Posts Tagged With Cases of Interest

Former Investment Advisor Arrested for $20 Million Fraud

On August 24th, Daryl Gene Bank, the former owner of an Investment Company in Virginia Beach, was arrested and, along with his co-conspirator Raeann Gibson, charged with conspiracy to commit mail and wire fraud, and engaging in unlawful monetary transactions.  Bank and Gibson allegedly entered into a conspiracy to operate multiple fraud schemes between January 2012 and July 2017.  The co-conspirators prepared materially false and misleading investment offerings, and knowingly omitted material information, to at ... Continue Reading

Two International Bank Managers Charged in Libor Interest Rate Manipulation Scheme

On August 24, 2017, Danielle Sindzingre and Muriel Bescond, both French bank managers, were indicted and charged with one count of conspiring to transmit false reports concerning market information that tends to affect a commodity, as well as four counts of transmitting these false reports.  The two French bank managers allegedly transmitted false and misleading information in connection with the London Interbank Offer Rate (LIBOR), a benchmark interest rate that is calculated for various currencies ... Continue Reading

E-Commerce Company and Top Executive Agree to Plead Guilty to Price-Fixing Conspiracy for Customized Promotional Products / Second E-Commerce Company and its Top Executive Agree to Plead Guilty to Price-Fixing Conspiracy in Customized Promotional Products Industry

Two e-commerce companies and their top executives pled guilty to conspiring to fix prices for customized promotional products sold online to U.S. customers.  On August 7, 2017, Zaappaaz Inc. (d/b/a WB Promotions Inc.,, and pled guilty to conspiring to price fix, and its President Azim Makanojiya, pled guilty to criminally violating the Sherman Act.  According to the charges, conspirators used social media and encrypted messages to engage in illegal agreements to fix the ... Continue Reading

Former ArthroCare Corporation CEO Convicted for Role in $750 Million Securities Fraud

On August 18, 2017, a federal jury found former CEO of ArthroCare Michael Baker guilty 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 of making false statements.  Baker and his co-conspirators were alleged to have artificially inflated sales and revenue by determining which of their products would meet Wall Street needs, based on analysts’ forecasts, and then “parked” ... Continue Reading

Mylan Pays $465 Million to Resolve False Claims Act Investigation for Underpaying EpiPen Rebates

On August 17, 2017, Mylan Inc. and Mylan Specialty L.P. resolved claims brought under the whistleblower provisions of the False Claims Act (“FCA”), agreeing to pay $465 million in a civil settlement with government regulators.  The government alleged that Mylan erroneously and knowingly reported EpiPen to Medicaid as a generic medication, despite the unavailability of any equivalent pharmaceutical, allowing them to charge high prices on the private market while evading corresponding obligations to Medicaid under ... Continue Reading

Five Individuals Charged with Participating in Three Insider Trading Schemes Generating More Than $5 Million in Profits on Inside Information Misappropriated from an Investment Bank

On August 16, 2017, five individuals were arrested and charged for their roles in overlapping insider trading schemes.    Michael Siva, Roberto Rodriguez, Rodolfo Sablon, Jhonatan Zoquier, and Jeffrey Rogiers were each charged with conspiracy, wire fraud, and multiple counts of securities fraud and fraud in connection with a tender offer.  The U.S. Attorney’s Office also announced the unsealing of guilty pleas from August 9, 2017 by Daniel Rivas and James Moodhe, who admitted to engaging ... Continue Reading

Acting Manhattan U.S. Attorney Announces Agreement with Swiss Asset Management Firm to Resolve Criminal Tax Investigation

On August 15, 2017, Prime Partners SA entered into a non-prosecution agreement with the U.S. Attorney’s Office for the Southern District of New York.  As part of that agreement, Prime Partners agreed to pay $5 million to the U.S.  Prime Partners admitted that it aided its clients in concealing their ownership of foreign bank accounts in order to avoid paying taxes—totaling about $680,000—to the U.S. government.  As part of this effort, Prime Partners created sham ... Continue Reading

Investment Bank Vice President Pleads Guilty to Insider Trading

On August 10, 2017, Avaneesh Krishnamoorthy pled guilty to engaging in a scheme to commit insider trading.  Krishnamoorthy was the vice president and risk management specialist for a New York-based investment bank.  Through his position, he learned material nonpublic information concerning the acquisition of a company, whose shares are traded on the New York Stock Exchange, by a private equity fund.  He subsequently used this information and traded in the stock options of the company ... Continue Reading

