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Wednesday February 25, 2009
2 New Arrests in New York Securities Fraud Case
Investors who managed millions for universities, charities arrested in NY fraud case
- Tom Hays, Associated Press Writer
NEW YORK (AP) — The owners of an investment firm that managed hundreds of millions of dollars for universities and charities were arrested Wednesday by the FBI in the latest white-collar scandal to rock Wall Street.
Paul Greenwood, also a horse breeder and elected official in suburban New York, and Stephen Walsh were awaiting an appearance in federal court in Manhattan to face securities and wire fraud charges alleging they raided funds of $1.3 billion to buy horses and cover other personal expenses. The names of their attorneys were not immediately available.
Court papers identified Greenwood and Walsh as the owners of Greenwich, Conn.-based WG Trading Company LP and of Westridge Capital Management Inc., based in Santa Barbara, Calif. Their operation also had offices in Manhattan and Jersey City, N.J.
The firms’ clients included “charitable and university foundations, retirement and pension plans and other institutions,” a criminal complaint said.
The complaint alleges that since the summer of 2007, the illegal wire transfers were made to bank accounts held by Greenwood and Walsh’s wife.
It also cites an interview with an unidentified WG Trading employee who described being instructed to transfer funds to personal bank accounts.
The employee claimed the money was used for “the purchase of expensive collectible items by Greenwood, the purchase of horses by Greenwood, transfer of cash to Walsh’s then-wife and … the purchase of an apartment for Walsh’s ex-wife pursuant to a divorce settlement.”
The arrests add to a growing list of white-collar defendants facing charges in U.S. District Court in Manhattan, topped by the case of Bernard Madoff, who has pleaded not guilty to masterminding a $50 billion Ponzi scheme.
Other cases include that of Florida hedge fund Arthur Nadel, accused of bilking investors of up to $350 million, and Mark Dreier, a prominent lawyer charged with stealing $400 million in a hedge fund scam. They also have pleaded not guilty.
The criminal investigation of Greenwood and Walsh sprang from an audit launched earlier this month by the National Futures Association, a Chicago-based regulatory agency for the U.S. futures industry.
The group suspended the pair after they refused to answer questions about a dubious series of loans between their various entities that involved more $500 million in transfers, NFA spokesman Larry Dyekman said Tuesday.
“They wouldn’t cooperate at all so we had to take action,” Dyekman said.
Last week, University of Pittsburgh and Carnegie Mellon University sued Westridge, Greenwood and Walsh, seeking the immediate return of more than $114 million they invested.
Greenwood was elected last year as a supervisor in North Salem, N.Y., where press accounts say he raises horses on a 300-acre farm. He once owned Old Salem Farm, a 54-acre riding school and horse farm bought from Paul Newman and Joanne Woodward.
The FBI made two more arrests Wednesday in separate investigations of securities fraud.
James Nicholson, president and general partner of Westgate Capital, a New York City investment fund, and a trader, Mark Bloom, were awaiting appearances in federal court.
Source AP, and Yahoo Finance
http://finance.yahoo.com/news/2-arrests-in-NY-securities-apf-14467319.html
May 2, 2009
$6. Dollars vs. $50 Billion this should outrage every citizen
The Los Angeles Times posted this article about people having to sell their gold teeth for $6, which is an absolutely horrible status of the economy. Read the article
Fortune Magazine published this article called"Sending Wall Street to Jail": Madoff for $50 billions. The money is going somewhere, the Government was aware of it for the last 30 years but officials did nothing. And now people have to sell their teeths! Citizens should be outraged. |
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$6 vs. $50 billions |
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How could the Los Angeles Times, such prestigious news paper, publish that horrific picture, giving ideas to maybe hundreds of thousands of people to sell their teeth for $6 dollars. What is next for our great State of California? I could never have imagined I would see such a picture or article in my lifetime. Read More |
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The Associated Press contributed to this report. Obama cracks down on overseas tax loopholes President’s two-part plan calls for hundreds of new federal tax agents Obama unveils tax plan May 4: President Obama says his new tax plan will generate more than $200 billion in revenue over 10 years and will close loopholes that some Americans have used to exploit the system.
