Fraud

Ponzi Fraud
A Ponzi scheme is a fraud that pays returns to its investors from their own money or the money paid by subsequent new investors, rather than from any actual profit.

It is named after Charles Ponzi, who applied the concept to the arbitrage of International Reply Coupons in the early 1920s. Ponzi promised a 50% profit within 45 days, or a 100% profit within 90 days, by buying discounted postal reply coupons in other countries and redeeming them at face value in the US. By June 1920, people had invested $2.5m in Ponzi's scheme. By July, he was raking in a million dollars per week.
Ponzi's scheme eventually brought down six banks. Investors lost about $20m in 1920 dollars ($250m in 2018 dollars). Ponzi set the template for Bernie Madoff's $12B scheme that collapsed in 2008, the largest Ponzi scheme in history.
__________________________
Stablecoin - The latest Ponzi Scheme for Dummies
A stablecoin is a cryptocurrency whose value is pegged to an asset – gold or some other commodity. The stablecoin con begins with a simple value proposition. It goes something like this ... Stablecoin's main use is to provide cryptocurrency users with the ability to convert volatile crypto positions into ‘stable’ alternatives. As with any Ponzi scheme, the value of your investment is stable until it's worthless. Your money goes to the scammers.
Confusion about the inner workings of any con is a key part of the confidence game. Stablecoins can be algorithmic, crypto-based, or collateralized. Algorithmic stablecoin refers to where the vendor of the coin maintains its market value by buying its coins on the open market. The vendor pays for its coins with IOUs. Crypto-based stablecoins are no better. In this approach, the vendor of the stablecoin collateralizes its coins with other crypto.
__________________________

The story goes for every stablecoin worth $1 the vendor issues, it maintains at least $1 in assets.
The third approach to implementing a stablecoin is to collateralize it with money or assets. This scheme is vaguely similar to a banking fractional reserve system.

Just one tiny problem: many vendors choose to partially collateralize and they aren't regulated. The most popular stablecoin, USDT from Tether, is an example of a supposedly fully collateralized stablecoin – only it doesn't allow a public audit of its fiat reserves.
3 men charged in $364m Ponzi scheme

Kevin B. Merrill
Kevin B. Merrill, 53, Jay B. Ledford, 54, and Cameron Jeziersky, 28, have been nailed in the case and are accused of using a web of lies, forgeries and fake documents to carry out a massive fraud since 2013, using the money to fund lavish lifestyles, including dozens of luxury cars, jewelry, high-end real estate and gambling in Vegas.

About $197 million of the money was used to pay earlier investors. The three falsely told investors they would use the money to invest in consumer debt portfolios, generating profit by collecting on the payments people made on their debt or by selling the portfolios. It was all rubbish.

Jay B. Ledford

Cameron Jeziersky
"We allege defendants engaged in a brazen fraud, deceiving investors to perpetuate their wrongdoing and line their pockets with ill-gotten gains."
The indictment seeks the forfeit of nine luxury properties, 26 supercars, one boat, an aircraft, a life insurance policy, diamond rings, and jewelry.

If convicted on all charges, Merrill and Ledford each face up to 262 years in prison. Jazierski could face up to 120 years in prison. Merrill and Ledford were ordered detained. Jezierski was released under the supervision of U.S. Pretrial Services.

  1. 2014 Ford Explorer
  2. 2014 Lamborghini Aventador Roadster
  3. 2014 Mercedes-Benz S63
  4. 2015 BMW S1000R
  5. 2015 Harley-Davidson VRSCDX
  6. 2016 Ferrari 488
  7. 2017 Audi R8 5.2 Plus
  8. 2017 Lamborghini Huracán convertible
  9. 2017 Range Rover
  10. 2017 Range Rover Sport
  11. 2017 Porsche 911 Turbo S
  12. 2018 Rolls-Royce Dawn
  13. 2017 Rolls-Royce Wraith
  14. 2018 McLaren 720S
  15. 2008 Bugatti Veyron
  16. 2013 Ferrari California
  17. 2014 BMW M6 Gran Coupe
  18. 2014 Ferrari F12 Berlinetta
  19. 2014 Pagani Huayra
  20. 2015 Mercedes-Benz S63
  21. 2017 Cadillac Escalade
  22. 2017 Lamborghini Aventador
  23. 2018 Ferrari 488 Spider
  24. 2018 Lamborghini Hurac├ín 
A massive Ponzi scheme is likely to see the two dozen luxury cars, including four Lamborghinis, four Ferraris and a Bugatti Veyron hit the auction market. Scammers also blew the loot on luxury property, a boat and precious jewelry.



