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By Associated Press January 22, 2010, 2:51 PM ES Federal prosecutors in New Jersey say a Florida man has admitted his role in a $20 million stock fraud and money laundering scheme. Gary Brown pleaded guilty Thursday to a one-count complaint that charged him with conspiracy to commit securities fraud, wire fraud and money laundering, and agreed to forfeit approximately $650,000. The 61-year-old Sarasota man faces up to f...

By Associated Press January 15, 2010, 8:33 AM EST A New Jersey man has been sentenced to 18 years in prison and ordered to pay more than $100 million in restitution for masterminding what a judge described as one of the biggest real estate frauds in state history. Sixty-one year-old Wayne Puff of Old Bridge pleaded guilty in April to wire fraud. He admitted using his company, New Jersey Affordable Homes Corp., to lure ...

By Associated Press January 12, 2010, 8:12 AM EST A Florida lawyer charged in a $1.2 billion fraud apparently heeded the American Express slogan "Don't leave home without it." Court records show Scott Rothstein racked up more than 20 million reward points on his American Express account. Cardholders typically receive one point for every dollar spent. Federal authorities want to use the rewards to pay back victims of R...

By Associated Press January 11, 2010, 2:52 PM EST The host of a radio business program is accused of taking part in a $20 million investment fraud targeting Iranian-Americans in the Los Angeles area. The Securities and Exchange Commission announced Monday that it's suing NewPoint Financial Services Inc., its two co-owners and its controller. The SEC got a court order freezing the company's assets. Federal officials sa...

Finra says that Fidelity — as a custodian —isn't liable for investment losses of RIA's clients By Jed Horowitz January 10, 2010, 6:01 AM EST A New York couple who lost more than $2 million on financial and health care stock investments made by their independent adviser in 2008 and who stopped opening their monthly statements has failed in a bid to collect damages from Fidelity Investments, the custodian for their RI...

By Darla Mercardo Finra has barred a registered representative after finding that the Virginia rep had misrepresented the return a client would receive on a deferred annuity. According to the regulator’s BrokerCheck records, Kimberly Sue Rutherford told a client that the annuity would generate a higher rate of return than what the policy terms offered. Ms. Rutherford allegedly provided the client with false annual acc...

By InvestmentNews Staff December 29, 2009 If it felt like you were reading a story about a different Ponzi scheme nearly every day, that's because you probably were: There were an estimated 150 such investment scams broken up this year, for an average of roughly three Ponzis a week in 2009. That, of course, does not include the most notorious Ponzi schemer -- Bernie Madoff-- who was busted last December and is now serv...

It was a rough year for Ponzi schemes. In 2009, the recession unraveled nearly four times as many of the investment scams as fell apart in 2008, with "Ponzi" becoming a buzzword again thanks to the collapse of Bernard Madoff's $50 billion plot. Tens of thousands of investors, some of them losing their life's savings, watched more than $16.5 billion disappear like smoke in 2009, according to an Associated Press analysis o...

A once high-flying South Florida attorney who courted politicians and celebrities was arrested Tuesday on federal racketeering and fraud charges for allegedly operating a $1 billion investment fraud scheme using faked legal settlements, law enforcement officials said. Lawyer Scott Rothstein was led into the Miami FBI office in handcuffs following his early-morning arrest on five charges, including a violation of the Racke...

SEC says Patrick Kiley, host of ‘Follow the Money,’ and a cohort ripped off investors in FX scam. By Sara Hansard November 24, 2009, 5:40 PM EST The SEC has obtained an emergency court order freezing the assets of a Minneapolis money manager and a nationally syndicated radio personality for allegedly operating a foreign-currency-trading scheme. Patrick Kiley pitched the unregistered investments on “Follow the Mo...

By Associated Press [via Investment News] State and federal prosecutors have charged seven people in an alleged securities scam that cheated dozens of people out of $17 million. The Riverside County district attorney's office said Thursday that James Duncan, who called himself "the Cash King" in online videos, and Hendrix Montecastro each face 249 counts, including grand theft. Five others were also charged and arreste...

