| From: StockDung | 5/26/2013 8:50:14 AM | | | | | | Kiwi and conman in takeover mystery
\\ MATT NIPPERT
Last updated 05:00 26/05/2013
Ponzi operator: Marc Duchesne claimed to be Margaret Thatcher’s nephew.
A New Zealander with multiple fraud convictions and an international conman wanted by United States authorities are attempting to take over a listed energy company.
Takeover documents filed on May 10 state New Zealander Shaun Morgan was the proposed chief executive officer of a proposed merger between Corporate Partners and the Insight Management Corporation, a penny dreadful listed on the United States' OTC exchange.
Last week Sunday Star-Times revealed Morgan, who has served prison time for fraud in both the United States and Switzerland, was released from prison in January and was refashioning himself as a fraud-buster in the United Kingdom.
Another proposed director, Marc Duchesne, was sentenced in 2009 to four-and-a-half years in prison in the United Kingdom for running a £12 million (NZ$22m) Ponzi scheme but escaped from jail in 2010 while awaiting extradition to the United States to face other fraud charges.
A biography of the pair provided in the takeover documents fails to note Morgan's two prison sentences - in Switzerland and Utah - for bank fraud, or Duchesne's permanent Securities and Exchange Commission ban on any involvement with penny dreadfuls after a previous pump-and-dump scam.
Morgan confirmed to the Sunday Star-Times he had worked on the Insight deal, but said the takeover documents - including his biography - were prepared without his involvement. He said his signature on them was forged.
A claim in the takeover documents that he had a Masters degree from the London School of Economics was false, he said.
Morgan lists his job title on LinkedIn as "CEO of Corporate Partners", but said: "It was never my company, I was contracted as a consultant."
Morgan said he had met Duchesne once, in Switzerland in 2007, where the Englishman claimed to be a nephew of Margaret Thatcher.
Morgan said he was unaware of Duchesne's criminal background or involvement in Corporate Partners until earlier this month when, he said, the takeover deal collapsed.
Morgan said he withdrew from the deal after he became concerned at a lack of progress.
"There was a lot of work done, and emails and contracts exchanged - and nothing really came out of it. It got down a path of repetitive behaviour. While I'm happy to be receiving payment for doing work, I don't want to be sitting in a jail cell again."
Duchesne made headlines in the United Kingdom in 2009 after his Benchmark Asset Management was revealed to be a £12m Ponzi scheme where the proceeds were spent on Ferraris, chartering private jets and cosmetic surgery.
Court hearings in the United Kingdom revealed Duchesne had fraud convictions in Switzerland and his claims Thatcher was his aunt were false.
Across the Atlantic, two separate investigations have fingered Duchesne - who also called himself Marc Spinks, Carl Von Wasserman and Otto Von Rittner - in a pump-and-dump scam and the flogging of worthless insurance contracts.
A spokesman for London's Metropolitan Police said Duchesne had been recaptured after his 2010 escape, and hearings to consider dual extradition requests - from Texas and Washington - started last week.
Given Duchesne was in prison at the time the Insight takeover was proposed, and Morgan's claims that his signature was forged, exactly who stands behind Corporate Partners is a matter of some mystery.
The Insight takeover documents state Corporate Partners, a "specialist investment management consulting group", is based in the United Kingdom, but the sole director of that country's Corporate Partners - a lawyer - said his company had no connection to Morgan or the Insight deal.
A Corporate Partners internet domain registered by Morgan - using his Gold Coast-based mother's name - redirected to a Corporate Partners website that said the company's headquarters was in Cyprus.
Morgan said he believed Corporate Partners was a Turkish firm.
Emails sent to Corporate Partners and Insight Management about the proposed merger went unanswered.
- © Fairfax NZ News |
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| To: StockDung who wrote (116431) | 5/26/2013 12:35:34 PM | | From: scion | | | | Another proposed director, Marc Duchesne, was sentenced in 2009 to four-and-a-half years in prison in the United Kingdom for running a £12 million (NZ$22m) Ponzi scheme but escaped from jail in 2010 while awaiting extradition to the United States to face other fraud charges.
Duchesne fraud (UK) Marc Duchesne (born, Mark Spinks) (1962-), described as a "Walter Mitty character," conned experienced investors into believing their money was safe, promising monthly returns of up to 11%. He posed as the manager of a fraudulent hedge fund company where £15 million was deposited in pounds and Euros. Sentenced to four and a half years in prison, 6 March 2009. Three other men pleaded guilty to their involvement in introducing investors to the scam and received prison sentences.
Benchmark Asset Managers Bogus hedge fund company that Duchesne claimed was based in the City and regulated by the Financial Services Authority.
Duchesne spending sprees
In a year of frenzied spending sprees, Duchesne frittered away investors' money on a Rolls Royce Phantom and chauffeur, a Bentley Arnage, several motorbikes and a speedboat for a friend. He also squandered it on chartered jets £60,000 ($90,000) on cosmetic dentistry and £22,000 ($33,000) on cigars as he created an 'aura of financial invincibility', Southwark Crown Court heard that he would spend thousands of pounds at Harrods department store every month. At the of his arrest in June 2006, Duchesne was living in a £11,000-a-month penthouse apartment overlooking the Thames in Canary Wharf, with a Ferrari Enzo parked outside.