MSNBC WASHINGTON – President Barack Obama announced changes to U.S. tax policy Monday that are certain to be unpopular with corporations with international divisions and individuals who use tax havens. Obama’s two-part plan, which he unveiled at the White House with Treasury Secretary Timothy Geithner, also calls for 800 new federal tax agents to enforce the system. The president’s proposal would eliminate some tax deductions for companies that earn profits in countries with low tax rates, as well as consider U.S. citizens who use tax havens in the Bahamas or Cayman Islands guilty of violating U.S. tax laws.
If Obama wins congressional approval for the changes — and he faces a challenge on Capitol Hill — it could deliver $210 billion in tax revenue over the next decade. Officials described the administration’s plan ahead of the announcement on the condition of anonymity so they wouldn’t upstage the president’s remarks. However, they acknowledged the political challenges facing the plan. The administration won’t seek a complete repeal of overseas tax benefits and, although the rule changes are narrower than some anticipated, business leaders still oppose them as a tax hike. Obama aides countered that the plan is a step toward a massive overhaul of international financial regulations the president has promised. In exchange, Obama said he was willing to make permanent a research tax credit that was to expire at the end of the year and is popular with businesses. Officials estimate that making the tax credits permanent would cost taxpayers $74.5 billion over the next decade.
But administration aides said 75 percent of those tax credits paid workers’ wages; given the struggling economy, aides were reluctant to do anything that could add more Americans to the unemployment rolls. It was small comfort. Companies who shelter profits in international accounts stand to lose billions if Obama’s plan becomes law. Under the existing regulation, those companies pay taxes only if they bring the profits back to the U.S. If they keep the profits offshore, they can defer paying taxes indefinitely — and many do. Obama’s plan wouldn’t go into effect until 2011; Obama has said he does not want to tinker with tax revenues until his $787 billion stimulus plan has run its course. The proposals, however, were far from complete, and aides said this was just one piece of the administration’s plan for sweeping overhaul. First up: Companies won’t be able to write-off domestic expenses for generating profits abroad. For instance, administrative tasks performed in New York for a London office would not be tax deductible in the United States. Administration officials depicted the move as a way to close unfair tax loopholes that encouraged companies to send jobs overseas.
They argued that if it costs the same amount to do business in, say, Ireland as in Iowa, why not do it entirely in Des Moines? Officials said Obama would characterize the move as a way to keep jobs in the United States and fight a system that is rigged against U.S. companies who keep their entire business operation domestic. Obama also planned to ask Congress to crack down on tax havens and implement a major shift in the way courts view guilt. Under Obama’s proposal, Americans would have to prove they were not breaking U.S. tax laws by sending money to banks that don’t cooperate with tax officials. It essentially would reverse the long-held assumption of innocence in U.S. courts. If financial institutions cooperate with Washington and disclose details when asked, Americans could invest anywhere they like. Obama officials also said they would close a Clinton-era provision that would cost $87 billion over the next decade by letting U.S. companies “check the box” and treat international subsidiaries as mere branch offices. Officials said it was meant as a paperwork shortcut that is now a widely used and perfectly legal way to avoid paying billions in taxes on international operations.
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May 1, 2009
The Recalls Broken Promise…
I recommend everyone reads this book…. then vote for me ..Let’s give back the power to the people of California.
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Lawyers to turn informers
Credit Management, Dec 2003
Lawyers and accountants have an obligation, under the Proceeds of Crime Act, which came into force this year, to report any ’suspicious transactions’. The intention is to tackle money laundering, but the most senior family judge, Dame Elizabeth Butler-Sloss, has ruled that lawyers must report even the smallest tax evasion.
We know the effectiveness of a poacher turned gamekeeper, but what of the dilemma of a lawyer who must, by law, turn informer?
