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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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February 17, 2023

Two individuals who ran a Ponzi scheme involving cattle and marijuana have been sentenced to 6 years in prison and ordered to pay almost $16 million in restitution each.  Additionally, Reva Joyce Stachniw was ordered to forfeit $6 million, and Ron Throgmartin was ordered to forfeit $1 millionDOJ

February 16, 2023

Derivative clearing organization (DCO) The Options Clearing Corporation (“OCC”) has been ordered to pay $17 million to the SEC and $5 million to the CFTC for its failure to establish, implement, maintain, and enforce policies and procedures to manage operational risks related to its automated systems, in violation of numerous rules and regulations, including the Commodity Exchange Act and CFTC regulations called DCO Core Principles.  Due to those deficiencies, between 2019 and 2021, OCC’s Clearing Fund was underfunded by $200 million to nearly $600 million.  OCC previously settled other charges with the SEC for $15 million and the CFTC for $5 million.  SEC; CFTC

Top Ten Tax Enforcement Actions of 2022

Posted  02/8/23
us cash with "taxes" sign on top
Tax fraud can take many forms, but each form results in shortchanging government coffers.  More seriously, with our tax system depending heavily on taxpayers’ willingness to voluntarily file tax returns and pay taxes, tax fraud undermines confidence in the system.  Enforcement of tax laws builds confidence in the system, and deserves to be a law enforcement priority. The top tax recoveries in 2022 start with...

February 7, 2023

Saivian LLC and owner EJ Dalius have agreed to pay $24 million in disgorgement, prejudgment interest, and penalties for operating a multimillion-dollar Ponzi and pyramid scheme.  According to the SEC, Savian and Dalius promised investors 20% cash back on retail shopping purchases as long as they paid a $125 fee every 28 days and submitted receipts for their purchases.  Savian and Dalius claimed the cash back payments were funded by monetizing receipt data, when in fact, it was funded by payments from prior investors.  In addition to the Ponzi scheme, Savian and Dalius also ran a pyramid scheme wherein affiliates sold memberships to others down the line.  SEC

Top Ten Federal Financial and Healthcare Fraud Prison Sentences of 2022

Posted  02/2/23
Financial and healthcare fraud often can carry stiff monetary penalties for entities facing government enforcement, as shown on our other Top Ten Lists. Whistleblowers reporting wrongful conduct under one of the federal whistleblower reward laws sometimes find that criminal authorities are as interested in their allegations as civil enforcement agencies and authorities. Fraud can also result in criminal charges and...

Top Ten SEC and CFTC Recoveries of 2022

Posted  02/1/23
stock market numbers
In 2022, the SEC and CFTC redoubled their efforts to preserve market integrity and shut down financial frauds.  Both in size and composition, the agencies’ major recoveries look quite different from a year prior.  2021 was all about crypto, with four of the top ten recoveries relating to crypto offerings or exchanges.  With the recent collapse of the crypto market—exposing some of the biggest frauds since the...

Top Ten Federal Financial Fraud Recoveries of 2022

Posted  02/1/23
Federal enforcement of financial fraud takes many forms.  This year, thanks to positive developments in the world of money-laundering enforcement, we have expanded our Top Ten Lists related to federal financial fraud. In addition to documenting SEC and CFTC enforcement actions, FCPA enforcement, and money-laundering enforcement, the following list focuses on financial fraud in other realms. The Consumer Financial...

January 24, 2023

A former energy company executive accused of defrauding investors of more than $15 million and misappropriating investor funds has been sentenced to 5 years in prison after pleading guilty to wire fraud.  While serving as the executive chairman and managing partner of Citadel Energy, which supposedly helped oil and gas companies with fluid management, Joey Stanton Dodson made false and misleading representations and omissions to investors concerning the intended use of their funds and his own compensation.  After obtaining over $15.6 million from over 50 investors, Dodson misappropriated $1.3 million into his own accounts, and used some of it to repay investors of unrelated entities.  DOJ

January 23, 2023

Charlie Abujudeh of California has been ordered to pay over $5 million for his role in defrauding retail investors through a microcap fraud scheme.  Abujudeh and associates allegedly made misleading statements during high pressure sales calls and email promotions to urge investors to invest in Odyssey Group International, Inc., Scepter Holdings, Inc., and CannaPharmaRx, Inc., then gave hundreds of thousands of investor funds to a contact within Odyssey.  SEC
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