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February 11, 2022

Defendants Seyed Taher Kameli and his companies, Chicagoland Foreign Investment Group, LLC and American Enterprise Pioneers, Inc., will pay jointly and severally $1.6 million after entering into a judgment for defrauding EB-5 immigrant investors. Kameli is an immigration attorney, some of whose clients were victims of the fraud. He promised at least 226 foreign investors that their $500,000 investments would finance construction of a senior living project and pave the way for at least 10 permanent full-time jobs, as well as qualifying each investor for a path to permanent U.S. residency. Instead, he commingled and misused some of the $88.7 million raised. Defendants are enjoined from further violations of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Kameli also agreed administratively to a 5-year suspension from practicing before the SEC as an attorney. SEC

Tagged in: Financial and Investment Fraud, Misrepresentations, Securities Fraud, Visa Fraud,

January 20, 2022

Florida resident Mary Kathryn Marr was sentenced to 14 years in prison following her guilty plea on charges related to her role in a criminal enterprise that scammed victims into sending members of the conspiracy funds for fraudulent investments based on high-pressure “boiler room” tactics.  The conspirators operated a network of bank accounts in the names of shell companies into which the boiler room agents, and sometimes Marr herself, instructed victims to send their money.  The victims’ funds were then laundered through more bank accounts and sent overseas.  Marr was also ordered to forfeit various assets, pay a fine of $1.5 million, and pay restitution of $14.5 million to victims.  USAO MD FL

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Misrepresentations, Ponzi Schemes, Securities Fraud,

January 10, 2022

The SEC has issued two awards totaling more than $4 million to three whistleblowers whose information and assistance helped bring about two successful enforcement actions.  In the first order, a single whistleblower who reported internally before providing significant new information to the agency on an existing investigation was awarded $2.6 million.  According to the SEC, the misconduct occurred overseas and would have been difficult to detect without the whistleblower’s tip.  In the second order, two whistleblowers received a joint award of $1.5 million for providing substantial ongoing assistance.  SEC

Tagged in: Financial and Investment Fraud, International Whistleblowers, SEC Whistleblower Reward Program, Securities Fraud, Whistleblower Rewards,

December 21, 2021

Nikola Corporation will pay $125 million to resolve charges that the transportation systems provider, which designs and manufactures electric trucks and hydrogen fuel systems, misrepresented or omitted material facts about its products, technical advancements, and commercial prospects.  Many of these statements were made by Nikola’s founder and former CEO, Trevor Milton, on social media and otherwise, both before and after Nikola went public through a merger with a special purpose acquisition company (SPAC).  An SEC action against Milton is continuing.   SEC

Tagged in: Financial and Investment Fraud, Misrepresentations, Securities Fraud,

December 17, 2021

J.P. Morgan Chase entities, including broker-dealer J.P. Morgan Securities LLC, will pay a total of $200 million -- $125 million as an SEC penalty and $75 million as a CFTC penalty -- to resolve claims that firm employees communicated both internally and externally on unapproved channels, failed to preserve written communications, and failed to supervise.  Defendants admitted that employees, including senior and supervisory employees, regularly and openly communicated about business using personal devices, text messages, WhatsApp, and other private messaging, none of which were preserved by the firm, in violation of recordkeeping requirements.  As a result, J.P. Morgan entities were unable to provide information in response to subpoenas and information requests from regulators.  SEC; CFTC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Fraud in CFTC-Regulated Markets, Regulatory Violations, Securities Fraud,

December 7, 2021

The SEC has issued a whistleblower reward of $5 million to an individual who voluntarily provided original information to the Commission regarding the misuse of proceeds from a securities offering.  The SEC found that the whistleblower promptly reported the misconduct, enabling the Commission to quickly bring a successful enforcement action and return millions to harmed investors.  SEC

Tagged in: Financial and Investment Fraud, SEC Whistleblower Reward Program, Securities Fraud, Whistleblower Rewards,

November 24, 2021

Guy Scott Griffithe, who controlled an entity called Renewable Technologies Solutions, Inc., and Robert William Russell, who owned an entity called SMRB, LLC, have been ordered to pay more than $6 million to resolve charges that they mislead investors by falsely stating that investments in Renewable would be used to operate SMRB, which held a license to grow marijuana under Washington’s recreational cannabis laws.  To create the illusion that the marijuana business was profitable and paying dividends as promised, Griffithe allegedly paid out purported profit distributions to some investors, which were partially funded in a Ponzi-like fashion using funds from other investors.  Griffithe was found liable for more than $5.3 million in disgorgement, prejudgment interest, and civil penalties; Russell was found liable for more than $698,000 in disgorgement, prejudgment interest, and civil penalties.  SEC

Tagged in: Financial and Investment Fraud, Misrepresentations, Ponzi Schemes, Securities Fraud,

November 8, 2021

United States Commodity Funds LLC, a registered commodity pool operator , and United States Oil Fund LP, an exchange-traded product whose general partner is United States Commodity Funds LLC, will pay a total of $2.5 million to resolve charges by the SEC and CFTC.  USO’s stated investment objective was to track changes in the spot price of oil; however, during oil market turmoil in early 2020, USO’s sole futures commission merchant told USO it would not execute any new oil futures positions for USO. As a result of this limitation, USO was restricted from investing the proceeds generated by the future sale of newly created shares in oil future contracts, creating the risk that USO would not be able to meet its stated investment objective. The SEC and CFTC alleged that the defendants failed to fully disclose these limitations to commodity pool participants.  CFTC; SEC

Tagged in: Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Misrepresentations, Securities Fraud,

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