A lawsuit claims numerous red flags were ignored, such as the movement of some $500 million through lawyer Scott Rothstein accounts at a TD Bank branch in Fort Lauderdale in October alone. By Associated Press November 20, 2009, 3:54 PM EST Investors claiming they were fleeced by a high-profile South Florida attorney filed a $100 million lawsuit Friday contending that the lawyer orchestrated a massive Ponzi scheme wit...

By Associated Press November 18, 2009, 10:58 AM EST A New Jersey-based financial adviser has admitted operating a scheme that defrauded investors of more than $9 million. Sixty-nine-year-old Maxwell Smith of Fair Haven pleaded guilty Tuesday to a five-count criminal information charging him with mail fraud. Smith will remain free on bail pending sentencing on Feb. 26. He faces up to 20 years in prison per count and a ...

By Associated Press November 17, 2009, 9:05 AM EST A former University of California lineman who spent time in the Tennessee Titans' camp in 2001 has been sentenced to 57 months in federal prison for his role in a $5 million Ponzi scheme. Reed Diehl was sentenced in Orange County federal court Monday. The 31-year-old was indicted last year following an FBI investigation. He pleaded guilty in July to three counts of wi...

he Securities and Exchange Commission has charged a Michigan stockbroker with fraud, alleging that he lured hundreds of elderly investors into a $250 million Ponzi scheme after convincing many of them to refinance their home mortgages. The SEC alleges that 59-year-old Frank Bluestein, a Detroit-area stockbroker, acted as the single largest salesperson in the Ponzi scheme operated by Edward May and his company, E-M Manage...

By Sue Asci September 29, 2009 A former Ameriprise broker was charged yesterday with stealing nearly $350,000 from six former clients. Shane Selewach, 46, of Hyannis, Mass., pleaded not guilty to charges that he misappropriated funds from investors after being charged in Barnstable (Mass.) District Court. Mr. Selewach allegedly told clients that he would invest their assets in hedge funds or real estate strategies fro...

By Associated Press October 20, 2009 Two former Nebraska City brokers say they shouldn't be prosecuted for securities fraud because the investors who lost more than $20 million acknowledged the risks in writing, but prosecutors said Monday the records don't tell the full story. Rebecca Engle and Brian Schuster are accused of defrauding more than 130 investors by improperly selling risky investments in several interrela...

Investment News By Sara Hansard October 19, 2009 Morgan Stanley has agreed to pay a $90,000 fine to the Financial Industry Regulatory Authority Inc. to settle charges that it traded municipal bonds at unfair prices. The fine covered 11 corporate-bond trades and three municipal-securities trades made in 2003. Markups or markdowns listed in Finra's complaint ranged from 5.25% to 24.3%. In addition to paying the fine, Morg...

By Associated Press October 12, 2009 A lawyer for a Miami insurance agent says he'll plead not guilty to charges of stealing more than $14 million from premium finance companies. Fifty-two-year-old Jose V. Peris, owner of Insurance Force Corp., is accused of submitting thousands of fraudulent contracts to the companies by listing fictitious policyholders. His lawyer, Joel DeFabio, said Peris remained in jail Friday un...

By Associated Press October 7, 2009 A Lansing, Mich.-area investment adviser accused of defrauding investors of hundreds of thousands of dollars has been sentenced to five to 30 years in prison. Ingham County Circuit Judge Joyce Draganchuk also ordered Jeffrey Sadlak of Delta Township to pay $487,384 in restitution to his victims. Ms. Draganchuk said during Mr. Sadlak's sentencing hearing, "I think our prison space is...

Investor Funds Were Used to Pay for Mortgage, Plastic Surgery: Jefferson City, MO – Secretary of State Robin Carnahan’s Office today shut down a scheme run by J. Scott Schlueter of St. Louis, who allegedly sold unregistered investments and used the nearly $325,000 he collected from investors to pay personal expenses. Schlueter, who was indicted on criminal charges in Illinois last month, established Legacy Financial ...

