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Financial and Investment Fraud

This archive displays posts tagged as relevant to financial and investment fraud. You may also be interested in the following pages:

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Constantine Cannon Attorneys Eric Havian and Michael Ronickher Published in Law360 on the Need for Anti-Money Laundering Whistleblower Rewards

Posted  12/12/18
In the wake of anti-money laundering enforcement activity spurred by the Panama Papers, Constantine Cannon attorneys Eric Havian and Michael Ronickher published an article in Law360 on why we need an anti-money laundering whistleblower program. Havian and Ronickher argue for a new, DOJ-led whistleblower program to close the “large enforcement gap” left open by the existing IRS and SEC programs: “Domestic law enforcement agencies have great difficulty detecting and prosecuting...

November 30, 2018

As part of an ongoing investigation into price fixing in the international freight forwarding industry, Roberto Dip and Jason Handal, executives in a Louisiana-based freight forwarding company, pleaded guilty to charges arising from a conspiracy between competitors to fix prices for freight forwarding services.   Dip and Handal also agreed to cooperate with the ongoing investigation.  DOJ

Money Laundering Watch: Will More Chickens Come Home to Roost Following Deutsche Bank Raid?

Posted  11/30/18
The Panama Papers fallout continues with a massive early morning raid on Deutsche Bank headquarters in Frankfurt, Germany. Some 170 officers searched for evidence of the bank’s role in over $350m worth of suspected money-laundering through organizations in the British Virgin Islands. Deutsche Bank confirms the investigation is related to the Panama Papers: the April 2016 release of over 11 million files about 200,000+ offshore shell companies. The documents revealed...

November 28, 2018

Edwin Fujinaga, the former president and CEO of MRI International, Inc., which purported to be a medical collections and investment company, was convicted after a five-week trial for his role in a $1.5 billion ponzi scheme. Fujinaga solicited investments from over 10,000 Japanese residents, promising investors that their funds would be used to purchase medical debt. In fact, less than two percent of investor funds were used to purchase medical claims.  Fujinaga diverted the remainder for personal use and to pay off earlier investors.  In 2013, the Japanese government revoked MRI's license to market securities.  USAO NV

November 19, 2018

In a deferred prosecution agreement, Société Générale S.A. will pay penalties of $1.34 billion to federal and state prosecutors and regulators in relation to criminal charges that SG violated sanctions laws by processing billions of dollars in illegal transactions involving Cuban credit facilities through the U.S. financial system on behalf of entities subject to U.S. economic sanctions. According to a stipulated statement of facts, from approximately 2004 through 2010, SG operated 21 credit facilities that provided significant money flow to Cuban banks, entities controlled by Cuba, and Cuban and foreign corporations for business conducted in Cuba, primarily for the finance of oil transactions between a Dutch commodities trading firm and a Cuban corporation with a state monopoly on the production and refining of crude oil in Cuba.  The total penalties include: $717.2 million in civil forfeitures; $81.265 million to the Federal Reserve; $53.9 million to the Office of Foreign Assets Control; $325 million to the New York State Department of Financial Services; and, $162.8 million to the New York County District Attorney.  USAO SDNY

November 16, 2018

The CFTC and State of Utah have charged Rust Rare Coin, Inc. (RRC) and owner Gaylen Dean Rust for their roles in a precious metals Ponzi scheme. According to the DOJ press release, beginning in 2008 until only just recently, Rust fraudulently obtained over $170 million for RRC by lying to at least 200 investors in at least 17 states to get them to invest money in a silver pool. Investors were told the company's silver holdings amounted to between $77 to $80 million, and they stood to gain between 20-40% profit each year as a result of RRC’s buying and selling strategy. In reality, however, the defendants did not have nearly as much silver and were using investor contributions to pay other investors, as well as personal expenses. CFTC, UT AG

Record-Breaking Year for the SEC Whistleblower Program: What the SEC Annual Report Tells Whistleblowers

Posted  11/16/18
In its 2018 Annual Report to Congress, the SEC Office of the Whistleblower described a “record-breaking year,” with a substantial increase in the number of tips received and the largest whistleblower awards to date.  While these numbers illustrate the benefits of the SEC Whistleblower Program, the SEC rightly says that it is “most proud” of the benefits the Whistleblower Program offers to investors, with over $1.7 billion in monetary sanctions...

November 16, 2018

CarrierEQ Inc. (Airfox) and Paragon Coin Inc. have agreed to pay civil penalties of $250,000 each to resolve charges that they conducted initial coin offerings (ICOs) in 2017 without registering the ICOs pursuant to federal securities laws.  Airfox's offering had raised $15 million and Paragon had raised $12 million.  The companies also agreed to provide compensation to harmed investors and to register their tokens as securities.  SEC

November 8, 2018

For its continued failure to prevent fraudulent money transfers, MoneyGram International Inc. (MoneyGram) agreed to pay $125 million to settle allegations it violated a 2009 order with the FTC and a 2012 deferred prosecution agreement with the DOJ. Both the 2009 order and 2012 agreement had required the global money transfer business to implement certain fraud prevention measures. Instead, even though some of its locations had reached fraud rates of as high as 50%, MoneyGram allegedly failed to take action, including failing to suspend or terminate locations or employees with high fraud rates, and failing to block individuals that it should have known were committing fraud. The new settlement expands the 2009 order and 2012 agreement to apply worldwide and requires additional fraud prevention measures. DOJ; FTC; USAO MDPA
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