Duchesne flight
Duchesne was arrested and bailed, he then fled to Switzerland, where he had been previously convicted for a string of frauds and falsifying documents.
eurekaencyclopedia.com
Six Charged in Insurance Scam Over Fatal Boat Sinking
By Laurel Brubaker Calkins - Feb 18, 2011 7:45 PM GMT-0500
bloomberg.com
“INSURERS” OF THE ETHAN ALLEN INDICTED IN ALLEGED INSURANCE FRAUD SCHEME
(HOUSTON) - Christopher Purser, 49, of Houston, and five other defendants have been charged with wire fraud, conspiracy to commit wire fraud and conspiracy to launder money in a superseding indictment returned on Feb. 16, 2011, by a Houston grand jury, United States Attorney José Angel Moreno and Internal Revenue Service Criminal Investigations (IRS-CI) Special Agent in Charge Rodney E. Clarke announced today.
Purser and his co-defendants are alleged to have conspired to sell fake and fraudulent liability insurance policies to nursing homes, assisted living facilities, apartment complexes, condominium associations, bars, restaurants and, eventually, to a company called Shoreline Cruises Inc., which operated a tour boat called the Ethan Allen on Lake George, New York. The Ethan Allen sank on Oct. 2, 2005, in a tragic accident that claimed the lives of 20 elderly tourists. At the time, reports circulated in the press that the vessel's insurance policy may have been bogus.
Charged along with Purser are: Malchus Irvin Boncamper, 56, of Basseterre, Federation of St. Kitts and Nevis, West Indies; Marc-Thibaud Duchesne, 49, a British citizen formerly residing in Houston; William Ballachey, 64, of Brossard, Canada; Edmund Hugh Benton, 52, of Scottsdale, Ariz.; and Robert Steve Mills, 55, formerly a resident of Dallas, Texas, and Ft. Myers, Fla. Mills was also charged with obstruction of justice for attempting to influence a person to testify falsely before a federal grand jury in Houston in 2009.
According to allegations contained in the superseding indictment, Purser controlled an insurance brokerage firm in Houston called Monarch Insurance Services, which sold fake liability insurance policies during 2000-2001 to nursing homes and assisted living facilities around Texas and the United States. Purchasers allegedly paid millions of dollars for the insurance only to discover that it was fake when insurance companies denied liability and began filing lawsuits against Purser and Monarch. Thereafter, operating through Abenefit associations@ called International Property Owners Association and Global Property Owners Association, Purser allegedly sold fake and fraudulent liability insurance policies to apartment complexes, condominium associations, bars, restaurants and the operator of the Ethan Allen.
The indictment alleges Purser backdated documents after the Ethan Allen accident to make it appear that Shoreline Cruises had not purchased coverage while the vessel was operating on Lake George when, in fact, Shoreline had purchased exactly that type insurance policy. The indictment also alleges that none of the insurance companies involved in Ethan Allen's insurance policy had the financial ability to pay the claims.
The indictment also alleges Purser and the other defendants conspired to launder proceeds of the fraud through bank accounts in The Bahamas, Canada, Hong Kong, Liechtenstein, Nevis, Nicaragua and St. Kitts.
Purser was arrested by IRS-CI agents on Feb. 17, 2011, in Houston and is scheduled to make an initial appearance this afternoon or Tuesday before a U.S. Magistrate Judge.
According to the indictment, Boncamper, a Chartered Certified Accountant, operated an accounting and corporate services business on the island of St. Kitts that owned and formed Ashell@ insurance companies in the Caribbean, including the companies that purportedly insured the Ethan Allen. Boncamper also allegedly prepared fraudulent financial statements and audit reports for those companies. Boncamper's fraudulent documents, according to the indictment, were transmitted to Shoreline Cruises Inc. in New York to create the false appearance that its insurers had financial strength.
Boncamper was arrested on Jan. 14, 2011, at Miami International Airport after arriving on a flight from St. Kitts. Following a Jan. 21, 2011, hearing in federal court Miami, Fla., U.S. Magistrate Judge Patrick White ordered Boncamper to remain in custody without bond pending his trial. Judge White found that no conditions of release could reasonably assure Boncamper=s presence at trial because of Boncamper=s strong family and financial ties outside of the United States.
Duchesne, who allegedly sometimes used the name Dr. Carl Von Wasserman, is accused of having arranged for Boncamper=s shell companies to acquire fraudulent Eurobonds guaranteed by a non-existent Swiss financial institution. Duchesne is also charged with having produced fake financial statements and an audit report by fictitious Aindependent accountants@ which was then sent to Shoreline Cruises in Lake George, N.Y. On Jan.16, 2010, while awaiting possible extradition to the United States to face charges pending in the District of Columbia, Duchesne escaped from a British prison and disappeared. At this time, Duchesne is a fugitive.
Ballachey, who ran several businesses near Montreal, Canada, claimed to have arranged for four different Indonesian insurance companies to reinsure policies purchased by nursing homes and other businesses in the United States, according to the indictment. Allegedly, all of the reinsurance that Ballachey procured was completely fake. Ballachey was subsequently indicted in New York for wire fraud and conspiracy. Ballachey has not been apprehended and remains a fugitive.
According to the Houston indictment, Benton was a close business associate of Matthew Schacter, a fugitive in Barbados who lived under various false names and controlled dozens of fake Caribbean insurance companies. Benton and Schacter allegedly arranged for one of those companies, Heritage Mutual Surety Limited, of Nevis, to provide insurance to apartments and condominiums in Texas during 2003 and helped to launder insurance premiums through bank accounts in Nicaragua, St. Kitts and The Bahamas.
Schacter - Benton=s alleged business partner - engaged in various transactions during the late 1990s and early 2000s that led insurance regulators from 10 U.S. states and Canadian provinces to file cease and desist orders. In 2004, Schacter was charged in a federal criminal complaint in Sacramento, Calif., with insurance fraud. He was arrested during a trip to Canada, extradited to the United States and died in custody on Oct. 2, 2005, the very same day that the Ethan Allen sank on Lake George, N.Y. Benton’s current whereabouts are unknown.