__________________________
Alleged Vancouver fraudster Mark Chandler fights extradition
Langley-based developer Mark Chandler is accused of fraud in California following an FBI investigation. The charges resulted from an investigation into a development project known as Hill Street in downtown Los Angeles between 2008 and 2011. “The record of the case portrays a fraud that does not exist,” said Chandler’s lawyer.

The judge disagreed, and ordered Chandler extradited to face trial in the U.S. Chandler will appear before judges of the B.C. Court of Appeal on Feb. 15 to appeal the decision. Lawyers say he may appeal to the Supreme Court of Canada.
Chandler is best known for the Murrayville House project, which dissolved into multiple lawsuits in 2017.
The project is being investigated by the RCMP.Some would-be buyers waited years as repeated construction delays stalled the project. Units in the development were sold to two, three, or even four purchasers. All contracts were voided in court. The 'developer' has accumulated a long list of lawsuits, including from an American private jet leasing agency, a Vancouver yacht charter company, a Ferrari Maserati dealership, and a waterfront Hawaii getaway.
__________________________
ATM deep insert skimmer - the latest thing
Crooks have stepped up their game from ATM overlays. The latest device being used to rip you off is called a deep insert skimmer. That's a skimmer that you can't see at all from outside the machine. It captures your card data and that information can be used to access your account or clone your card.
Deep insert skimmers record card data and store it on an embedded flash drive, then transmit stolen card data wirelessly via infrared, like a TV remote control. The hidden camera has a dual function: to record PINs and to receive card data from the skimmer. Crooks leave the insert skimmer embedded in the ATM’s card slot, and swap out the hidden camera when its battery is low. The skimmer turns itself on when reading a card, giving a long battery life.
It's a rapidly growing crime. Last month the Oklahoma City metropolitan area experienced rash of ATM attacks involving deep insert skimmers. Two weeks ago a Romanian pleaded guilty to bank fraud and identity theft in Springfield, Massachusetts. Police say he was part of an organized group that inserted skimming devices in ATMs and stole more than $900,000 from bank customers in Massachusetts, New York and New Jersey. The man faces up to 30 years in federal prison.

Another Romanian group was recently busted in the Philippines.
__________________________
California busts recycling fraudsters
Thousands of pounds of empty beverage containers were intercepted while being smuggled into California. The state confiscated 56,000 pounds of material worth an estimated $82,853 in potential California Redemption Value. Eight people were arrested. California residents pay deposits of 5 cents to 10 cents on certain beverage containers that can be redeemed at certified recycling centers. Out-of-state containers are not eligible.
The most recent seizure occurred Aug. 15 when a Yuma, Arizona resident, who owns a recycling center, was arrested while bringing 907 pounds of aluminum empty beverage containers into California. That operation alone is suspected of having smuggled 468,000 pounds of aluminum over three years. Those busted are charged with felony recycling fraud, conspiracy, and attempted grand theft. Those crimes can carry sentences ranging from six months to three years behind bars.
__________________________
Stolen wireless devices being used in fraud schemes
Toronto police warned businesses about a spate of thefts of wireless payment machines that are then used to commit fraud. Cops aren't releasing the technical details.

PAT (Pay at Table) devices are wireless credit/debit card payment terminals which operate on wireless technologies like wifi, bluetooth or cellular. They are commonly used in restaurants and bars. Thieves are stealing some machines outright.
Four separate incidents are being investigated, all of which came from thefts at restaurants. Police recommend that wireless payment terminals be securely stored when not in use and that they should never be left unattended. They say the fraud scheme itself is simple. Some payment devices contain merchant account information and may also temporarily store credit/debit card information from any cards used in it.

