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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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WATCH THIS SPACE: DOJ and DOE Call Out Lockheed Martin for Self-Dealing at Hanford Plutonium Site

Posted  02/15/19
By Jessica T. Moore
The nation’s largest toxic cleanup site has suffered another setback, this time not in the cleanup itself but in alleged self-dealing, corruption, kickbacks, and lies, costing taxpayers over $60M, according to a complaint filed by DOJ against Mission Support Alliance, Lockheed Martin Services (and a subsidiary), and Jorge Francisco Armijo. The Hanford Nuclear Site in central Washington state made plutonium for...

Constantine Cannon Partner Mary Inman Comments on Importance of Anonymity for Whistleblowers to Government Accountability Project

Posted  02/15/19
London partner Mary Inman was recently quoted in DC-based Government Accountability Project (GAP)’s blog post about effective whistleblower protection in emerging international laws. Among other priorities, the long-standing Government Accountability Project brings attention to important whistleblower issues, corporate and financial accountability, and international whistleblower rights – issues that are...

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

January 31, 2019

A North Carolina jury found Robert Leslie Stencil and Michael Allen Duke guilty of money laundering and mail and wire fraud for their roles in a five-year multi-million dollar high-yield investment fraud. According to the prosecution, Stencil, Duke and their co-conspirators sold millions of dollars of worthless stock in a sham company named Niyato Industries Inc. (Niyato). Stencil, Duke and their co-conspirators sold approximately $2.8 million in stock to around 140 victims, many of whom were elderly. DOJ

January 31, 2019

The CFTC suspended Chicago trader Kevin Crepeau and ordered him to pay a $120,000 for engaging in spoofing in the Chicago Mercantile Exchange (CME) soybeans futures market. According to the CFTC, Crepeau placed orders to buy or sell futures contracts on soybeans, soybean meal, and soybean oil with the intent to cancel to induce other market participants to fill his other orders on the opposite side of the market.  Then, he cancelled the fake orders after his genuine orders had been filled. CFTC

January 28, 2019

Jiongsheng (“Jim”) Zhao, of Sydney, Australia, a commodities trader at an Australian proprietary trading firm (Trading Firm A), pleaded guilty to spoofing in connection with his fraudulent and deceptive trading activity in the E-mini S&P 500 futures contracts market on the Chicago Mercantile Exchange (CME). Zhao admitted that from approximately July 2012 through March 2016, he placed thousands of orders for E-mini S&P 500 futures contracts on the CME that he intended to cancel before execution to artificially move the price of E-mini S&P 500 futures contracts in a direction that was favorable to Zhao to the detriment of other market participants. Trading Firm A kept a percentage of Zhao’s trading profits, ranging at various times from 20 percent to 50 percent. DOJ

Top Ten State Fraud Recoveries of 2018

Posted  01/25/19
While 2018 saw many important federal settlements and whistleblower awards across a wide range of industries, state governments were equally busy rooting out fraud. In fact, in the last few years, recognizing the ever-growing need to hold businesses accountable for defrauding taxpayers, several states have passed their own false claims statutes modeled after the federal false claims act. These laws operate in a...

Top Ten Federal Financial Fraud Recoveries of 2018

Posted  01/25/19
While 2018 has been a banner year for FCPA, Tax, and SEC & CFTC recoveries, in the bottomless pit of financial frauds that hurt taxpayers, the government, consumers, investors, and the American economy, 2018 brought us additional stunning recoveries for violations related to residential-mortgage backed securities, international economic sanctions, consumer protection, anti-money-laundering, EB-5 investment fraud, and...

Top Ten SEC and CFTC Recoveries of 2018

Posted  01/18/19
The SEC and CFTC were busy in 2018. In addition to its robust FCPA enforcement, the SEC recovered hundreds of millions of dollars from companies accused of defrauding investors, breaching fiduciary duties, and violating SEC rules. The SEC also awarded its largest-ever whistleblower awards in 2018. Likewise, the CFTC spent the last year cracking down on market manipulators, rooting out commodities fraud, and halting...
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