Mills is charged with having controlled the Ashell@ insurance companies formed by Boncamper in St. Kitts and Nevis and allegedly worked closely with Purser to sell fake and fraudulent insurance policies. Mills collected premiums from the sale of those policies in bank accounts in Managua, Nicaragua, according to the indictment.
On Jan. 10, 2011, Mills was arrested by IRS-CI agents in Bonita Springs, Fla., as a result of a warrant that issued following the filing of a criminal complaint which charged him with having attempted to influence his daughter to lie to a federal grand jury in Houston investigating the insurance fraud scheme. Mills was ordered temporarily detained and transported to Houston where a federal magistrate judge will schedule a hearing to determine whether he should be released on bond or detained pending his trial.
Anyone with information about the whereabouts of Duchesne, Ballachey or Benton is asked to call (281) 721-7766.
The conspiracy, wire fraud and obstruction of justice charges each carry a maximum statutory penalty of 20 years imprisonment and a fine of not more than $250,000.
The charges are the result of an intensive investigation conducted by the IRS-CI with assistance from Immigration and Customs Enforcement - Homeland Security Investigations, the Texas Dept. of Insurance, the New York State Dept. of Insurance and the California Dept. of Insurance. During this four-year investigation, the U.S. government also received extensive and valuable assistance from the governments of St. Kitts and Nevis and also St. Vincent and the Grenadines. Investigators also received valuable assistance from the governments of The Bahamas, Nicaragua, The Philippines and Australia.
Assistant U.S. Attorneys John R. Lewis and Belinda Beek will be prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless and until convicted through due process of law.
# # #
justice.gov |
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| To: StockDung who wrote (116376) | 5/27/2013 10:12:01 AM | | From: StockDung | | | | Zicam still promoting "Pre-Cold" nonsense even after zicam.com NAD recommends Matrixx discontinue preventive claims for Zicam cold remedies
Zicam scam continues to bilk public wit fraudulent claims.
=====================================================================
NAD recommends Matrixx discontinue preventive claims for Zicam cold remedies
April 5, 2013 | By Michael Johnsen
NEW YORK — The National Advertising Division on Friday recommended that Matrixx Initiatives discontinue advertising claims that suggest its homeopathic Zicam Cold Remedy products prevent users from catching a cold.
Claims at issue were featured in an advertising campaign that depicted a “Cold Monster” and encouraged treatment with Zicam products at the “pre-cold” stage.
Claims included “The Pre-Cold Medicine"; “Take Zicam Now And Go From Pre-Cold To No Cold, Faster"; and “clinically proven [to reduce the duration of a cold].”
Given the context in which they appeared, NAD found that the claims “Pre-Cold Medicine” and “Go from Pre-Cold to No Cold Faster” were unlikely to convey to consumers the message Zicam Cold Remedy products provide a prophylactic benefit. NAD also recommended that all iterations of the advertiser’s “clinically proven [to reduce the duration of a cold]” claims — in TV, print, Internet and other advertising media — clearly and conspicuously disclose that the claim applies solely to its Zicam Rapid Melts, Chewables and Oral mist products.
Matrixx, in its advertiser’s statement, said the company acknowledges NAD’s concerns and has taken steps to addresses NAD’s recommendations.
NAD is an investigative unit of the advertising industry system of self-regulation and is administered by the Council of Better Business Bureaus. ProPhase Labs had initiated the marketing challenge.
NAD is an investigative unit of the advertising industry system of self-regulation and is administered by the Council of Better Business Bureaus. ProPhase Labs had initiated the marketing challenge. |
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| From: StockDung | 5/28/2013 3:09:17 PM | | | | | | Liberty Reserve Accused of Biggest Money-Laundering Plot
By Patricia Hurtado & Linda Sandler - May 28, 2013 2:11 PM ET
The operators of Liberty Reserve SA were indicted for a conspiracy that masked more than $6 billion of criminal proceeds in what Manhattan’s top federal prosecutor said is probably the largest U.S. money-laundering case.
Liberty Reserve, incorporated in Costa Rica in 2006, “facilitated global criminal conduct” and was created and structured “as a criminal business venture, one designed to help criminals conduct illegal transactions and launder the proceeds of their crimes,” Manhattan U.S. Attorney Preet Bharara said in an indictment unsealed today.
U.S. Attorney Preet Bharara
Peter Foley/Bloomberg
U.S. Attorney Preet Bharara said he will hold a news conference later today to describe the charges against Liberty Reserve SA and the seven individuals that were indicted.
U.S. Attorney Preet Bharara said he will hold a news conference later today to describe the charges against Liberty Reserve SA and the seven individuals that were indicted. Photographer: Peter Foley/Bloomberg
“Its existence was based on a criminal business model,” Bharara said at a press conference.
The company helped at least 1 million users, many of them criminals, process an estimated 55 million financial transactions during the past seven years, according to Bharara’s office. The company operated one of the world’s most widely used digital currencies, allowing users to send and receive “instant, real-time currency,” according to the indictment in federal court in Manhattan.
Digital currency, also called Bitcoin, was developed as a way to make payments over the Internet without paying fees to a bank. The U.S. Justice Department warned as early as 2008 that criminals would increasingly rely on the digital currency industry to launder and move funds because it facilitates financial transactions outside the rules of the traditional banking system.
Cyber-Crime Hub “Liberty Reserve has become a financial hub of the cyber-crime world, facilitating a broad range of online criminal activity, including credit card fraud, identity theft, investment fraud, computer hacking, child pornography and narcotics trafficking,” prosecutors said in the indictment.
