Archive

February 21, 2019

Precious metals dealer Hannes Tulving, Jr. and The Tulving Company, Inc., have been ordered to pay a civil monetary penalty of $15.7 million, having been charged with fraudulent solicitation and misappropriation in 2015.  Between 2013 and 201, defendants fraudulently held themselves out as a reputable dealer in gold, silver, platinum, and palladium bullion and coins, soliciting more than $150 million in funds from 381 people.  Tulving then misappropriated funds for unauthorized uses and failed to purchase or deliver the metals to customers.  In 2016, Tulving was sentenced to 30 months in prison.  CFTC

February 15, 2019

Following his conviction at trial for securities fraud and related charges, attorney James M. Schneider of Boca Raton, Florida, was sentenced to seven years in prison and ordered to pay restitution of $19.7 million to over 2,000 investors.  From 2008 to 2013, Schneider and his co-conspirators created approximately 20 shell companies, falsely representing their ownership and control in SEC filings before offering their securities for sale.  The conspirators would then use the shell company shares in pump-and-dump and other manipulation schemes.  USAO SD FL

February 7, 2019

The founder and president of an online gaming company has been arrested and charged with securities fraud for allegedly defrauding more than 50 investors of about $9 million in a scheme that ran from 2013 to 2017. To execute the fraud, Robert Alexander allegedly lied to investors about his professional background, Kizzang LLC's financial condition, and the expected returns on investment. He then allegedly appropriated $1.3 million for his own use. If convicted, he faces a maximum sentence of 40 years in prison and millions in fines. SEC; USAO SDNY

February 5, 2019

The former chairman and CEO of a pharmaceutical manufacturing company has been convicted of engineering an elaborate fraud on two banks that eventually led one to collapse and the other to suffer $1 million in losses. According to the DOJ, Jack Kachkar of Inyx Inc entered into a series of loan agreements with Westernbank of Puerto Rico—at the time one of the largest banks in Puerto Rico—that were backed by Inyx's assets, including accounts receivable. He then caused his employees to present tens of millions of dollars of fake invoices and misrepresented the worth of his personal collateral in order to induce $142 million in loans. When the bank finally declared the loans in default two years later, in June 2007, it suffered $100 million in losses, which led directly to its collapse. In a separate scheme, Kachkar deposited a fraudulent $3 million check at Mellon United National Bank of Miami, purportedly from the sale of a private jet (which he'd bought with money diverted from the Westernbank loan). Once the provisional credit cleared, he wired it all out and then refused to reverse the wire, causing the bank to suffer $1 million in losses. He now faces a federal judge for sentencing in April. DOJ; USAO SDFL

December 21, 2018

Lon Olen Friedrichsen of Alton, Iowa, has been ordered to pay $2.1 million following a CFTC complaint alleging that he improperly solicited customers to obtain access to their futures trading accounts by misrepresenting his registration and experience.  Friedrichsen then ran up substantial losses in the customer accounts, but created false statements to conceal those losses.  CFTC

December 21, 2018

Forex trading firm Wright Time Capital Group LLC and its principal, Michael S. Wright, have been ordered to pay approximately $1.6 million in connection with a CFTC complaint charging that they fraudulently solicited investments in a commodity pool for foreign exchange trading, misrepresented that pool participants’ funds would be used to engaged in forex trading, misappropriated pool participants’ funds, and created false records that misrepresented trading returns and account values. CFTC

December 21, 2018

Advisory firms American Portfolios Advisers Inc. and PPS Advisors Inc., together with PPS's CEO/CIO, Lawrence Nicholas Passaretti, will pay more than $1.8 million to settle SEC charges that they improperly recommended mutual fund share classes that paid 12b-1 fees to the firms' representatives.  In addition, the companies misrepresented to customers that their advisors did not receive 12b-1 fees and/or only selected more expensive share classes when less expensive classes were not available.  SEC

December 21, 2018

Randall Gilbertson was sentenced to 12 years in prison following his conviction on numerous counts related to his manipulation of the stock price of Dakota Plains Holdings, Inc., a company he founded, in a reverse merger of Dakota Plains into a publicly traded shell company, Malibu Club Tan.  Gilbertson was also ordered to pay restitution of over $15 million.   USAO MN

December 19, 2018

Following charges brought by the CFTC in 2016, Haena Park and companies affiliated with her, Phaetra Capital GP LLC, Phaetra Capital Management LP, and Argenta Group LLC, have been ordered to pay $23 million in restitution to defrauded investors in commodity pools operated by defendants.  Park made material misrepresentations and omissions concerning her trading expertise, and the defendants made and issued false documents to conceal their trading losses and misappropriations of investor funds, in addition to commingling funds and failing to operate the commodity pool as a separate legal entity.  CFTC

December 14, 2018

A debt-relief telemarketing operator has been permanently banned from both industries and ordered to pay over $23 million to the FTC and State of Florida for violating the Federal Trade Commission Act, Telemarketing Sales Rule, and Florida Deceptive and Unfair Trade Practices Act. Under the guise of multiple shell companies, Kevin Guice and his associates sold fraudulent debt relief services to more than 10,000 unsuspecting consumers, often by calling phone numbers on the FTC's National Do Not Call Registry. In one scheme, telemarketers falsely claimed to be able to substantially and permanently lower credit card interest rates in exchange for an upfront fee of between $500 to $5,000. In another scheme, telemarketers again falsely claimed to be able to access non-existent government funds to pay off credit card debt in exchange for another upfront fee of between $2,500 to $26,000. Proceeds from the $23 million judgment will be used to pay restitution to consumers harmed by these fraudulent schemes. FTC; FL AG