Articles Tagged with victims

AdobeStock_69736117-2-300x200According to a recent Financial Advisor article, a new scam has surfaced where scammers conducting fake online job interviews attempt to steal victims’ money. They may ask to provide personal or financial information, which, in that case, individuals are encouraged to terminate the call immediately. The scammers may also ask you to pay a fee. The scammers also have been requesting documents or files to be downloaded in order for them to capture keystrokes or mouse movements or even for them to take control of your webcam. Other signs may be if the scammer tells you the job is “guaranteed,” or “waiting for you,” and they may pressure you to commit to the job quickly and add poorly written text on the online video platform, or other communications. The scammers pretend to be involved with a range of legitimate organizations, including the Financial Industry Regulatory Authority (FINRA).

Two South Carolina men entered guilty pleas in connection to an investment fraud case, one of which was a Myrtle Beach lawyer.

HORRY COUNTY, SC (WMBF) — Two South Carolina men entered guilty pleas in connection to an investment fraud case, one of which was a Myrtle Beach lawyer.

According to the Federal Bureau of Investigations, “United States Attorney Bill Nettles stated today that Michael Mark McAdams, 43, of Myrtle Beach, and Robert Dane Freeman, 69, of Greenville have entered guilty pleas to conspiracy to commit wire fraud in violation of Title 18, United States Code, Section 1349. Facts during the plea hearing revealed that using a series of overseas banking transactions, McAdams and Freeman took millions of dollars from investors as a part of a fraud that claimed the victims’ money, and used the funds for personal expenses.

This week, the North American Securities Administrators Association released its enforcement statistics on state regulators. The state regulators last year brought more cases against registered financial advisers than against unregistered entities. From 2015, the report stated that 812 registered advisers were named as respondents in cases, while only 791 unregistered individuals and firms were named as respondents. The states ordered $538 million in restitution to investors and levied $230 million in penalties and fines. They made respondents pay $18 million in court costs and contribute $11 million to investor education initiatives. Enforcement actions resulted collectively in 1,200 years of incarceration, probation and deferred adjudication. 250 adviser licenses were revoked and 475 were denied, while 2,990 registrations were withdrawn.

At the center of most of these investigations were real estate products and oil and gas investment programs. Others included variable and fixed-indexed annuities, hedge funds, life settlements/viaticals and structured products. The most popular victims were the elderly, with one-third of state investigations involving that group. Vulnerable adults were disproportionately targeted by fraudsters.

Jerome Bonnett, formerly with Bonnett Wealth Management, and Securities America, committed suicide in May after Bonnett Wealth Management collapsed and he was charged with first-degree forgery and insurance fraud. On May 20, Bonnett Wealth Management had its assets frozen by the state of Nebraska. Bonnett was being investigated for mismanaging investor funds for personal use. The fraud he orchestrated was estimated at $1.35 million. Many of his victims were his close friends and family members. Eight of his investors were named as beneficiaries of a $3.2 million life insurance policy he took out more than two years before his suicide. According to his online Financial Industry Regulatory Authority (FINRA) BrokerCheck report, Bonnett was registered with Fortis Investors in Oakdale, Minnesota from May 1991 until November 1994, Walnut Street Securities in El Segundo, California from October 1994 until January 1995 and Securities America in Omaha, Nebraska from January 1995 until October 2015. He has one customer dispute against him and was not licensed within the industry before his death.

The Olympics provide for more scam artists to operate and steal money. Many scam artists use the games to steal personal information such as credit card numbers, bank account numbers and other identifying data. Fake lottery scams are popping back up because of the Olympics. Typically “winners” are notified that they have been selected for a lottery prize, as well as a trip to Brazil to see the Olympics. The victims are then asked to provide the details of their bank accounts in order to facilitate the transfer of funds. If a customer did not enter a lottery, they cannot win.

Another common scam is the Coke scam, wherein victims will get an email claiming they have won a cash prize of $1 million from the Coca-Cola foundation in partnership with the Olympic committee. To claim the prize, the victim must fill out personal information such as whether they prefer a bank transfer or to pick up their check in person in Nigeria.

Many fraudsters also peddle fraudulent merchandise with the Olympics logo on it. Tips are to only make purchases on the Olympics website and to always use a credit card. Beware of any solicitations that are emailed and be vigilant.