The U.S. charged seven people, including operators and owners of Liberty Reserve and alleged that two defendants, Arthur Budovsky and Vladimir Kats, previously ran a company called Golden Age Inc. that functioned as an exchange for “E-Gold.” The two men were convicted in New York state court for operating an unlicensed money-transmitting business in December 2006, Bharara’s office said.
Budovsky then moved to Costa Rica where he and Ahmed Yassine Abdelghani incorporated Liberty Reserve, the U.S. alleged.
‘Grew Exponentially’ Liberty Reserve “grew exponentially,” prosecutors in Bharara’s office said, and eventually the company became “the predominant digital form or money laundering used by cyber criminals worldwide.”
Five people tied to the case were arrested on May 24, including Budovsky, who was arrested in Spain and is the principal founder of Liberty Reserve, the U.S. said. Kats, the co-founder of Liberty Reserve, was arrested in Brooklyn, New York, prosecutors said.
Azzeddine El Amine, a principal deputy to Budovsky, was arrested in Spain, the U.S. said. Mark Marmilev and Maxim Chukharev, who helped designed and maintained the operation’s technological infrastructure, were arrested in Brooklyn and Costa Rica respectively, Bharara’s office said.
Two others, Abdelghani and Allan Esteban Hidalgo Jimenez, are at large in Costa Rica, Bharara’s office said.
The indictment includes a count of conspiracy to commit money laundering, conspiracy to operate an unlicensed money transmitting business and operation of an unlicensed money transmitting business. The U.S. also seized five domain names tied to Liberty Reserve and the domain names of four exchanger websites that were controlled by the defendants.
Accounts Seized The U.S. has also filed civil actions and seized accounts tied to the defendants. At least 45 bank accounts have been restrained or seized, the U.S. said. A related civil action was filed by the U.S. against 35 exchanger websites seeking the forfeiture of the exchanger’s domain names over claims they were used to facilitate the money laundering conspiracy.
The U.S. Treasury Department today said in a statement that Liberty Reserve is primarily a money-laundering concern in what the department called the first use of certain authorities in the U.S. Patriot Act against a virtual currency provider.
“Liberty Reserve’s virtual currency has become a preferred method of payment on websites dedicated to the promotion and facilitation of illicit web-based activity, including identity fraud, credit-card theft, online scams and dissemination of computer malware,” Treasury said in the statement.
Patriot Act The Treasury’s Financial Crimes Enforcement Network has proposed rules that would bar U.S. financial institutions from dealing with foreign banks that handled transactions for Liberty Reserve, it said in today’s statement. The Patriot Act gives Treasury a range of such options to protect the U.S. financial system from money laundering and terrorist financing risks, it said.
Bitcoin Inc., which developed a digital currency in 2009, describes on its website the new form of money as using cryptography “to control its creation and transactions, rather than relying on central authorities.”
This month, The U.S. Department of Homeland Security seized a financial account with online payment processor Dwolla, registered in the name of a subsidiary of Mt. Gox, the world’s largest exchange of cyber currency, according to a warrant signed by a federal judge in Baltimore on May 14. Requesting the warrant, a special agent of the department said he had cause to believe the account was part of an unlicensed money transfer business.
Law enforcement officials alleged that the company was engaged in a money-service business without first registering with the Financial Crimes Enforcement Network. While the virtual currency does log each transaction centrally, no national government regulates it.
The case is U.S. v. Liberty Reserve, 13-cr-368, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporters on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net; Linda Sandler in New York at lsandler@bloomberg.net
To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; John Pickering at jpickering@bloomberg.net |
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| To: scion who wrote (116339) | 5/29/2013 8:52:38 AM | | From: scion | | | | U.S. accuses currency exchange of laundering $6 billion
11:30am BST
By Emily Flitter
uk.reuters.com
NEW YORK (Reuters) - U.S. prosecutors have filed an indictment against the operators of digital currency exchange Liberty Reserve, accusing the Costa Rica-based company of helping criminals around the world launder more than $6 billion in illicit funds linked to everything from child pornography to software for hacking into banks.
The indictment unsealed on Tuesday said Liberty Reserve had more than a million users worldwide, including at least 200,000 in the United States, and virtually all of its business was related to suspected criminal activity.
U.S. Attorney Preet Bharara called the case perhaps "the largest international money laundering case ever brought by the United States".
"Liberty Reserve has emerged as one of the principal means by which cyber-criminals around the world distribute, store and launder the proceeds of their illegal activity," according to the indictment filed in U.S. District Court for the Southern District of New York.
Officials said authorities in Spain, Costa Rica and New York arrested five people on Friday, including the company's founder, Arthur Budovsky, and seized bank accounts and Internet domains associated with Liberty Reserve.
Switzerland's Federal Office of Justice said the United States had requested legal assistance on May 16. The Swiss said they complied with the request in full by May 21, seizing a computer server used by Liberty Reserve.
The indictment detailed a system of payments that allowed users to open accounts under false names with blatant monikers like "Russia Hackers" and "Hacker Account".
The use of digital currency has expanded over the past decade, attracting users ranging from video gamers looking for ways to buy and sell virtual goods to those who lack faith in the traditional banking system.
Touted by some investors as the future of money, these virtual currencies have gained the attention of U.S. regulators looking to bring them under anti-money-laundering rules.
The U.S. Treasury said on Tuesday it named Liberty Reserve under the USA Patriot Act as "specifically designed and frequently used to facilitate money laundering in cyber space".
That designation, a first against a virtual currency exchange, prohibits banks or other payment processors from doing business with Liberty Reserve, even under a new name.
The Treasury also said Liberty Reserve's virtual currency was used to anonymously buy and sell software designed to steal personal information and attack financial institutions.