A judge has ordered a former Merrill Lynch employee, San Antonio stockbroker Bruce E. Hammonds, to serve almost five years in prison and three years supervised release for Texas securities fraud. Bruce E. Hammonds also must pay $1.1 million in restitution to the Merrill Lynch investors he defrauded and almost $60,000 to two clients that he continued to defraud after the broker-dealer fired him in June 2008. Hammonds rep...

FA Magazine - August 06, 2009 Fee-Only Pioneer Zabalaoui Sentenced To 8 Years During an emotional court case yesterday, a federal judge sentenced 71-year-old former planner Judith Zabalaoui to 97 months in prison for using a Ponzi scheme to embezzle millions from clients in the New Orleans area. Citing the severity of the offenses, Federal District Judge Mary Ann Vial Lemmon also ordered Zabalaoui to pay $3,255,000 i...

Frank Bluestein ‘lured elderly investors into refinancing the mortgages on their homes,' regulator alleges By Bruce Kelly and Sara Hansard September 28, 2009 The Securities and Exchange Commission today charged Frank Bluestein with fraud for allegedly being the single largest salesperson in a $250 million Ponzi scheme that collapsed in August 2007. According to the SEC's complaint, from 2002 to 2007 Mr. Bluestein ...

Also accused of failing to tell clients he was not registered to sell securities By Sue Asci September 29, 2009 A former Ameriprise broker was charged yesterday with stealing nearly $350,000 from six former clients. Shane Selewach, 46, of Hyannis, Mass., pleaded not guilty to charges that he misappropriated funds from investors after being charged in Barnstable (Mass.) District Court. Mr. Selewach allegedly told clien...

Financial Advisor Magazine The Securities and Exchange Commission has charged a Michigan stockbroker with fraud, alleging that he lured hundreds of elderly investors into a $250 million Ponzi scheme after convincing many of them to refinance their home mortgages. The SEC alleges that 59-year-old Frank Bluestein, a Detroit-area stockbroker, acted as the single largest salesperson in the Ponzi scheme operated by Edward Ma...

By JACK HEALY, New York Times Published: September 23, 2009 Treasury Secretary Timothy F. Geithner urged Congress on Wednesday to adopt the Obama administration’s proposals to overhaul financial regulations, warning that the system was still fraught with the same problems that helped to create last year’s crisis. “The flaws in our financial system and regulatory framework that allowed this crisis to occur, and in...

KALISPELL - A Kalispell financial adviser could face fines totaling millions of dollars, with state regulators alleging he duped investors out of at least $1.5 million in a Ponzi scheme. Donald Chouinard - who worked for LPL Financial Corp. and operated both DC Wealth Management and DC Associates - has 15 days to request a state hearing on the matter. He did not return calls on Friday. Lynne Egan, deputy commissioner fo...

State said the agent violated insurable-interest laws and failed to serve the interests of customers By Darla Mercado September 16, 2009 The Illinois Department of Insurance today stripped a producer of his insurance license and slapped him with a fine due to his involvement in a deflated trust that was intended to cover consumers' final expenses. The agent, Edward L. Schainker, was slapped with the punishment after t...

John Edward Mullins and wife allegedly drained their client’s trust while she was in a nursing home By Sue Asci September 15, 2009 A former Morgan Stanley broker was barred today by the Financial Industry Regulatory Authority Inc. for allegedly misappropriating $11,156.47 from the charitable foundation of a 97-year-old nursing home resident who was his client for more than 20 years. John Edward Mullins allegedly beg...

A financial adviser in New Jersey has been indicted on charges that he stole more than $500,000 from clients. Stephen Severio of Fair Haven was charged with theft by deception and related offenses in an indictment handed up Thursday by a Monmouth County grand jury. Prosecutors say Severio stole the money while working at Merrill Lynch's office in Red Bank. Severio allegedly persuaded 26 investors to withdraw funds from...

Oren Eugene Sullivan pleaded not guilty of conning 35 investors and depositing their cash into his own bank account By Darla Mercado September 9, 2009 A former New York Life Insurance Co. agent pleaded not guilty in a federal court in South Carolina yesterday following charges that he had swindled 35 investors out of more than $2 million over 13 years. Facing a seven-count fraud indictment, Oren Eugene Sullivan of Roc...