Former Broker Sentenced to 15 Months Imprisonment for $131 Million Market Manipulation Scheme

In July and August, several individuals were sentenced for their involvement in a $131 million securities fraud scheme. From 2009 to 2015, the coconspirators fraudulently controlled the price and volume of shares traded in a publicly traded company called ForceField Energy Inc. by using nominees to buy and sell company stock without disclosing this to other investors, orchestrating ForceField stock trading that would appear as real trading volume and interest, and hiding payments to stock ... Continue Reading

Former Cocoa Company Executives Arrested for Defrauding Lenders of $400 Million

On August 8, 2017, a federal court in New York unsealed the indictment charging Peter G. Johnson, Peter B. Johnson, and Thomas Reich with defrauding banks by using false “borrowing base” reports that were designed to secure a $400 million line of credit for their company.  As part of this fraud, the defendants allegedly lied repeatedly about the financial condition of the company and, through “borrowing base” reports required by the banks, deceived lenders about ... Continue Reading

Martin Shkreli, Former Hedge Fund Manager, Convicted in Multi-Million Dollar Fraud Scheme

On August 4, 2017, Martin Shkreli was convicted by jury of three counts charging him with securities fraud and securities fraud conspiracy.  The conviction related to Shreli’s role as the founder and managing member of two hedge funds, MSMB Capital Management LP and MSMB Healthcare Management LP, and as the former CEO of the biopharmaceutical company, Retrophin Inc.  The trial, which lasted six weeks before United States District Court Judge Kiyo A. Matsumoto, convicted Shkreli ... Continue Reading

Former President and Chairman of the Board of Gerova Financial Group Sentenced to Six Years for Defrauding Shareholders

In August, former president and board chairman of Gerova Financial Group Gary Hirst was sentenced to 78 months in prison, one year of supervised release and $19,038,650.53 in forfeiture for defrauding shareholders in a scheme that lost Gerova $72 million.  From 2009 through 2011, Hirst and his co-conspirators caused over five million shares of Gerova stock to be issued in the name of a foreign nominee, Ymer Shahini, for the purpose of concealing the coconspirators ... Continue Reading

William T. Walters Sentenced for Role in $43 Million Insider Trading Scheme

On July 27, William T. “Billy” Walters was sentenced to five years imprisonment, one-year supervised release, and a $10 million fine for conspiracy to commit insider trading.  Walters and his coconspirator, Thomas C. Davis, misappropriated nonpublic information about the financial performance of Dean Foods, the largest processor and distributor of fresh milk in the United States.  As member of Dean Foods’ board of directors, Davis passed along inside information to Walters in advance of public ... Continue Reading

Short Hills, New Jersey, Investment Manager Sentenced to 33 Months in Prison for $675,000 Ponzi Scheme

On July 27, 2017, Mark Moskowitz, an investment manager with an office in Short Hills, New Jersey, was sentenced to 33 months in prison and ordered to pay restitution and forfeiture of nearly $700,000.  He had previously pled guilty to one count of wire fraud.  Moskowitz controlled an investment fund for which he concealed losses and falsely told investors that the fund was growing.  Based on his false representations investors provided additional funds to Moskowitz.  ... Continue Reading

Wall Street Investment Analyst Sentenced to 45 Months In Prison and Ordered to Pay $2.8 Million for Insider Trading

On July 26, Former analyst John Afriyie was sentenced to 45 months in prison, three years supervised release, and $2,780,720.02 in forfeiture and restitution, having been convicted of insider trading  in January.  While working for Apollo Investment Management LLC, a private investment fund, Afriyie trading on nonpublic information pertaining to a possible acquisition by the fund of ADT Corporation, trading on the information in 28 separate transactions over a two-week period.  Afriyie earned $1.5 million ... Continue Reading

Russian National and Bitcoin Exchange Charged in 21-Count Indictment for Operating Alleged International Money Laundering Scheme and Allegedly Laundering Funds from Hack of Mt. Gox

On July 26, 2017, a grand jury in California indicted Alexander Vinnik, a Russian national, for money laundering, operating an unlicensed money service business (BTC-e), and related crimes.  One day prior to the indictment, Vinnik was arrested in Greece.  The indictment alleges that Vinnik stole identities, facilitated drug trafficking, and helped launder criminal proceeds.  Vinnik is also accused of receiving funds from the infamous hack of Mt. Gox and laundering them through online exchanges, including ... Continue Reading

