Trista Joy Lathern: one bad apple. Image from openphoto.net.

People have all kinds of excuses for not donating to charity. Most of the people I know and I don’t hand out money to people asking for change on the streets because we all agree that unless we know what they’re going to use it for, we might be hurting instead of helping. We don’t have money to lend for furthering someone’s drug habit.

When it comes to charity organizations, people often have reservations because they worry that they’re being scammed or that the organization won’t use the money responsibly. How do thought patterns like this arise? Because of people like Trista Joy Lathern. For every legitimate charity organization and individual seeking much-needed help, there are despicable scammers like Trista Joy Lathern who ruin things for everybody.

What did Trista Joy Lathern do?

According to Texas authorities, Trista Joy Lathern held benefits in her home state of Texas to raise money to help pay for her medical bills, saying she had breast cancer and had lost her insurance. Her bald head made it appear as though she was going through chemotherapy. The benefits in her honor raised more than $10,000.

Turns out she shaved her head. She even lied to her husband about having cancer. She took the money from donations at the benefit and spent $6,800 on, drumroll please … breast implants for her perfectly healthy breasts.

Why fake breast cancer?

A police affidavit says that “Trista said she and her husband had been (having) marital problems and she thought telling him she had cancer would bring them closer together.” A lot of others are reporting that Trista thought the breast implants themselves would save her marriage.

Trista Joy Lathern is 24 years old and had been married for seven months. In case you’re wondering whether it is illegal to lie about having cancer and collect money from people for said case of fake cancer, yes it is. Trista Joy Lathern has been arrested for doing this. It is called fraud. Also, in case you are wondering whether lying about having cancer and getting breast implants saved her marriage, Zimbio reports that “Lathern’s husband filed for an annulment on the day of her arrest.”

I know, shocking, right?

The plight of the giver

Trista Joy Lathern and all of the other scammers out there who dupe people into donating their hard-earned money to fake causes should be very ashamed of themselves. Because of people like Trista Joy Lathern, there are individuals out there who are really in need of help and can’t get it because others are rightfully untrusting.

What would you do if you donated money to someone in your community and later found out that person used it for totally unnecessary cosmetic surgery? Bearing in mind that two wrongs don’t make a right, I would probably not seek revenge on that person. However, it would take a lot to get me to donate money to a cause again. I have had people lie to me about why they wanted money and refuse food before, and that has caused me to never give handouts to strangers.

People like Trista Joy Lathern don’t just stop at lying about why they want the money. They take it a step further and spend it on things that the donaters could very well be vehemently opposed to. Trista Joy Lathern is no better than a street person who spends his handouts on meth. How can people be generous and giving when they can’t trust others?

Tom Cruise, famous Scientologist. Image from Flickr.

The French government has never recognized the Church of Scientology as a religion. It has always viewed it as a “sect” or simply a commercial operation. Now, after two women filed complaints against the Church of Scientology, the French court has said the Church of Scientology is guilty of fraud.

Now, several French Church of Scientology leaders and two branches of operation in France have been fined. Prosecutors also asked that the Church of Scientology operations in France be dissolved.

Church of Scientology not banned … yet

BBC News reports that the court stopped short of banning Church of Scientology operations from the country. However, BBC also reports that a ban on the Church of Scientology is still possible, though it does not say where it got that information. France has always taken a stance on the Church of Scientology, saying it was only out for quick cash and has never been a legitimate religion. BBC News says:

Unlike the US, France has always refused to recognize Scientology as a religion, arguing that it is a purely commercial operation designed to make as much money as it can at the expense of often vulnerable victims, the BBC’s Emma Jane Kirby reports from Paris.

Church of Scientology has more troubles

In the U.S., a Hollywood connection has yet again brought the Church of Scientology to the forefront of the media. The director of the Oscar-winning film “Crash” has left the Church of Scientology after 35 years. Paul Haggis says his reason for leaving the church  is its stance against gay marriage and its position on gay rights.

Paul Haggis wrote a letter to the Church of Scientology’s Celebrity Centre, saying he could no longer be part of an organization that tolerates “gay-bashing.” The Church of Scientology officially supported the Proposition 8 ban in California, which made it illegal for same-sex couple to marry after the supreme court declared it legal.

Image of Bernard Kerik from Wikimedia.

Bernard Kerik knows that committing tax fraud is a no-no. He made that clear in 2004, when he withdrew his name from consideration for Secretary of Homeland Security. At that time, Bernard Kerik admitted that he had committed tax fraud.