Until now, client privilege has meant that what a client told his solicitor, or what the solicitor found out about him, was confidential. Now, suspicious transactions must be reported. One solicitor has pointed out that if a solicitor knows, or suspects, that a client is paying cash to a builder to avoid VAT, it must be reported. If a client offers to pay a solicitor in cash, “and let’s forget the VAT”, not only must the solicitor decline – as any reputable solicitor would – but the solicitor must report the client.
Couples who are divorcing face the prospect that if their solicitors have even the slightest suspicion of tax evasion, there is a duty to report it. Failure to do so could lead to a prosecution against the solicitors, with a maximum penalty of 14 years imprisonment.
So, in the interests of preventing money laundering and fraud, solicitors have to rat on their clients. They must report the matter to the National Criminal Intelligence Service, and they must advise the client that they are doing so. Suppose that the investigation proves that the client was totally honest? Has the client any rights against the solicitor who caused his conduct to be investigated – and, no doubt, for the associated ’stress’ of any investigation?
There could be some interesting cases to come.
Copyright Institute of Credit Management Ltd. Dec 2003
Provided by ProQuest Information and Learning Company. All rights Reserved
http://findarticles.com/p/articles/mi_qa5308/is_200312/ai_n21339813?tag=content;col1
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May 18, 2009
President Obama’s Plan Identity Theft: New Account Fraud
New Account Fraud: Thieves use personal information, such as Social Security numbers, birth dates, and home addresses, to open new accounts in the victim’s name, make charges indiscriminately, and then dissappear. While this type of identity theft is less likely to occur, it imposes much greater costs and hardships on victims.
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May 27, 2009
'FRAUD RING' IN CHECK
By MURRAY WEISS
The Manhattan District Attorney's Office is expected to announce today the indictments of 18 people -- including four alleged ringleaders -- although as many as 40 suspects have already been arrested.
They include numerous bank employees, law-enforcement sources said yesterday.
It is one of the largest frauds of its kind, in terms of scope, that the DA's office has ever handled, the sources said.
The NYPD's Special Fraud Squad became aware of the scheme in May 2008 when the department's Property Clerk's Office found several checks on its account that couldn't be account for.
After months of forensic accounting, it was determined that the ring had written hundreds of bogus checks for millions of dollars drawn on accounts of about 20 large companies and city agencies, the sources said.
Bank tellers would provide the scammers with legitimate canceled checks, which they would use to make forgeries, according to the sources.
The ringleaders would then hire hundreds of people to go into branches with forged checks for several thousand dollars and deposit them into new accounts.
They would immediately withdraw as much of the newly deposited money as the bank would allow -- and give it to the ringleaders.
Investigators believe that as many as 20 tellers were involved.
The major targets were branches of JPMorganChase, although some branches of Washington Mutual -- which Chase recently acquired -- were also hit.
The master forger was identified as James Malloy, 25, of The Bronx, who has already pleaded guilty to a similar scam in federal court, but who allegedly continued running the bank scheme while he awaited sentencing.
"He was waiting to go in and running amok," a source said.
He was arrested in February and authorities believe he may have stolen as much as $2 million.
In the criminal complaint against him, he was charged with counterfeiting 81 checks for $99,000 from the Center for Employment Opportunities, a job-placement firm.
He also allegedly stole $79,000 using 66 checks from SCAN New York, a children's advocacy group, and $20,000 using city Housing Authority checks.
When he was arrested, cops found in his apartment 200 counterfeit corporate and personal checks, stolen bank-customer profiles, forged debit cards and magnetic paper for making checks, police said.
Investigators think the men used most of the proceeds to finance a high-flying lifestyle of club-going, Cristal champagne and expensive meals.
murray.weiss@nypost.com
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MAFIA BANK SCAM BUST
By KAJA WHITEHOUSE, Post Wire Services
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It could have been a face-off between a mob boss and Bank of America honcho Ken Lewis.
It could have happened had Italian police not thwarted a $2.2 billion scam orchestrated by the Sicilian Mafia to be carried out on already burdened financial firms, like BofA, international banking giant HSBC and now-defunct brokerage Lehman Brothers.