CRACKDOWN ON VIRTUAL MONEY?
Liberty Reserve, with around 12 million transactions per year, laundered over $6 billion in criminal proceeds since it began operating in 2006, the indictment said.
A ring of hackers who recently stole $45 million from two Middle Eastern banks by hacking prepaid debit cards used Liberty Reserve to distribute their take, according to court papers.
Tech blogger Brian Krebs, a former Washington Post reporter who now runs the blog Krebs On Security, wrote on Tuesday "the action against Liberty Reserve is part of a larger effort by the U.S. government to put pressure on virtual currencies".
Treasury Undersecretary for Terrorism and Financial Intelligence David S. Cohen told a press conference it was a response to a specific abuse of the financial system. "I want to make clear that today's action does not mean that we are trying to eliminate virtual currencies and their providers," he said.
On Tuesday, the company's website, www.libertyreserve.com, displayed the message: "This domain name has been seized by the United States Global Illicit Financial Team."
In addition to Budovsky, who was arrested in Spain along with his deputy, Azzedine El Amine, co-founder Vladimir Kats was arrested in Brooklyn, New York. Two technology designers, Maxim Chukarev and Mark Marmilev, were also arrested, Chukarev in Costa Rica and Marmilev in New York.
Two more company employees were still at large in Costa Rica, according to officials: Ahmed Yassine Abdelghani and Allan Esteban Hidalgo Jimenez. According to the indictment, almost all of the men used the alias Eric Paltz.
None of the men could be reached for comment.
Investigative police in Costa Rica said that along with computers and files, six cars were seized from Budovsky's house in the wealthy suburb of Escazu: three Rolls Royce, two Jaguars and one Mercedes Benz.
THIRD PARTY GATEWAYS
Liberty Reserve's currency unit was called the "LR". Users opened accounts at Liberty Reserve giving only a name, address and date of birth that the company made no attempt to verify, according to the indictment.
Once a user had a Liberty Reserve account, he or she could use cash to purchase LRs from third-party exchange merchants, separate companies trading LRs with each other in bulk and charging fees to make the conversions between LRs and hard cash.
Liberty Reserve users could transfer the digital currency units to each other, to be redeemed in different parts of the world for cash using the exchange merchants.
The third-party exchange companies provided the gateway to more conventional payment systems.
According to information from Liberty Reserve's archived web pages, the company had relationships at one time with at least 35 different exchange companies, some of which transferred cash back and forth to customers using PayPal, Western Union, MoneyGram, credit cards including Visa, Mastercard, American Express, and CitiBank Global Money Transfer.
PayPal said it has not allowed payments to be processed for Liberty Reserve for the last five years. Spokesmen for Western Union, MoneyGram, Visa, Mastercard and Citigroup did not respond to requests for comment. A spokeswoman for American Express said American Express sold Amex Bank to Standard Chartered in 2007.
The indictment said Liberty Reserve did not collect any banking or transaction information from the third-party exchange companies. It also let its users hide their Liberty Exchange account numbers when making transactions.
The U.S. is expected to seek extradition for the people arrested in Spain and Costa Rica. It was unclear when the two people arrested in Brooklyn, New York, would appear in court.
The Costa Rican prosecutor's office said Liberty Reserve had been operating illegally in Costa Rica since 2006. Budovsky, a Ukranian-born former American citizen, had already pleaded guilty to U.S. charges that he operated an illegal financial services firm out of New York. Officials said they suspected that Liberty Reserve relocated to Costa Rica from the United States after U.S. authorities began looking into its operations.
Costa Rica's investigative police said Budovsky operated five offices in the wealthy suburbs of Escazu and Santa Ana in the outskirts of the capital city. The companies identified by Costa Rican investigative police were called Silverhand Solutions & Technology, Worldwide E-Commerce Business, Grupo Lulu Limitada, Triton Group and Cyberfuel.com.
The U.S. Treasury Department's anti-money-laundering unit, the Financial Crimes Enforcement Network (FinCEN), issued guidance in March that labeled digital currency firms as money transmitters, thereby obliging them to put in place anti-money-laundering programs and register with FinCEN.
Tokyo-based Mt. Gox, a top exchange for Bitcoin, the best known virtual currency, failed to register with FinCEN earlier this month and had its U.S. dollar accounts seized by authorities.
Over the past week, a Bitcoin unit has traded at around $130, according to the website Bitcoincharts.com.
(Reporting by Emily Flitter in New York; Additional reporting by Nate Raymond, Joseph Ax, Peter Rudegeair and Matthew Goldstein in New York, Brett Wolf in St. Louis and Isabella Cota Schwarz in San Jose, Costa Rica, Martin de Sa'pinto in Zurich; Editing by Jeffrey Benkoe, Tim Dobbyn, Jan Paschal and Will Waterman)
uk.reuters.com |
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| From: StockDung | 5/29/2013 2:40:26 PM | | | | | | Green Tea company backed by ex-A.G. Mark Shurtleff is fined
Scandal » Video featuring ex-A.G. used in court; judge finds the firm in violation.
By Tom Harvey
| The Salt Lake Tribune
First Published May 28 2013 05:24 pm • Updated 3 hours ago
A Utah company has been fined $110,000 for illegally pitching business opportunities — in one instance apparently under the nose of the state’s top cop.
In fact, a video of then-Attorney General Mark Shurtleff’s 2009 appearance before a meeting of The Green Tea Co. was introduced as evidence in the case brought by state regulators.
The Swallow, Shurtleff allegations
Utah Attorney General John Swallow and his predecessor, Mark Shurtleff, have come under scrutiny on a number of fronts:
» Indicted businessman Jeremy Johnson has, at times, accused Swallow of helping to arrange to bribe Senate Majority Leader Harry Reid, D-Nev. Swallow says he only helped Johnson set up a lobbying deal.