The Securities and Exchange Commission (SEC) announced that it has barred Jeffrey E. Gallagher from the securities industry. Gallagher pleaded guilty to one count of wire fraud, three counts of engaging in monetary transactions in property derived from specified unlawful activity and two counts of tax evasion. Gallagher was sentenced to three years in prison, followed by three years of supervised release. He was ordered to pay $616,535 in restitution to his victims and $69,377 in restitution to the IRS. Gallagher had acted as an unregistered broker-dealer from 2008 until 2012 and was accused of running an investment scam during that time. A total of $617,475 of investor money was lost and he also used $249,703 of the 23 victim’s money for his own personal benefit. He did not report the money to the IRS. Gallagher pled guilty to one count of mail fraud and three counts of interstate transportation of stolen property based on his illegal and unauthorized options trading while employed as a stockbroker at PaineWebber Inc. He was sentenced to 15 months in prison. The SEC barred Gallagher from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent or nationally recognized statistical rating organization, and from participating in the offer or trading of any penny stocks.

Stoltmann Law Offices is still interested in speaking to those investors who may have invested money with Malcolm Segal, a former branch manager of Aegis Capital Corp in Langhorn, Pennsylvania. Last week, Segal was sentenced to ten and a half years in prison by the Securities and Exchange Commission (SEC) for fraudulently selling certificates of deposit. He pled guilty to wire fraud and mail fraud in February and was sentenced Thursday in U.S. District Court in Philadelphia and ordered to pay his victims $3 million in restitution. The SEC also had filed a civil complaint for fraud against him and barred him from the financial industry. His scheme ended in 2014. Segal falsely claimed that his certificates of deposit could provide higher interest rates on FDIC-insured CDs than otherwise available to the general public. In some instances, Segal purchased those CDs on behalf of investors, but took the money for himself. He then told the customers he had purchased the CDs for them and misappropriated their money. Eventually, Segal also stole directly from customer brokerage accounts in an effort to keep funding the ponzi payments and to keep his scheme from being detected.

The U.S. Securities and Exchange Commission (SEC) sued a United Kingdom man accused of hacking into the online brokerage accounts of U.S. investors. Idris Dayo Mustapha allegedly placed unauthorized stock trades and hacked into accounts to buy more than $5 million in stocks of little-known companies in April and May. He also sold his own personal stocks at the same time. This cost his nine victims $289,000, while he made at least $68,000. Mustapha was charged with securities fraud.

According to a Financial Industry Regulatory Authority (FINRA) complaint, Edward Beyn was accused of excessively trading and churning six customer accounts while he was registered as a representative with Craig Scott Capital (CSC). This is a tactic used by brokers to garner large commissions for themselves, even if it is not in the best interest of the client. Beyn allegedly used a short-term trading strategy in the customers’ accounts as a means to turn over the accounts quickly and generate outside commissions for himself. He relied heavily on buying and selling equities of companies releasing their earnings reports as a catalyst for excessively trading accounts. Each of these carried a markup. A broker must take into account a customer’s age, net worth, trading strategy and investment objectives when recommending and selling securities. If he does not, his firm can be held responsible for investment losses. This allegedly took place between March 2012 and August 2013. He executed 115 transactions in this time period, and generated approximately $188,704 in commissions and fees for himself. Many of his victims were over the age of 60.

Beyn was registered with Pointe Capital in Bethpage, New York from May 2008 until October 2008, Clark Dodge & Co. in Garden City, New York from October 2008 until March 2009, JHS Capital Advisors in Bethpage from May 2009 until may 2010, Brookstone Securities in Uniondale, New York from May 2010 until February 2012 and Craig Scott Capital in Uniondale, New York from February 2012 until September 2015. He is currently registered with Rothschild Lieberman in Syosset, New York and has been since September 2015. He has seven customer disputes against him, five of which are currently pending.

On Monday, the Idaho Department of Finance released its annual list of top investor threats. Among the things to look out for are unsolicited investments, especially those involving promissory notes, oil and gas deals and real estate investment opportunities, including real estate investment trusts (REITs). The top threats were determined by surveying members of the North American Securities Administrators Association. They include:

  1. Unregistered Products/Unlicensed Salesmen: The offer of securities by an individual without a valid securities license should be a red flag for investors, as should pitches of investments as “limited or no risk” and high returns.
  2. Promissory Notes: Most promissory notes available to retail investors must be registered as securities with the Securities and Exchange Commission (SEC) and the states in which they are sold. Average investors should be cautious about offers of promissory notes with a duration of nine months or less, which in some instances, do not require registration at the federal level. Short term notes that appear to be exempt from securities registration have been the source of most fraudulent activity involving promissory notes.
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