Tuesday, December 9, 2008

The Gathering Darkness: Freakish Fraud Events Cloud Year's End

Recent bizarreness in investment fraud seems to be a product of cosmic alignment in the weeks leading to Christmas. This year's manger features a con man with his hand out, lit by a helicopter search light. No angels in the budget this year.

High (or low) points so far:

Pay By Touch honcho John P. Rogers puts the touch on VC investors for $340 million

Attorney Marc Dreier hung out to dry for issuing $100 million in fake notes

Boots Del Biaggio nailed by Feds in $65 million scam

Add your own bailout insanity item here!

Tuesday, November 25, 2008

Utah-Based 4NExchange: Just Another Ponzi Scheme

In a state more knowned for Latter Day Saints and basements full of canned peaches, Forex futures "trading" company 4NExchange stuck out like the proverbial sore thumb.

Or at least it did to regulators, who arranged for proprietors Paul Grant and Ronald Bassett to pay $720,000 in civil fraud penalties. No word on the poor saps who poured untold amounts of money down the 4NExchange rathole. Some 220 customers lost about $18 million of the $30 million they invested.

Generally guys like this ignore warnings against similar practices in the future, but Grant and Bassett are in a place where fraud may be a little more difficult to commit: federal prison. Both are servering five year sentences for fraud, money laundering, and other do-re-mi related offenses.

They've also been ordered to repay the $18 million swindled out of investors. Note to investors: that's a when-monkeys-fly-out-of-my-ass scenario. The boys may not be in the Caymans, but you can damn straight bet that there money is.

Friday, October 31, 2008

SoCal Resident Fined $11 Million in Forex Ponzi

There's nothing like money, especially when it comes from suckers. Southern California fraudster Jinsup Choi was ordered to fork over $11 million after he was find guilty of swindling 83 people out of about $19 million over a five year period from 2002-2005.

Choi took money from investors who believed he was investing it in commodity futures. Instead, Choi took the dough and placated customers with fake account statements. In time honored Ponzi style, he fed old investors with funds fleeced from new ones.

Customer cash went for Choi's purchases of items like a yacht, cars, and bling.

Earlier this year Choi pled guilty to criminal wire fraud charges stemming from the scam.

The time frame illustrates how slow suckers are to get wise, and how equally slow the justice system works to make things right. It remains to be seen whether Choi can or will pay back investors as ordered by U.S.D.C. Judge Howard Matz.