Insurance agent gets up to five years for running a Ponzi scheme Robert Rister stole $550,300 from his clients by pretending to reinvest liquidated holdings By Darla Mercado September 4, 2009 A South Shore, Ky.-based insurance agent this week was sentenced to five years in prison and ordered to pay almost $400,000 in fines for swindling clients in a Ponzi scheme that involved annuities. Between August 2003 and June 20...

Robert Rister stole $550,300 from his clients by pretending to reinvest liquidated holdings By Darla Mercado September 4, 2009 A South Shore, Ky.-based insurance agent this week was sentenced to five years in prison and ordered to pay almost $400,000 in fines for swindling clients in a Ponzi scheme that involved annuities. Between August 2003 and June 2008, Robert W. Rister, an independent insurance agent at Rister In...

Pat Kiley called his worldwide radio audience "Truth Seekers," and in weekly hour-long broadcasts recorded from his Burnsville home, he warned about a coming financial Armageddon that would impoverish anyone who didn't entrust him and his business partners with their money. Hundreds of listeners turned over much of their life savings to Kiley and his associates. His pitch, carried on more than 200 stations nationwide, in...

By Associated Press August 25, 2009, 9:13 AM EST Federal prosecutors have charged a woman who once advised Michael Vick and several other NFL players with stealing $3 million from eight victims in a Ponzi scheme. Prosecutors say Mary Wong worked out of her Omaha home and purported to sell investments in luxury properties in Arizona, Tennessee and Michigan along with private jets and other investments. But according to ...

ROCK HILL, S.C. -- A Rock Hill insurance agent is accused of a Ponzi scheme, swindling millions from unsuspecting investors. His daughter, who asked not to reveal her name, tells NewsChannel 36 it's all just a miscommunication. Her parents' $400,000 Rock Hill home is up for sale, their things in boxes. Oren Sullivan's daughter says the charges he faces are a mistake. "I know his character, I know it's a miscommuni...

By Dorothy Hinchcliff The Financial Industry Regulatory Authority (FINRA) has fined five bank broker-dealers a total of $1.65 million for deficient supervision and procedures related to variable annuity (VA), mutual fund or unit investment trust (UIT) transactions. Brokers at each of the firms operated out of branches of affiliated banks, selling VAs, mutual funds or UITs to bank customers, who, in many instances, w...

By Sara Hansard August 13, 2009 The Securities and Exchange Commission on Tuesday filed an administrative proceeding against Axa Advisors LLC < http://sec.gov/litigation/admin/2009/34-60480.pdf> for failing to supervise a former registered representative who pleaded guilty to securities fraud in January 2008. New York-based Axa Advisors offered to pay a $50,000 settlement — without admitting to or denying the SEC's al...

A former financial adviser and registered representative who reportedly hid his criminal past by using a dead infant's identity pleaded guilty today to several fraud charges. Joseph Bonanno of Canton, Ohio, pleaded guilty in the U.S. District Court for the District of Northern Ohio to wire fraud, aggravated identity theft, two counts of making a false statement and one count of making a false statement in an application ...

Securities industry regulators say a St. Peters stockbroker ran an eight-year ponzi scheme in which he swindled brokerage customers, fellow church members and a cousin in order to support a "lavish personal lifestyle" and $4,000-per-month entertainment bills. The Financial Industry Regulatory Authority announced Monday that broker Kenneth George Neely took $600,000 from at least 25 victims, claiming he would invest ...

By Jim Gallagher ST. LOUIS POST-DISPATCH Securities industry regulators say a St. Peters stockbroker ran an eight-year ponzi scheme in which he swindled brokerage customers, fellow church members and a cousin in order to support a "lavish personal lifestyle" and $4,000-per-month entertainment bills. The Financial Industry Regulatory Authority announced Monday that broker Kenneth George Neely took $600,000 from at least...

