Yet even more arrests for Ponzi schemes January 24, 2009Posted by jefhenningeresq in News.
Tags: Crime, Fraud, Law, mail fraud, News, Ponzi scheme, theft
This is getting pretty crazy huh? The media made it seem like Madoff invented the Ponzi scheme. Now, there are too many arrests in a day to cover. I’m sure there are plenty others to follow.
Many of these cases begin with a civil suit. I’m concerned that the attorneys working these civil suits are not skilled in handling white collar crime cases. Otherwise, they will be able to see the criminal case long before the arrest and as a result, they can use the civil case to start building a defense. Discovery in a civil case is more or less wide open whereas a Federal criminal case is much more limited.
However, this works both ways. So, the client can be deposed whereas in a criminal case, they have the right to remain silent. I believe that this scares many attorneys into throwing in the towel when it comes to the civil case. While this would normally make sense, the chances of winning a Federal criminal case is remote if the client is indicted. Thus, if the attorney can develop some good evidence at the civil case, they could put some doubt in the minds of the US Attorney’s office before the client is even arrested. Due to the way they pick and choose cases (which accounts for the high conviction rate), they may never arrest the client in the first place. We have done this with many Federal and State cases. This saves our clients’ reputation not to mention a substantial amount of legal fees.
Two of the more recent Ponzi scheme arrests are:
1. Vander Tuig, Jonathan Carman, Mark Sostak, Soren Svendsen, Scott Yard and Robert Waldman have been charged with grand theft and securities fraud. All six men were affiliated with the Carolina Development company and were alleged to have defrauded over 1000 victims out of a total of $52 million. The alleged scam was to promise big returns to clients investing in luxary property next to golf courses in California. Like many of these cases, this alleged fraud came to light during a 2006 SEC investigation which resulted in a 2007 judgment. Story is here.
2. Frank Castaldi is alleged to have stolen tens of millions of dollars from about 200 to 300 clients. Since 1985, he allegedly promised investors returns of 10 percent to 15 percent on six-month promissory notes. Unlike the six men in the other story, Castaldi is not locked up with a multi-million dollar bail. Why? Because he is cooperating. That’s the real interesting part of this story. His attorney is obviously doing a good job for him.
He owns several businesses and thus, has several business partners. Anyone connected to this guy is in big trouble and needs a good attorney ASAP because the more people he brings in, the better of a deal he will get.
The story is here.