Chicago Trader Sentenced for Misappropriating More than $1.7 Million in Client Funds

On July 26, 2017, Randall Rye, a twenty-six year old owner of Faster Than Light Trading LLC, was sentenced to more than five and a half years imprisonment for defrauding clients out of $1.7 million.  Rye promised substantial profits from his proprietary trading program and claimed to invest clients’ money using a computer algorithm.  Rye misappropriated the funds for his own personal use, including for travel expenses and expensive event tickets.  United States v. Rye ... Continue Reading

Former CEO of Virtual Currency Companies Pleads Guilty to $9 Million Fraud

On July 20, 2017, Homero Joshua Garza pled guilty to one count of wire fraud for a scheme in which companies he owned and operated sold fraudulent virtual currency products to consumers.  Virtual currency is a digital representation of monetary value that functions as a form of currency; a virtual currency “miner” is computer hardware that runs software which solves computer algorithms to validate groups of transactions in that virtual currency, awarding the operator of ... Continue Reading

Former Credit Suisse Banker Pleads Guilty to Conspiring with U.S. Taxpayers and Other Swiss Bankers to Defraud the United States

On July 19, 2017, Susanne D. Rüegg Meier, the former head of the Zurich Team of Credit Suisse’s North American desk in Switzerland, pled guilty to conspiring to defraud the U.S.  From 2002 to 2011, she participated in a conspiracy to aid U.S. taxpayers in evading their income taxes by concealing assets and income in Swiss accounts.  The tax loss associated with her conduct was somewhere between $3.5 and $9.5 million.  In particular, Rüegg Meier ... Continue Reading

CEO of Virginia Health Care Technology Company Sentenced to Almost Ten Years in Prison for $49 Million Shareholder Fraud and $7.5 Million Employment Tax Fraud

On July 19, 2017, Sreedhar Potarazu was sentenced to 119 months and 29 days—approximately ten years—in prison for fraud and failure to account for and pay employment taxes.  Potarazu, an ophthalmic surgeon in Maryland and Virginia, founded a Delaware corporation, which operated in McLean, Virginia and provided healthcare-related data analysis and services.  Potarazu provided materially false and misleading information to the company’s shareholders in order to induce more than $49 million in capital investments into ... Continue Reading

Three Former Traders for Major Banks Arraigned in Foreign Currency Exchange Antitrust Conspiracy

On July 17, 2017, three former foreign exchange traders, Richard Usher, Rohan Ramchandani and Christopher Ashton, voluntarily surrendered to the FBI and were arraigned for their alleged roles in a conspiracy to manipulate prices in the FX spot market.  The one-count indictment alleges that, from at least December 2007 through at least January 2013, the three traders conspired to fix prices and rig bids for U.S. dollars and euros exchanged on the FX spot market, ... Continue Reading

Spouse of Lawyer at International Law Firm Charged with Insider Trading

On July 12, Fei Yan, a post-doctoral associate at a Cambridge, Massachusett university was arrested and charged with insider trading.  Yan allegedly traded in options to buy stock in Stillwater Mining Company based on nonpublic information regarding a corporate acquisition that he obtained from his spouse, a lawyer working on the acquisition for a private international law firm.  Yan’s internet search history reflected online research into how to commit insider trading while evading detection.  Yan ... Continue Reading

Participants in Long Island Boiler Room Indicted for $147 Million Stock Manipulation Scheme

On July 12, 2017, a nine-count indictment against 14 defendants was unsealed, involving charges for conspiracy to commit securities fraud, conspiracy to commit wire fraud, conspiracy to commit money laundering, and substantive securities fraud.  The charges relate to alleged stock manipulation of five publicly traded companies: National Waste Management Holdings, Inc., CES Synergies, Inc., Grilled Cheese Truck, Hydrocarb Energy Corporation, and Intelligent Content Enterprises, Inc.  According to prosecutors, the defendants bought shares from corporate insiders ... Continue Reading

Nichicon Corporation Agrees to Plead Guilty for Fixing Prices of Electrolytic Capacitors

On July 11, 2017, Nichicon Corporation agreed to plead guilty and pay a $42 million criminal fine for its role in a conspiracy to fix prices for electrolytic capacitors, which store and regulate electrical current in a variety of electronic products.  Nichicon Corporation conspired with others to suppress and eliminate competition of electrolytic capacitors from at least November 2001 until December 2011.  Nichicon Corporation is the seventh company to be charged as part of this ... Continue Reading