The Securities and Exchange Commission alleged that financier Danny Pang defrauded investors of hundreds of millions of dollars and obtained a temporary order freezing his assets. As part of the SEC's civil lawsuit filed in federal court in Los Angeles, U.S. District Judge Philip Gutierrez froze the assets of Mr. Pang and the Irvine, Calif., businesses he ran, Private Equity Management Group Inc. and Private Equity Manag...

By Heather Ratcliffe ST. LOUIS POST-DISPATCH The owner of a securities firm in St. Louis was sentenced Tuesday to nearly six years in prison for defrauding investors of more than $4.5 million. Scott Luster, 53, president and owner of Rate Search Inc., pleaded guilty in February in federal court in St. Louis of mail fraud and a tax charge, acknowledging that he used customer money for personal and business expenses. R...

By MARK MAREMONT and JOHN R. EMSHWILLER California money manager Danny Pang temporarily stepped aside at his investment firm, which says it runs assets worth $4 billion, as federal civil and criminal officials began to look into allegations of impropriety. In the civil inquiry, an attorney for a former president of Mr. Pang's firm -- Private Equity Management Group Inc. -- said he has been contacted by the Securities and...

St. Louis Business Journal by Kelsey Volkmann St. Louis investment adviser Stephen Coleman is slated to appear for a hearing before the Missouri Administrative Hearing Commission on Thursday to determine whether his securities license should be revoked. Coleman, who operates Daedalus Capital and the now-defunct Chicken Little Fund Group, has been under investigation by Missouri Commissioner of Securities Matthew Kitzi ...

St. Louis Business Journal The Missouri secretary of state’s office has ordered a St. Charles County man to stop the sale of unregistered investments in life insurance policies. James Staley is accused of offering and selling unregistered investments in life insurance policies through Wealth Financial International, a Chesterfield company he organized, Missouri Secretary of State Robin Carnahan’s office said Monday....

As my Aunt Betty once told me, it's only when the rinse cycle begins that you see how dirty the laundry really was. With the market still off more than 40% from its peak in 2007, investors are examining how their portfolios ended up so filthy -- and blaming brokers. Through March 31, investors filed 1,264 arbitration cases with the Financial Industry Regulatory Authority, or Finra, up 114% from the year-earlier period. ...

By Senior Market Advisor | Published April 1, 2009 From the April 2009 Issue of Senior Market Advisor Magazine Trust. The market is so scary right now. It’s scary to even think about money and where it’s going. I saw that Madoff story on the nightly news and it’s so scary. You don’t know who to trust. And there’s so many out there that want your money. I need somebody to trust. Dawn C., 74 Oklahoma City, Okl...

By Steven McCarty | Published April 1, 2009 From the April 2009 Issue of Senior Market Advisor Magazine Last month, I discussed how due diligence went past due in our business … with devastating results. This month, I’d like to talk about the resurgence of due diligence—and what it all means. Clearly, the lack of due diligence has affected your clients both objectively and subjectively. Objectively, many have lo...

Emily Lambert, 03.25.09, 06:00 PM EDT Forbes Magazine dated April 13, 2009 You'd think investors would be leery of brokers with sketchy histories. Think again. Bambi Holzer has done a masterful job burnishing her reputation as a trusted financial expert. The 50-year-old broker has appeared on the Today show and NBC Nightly News. Her fourth book, Financial Bliss, hit stores two years ago, and in 2008 USA Today turned to...

By Bruce Kelly Robert W. Baird & Co. Inc. has won a $1.43 million arbitration award against Morgan Stanley and a former Baird broker. Milwaukee-based Baird alleged that three brokers “abruptly left their positions” with the firm and “delivered client records to their new employer, Morgan Stanley Dean Witter, for use in solicitation of [Baird’s clients],” according to the Financial Industry Regulatory Authorit...

By Harry Lew | Published February 26, 2009 From Senior Market Advisor News Desk A Connecticut insurance agent has pleaded guilty to embezzlement after plundering her employer’s checking account to pay for personal expenses. The agent is expected to receive three years in prison and five years of probation. The woman had only a 10th-grade education, but was hired by the agency owner when she was 18. With the owner’s...

