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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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COVID Frauds of the Week: Fraud on the PPP

Posted  06/26/20
hundared dollar bill zoomed in to president's face
This week’s COVID-19 frauds centered on (temporarily) successful attempts to receive Paycheck Protection Program (PPP) funds for nonexistent companies and fabricated or inflated employee headcounts. First up is the owner of a wedding planning company that sought personal enrichment via more than $3 million in forgivable PPP loans for his 120 nonexistent employees. Fahad Shah, 44, of Murphy, Texas, was arrested...

COVID Frauds of the Week: Consumer and Investor Fraud

Posted  06/18/20
tiles spelling out lockdown
Scammers continue to prey on the vulnerable during the COVID-19 crisis, and thankfully, they continue to get busted for it.  This week, the enforcement highlights centered on consumer and investor fraud, although there are surely numerous other kinds of fraud that have not yet been stopped. The Federal Trade Commission this week announced that it had taken legal action to try to shut down a remarkably (and...

DOJ Charges Healthcare CEO with Criminal Securities and Healthcare Fraud

Posted  06/12/20
Hands in handcuffs behind back of white man in business suit
In 2008, Rahm Emanuel, then-President Obama’s chief of staff, famously said, “You never want a serious crisis to go to waste.  I mean, it’s an opportunity to do things that you think you could not do before.”  However poorly phrased, generations of political and business leaders have understood the kernel of truth in his admonition. So have scammers and rip-off artists. We have been following the...

June 5, 2020

The world’s former largest private manufacturer of dermatology products, along with its former chairman and CEO, have been ordered to pay $37 million to defrauded shareholders, many of whom were company employees.  According to the SEC, Stiefel Laboratories and Charles Stiefel bought back stock at severely undervalued prices and failed to disclose information during the buyback that would have alerted shareholders to the stock’s true value.  At the time, the company was quietly negotiating the sale of the company to GlaxoSmithKline PLC, which ultimately led to a share price of more than four times what defendants paid to shareholders.  SEC

June 4, 2020

Investment advisory firm Navallier & Associates, and its founder and Chief Investment Officer, Louis Navallier, has been ordered to pay $30 million to the SEC for allegedly defrauding prospective clients and retained clients in connection with the firm’s Vireo AlphaSector investment strategies.  The firm was allegedly aware of false and misleading statements regarding the stategies’ performance in marketing materials sent to clients, but failed to inform clients and in fact continued to sell the strategies.  SEC

May 19, 2020

The country’s largest subprime auto financing company, Santander Consumer USA Inc, has agreed to pay over $550 million to resolve allegations of violating consumer protection laws by knowingly placing consumers in auto loans that the company expected would default at a rate of over 70%.  Under the settlement, affected consumers in 34 states who defaulted on loans between 2010 and 2019 will receive restitution.  Additionally, Santander has agreed to various relief efforts, including transferring titles and waiving balances for consumers who defaulted on loans and had not had their cars repossessed yet, waiving balances or debt still owed even on cars already repossessed, and helping to repair consumer credit scores.  CA AG; NY AG; VA AG

COVID Frauds of the Week: Unproven Tests, Nonexistent Equipment, Price Gouging, and $10 Million in SBA Loans

Posted  05/15/20
sample test tubes scattered around
Fraudsters continue to attempt to capitalize on anxiety and uncertainty during the pandemic by marketing unproven products and services for the prevention, treatment, or cure of COVID-19. This week, we highlight the massive FTC efforts to identify and shut down illegal activities via Warning Letters (around 100 issued to date); two new SEC actions; as well other government actions to quash sales of unproven or...

US to Recover More Than $49 Million in Assets Related to the 1MBD Embezzlement and Money Laundering Scandal

Posted  05/8/20
money in a laundry machine
The DOJ entered into a $49 million settlement this week in one of the civil forfeiture cases related to the 1Malaysia Development Berhad fund scandal.  The 1MDB fund was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment, and its funds were intended to be used for improving the well-being of the Malaysian people. According to...

May 6, 2020

The United States has obtained a settlement of $49 million in the 1Malaysia Development Berhad (1MDB) scandal, in which high-level officials of 1MDB and their associates allegedly robbed the people of Malaysia by misappropriating over $4.5 billion in public funds, which they laundered through financial institutions based in the United States and other countries and squandered on expensive properties and possessions.  With the conclusion of the case against Emirati businessman Khadem al-Buraisi, the United States has recovered over $1.1 billion in assets arising from the 1MDB scandal, representing the largest civil forfeiture by the DOJ and the largest recovery to date under the agency’s Kleptocracy Asset Recovery Initiative.  DOJ; USAO CDCA

Keeping Our Eyes Open for COVID-19 Fraud

Posted  05/1/20
coronavirus-map
The COVID-19 pandemic is shaping the way we live around the world and dominating headlines.  Inevitably, it will be a major focus for government enforcement agencies.  The whistleblower team at Constantine Cannon is closely tracking reports of fraud in the Coronavirus response. This week, we launched a new webpage as a hub for COVID-19 fraud news.  We encourage you to visit this page, which will be updated...
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