Category Archives: Ponzi Schemes

How Investors Used Social Media to Sniff Out a Scam — Before it Started

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On January 4, 2012 the SEC charged Anthony Fields, Anthony Fields & Associates and Platinum Securities Brokers, with selling $500 billion of fraudulent securities through LinkedIn and other social media websites.  For example, according to the SEC he used LinkedIn discussions to promote fictitious “bank guarantees” and “medium-term notes.” The postings resulted in interest from multiple purported potential buyers.

One of the interesting things about this case is that nobody actually purchased the stock and nobody lost any money.  The SEC shut this one down before it even got started, which is unusually proactive in my experience. Continue reading →

Ponzi Scheme and Investment Fraud Red Flags

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This is repost of an article on her Fraud Files Blog.  This was written by Tracy Coenen, CPA, CFF who investigates cases of financial fraud and Ponzi Schemes.

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Ponzi Scheme and Investment Fraud Red Flags

Posted on January 20th, 2012

Charles Ponzi

How do you know if you’re considering investing in a Ponzi scheme? The promoters will never come out and tell you they are running a pyramid scheme, so the investors have to be smart enough to recognize them on their own. The good news is it is easy to spot a Ponzi scheme.

Now I don’t mean that it’s easy to prove in a court of law that something is a Ponzi scheme. In a civil or criminal case, there are certain standards of proof that need to be met. But you’re not a court. You’re simply an investor. Whether you have $10,000 to invest or $10 million to invest, your money is probably pretty important to you. Continue reading →

Robert Holloway is Arrested and Charged — Just Another Utah Fraud Scheme

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Last week the Deseret News reported that Robert Holloway was arrested in San Diego for his alleged role in a $25 million investment fraud scheme.  He was charged with four counts of wire fraud and one count of making and subscribing a false income tax return, according to an indictment unsealed Thursday in the District of Utah. This is not a new case, US Ventures was sued by the CFTC and was placed into receivership in January of this year.  The receiver appointed by the Federal Court is Wayne Klein, and his receivership website can be found here.  The only new development here was Mr. Holloway’s arrest, and its unclear to me why it took so long.

According to the Deseret News article, Holloway falsely claimed that US Ventures used proprietary trading software that was consistently profitable; that it had more than $32 million under management and generated returns of 0.8 percent per trading day; and that it would retain a 30 percent share of investors’ profits as a management fee. The indictment states that Holloway raised more than $25 million from investors and generated and distributed reports to investors containing false daily returns on their investments.   The Salt Lake Tribune also wrote a story on this arrest.

Holloway is scheduled to appear in court in Salt Lake City on December 16.

Seniors: Beware of Affinity Fraud

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This is a repost of an excellent article by Christine Benz that was published in Morningstar entitled Seniors: Beware of Affinity Fraud:

In hindsight, a scam like the one Bernie Madoff perpetrated on his victims looks like it should’ve been a cinch to detect. Madoff’s clients were promised steady returns of 10%-12% per year; that should’ve looked impossible even to novice investors, particularly given the extreme market volatility that marked the first decade of the 21st century. Financial analyst and Madoff whistle-blower Harry Markopolos said he knew that Madoff had faked his clients’ returns within five minutes of seeing them.

Much ink has been spilled over how Madoff managed such a swindle–a court-appointed trustee estimated client losses in the $18 billion range–but one of his methods was clear: Using a technique called affinity fraud, Madoff presented himself as a trusted member of communities at the same time he was trying to separate them from their money. Various Jewish organizations and institutions, as well as Jewish individuals planning for their own financial goals, were hit particularly hard: In addition to losing millions, several charitable entities were forced to lay off staff or close altogether. Continue reading →

New Criminal Charges Filed Against Rick Koerber

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The U.S. Attorneys has office filed a new indictment against Rick Koerber, who is alleged to have run a Ponzi scheme that took in more than $100 million from Utah investors.  Last week a federal grand jury returned a new 20-count indictment alleging that Koerber engaged in widespread investment and tax fraud.

According to an article in the Salt Lake Tribune last week, this new indictment follows a federal judge’s decision in July to throw out a key piece of evidence in Koerber’s case.  ”Assistant U.S. Attorney Stewart Walz previously said the ruling by U.S. District Judge Clark Waddoups affected a “significant” part of an existing 22-count indictment alleging fraud, money laundering and tax evasion by Koerber in his operation of FranklinSquires Cos. and related real-estate investment businesses.”  This ruling meant that prosecutors had to file a new indictment containing small changes to a section of the indictment describing the alleged scheme and artifice to defraud. Continue reading →