» Three Utah businessmen have said Swallow, as a fundraiser for Shurtleff in 2009, suggested that a contribution to Shurtleff’s campaign would get them special consideration if there were complaints about their operations to the attorney general’s office.
» A complaint has been made to the Utah State Bar by the state’s former director of consumer protection, alleging Swallow violated attorney-client rules by discussing a consumer-protection case with a potential donor and suggesting the target meet with Shurtleff.
» The lieutenant governor’s office is in the process of hiring a special counsel to investigate a complaint that Swallow concealed business interests on his candidate financial disclosure forms, including a company central to the Johnson deal.
» Convicted businessman Marc Sessions Jenson said Swallow and Shurtleff took posh vacations to his Newport Beach, Calif., villa on Jenson’s dime while he was free on a plea deal with the attorney general’s office. During the trips, Jenson said they pressed him for fundraising help and other financial deals.
» Businessman Darl McBride provided a recording of a 2009 breakfast meeting in which Shurtleff offered him $2 million to take down a website criticizing Mark Robbins, Jenson’s former business partner. Shurtleff said he could get the money from Jenson because of his plea deal. Jenson said he refused.
The Utah Division of Consumer Protection fined and issued a cease-and-desist order against Green Tea after an administrative law judge determined the Lehi operation failed to comply with state law while selling mall-cart franchises to peddle its products.
Shurtleff was attorney general in 2009 when he appeared at a Green Tea meeting at Salt Lake City’s Alta Club — one of a string of such get-togethers ­— where the company was pitching attendees on opportunities to sell its green-tea-based nutritional and health products.
Judge Andrea Hendricks mentioned the meetings in her ruling that found Green Tea violated a state law requiring companies selling franchises or business opportunities to notify the state that they are complying with federal regulations.
Shurtleff did not respond Monday to messages seeking comment for this story.
The case is one of several that have come to light recently in which Shurtleff appeared before or accepted campaign donations from companies that had regulatory issues or were in industries prone to consumer complaints in which his office potentially could have become involved.
In videos posted on YouTube in 2009, Shurtleff appears before a Green Tea meeting at the Alta Club to tout his new historical novel, Am I Not a Man? The Dred Scott Story. He also takes the opportunity to endorse the company’s products and to laud multilevel marketing, a controversial business model involving independent distributors who earn commissions by recruiting others.
"You have to have a really good product, that’s key to me in law enforcement, and you do, you’ve proven that," Shurtleff says in the video. An investigator used the video as evidence to show the company was promoting business opportunities without complying with state law.
Investigator Elizabeth Blaylock said at a March hearing that the Shurtleff video — and another of company officials at similar meeting with prospective clients — made the point that "selling Green Tea is simple, easy, low cost, low risk.
An attorney for the company did not return an email and a voice message seeking comment on the ruling.
Although the company’s contracts stated it was not selling franchises, the judge determined that its rules and the ways it controlled those who bought the mall carts showed it was offering franchises under federal rules.
Utah law says such companies must register with the state by declaring they are heeding those federal rules.
The ruling tells of several people who bought mall carts only to find they came nowhere close to the earnings potential the company had promoted, including figures given out at Alta Club meetings.
The $110,000 fine stemmed from an assessment set in state law of $2,500 for each of 44 violations, according to Jennifer Bolton, spokeswoman for the Utah Department of Commerce.
"This amount is large," she said Monday. "It is unusual for a franchise to engage in multiple franchise or business-opportunity sales without the appropriate registration."
The company can appeal the ruling.
tharvey@sltrib.com
Twitter: @TomHarveySltrib |
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| From: StockDung | 5/29/2013 5:17:39 PM | | | | | | Secret recording: Mark Shurtleff offers $2 million to silence critic
Scandal » Utah businessman says 2009 meeting with ex-A.G. was “like an episode in ‘Bizarro World.’ ”
By Robert Gehrke
| The Salt Lake Tribune
First Published May 23 2013 05:43 pm • Last Updated May 24 2013 09:51 am
On the breakfast table at Mimi’s Cafe, Darl McBride had eggs and potatoes served in a fried tortilla and an offer of $2 million from Utah’s then-attorney general, Mark Shurtleff, if he would just shut his mouth.
McBride says he had invested $286,000 with a prominent businessman, Mark Robbins, who had allegedly promised him a $5 million return that McBride hoped would sustain a grueling legal battle over intellectual-property rights between his company, The SCO Group, and IBM.
Published May 28, 2013
At a glance
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Excerpts from recording of Shurtleff-McBride meeting
Mark Shurtleff: “Do you know this Marc Jenson?
Darl McBride: “I’ve heard the name.”
Shurtleff: “He left here [inaudible] supposedly sold his home, he had to do a bunch of stuff to pay his debts.”
McBride: [Inaudible].
Shurtleff: “I do think he is [good for it]. … I don’t believe Robbins has the money, but I believe Jenson does. … I’ve kind of got a weird relationship [with Jenson] because he is still under a plea-in-abeyance program. We put him on a three-year plea-in-abeyance. He’s got to pay the money back. If he does that, the charges will be dropped. [Inaudible] He’s got every motivation in the world.
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Shurtleff: [Once] you’ve got your money, you’ve got to promise us there can’t be anything else from you. It’s just straight up. … I can try [asking Jenson]. I’m going to shut down my team on him. … I’ve never in my 25 years of prosecuting ever prosecuted anybody who had more friends come to his rescue than this guy [Jenson] has. They’re coming in from all walks of life. Mission presidents in Korea saying basically he’s a good guy, it wasn’t his deal. You’re prosecuting the wrong guy. I hope if I ever get charges, I have that [kind of friends].”