Proposed Senate bill would ban use of phony credentials obtained from online degree mills Ben Gemignani A new bill currently before the Missouri Legislature, SB182, introduced by Senator Matt Bartle (R-Jackson County), would, according to a press release from the Missouri Department of Higher Education, "prohibit the use of false or misleading documents to obtain employment or a college admission in Missouri." "How would...

By Steve Wartenberg THE COLUMBUS DISPATCH Pat Huddleston understands how the mind of a con artist works. "The scam artist understands human nature and preys upon it," said Huddleston, a former official with the U.S. Securities and Exchange Commission who now runs Investor's Watchdog in Atlanta. "They know the route around every roadblock and how to get around it." In times like these, with 401(k) investments shrinkin...

By Kelsey Volkmann--St. Louis Business Journal The U.S. Justice Department and the U.S. Postal Inspection Service are the latest to investigate St. Louis investment adviser Stephen Coleman of Daedalus Capital for alleged fraud. Coleman has been under investigation by Missouri Commissioner of Securities Matthew Kitzi for alleged securities fraud after investors complained Coleman misled them. That investigation found tha...

By David Port | Published February 1, 2009 From the February 2009 Issue of Senior Market Advisor Magazine To play by the rules, you have to know the rules. For many advisors, that means becoming familiar with such imposing documents as the FINRA Manual, a sprawling and still-growing amalgamation of legalese (posted online at finra.complinet.com) that at last count included close to 1,400 pages of rules from FINRA, the ...

On Wednesday, federal officials in Florida also charged Mr. Schrenker with faking a distress call from an aircraft and intentionally crashing a plane. View Full Image Associated Press U.S. Marshals found Marcus Schrenker in a tent Tuesday at this KOA campground in Chattahoochee, Fla., and took him into custody. Mr. Schrenker couldn't be reached for a comment on Wednesday. It's been an eventful week for Mr. Schrenker, 3...

By Allan Sloan, FORTUNE Magazine--senior editor at large January 5, 2009: 6:14 AM ET NEW YORK (Fortune) -- Yes, there really are times when life imitates art. A case in point: the Bernie Madoff scandal, in which the disgraced investor bears a startling resemblance to Zero Mostel's sleazy theater promoter in one of my favorite flicks, "The Producers." http://money.cnn.com/2009/01/05/magazines/fortune/sloan_madoff.fortune...

Published January 1, 2009 From the January 2009 Issue of Senior Market Advisor Magazine For me, it's honesty. I want a straight shooter. I have been burned in some investment opportunities over the years, so I put my top priority in an advisor as being somebody I have faith to do right by me. As you can guess, dishonesty is the worst attribute." - David R., 68 Memphis, Tenn. My advisor is very, very professional and...

Carrie Coolidge-FORBES Insurance agents who steal from clients can go undetected for years. Jeanne and Anthony Trotta were in their 80s when they bought $150,000 worth of annuities in 1998 from Michael Minnehan, an insurance agent in their hometown of Milford, Mass. Minnehan told them the annuities would do better than a savings account. They might have, if the money hadn't been stolen. Problems in purging CRD records

By Senior Market Advisor | Published October 1, 2008 From the October 2008 Issue of Senior Market Advisor Magazine Following a recent U.S. Court of Appeals ruling, financial advisors will continue to find it difficult to purge their Central Registration Depository (CRD) records of consumer complaint information following a settlement agreement. This makes it all the more important for advisors to prevent complaints in ...

By Senior Market Advisor | Published September 1, 2008 From the September 2008 Issue of Senior Market Advisor Magazine There’s a reason Ron Tuchin devotes an entire page of his firm’s Web site to client testimonials. Among the various marketing tools advisors use to promote their practices and their expertise, he says, testimonials- whether they come from individual clients, groups, the media or professional ...

Kathleen Day Washington Post Staff Writer Sunday, August 27, 2006 Working single mom Kathy A. Gambrell has had no problem finding a lawyer to write her will or a certified public accountant to prepare her taxes -- professionals she found by asking friends and family for recommendations. But a four-year quest to find a financial planner has left the editor of the District-based CongressDaily baffled, angry and, worst of ...