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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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August 25, 2020

American Honda Motor Co., and Honda of America Mfg., Inc. (Honda) has reached a settlement with the Attorney Generals of 48 states and agreed to pay $85.1 million to resolve allegations of failing to disclose certain airbag safety failures to regulators and ­­­customers of Honda and Acura vehicles sold in the United States.  According to the complaint, Honda engineers were aware that the propellant used in Takata-manufactured airbags—used in Honda and Acura vehicles since 2001—could burn aggressively, cause the inflator to burst, and ultimately harm drivers and passengers, yet continued to represent that its cars were safe even as it began recalling affected vehicles in 2008.  Although the company eventually recalled approximately 12.9 million vehicles, the recalls came too late and the failures resulted in at least 14 deaths and over 200 injuries nationwide.  AG CA; AG FL; AG NY; AG GA

August 20, 2020

TD Bank, N.A. has been ordered to pay an estimated $97 million in restitution to about 1.42 million customers, as well as a civil monetary penalty of $25 million, for engaging in deceptive practices that violated the Consumer Financial Protection Act of 2010 and the Fair Credit Reporting Act.  In connection with its optional Debit Card Advance (DCA) service, TD Bank allegedly interfered with its customers’ ability to understand terms and conditions by misrepresenting DCA as “free” or a “feature” of their new checking accounts, when in reality it could result in fees of $35 per overdraft transaction.  Furthermore, in connection with consumer account information, TD Bank allegedly failed to implement policies that would ensure the accuracy of that information before it was provided to consumer reporting agencies.  CFPB

August 19, 2020

The Bank of Nova Scotia (Scotiabank) has been ordered to pay $127.4 million to the CFTC and $60.4 million in criminal fines, forfeiture, and restitution to the DOJ for attempting to manipulate prices and spoofing in precious metals futures contracts, making false and misleading statements to investigators, and failing to comply with swap dealer conduct and supervision requirements.  The alleged misconduct occurred over the eight years ending in 2016 and involved four precious metals traders in New York, London, and Hong Kong.  From the penalty paid to the CFTC, a record-breaking $42 million will go toward resolving the price manipulation and spoofing allegations, and a record-breaking $17 million will go toward resolving the false and misleading statements allegations.  In addition to the fines, Scotiabank has entered into a deferred prosecution agreement and agreed to retain an independent monitor.  CFTC; DOJ; USAO NJ 

July 28, 2020

Savraj Gata-Aura, a British citizen, has been sentenced to four years in prison and ordered to forfeit nearly $3 million for his role in a massive Ponzi scheme involving coworking space Bar Works that defrauded over 800 investors of more than $40 million.  Together with fellow British citizen Renwick Haddow—who was widely reported to be disqualified from serving as the director of a U.K. company and was managing Bar Works under the alias “Jonathan Black”—Gata-Aura solicited investors by making material misrepresentations about Bar Works’ management and the company’s financial condition.  Haddow is due to be sentenced later this year.  USAO SDNY

July 27, 2020

The owner and operator of three California-based companies, Brandon Frere, has been sentenced to over three years in prison for using deceptive sales tactics to draw customers to his companies’ student loan repayment services programs.  Between 2014 and 2018, Frere allegedly instructed employees of American Financial Benefits Center (AFBC), the Financial Education Benefits Center (FEBC), and Ameritech Financial (Ameritech) to make false statements concerning the companies’ abilities, engage in improper enrollment practices that made customer payments look smaller, and hide monthly fees.  A hearing later this year will determine the amount of restitution that Frere will be required to pay.  USAO NDCA

COVID-19 Frauds of the Week: Fake Employees and Fake Treatments

Posted  07/17/20
handcuffs on a gavel with money scattered around
Taxpayers, rightfully upset about large companies such as Shake Shack and Ruth’s Chris Steakhouse claiming large sums of Paycheck Protection Program money from the Small Business Administration, should consider shifting some of their ire to applicants posing as the original intended recipients—small businesses—who are getting in on the grift. And for fraudsters who prefer to market unproven products rather than...

July 1, 2020

Leonard J. Cipolla of Richmond, Virginia, was sentenced to ten years in prison for bilking more than $7 million in investor funds from customers of his Tate Street Trading, Inc..  Cipolla falsely told the investors that he was a successful commodities trader and could guarantee them a fixed rate of return.  In fact, Cipolla diverted the investor funds that he did not lose through speculative trading, and provided his customers with false account statements.  USAO EDVA

July 1, 2020

Raeann Gibson of Palm City, Florida, was sentenced to ten years in prison based on her role in an investment fraud conspiracy.  Gibson served as the Chief Operating Officer of Dominion Investment Group, which defrauded elderly investors of over $25 million by diverting investment funds to the personal use of Gibson and co-defendant Daryl Bank.  Gibson created numerous shell companies, laundered investment funds through multiple accounts, and spoke with investors.  USAO EDVA

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...

April 20, 2020

A company that markets rent-to-own payment plans in retail stores nationwide has agreed to pay $175 million to settle FTC charges of intentionally misleading customers.  By hiding payment terms, Progressive Leasing allegedly led customers to believe the payment plans had no interest when in fact, the company did charge an interest rate that resulted in customers paying as much as double the true price of products.  The settlement proceeds will go toward refunds for affected customers, and under the terms of the proposed settlement, Progressive Leasing will be prohibited from engaging in similar conduct and required to disclose full payment costs to its customers.  FTC
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