Sixth Major Bank Pleads Guilty to Antitrust Conspiracy in Ongoing Foreign Currency Exchange Investigation

On January 25, 2018, BNP Paribas USA Inc. (“BNPP USA”) a subsidiary of BNP Paribas S.A., pled guilty to participating in a price-fixing conspiracy in the foreign currency exchange (“FX”) market.  The one-count information filed in the Southern District of New York alleges that between September 2011 and July 2013, BNPP USA engaged in a conspiracy to suppress competition by manipulating prices on an electronic FX trading platform in violation of the Sherman Act.  The ... 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

Chinese National Sentenced for Economic Espionage and Theft of a Trade Secret from U.S. Company

On January 18, 2018, Xu Jiaquiang was sentenced to five years in prison by U.S. District Judge Kenneth M. Karas of the Southern District of New York.  Xu pled guilty on May 19, 2017 to economic espionage and theft of a trade secret, in connection with Xu’s theft of his former employer’s proprietary source code, with intent to benefit the People’s Republic of China.  According to the charging documents, from November 2010 to May 2014, ... 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

New Mexico Man Pleads Guilty to Directing Computer Attacks Against Websites

On January 17, 2018, John Kelsey Gammell pled guilty to engaging in and directing distributed denial of service (DDoS) attacks against websites across the nation.  He also pled guilty to two counts of being a felon in possession of a firearm.  According to Gammell’s admissions, he engaged in a campaign of DDoS attacks for nearly two years.  A DDoS attack is a malicious attempt to disable or interrupt service to a computer or website.  Gammell ... 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

Former President of Maryland-Based Transportation Company Indicted on 11 Counts Related to Foreign Bribery, Fraud, and Money Laundering Scheme

On January 12, 2018, federal officials announced an 11-count grand jury indictment that was filed against the former co-president of a Maryland-based transportation company specializing in the transportation of nuclear materials in connection with an alleged foreign bribery scheme.  According to the indictment, Maryland resident Mark Lambert conspired with others at the transportation company (“Transportation Company A”) between at least 2009 and October 2014 to bribe an official at JSC Techsnabexport (“TENEX”), a subsidiary of ... 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

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