Archive

May 26, 2016

The CFTC ordered Cypress Wealth Management, Inc. and its former owners and operators, Ted L. Romeo of Pompano Beach, Florida, and Richard D. Schrutt of Tampa, Florida, to pay over $530,000 in penalties and restitution on charges that they illegally offered off-exchange financed transactions in precious metals to retail customers.  CFTC

May 25, 2016

The CFTC ordered Citibank and its Japanese affiliates to pay a $175 million penalty for attempting to manipulate the Yen LIBOR and Euroyen TIBOR rates and false reporting of the Euroyen TIBOR and U.S. dollar LIBOR rates.  CFTC

May 25, 2016

The CFTC ordered Citibank to pay $250 million for attempting to manipulate and falsely report the U.S. dollar ISDAFIX benchmark rate.  CFTC

May 11, 2016

The CFPB took action against All American Check Cashing, Inc., which offers check cashing and payday loans, and its owner Michael Gray, for allegedly tricking and trapping consumers.  The complaint alleges that All American tried to keep consumers from learning how much they would be charged to cash a check, used deceptive tactics to stop consumers from backing out of transactions, made deceptive statements about the benefits of its high-cost payday loans, and also failed to provide refunds after consumers made overpayments on their loans.  CFPB

May 9, 2016

The CFTC ordered Cunningham Commodities, LLC, based in Chicago, Illinois, and its head accountant, Salvatore Carmen Russo, to pay a penalty of $150,000 for failing to immediately report a customer's segregated account deficiency.  CFTC

May 6, 2016

Liberty Reserve founder Arthur Budovsky was sentenced to 20 years imprisonment and to pay a $500,000 fine for running a massive money laundering enterprise through his company's virtual currency once used by cybercriminals around the world to launder the proceeds of their illegal activity.  According to the indictment, Liberty Reserve billed itself as the Internet’s “largest payment processor and money transfer system” and allowed people all over the world to send and receive payments using virtual currency.  But Liberty Reserve grew into a financial hub for cybercriminals around the world, trafficking the criminal proceeds of Ponzi schemes, credit card trafficking, stolen identity information and computer hacking.  DOJ

April 13, 2016

Nery Cowan, a former health care clinic consultant and Medicare biller for partial hospitalization program Greater Miami Behavioral Healthcare Center Inc. was sentenced to 135 months in prison and ordered to pay a $100,000 fine for her role in laundering money in connection with a $63 million health care fraud scheme.  As part of her guilty plea, Cowan admitted to directing and authorizing the payment of kickbacks and bribes to patient brokers and others in exchange for Medicare beneficiary referrals.  Cowan also admitted that Greater Miami personnel routinely falsified medical records affiliated with these recruited Medicare beneficiaries to support false claims to Medicare.  Cowan also admitted that she, along with co-defendants Dean Butler and Irina Mora, took great lengths to conceal kickback payments to shell companies owned by “patient brokers” who, on behalf of Greater Miami, solicited Medicare beneficiaries from assisted living facilities, halfway houses and drug courts located throughout the Southern District of Florida.  Judge Bloom previously sentenced Butler and Mora to 16 years and nine years in prison, respectively, following their guilty pleas.  DOJ

April 19, 2016

Three former executives at battery manufacturer Ener1 will pay collective penalties of $180,000 to settle allegations of materially overstating revenues and assets.  The financial misstatements stemmed from management’s failure to impair investments and receivables related to an electric car manufacturer that was one of its largest customers.  In addition, the SEC found that Robert Hesselgesser, the engagement partner for PricewaterhouseCoopers’ audit of Ener1’s 2010 financial statements, violated PCAOB and professional auditing standards.  Hesselgesser agreed to be suspended from practicing before the SEC as an accountant.  SEC

April 19, 2016

Technology manufacturer Logitech International will pay a $7.5 million penalty for fraudulently inflating its fiscal year 2011 financial results to meet earnings guidance and committing other accounting-related violations during a five-year period.  Logitech’s then-controller and then-director of accounting will pay collective penalties of $75,000 for violations related to Logitech’s warranty accrual accounting and failure to amortize intangibles from an earlier acquisition.  The SEC also filed a complaint in federal court against Logitech’s then-CFO and then-acting controller alleging that they deliberately minimized the write-down of millions of dollars of excess components parts for a product for which Logitech had excess inventory.  SEC

April 15, 2016

The SEC announced fraud charges against James Catipay and David Aldrich for allegedly raising $11.7 million from approximately 250 investors, many of them retirees, for their Los Angeles-based litigation marketing company, PLCMGMT LLC (a/k/a PLC or Prometheus Law).  Investors were told their money would be used to help gather plaintiffs for class-action and other lawsuits and they would earn hefty investment returns from settlement proceeds.  Instead, the SEC alleges that Catipay and Aldrich diverted millions of dollars for their personal use while failing to deliver the promised 100 to 300 percent returns to investors.  SEC