution to victims.  In order to attract investors to “Matrix Capital,” a hedge fund he created in October 2013, Mitsakos sent marketing materials claiming
Continue Reading

Virginia Man Pleads Guilty to $100 Million Market Manipulation Scheme Involving Fitbit Stock

On November 7, 2017, Robert Walter Murray pled guilty to securities fraud in connection with a stock manipulation scheme involving a sham tender offer for outstanding Fitbit, Inc. stock.  According to the indictment and statements made in public court proceedings, Murray, claiming to be an officer of a China-based entity called ABM Capital, filed a sham tender offer to purchase all outstanding Fitbit stock at a significant premium to its then-existing market price with the
Continue Reading

Former CEO of Arthrocare Corporation Sentenced to 20 Years in Prison for Role in $750 Million Securities Fraud Scheme

On November 3, 2017, Michael Baker, the former CEO of publicly traded medical device company ArthroCare Corporation (“ArthroCare”), was sentenced to 240 months in prison for his role in a scheme that resulted in shareholder losses of more than $750 million.  Following a two-week retrial, Baker was convicted in August of one count of conspiracy to commit wire fraud and securities fraud, seven counts of wire fraud, two counts of securities fraud, and two counts
Continue Reading

Former Chief Financial Officer of Pharmaceutical Company Pleads Guilty to Making False Statements to Auditors About Improper Accounting

On November 2, 2017, Philip Jacoby, the former CFO of Osiris Therapeutics, Inc., pled guilty to one count of making false statements to auditors in connection with a review of Osiris’s 2014 10-K and third quarter 2015 10-Q filings.  In September 2013, Osiris agreed with the FDA that it would not sell one of its products, Ovation, after December 31, 2014.  An Osiris distributor wanted to continue to be able to access Ovation after that
Continue Reading

Brooklyn Resident Charged with Securities Fraud Conspiracy in Two Initial Offerings of Cryptocurrency

On November 1, 2017, a criminal complaint was unsealed against Maksim Zaslavskiy, charging him with securities fraud conspiracy in connection with fraudulent misstatements made to investors in two initial coin offerings.  Zaslavskiy conducted these virtual currency offerings through two of his companies, REcoin Group Foundation, LLC and DRC World, Inc. To attract investors, Zaslavskiy and his associates told them that investments in REcoin were hedged by investments in real estate and physical diamonds, but these
Continue Reading

Spouse of Lawyer at International Law Firm Pleads Guilty to Insider Trading

On October 30, 2017, Fei Yan, a post-doctoral associate at a university located in Cambridge, Massachusetts pled guilty to insider trading.  Yan’s spouse worked at an international law firm where she learned material nonpublic information concerning the acquisition of Stillwater Mining Company, a publicly traded company whose shares are listed on the New York Stock Exchange.  While his spouse was working on the potential merger, Yan conducted online research into how to commit insider trading
Continue Reading

Connecticut Resident Pleads Guilty to Conspiracy for Participating in Multimillion-Dollar Ponzi Scheme

On October 30, 2017, Connecticut resident Steven Simmons pled guilty to one count of conspiracy to commit securities fraud and wire fraud stemming from his role in an alleged Ponzi scheme.  According to the superseding indictment filed against Simmons and other related filings with the court, Simmons solicited more than $6 million in investments for a hedge fund between 2013 and January 2017 by making false representations to investors that the funds would be placed
Continue Reading

Virginia Hedge Fund Manager Sentenced to 10 Years in Prison for Wire Fraud

On October 23, 2017, the Honorable Anthony J. Trenga of the Eastern District of Virginia sentenced former hedge fund manager Tamer Moumen to 10 years’ imprisonment, after Moumen pled guilty to wire fraud in May 2017 in connection with a $9.5 million investment scheme.  Moumen, the founder of Crescent Ridge Capital Partners, was additionally ordered to forfeit $9.5 million and to pay $7.5 million in restitution to victims.  According to documents filed with the court,
Continue Reading

Electrolytic Capacitor Manufacturer Indicted for Participation in Price-Fixing Conspiracy

On October 18, 2017, a federal grand jury in the Northern District of California in San Francisco returned an indictment charging Nippon Chemi-Con, a Japanese electrolytic capacitor manufacturer, with conspiracy to fix prices for electrolytic capacitors, which store and regulate electrical current in a variety of electronic products.  According to the indictment, between 1997 and 2014, Nippon Chemi-Con agreed with co-conspirators to fix prices of electronic capacitors, sold in accordance with these agreements, and took
Continue Reading

CodeSmart Holdings, Inc. CEO and Attorney Plead Guilty to Conspiracy to Commit Securities Fraud in Market Manipulation Scheme

On October 18, 2017, Ira Shapiro, the former Chief Executive Officer of CodeSmart Holdings, Inc., and Darren Ofsink, the founder of Ofsink LLC, each pled guilty to one count of conspiracy to commit securities fraud. The defendants twice fraudulently inflated the share price of CodeSmart, a publicly traded company, and sold their shares after the manipulated price reached high levels.  On the same day that CodeSmart reached its highest share price, it filed an amended
Continue Reading

Founder and CEO of Investment Fund Pleads Guilty to Commodities Fraud

On October 13, 2017, the founder and CEO of investment fund Wright Time Capital Group (“WTCG”) pled guilty to one count of commodities fraud stemming from his operation of a forex-related investment scheme.  According to authorities, New York resident Michael S. Wright obtained more than $400,000 in investments from victims since January 2011 by misrepresenting WTCG’s historical trading performance.  Wright reportedly issued falsified account statements to WTCG investors to create the appearance of successful forex
Continue Reading

Westchester Hedge Fund Manager Arrested in Connection with Alleged Ponzi Scheme

On October 5, 2017, Westchester County hedge fund manager Michael Scronic was arrested and charged with one count of securities fraud and one count of wire fraud for allegedly operating a $19 million Ponzi scheme.  Authorities allege Scronic, manager of the Scronic Macro Fund (the “Fund”), obtained more than $19 million from approximately 45 investors since April 2010 through misrepresentations as to the Fund’s performance and issuance of falsified account statements.  Scronic allegedly held out
Continue Reading

Technology Company’s Former CEO and Founder Sentenced to 49 Months in Prison for Defrauding Investors

On September 29, 2017, the Honorable Denise L. Cote of the Southern District of New York sentenced former technology company CEO and founder Maryse Liburdi to 49 months in prison for a scheme to defraud investors in her company.  Liburdi was also sentenced to three years of supervised release, and ordered to pay $7.07 million in forfeiture, and an additional $7.07 million in restitution to victims of the scheme.  From at least 2010 to 2015,
Continue Reading

Former Broker-Dealer Managing Director Sentenced for Public Pension Fund Bribery Scheme

On September 29, 2017, the Honorable J. Paul Oetken of the Southern District of New York sentenced a New York broker-dealer’s former managing director of institutional fixed income sales Deborah Kelley to three years’ probation, including six months of home confinement. Kelley was also ordered to pay a $50,000 fine, $187,900 in forfeiture, and complete 1000 hours of community service; restitution will be determined within 90 days.  Kelley pled guilty to conspiracy to commit securities
Continue Reading

Nine Indicted for Insider Trading Allegations

On September 28, 2017, nine defendants were indicted on fraud charges based on allegations they traded on nonpublic information regarding an impending corporate acquisition, resulting in illegal profits of $866,629.  According to the indictment, in 2015 Shane Fleming, a vice president of corporate sales at Life Time Fitness, Inc. of Minnesota, obtained inside information about the sale of Life Time Fitness to two private equity firms.  This information was shared with his friend and business
Continue Reading

LexBlog