Cops busted as many as 20 people across the globe, including in the Italian provinces of Sicily, Puglia and Tuscany, as well as Spain, Venezuela and Brazil.
Among those arrested during yesterday's international bust was Leonardo Badalamenti, son of famous Cosa Nostra boss Gaetano Badalamenti, who died in federal prison in 2004 while serving time for importing heroin to the US through pizzeria storefronts.
The junior Badalamenti, who hasn't lived in Italy in at least 30 years, was nabbed in Venezuela.
He fled Sicily in the 1980s after his family was defeated during the so-called Mafia wars, Italian publications report.
According to investigators, after persuading corrupt Venezuelan officials to issue the mobsters fake government bonds, Badalamenti and his crew planned to use the rogue securities to obtain credit lines totaling as much as $2.2 billion from BofA, Lehman, HSBC and other reputable financial firms.
Back in 2003 and 2004, the Mafia tried to use the bonds to obtain $500 million credit lines from various banks. At the time, UK authorities thwarted the scam before the banks were duped.
The gang planned to invest the money in a construction business that would fund high-end residences in Tuscany, Puglia and other Italian hot spots.
During the raid, police also seized goods worth nearly $7 million, including several buildings and a Tuscan farmhouse.
The senior Badalamenti, known commonly as Don Tano Badalamenti, was the mob boss of his hometown of Cinisi, Sicily, and head of the Sicilian Mafia Commission.
He was sentenced to 45 years in 1987 as a leader of the so-called Pizza Connection, a $1.65 billion drug-trafficking ring that used pizzeria storefronts to distribute heroin.
kaja.whitehouse@nypost.com |
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May. 21, 2009
President Obama: To start independent investigations of Financial Crime… I hope Judge Elizabeth White is taking notice…Justice should be equal and without bias
Obama Signs Financial Bill, Creating Investigative Panel
By Kate Phillips
President Obama on Wednesday signed legislation aimed at curbing financial fraud in the mortgage and other industries, including a provision that created an independent panel to investigate the root causes of the nation’s economic downturn.
Congressional lawmakers from House Speaker Nancy Pelosi to prominent Democratic senators, with significant Republican support, had called for creation of a commission modeled after the Sept. 11 panel and a Depression-era set of financial hearings called the Pecora commission.
This one would have subpoena power; Democratic congressional leaders would choose six members and Republican leaders four commissioners, but its work would be independent of Congress.
But after signing the bill, the White House issued what is called a signing statement by Mr. Obama, which includes this advisory to agencies about the financial panel’s potential reach:
Section 5(d) of the Act requires every department, agency, bureau, board, commission, office, independent establishment, or instrumentality of the United States to furnish to the Financial Crisis Inquiry Commission, a legislative entity, any information related to any Commission inquiry. As my administration communicated to the Congress during the legislative process, the executive branch will construe this subsection of the bill not to abrogate any constitutional privilege.
In other words, the president is reserving the right to claim executive privilege if the commission seeks information or documents that the White House considers to be beyond the bounds of public information and/or privileged communications and negotiations within the executive branch.
The Obama administration hasn’t been shy in using signing statements for recent pieces of legislation like the omnibus public lands bill. In that case, however, the president directly challenged a portion of the law.
Signing statements have been used by other presidents, but the practice became highly controversial under former President George W. Bush, who advanced disputed theories of executive power through their issuance and challenged more provisions than his predecessors had.
As far as the financial commission’s mission, lawmakers have described their hopes for it to delve into nearly every facet of the economic recession. After the bill signing on Wednesday, Representative John Larson, the chairman of the Democratic caucus from Connecticut, issued this statement: “The American people are demanding answers about the collapse of our financial system. As we work to reform and rebuild the financial sector we also need to look back and learn from the mistakes of the past. In the past twenty years, our economy has suffered through the bursting of three major financial bubbles. We can’t afford to let that happen again.”
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May. 21, 2009
California Residents are voting against raising taxes… Proposition 1A is voted down
Voters of California are letting Government know we have had enough of Government spending.
It is time for all of California to say “Enough is Enough” Join our campaign to bring the power back to the people.
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