But, facing a bench warrant in a separate civil case, Robbins had vanished. McBride took his pursuit of Robbins to the Internet, setting up a website called Skyline Cowboy, a sort of virtual bounty-hunting operation aimed at flushing out Robbins.
So it was that McBride found himself sitting across from Shurtleff in May 2009, listening to the state’s chief law-enforcement officer trying to persuade him to ditch the website and offering to get McBride $2 million if he backed off Robbins.
McBride recorded the conversation and has turned over a copy to federal agents, part of a wide-ranging investigation into alleged misconduct in the attorney general’s office under Shurtleff and his successor, John Swallow.
"He [Robbins] is very concerned, because he can’t get any deals done because people go out and see that [website]," Shurtleff says on the recording, before launching into the pitch: "What can I do?"
McBride says he needs $2 million. Shurtleff replies that he doesn’t think Robbins has that kind of money, but he believes he can get it from one of Robbins’ associates — Marc Sessions Jenson. A year earlier, Shurtleff’s office had charged Jenson with six securities-related felonies, but the businessman was free at the time as a result of a plea deal struck with the attorney general’s office.
"I think he’d do it," Shurtleff says. "I’ve kind of got a weird relationship [with Jenson] because he is still under a plea-in-abeyance program. We put him on a three-year plea-in-abeyance. He’s got to pay the money back. If he does that, the charges will be dropped. … He’s got every motivation in the world."
Shurtleff then tells McBride that he soon will be flying to Southern California to see Jenson and will try to get the money.
McBride never heard back.
story continues below
story continues below
"It was like an episode in Bizarro World," McBride told The Salt Lake Tribune. "The top cop is out protecting the bad guy, and he’s saying we’ll get the other guy who could be going to prison to come up with the money. It’s like an unsolvable Rubik’s Cube."
Shurtleff declined to comment on the meeting and the events surrounding it.
Jenson, too, has told investigators of Shurtleff’s pitch, which he said in an interview at the Utah State Prison left him flabbergasted and feeling trapped.
"These aren’t play numbers. These aren’t make-believe. He asked me to pay $2 million for no reason," Jenson said. "I was shocked by it."
At the time, Jenson was supposed to be scraping together $4.1 million in restitution as part of his plea deal and protested that he didn’t have $2 million to spare. At the same time, he was under Shurtleff’s thumb.
For his part, Robbins insists he never owed McBride money — although court records show McBride won a $109,000 default judgment against Robbins’ wife in 2009.
Robbins also maintains he never asked Shurtleff to meet with McBride and only found out about the get-together long after it took place.
"If the meeting was on my behalf, it was without my knowledge," Robbins said. "I have never asked Mark Shurtleff, [or] John Swallow … to do anything for me nor have I ever donated to them, contributed anything to them, paid them or done any favors for them — not directly and not indirectly through anyone else."
McBride says he’d previously gone to Shurtleff to complain that Robbins — whom McBride met when he coached Robbins’ son in football — had taken his money, but never got a response. McBride went to the FBI, as well, but the agency said it was overwhelmed with white-collar investigations.
So McBride launched the Skyline Cowboy website.
Shortly after a news story ran about Robbins’ disappearance and his partnership with Terry Diehl in a development near a Utah Transit Authority FrontRunner stop, McBride says he started getting threatening calls from Tim Lawson, who told him he was phoning on Shurtleff’s behalf. |
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| To: StockDung who wrote (116434) | 5/30/2013 8:43:42 AM | | From: scion | | | | Anonymous Payment Schemes Thriving on Web
By NICOLE PERLROTH
Published: May 29, 2013
nytimes.com
SAN FRANCISCO — Eight years ago, Ernie Allen, the head of the International Center for Missing and Exploited Children, called the heads of major banks and credit card companies. Why, he wanted to know, were they letting child pornographers move illicit profits through their systems?
And so began a collaboration between his organization, major banks, credit card companies, Internet service providers, payment processors, and Internet companies like Google and Microsoft. They had hoped to follow the money and quash child pornography for good.
But at some point the money trail went cold. For the last year, Mr. Allen has been working with global law enforcement and financial leaders to find out why.
He may be getting closer to an answer. Today, cybersecurity experts say billions of dollars made from child pornography and illicit sales of things like national secrets and drugs are being moved through anonymous Internet payment systems like Liberty Reserve, the currency exchange whose operators were indicted Tuesday for laundering $6 billion. Preet Bharara, the United States attorney in Manhattan, described it as the largest online money-laundering case in history.
“What we have concluded is that illegal enterprises — commercial child pornography, human trafficking, drug trafficking, weapons trafficking and organized crime — has largely moved to an unregulated system that is not connected to any central bank or national authority,” Mr. Allen said. “The key to all of this has been anonymity.”
Liberty Reserve was shut down last weekend, but cybersecurity experts said it was just one among hundreds of anonymous Internet payment systems. They said online systems like the Moscow-based WebMoney, Perfect Money, based in Panama, and CashU, which serves the Middle East and North Africa, require little more than a valid e-mail address to initiate an account. The names and locations of the actual users are unknown and can be easily fabricated. And they worry that the no-questions-asked verification system has created a safe harbor for illicit activity.
“There are a multitude of anonymous payment systems out there, similar to Liberty Reserve, of which there are over one hundred,” said Tom Kellermann, a vice president at the security company Trend Micro. “Many pretend to ‘know your customer’ but do not actually do due diligence.”
Representatives for WebMoney, Perfect Money and CashU did not return e-mailed requests for comment.
