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Misrepresentations

This archive displays posts tagged as relevant to fraudulent misrepresentations in financial transactions and financial markets. You may also be interested in the following pages:

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November 14, 2019

Veritaseum, Inc. and Veritaseum, LLC, together with their owner Reginald Middleton, agreed to pay $9.5 million to resolve claims of fraudulent conduct in their VERI Initial Coin Offering. Defendants were alleged to have misrepresented the potential profitability and viability of Veritaseum's purported operations, the use of funds raised in the VERI ICO, and the amount of funds raised in the VERI ICO.  Middleton was further alleged to have engaged in conduct to manipulate the price of VERI.  Defendants will disgorge $7.9 million in gains, plus interest, and Middleton will pay a $1 million civil penalty.  SEC

November 5, 2019

AT&T has agreed to pay $60 million to settle FTC charges of misleading customers.  From 2011 until 2014, AT&T advertised and sold “unlimited” data plans to millions of smartphone customers, but despite promises of unlimited data, it allegedly “throttled,” or reduced the data speeds, for customers on these plans after as little as 2 GBs of use.  At least 3.5 million customers were affected, all of whom will receive a credit or check for the refund amount owed as part of the settlement.  FTC

October 29, 2019

The co-defendant of a man recently sentenced for orchestrating the largest Ponzi scheme ever charged in Maryland has been sentenced to 14 years in prison and ordered to pay at least $189 million in restitution.  To facilitate the scheme to sell fake consumer debt portfolios, Jay Ledford create fake sales agreements, tax returns, and other documents to co-defendant Kevin Merrill, knowing they would be used to defraud investors.  When the two were arrested in 2018 with fellow co-conspirator Cameron Jezierski, the five-year scheme had already raked in over $396 million, with only 14% actually used to purchase consumer debt portfolios.  USAO MD

October 23, 2019

Gary Frank was sentenced to 17.5 years in prison following a guilty plea on charges related to his fraudulent business scheme.  Frank claimed to run a multi-million dollar company, Legal Coverage, Ltd., through which employers could offer legal services as part of their employee benefits package.  Based on these misrepresentations -- in fact, the company had very little revenue -- Frank obtained over $30 million in loans from financial institutions, which he used to fund his own extravagant lifestyle.  Frank was also ordered to pay restitution of $33.7 million.  USAO EDPA

October 21, 2019

Devumi, LLC and owner German Calas, Jr., have agreed to a $2.5 million judgment to settle the FTC’s first ever charges against the sale of fake indicators of social media influence, such as followers, subscribers, views, and likes.  The defendants allegedly enabled customers to deceive potential clients about their social media clout by filling tens of thousands of orders for fake LinkedIn followers, Twitter followers, YouTube subscribers, and YouTube views.  Due to the defendants’ inability to pay, upon payment of $250,000, the remaining monetary judgment will be suspended.  FTC

October 16, 2019

The FTC has settled with the marketers and sellers of two aloe vera-based supplements and imposed an $18.7 million judgment against them.  Defendants NatureCity, LLC and Carl and Beth Pradelli had been charged with making unsubstantiated claims to consumers about their products, TrueAloe and AloeCran, including that the products could improve cholesterol and triglyceride levels, reduce chronic pain, and treat various diseases.  FTC

October 10, 2019

A Maryland-based man has been sentenced to 22 years in prison for his role in a $396 million Ponzi scheme, the largest ever charged in Maryland.  Unbeknownst to hundreds of victim investors, the consumer debt portfolios they invested in through Kevin Merrill and co-conspirators Jay Ledford and Cameron Jezierski were fake, with Merrill, Ledford, and Jezierski going to great lengths to keep up the illusion.  The trio created imposter companies and bank accounts, fake documents, and invited would-be investors to tours of their Texas “office.”  By the time they were arrested in 2018, the scheme had raked in over $396 million, with another $260 million pending.  As part of his sentence, Merrill has also been ordered to pay restitution of at least $189 millionUSAO MD; SEC

October 10, 2019

A billboard licensing company that manages licenses in New York, Texas, Minnesota, and Missouri has agreed to pay $2.85 million to resolve fraud allegations.  In 2009 and 2011, All Vision LLC entered into contracts with USPS to manage licenses and collect payments on land that USPS leases out to billboard companies.  As part of the contract, All Vision had agreed to forward lease payments, less fees, to USPS in a timely manner, but allegedly withheld at least $8 million in payments while misrepresenting the actual amounts collected.  All Vision has since repaid over $5.2 million; the $2.85 million settlement will resolve all remaining claims.  USAO CO

September 30, 2019

Longfin Corporation has been ordered to pay $6.8 million in a default judgment entered in a federal court case alleging that Longfin filed fraudulent papers to qualify for a public offering under Regulation A+, misrepresenting the business as being based in the U.S.  In addition, Longfin reported fictitious revenue from sham commodities transactions and unlawfully distributed Longfin shares, including in unregistered transactions and to insiders and affiliates.  SEC

September 27, 2019

Pharmaceutical manufacturer Mylan N.V. has agreed to pay $30 million to resolve SEC charges that the company failed to disclose or adequately accrue for possible losses arising from a DOJ investigation into Mylan's classification, pricing, and rebate practices regarding its EpiPen product.  In 2017, Mylan agreed to pay $465 million to resolve that DOJ investigation.  SEC
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