In one case two men arrived at a busy bar before closing time. Their server left the PAT at the table and returned to her duties. The men said the device wasn't working and paid cash. They had replaced the device with a similar one that had been modified to collect and transmit card and PIN information. Cloned cards were then created. Fraudsters target high traffic merchants where large volumes of card information can be collected in a short period of time.
__________________________
Vancouver man Mark Eldon Wilson pulls 11 years in telemarketing scam
Mark Eldon Wilson, 57, of Vancouver was sentenced to 135 months behind bars for a telemarketing scheme that conned tens of thousands out of more than $18 million. Wilson was convicted of seven counts of mail fraud and two counts of wire fraud for running the cross-border telemarketing scheme that targeted Americans. Victims were sold a non-existent credit card "protection" service for $300 that purportedly would be in effect for 10 years, and were falsely promised a 100% money-back guarantee.
Wilson operated the scheme through firms that appeared to be affiliated with credit card companies. As part of the scam, telemarketers falsely suggested to victims that they were vulnerable to credit card fraud and would be held liable for fraudulent charges on their cards.

Between 1998 and 2001 Wilson collected over $18 million from more than 60,000 people in 37 states. Wilson used the proceeds for his lavish lifestyle which included luxury boats, a fleet of cars, and gambling trips to Las Vegas. Wilson fought his extradition to the US for more than a decade.
__________________________
Fraudster bankrolls son's NASCAR career

North Carolina businessman Robert Boston, who defrauded investors while bankrolling his son's NASCAR career, has been sentenced to 10 years in prison. Boston owes more than $27 million to victims after being found guilty of wire fraud, securities fraud, money laundering and conspiracy. Boston founded electronic waste recycling firm Zloop in 2012.

He concealed a history of bankruptcy and past frauds from franchise owners and investors.
His son, Justin Boston, drove in NASCAR's Camping World Truck Series in a truck emblazoned with Zloop's logo.

__________________________
Mormon Claud R. "Rick" Koerber guilty in $ 100m Ponzi scheme
Claud R. "Rick" KoerberAfter nine years of court wrangling, including a dismissal and a mistrial, Utah real estate investor Claud R. "Rick" Koerber was found guilty of 15 counts of wire fraud, fraud in the offer and sale of securities and money laundering. While prosecutors call it the largest fraud in Utah history, Koerber maintains that he defrauded no one but ran a profitable business and was singled out by those angered by his radio show, "The Free Capitalist." Koerber used his businesses — Founders Capital, Franklin Squires Investments and Franklin Squires Cos. — as a $100 million Ponzi scheme from 2004 to 2008. Prosecutors said half the money was redistributed to other investors.
While investors thought their money was to be used in real estate investments, Koerber spent it on luxury cars, producing a low-budget Mormon horror movie and his own lavish lifestyle.
__________________________
The SIM swap fraud
SIM swap fraud is a relatively new, sophisticated form of fraud that allows hackers to gain access to bank accounts, credit card numbers, and other personal data.

