White Collar Crime News

Massachusetts man charged in $9.6M fraud December 27, 2010

A Massachusetts man is accused defrauding more than 50 people by  running a Ponzi-style scheme with their $9.6 million.  Randy M. Cho allegedly told investors he was a self-employed securities trader who had a special relationship with Goldman Sachs and could buy discounted shares of well-known companies such as Google, Facebook and Rosetta Stone before their initial public offerings.  In one case, Cho allegedly told an investor he could buy 20,000 shares of Google at $1 each, when shares were publicly trading at $425 or more each.  Shouldn’t that raise a red flag there?

From 2001 to 2009, Cho allegedly collected more than $9.6 million from domestic and foreign investors. To keep his scheme going, Cho used more than $1.5 million from new investors to make payments to existing investors.  All together, investors lost nearly $8 million.  He was charged with one count of wire fraud and one count of filing a false federal income tax return for 2005, when he reported a total income of $118,475 but received nearly $1.2 million.

Like most of these cases, a civil lawsuit was filed.  In that case, Cho was order to repay the nearly $8 million he took from investors, plus $289,320 in interest, and was fined $150,000.

Story is here.

Belmar Criminal Defense Lawyers

Cho’s lawyer, Jim Marcus, said he’ll review the charges before deciding what to do.

Lakewood NJ developer Eliyahu Weinstein arrested in alleged Ponzi scheme August 12, 2010

Real estate developer Eliyahu Weinstein, arrested today at his Lakewood home on charges of defrauding investors of tens of millions of dollars as part of a Ponzi scheme.  At just 34 years old, the Feds claim that he was able to bilk investors on two continents out of nearly $300 million.  While he is well short of Madoff, he will be in rare company if those numbers hold up.  However, Madoff was an elderly man.  For someone so young to rack up these numbers is quite impressive.

The criminal complaint filed against Weinstein also charges a co-defendant, Vladimir Siforov of Manalapan.  Like many ponzi schemes,  Weinstein is alleged to have used his connections to his religious community; in this case, the Orthodox Jewish community.  Weinstein’s New York City-based attorney, Ephraim Savitt, argued for Weinstein’s release, did not have time to put together a bail package.  That could be a real moot point given the amount of time he is facing (just about the rest of his life) and the fact that he frequently flies overseas so he is a huge flight risk.

Right now, there doesn’t seem to be a clear pictures as to where all the money went.  However, some of the money funded a huge collection that included manuscripts and antique Judaica items valued at about $6.2 million; a jewelry and clock collection that cost about $7.6 million; and jewelry and watches valued at $6.2 million, including items from Bulgari, Cartier, Omega and Harry Winston.  That still leaves about $280 million unaccounted for.   

Developing…

Story is here and here.

Owner of Investment Firm Charged with Running Multi-Million-Dollar Ponzi Scheme April 1, 2010

Donald Anthony Young was charged today by indictment with one count of mail fraud and one count of money laundering. The charges relate to Young’s execution of a Ponzi scheme in which his investors lost more than $25 million. Young operated an investment advisory business in Kennett Square, Pennsylvania, which was known by various names including Acorn Capital Management II LP, Acorn Capital Management LLC, and Acorn II LP. According to the indictment, Young solicited individuals to invest with him, claiming that he would invest their funds in the stock of large stable companies. Ultimately, Young obtained more than $95 million from his investors. Instead of investing all of these funds as promised, Young allegedly diverted more than $25 million of investor funds for his own use, purchasing, among other things, luxury homes for himself in Palm Beach, Florida; Coatesville, Pennsylvania; and Northeast Harbor, Maine.

 “According to the indictment, this defendant helped himself to others’ fortunes, living a life of luxury, with little or no regard for the damage to our financial markets, our economy, and the reputation of the investment advisors who follow the rules.”

Because Young was allegedly stealing millions of dollars from his investors and using that money to pay his own personal and business expenses, he was unable to pay investors when they requested redemptions and he was forced to liquidate other investors’ funds to pay these redemptions. The indictment further alleges that when the United States Securities and Exchange Commission opened an investigation into Young’s business, Young attempted to obstruct the investigation by providing false and misleading information to the SEC and by refusing to provide the SEC documents, to which it was legally entitled.

According to the indictment, Young laundered the proceeds of his fraud by, among other things, stealing approximately $1.9 million of an investors’ funds and using these funds to purchase his luxury home in Palm Beach, Florida.

Millstone man gets off easy for ponzi scheme November 9, 2009

I’d like to know more about this case.  Michael D’Angelo was sentenced to three years in prison 10 months after pleading guilty to a second-degree charge of theft by deception in connection with securities fraud committed by his company, CMR Mngt. Group, LLC.   He has agreed to pay a total of $670,177 in restitution and penalties and his ability to do so probably got him the deal.

He was charged by the state Divison of Criminal Justice in March 2008. An investigation revealed he convinced 26 investors to contribute more than $3.2 million to his company over the course of two years beginning in January 2004.  Instead of making good on promises of 5 percent monthly returns generated by foreign currency trading and bank note trading, he used the new investments to pay off the original fund members.  Like Madoff and all the others, this scheme works as long as you bring in new people.  When the economy tanks and everyone wants their money, you get found out pretty quickly.

He also diverted large sums of money into the bank account of his wife, Diana D’Angelo and then used the funds to cover personal expenses that included their Monmouth County home and payments for high-end cars.  Again, this is a classic example of what separates a bad investor and a crooked one.  A bad investor suffers with everyone, a crooked one lives the high life.

Michael will be out of prison in about 6 to 9 months.  After his home and other assets are sold, he’ll probably still have a nice chunk of change to pay back to his victims.  The State could have probably hammered him with more charges but it seems like he had a good attorney that worked this out for him.

Story is here.