Currency exchanges like Liberty Reserve do not take or make payments of actual cash directly. Instead, they work with third parties that take payments and, in turn, credit the Liberty Reserve account.
After the authorities went after Liberty Reserve, underground forums buzzed with comments from people mourning the potential loss of frozen funds and others offering alternatives, including Bitcoin, the peer-to-peer payment network started in 2009 to offer a decentralized way to create and transfer electronic cash around the world.
In closed underground Russian-language forums, one person wrote, “I had almost 6k there. Where to now?” Another suggested, “Maybe another alternative is Perfect Money? I wonder if Bitcoin exchange rate will go up or not.”
Indeed, the value of the Bitcoin virtual currency spiked temporarily on news of the Liberty Reserve shutdown. But law enforcement officials say Liberty Reserve operated with more anonymity than Bitcoin. Unlike Liberty Reserve and other anonymous payment systems, Bitcoin transactions are stored in a public ledger, called a block chain, that make it possible to trace Bitcoin transactions even years after the fact.
“You can track specific Bitcoin movements just as you would the serial number on a U.S. dollar,” said Jeff Garzik, a Bitcoin developer. The real concern, security experts say, are private payment services that claim to do due diligence, but do not do even the most basic verification.
Typically, money transfers are subject to strict regulation, which include maintaining customer identification records, filing suspicious activity reports, mandatory reporting on large currency transfers, and “know-your-customer requirements.” But security experts say there are a multitude of anonymous payment systems that require no customer identification and have little capability to detect or report suspicious activities.
“You would think they would be regulated but there is no regulation,” Mr. Kellermann said.
Of online payment processors, PayPal is considered the gold standard. The company, now owned by eBay, has payment experts to ensure PayPal is compliant with “know-your-customer” regulations and with law enforcement agencies in each country in which it operates.
“It’s unfortunate that as many of these new services come on board, it’s the people looking to abuse them who are the first to use them,” said Anuj Nayar, a spokesman at PayPal. “There’s a lot more than just having the right technology in place to be an efficient global payment processor.”
In March, the Treasury Department’s Financial Crimes Enforcement Network, or FinCen, began applying anti-money laundering rules to virtual currencies, amid worries that new forms of cash purchased on the Web, like Bitcoin, were being used to finance illicit enterprises.
While Bitcoin is just a software system, there are multiple gateways and exchange points that allow Bitcoin owners to exchange their Bitcoins for cash. Federal authorities recently seized accounts associated with a United States intermediary of Mt. Gox, the world’s largest Bitcoin exchange, because it was not FinCen compliant. That, and other exchanges in the United States are now racing to be fully compliant with “know-your-customer laws” and anti-money laundering requirements.
Mr. Allen said he believed that was a good first step.
“With anonymous payment systems, tracking has become virtually impossible,” he said. “How do you prevent these kinds of problems when you are dealing with an unregulated currency, monitored by nobody? The answer, I think, is there has to be some kind of structure.”
This article has been revised to reflect the following correction:
Correction: May 30, 2013
Because of an editing error, an earlier version of this article referred incorrectly to Bitcoin, a peer-to-peer payment network started in 2009. It was meant to offer a decentralized way to create and transfer electronic cash, not a centralized way.
nytimes.com |
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| From: StockDung | 5/30/2013 9:03:31 AM | | | | | | Weekly note to Mark Harris: Still time to drop dime on Bryant Cragun money laundering. The DOJ may cop you a better deal if you out crooks you have delt with in the past. You ran Cragun's boiler Rooms and you have the goods regulators need. Just because Brent Baker did not care about Cragun's money laundering you can do something about it.
Face it Mark, you are facing 100 years in jail. Dime out everyone and be the first to squeel they may only give you 5 to 7 years.
While your at it brokeragte firms like World Trade Financial that where involved in you scheme need DOJ attention. You have the goods on them Mark. As you know FINRA stinks and as a matter of a fact just gave World Trade Financial a slap on the wrist for helping sell millions of shares of unregistered stock.
I can see your headlines now Mark: "Local idiot does good"
Good Luck to you CRIMM and becareful who you SLAPP!! |
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| From: scion | 5/30/2013 10:32:09 AM | | | | | | Sen. Warren Asks SEC for Any Research on Benefits of 'No Admission' Settlements
Bruce Carton
May 30 2013
complianceweek.com
In February 2013, Sen. Elizabeth Warren ushered in her first hearing as a senator by asking the nation's seven top financial regulators, "How tough you are? .... Tell me a little bit about the last few times you've taken the biggest financial institutions on Wall Street all the way to a trial? As discussed here, none of the regulators testifying at the hearing could provide any information on when their agency had actually taken a large financial institution to trial.
At the hearing, new SEC Chair Elisse Walter began to testify about how the SEC "look[s] at the distinction between what we could get if we go to trial, and what we could get if we don't," but she was shut down by Sen. Warren who apparently did not want to get sidetracked. In a letter [ warren.senate.gov ] (via World of Securities Regulation) dated May 14, 2013, however, Sen. Warren asked White, as well as the heads of the Federal Reserve and the DOJ, to provide more information on this point. Reiterating her concern that a regulator that is unwilling to actually take large financial institutions to trial has far less leverage in settlement negotiations, Warren asked White, Ben Bernanke and Eric Holder to answer the following question:
“ Have you conducted any internal research or analysis on trade-offs to the public between settling an enforcement action without admission of guilt and going forward with litigation as necessary to obtain such admission and, if so, can you provide that analysis to my office?
Two weeks later, it does not appear that the SEC, Federal Reserve or DOJ have offered any public response to Sen. Warren, but I will keep an eye out for this.
complianceweek.com |
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