A cellphone SIM card stores user data in GSM phones. They’re used for authentication — without a SIM card, GSM phones can't tap into a mobile network. A reliance on phone-based authentication has made SIM swapping an increasingly lucrative crime.
SIM criminals case their targets carefully before an attack. They call the victim’s cellphone provider and claim the SIM card has been lost or damaged. Then they ask customer service to activate a SIM card or number in their possession. With unfettered access to a victim’s phone number, criminals then target bank accounts and credit cards. The crime has more than tripled in the US since 2013.
__________________________
Fraudster Dawn Bennett spent $72k on Hindu prayers to stop investigators
As investigators closed in on investment adviser Dawn Bennett's ponzi scheme, she spent $72k of the stolen loot on prayers by Hindu priests in India to ward off charges. For one 'yagya' ritual, Bennett spent $7,250 for five priests to pray for her across 29 days. “I am in a very very tough fight going against my enemies and I need all the help I can get,” Bennett wrote. Prayers didn’t spare Bennett from a 17-count indictment on fraud charges. Neither did the 'hoodoo' spells she was casting on the FBI.
Bennett, 56, raised more than $20 million from at least 46 investors in her luxury sportswear company, often preying on elderly clients who 'knew' her from a radio show she hosted. Her apparel business, DJBennett, never made a profit and had at least $15.6 million in liabilities and $550,000 in total revenue.
The FBI’s investigation of Bennett began in December 2015 after the SEC formally accused her of defrauding investors.
The SEC cited statements that Bennett made on her paid weekly radio show, “Financial Myth Busting With Dawn Bennett.” Most of the loot went into Bennett's luxurious lifestyle with investors expected to recovery little, if anything.
__________________________
City of London fraud officer Dave Clark faces fraud investigation
Dave Clark, of the City of London police, faces a misconduct inquiry.A top anti-fraud cop is under criminal investigation for giving secret information to associates bidding for city contracts.
Clark faces an allegation that he requested police resources for personal matters and has been accused of breaching the Data Protection Act.
__________________________
'Green' Ponzi scheme pulls in $54m
Troy Wragg and Amanda Knorr of Mantria.Wayde McKelvy and co-conspirators Troy Wragg and Amanda Knorr lured more than 300 investors with the promise of huge returns, as high as 484 percent, for 'secure' securities investments in real estate and green energy. In reality Mantria Corp. of Philadelphia was a Ponzi scam.

Wragg and Knorr, who met as Temple University students, formed Mantria shortly after graduating from Temple where they met and began dating. The two teamed up with McKelvy to raise funds through his 'Speed of Wealth' seminars.
Of the $54m the trio collected, about $17.5m was returned to early investors while they each paid themselves approximately $6.2m.

McKelvy, who sold himself as a financial genius, is scheduled to be sentenced Jan. 30. No sentencing dates have been released for Wragg or Knorr.
__________________________
Ponzi artist Arthur Lamar Adams gave generously
Arthur Lamar Adams devised a sophisticated Ponzi scheme that lured at least 300 investors to pour in more than $100 million. His scheme recruited investors to invest at least $100,000 each in Madison Timber Properties in Mississippi.
For each investment made by an investor recruited, agents received a cut of the investor’s payment, amounting to more than $16 million in commissions.

Adams made numerous gifts with the loot, including $1,400 to the Trump Make America Great Again Campaign. Adams gave gifts to the Ole Miss Athletic Foundation of $49,900 in 2016 and $47,100 in 2017. In total the University of Mississippi received $402,100.
__________________________
120 Chicago properties hit market - Ponzi Scheme
Nearly 120 Chicago properties at the center of a Ponzi scheme will be going on the market soon, as a court-appointed receiver tries to recover money lost by investors. A Florida-based real estate firm, EquityBuild, acquired the properties, which include about 1,700 apartments.

EquityBuild lost control of them in August, after the SEC filed a lawsuit accusing the firm of defrauding its investors, prompting a judge to appoint a receiver to oversee a sale of the properties.
Led by a father-and-son team, Jerome and Shaun Cohen, EquityBuild and its affiliates raised at least $135 million from more than 900 investors starting in 2010. Prosecutors say EquityBuild affiliates “sustained heavy losses and the properties they pitched to investors failed to earn anywhere near enough to pay the promised double-digit returns."

Though EquityBuild’s investors are facing large losses, how much money they get back will depend on how the sales fare.
__________________________
NY developer Michael D’Alessio pleads guilty to $58M ponzi scheme
D’Alessio guaranteed monthly interest payments and a share in the profits.Michael D’Alessio, 53, has pleaded guilty in New York to one count of committing wire fraud and one count of concealing assets from a bankruptcy court. He faces up to 20 years in prison and fines when he is sentenced next year. The elaborate scheme involved defrauding investors of luxury real estate developments in Manhattan, the Hamptons, and Westchester.

He offered shares of a newly formed company, named after the location of the real estate to be developed and sold. The scheme began in 2015.
D'Alessio defrauded investors out of more than $58m. He used the loot to pay off debts and to fund gambling and other personal expenses.

When D’Alessio eventually was petitioned into bankruptcy, he immediately perpetrated another fraud by trying to conceal his assets.