Bernard Kerik had employed an illegal immigrant to work for him as a nanny. Although he had failed to pay taxes on his employee, Kerik said he didn’t know the worker was undocumented. This was only the beginning of his legal troubles. He apparently didn’t know, or didn’t care, that confidential information must remain confidential when one is being investigated for conspiracy, fraud and possible mob connections. But let’s back up.

More charges flood in

Shortly after Bernard Kerik withdrew his name from the running for Secretary of Homeland Security, investigations began regarding ethics violations, unclassified misdemeanors. He pleaded guilty to those and paid a $221,000 fine.The court said “pay the money now, and you’ll be free,” so he did.

But it wasn’t over. Near the end of 2007, Bernard Kerik was indicted by a grand jury. His charges include conspiracy, tax fraud and making false statements. That brings us to the present, where Bernard Kerik was out on bail and waiting for his trial, which begins Monday.

Breaking the rules

Just a quick primer on the justice system: When someone gets arrested on charges, they get thrown in jail and have the opportunity to post bail. If the accused pays the bail money, they can be let out of jail until they get their sentence, which happens after the trial. However, people who are out on bail generally must agree to certain conditions in order to remain out of jail.

In major cases such as Bernard Kerik’s, it’s imperative that the accused does not share sensitive information about the case with the public. So although Bernard Kerik posted his $500,000 bail, he violated the conditions of his release when he posted confidential documents on his defense web site, according to USA Today. The judge ruled that this action could potentially sway jurors and that Bernard Kerik could not be trusted to honor the terms of his release, so he was hauled back to the slammer.

Who cares about Bernard Kerik?

So why is everyone so interested in this Bernard Kerik fellow? He was police commissioner in New York City during the Sept. 11, 2001, attacks on the World Trade Center. He was seen often on television with Mayor Rudy Giuliani, and Giuliani recommended him for Security of Homeland Security.

Bernard Kerik also served as Interim Minister of Interior of Iraq for a few months in 2003, just after the start of the Iraq War.

Image from wikispaces.com

Most of the payday loan related crimes I write about involve petty thieves pointing guns in people’s faces and taking off with a bunch of cash. Today, however, I came across a payday loan crime of a different type.

I don’t know if this guy was giving out fax payday loans or no fax payday loans or what, but he wasn’t giving out nearly as much as he told  his investors he was. Here’s the scoop.

From the Baltimore Business Journal:

Alvin Allister Ambrose, 37, formerly of Broadwater Road in Clarksville, was sentenced by Howard County Circuit Court Judge Timothy J. McCrone to eight years in prison, with all but six months suspended, and ordered to pay $602,790 to investors.

Ambrose was convicted on June 28 on charges stemming from his misuse of $5.04 million in funds invested by more than 180 investors to provide payday loans to clients of Ambrose’s cash-advance business with a promised high rate of return to investors, the Attorney General’s office said. The state’s investigation determined that, of that amount, Ambrose invested only $261,932 in payday loans, the Attorney General’s Office said.

Prison for payday loan fraud

Ambrose was charged with “fraudulent misappropriation by a fiduciary.” I wonder how long it will take him to pay back the $602,790? It’s odd to me that he was sentenced to eight years in prison but will really only go there for six months, but this type of thing happens all the time so I guess the justice system knows what it’s doing.

This just highlights the fact that there are a whole lot of scammers out there. Sometimes it doesn’t matter how well you research a person before letting them handle your money, but it never hurts to thoroughly check out a business, individual securities broker or anyone else who you’re allowing to invest your money.

Federal Trade Commission cracks down

Last month, the FTC once again announced it would strengthen its efforts to reduce fraud and scamming. The FTC web site says:

The Federal Trade Commission today announced a law enforcement crackdown on scammers trying to take advantage of the economic downturn to bilk vulnerable consumers through a variety of schemes, such as promising non-existent jobs; promoting overhyped get-rich-quick plans, bogus government grants, and phony debt-reduction services; or putting unauthorized charges on consumers’ credit or debit cards.

Phony debt reduction and unauthorized charges? Pretty scary stuff.

Debt consolidation scams

Often the debt consolidation scammers pretend that they’re a debt consolidator and tell you they’ll give you a loan which will pay off all of your debts, and then you can just pay back the loan.

However, what often happens is that the fake debt counselor will collect a big chunk of money as a down payment for the loan and then just disappear, leaving your debt fully intact.

Do your homework

I know I already said this, but make you you do careful research when selecting  a financial expert for any reasons. Scammers have also posed as fake mortgage modification companies.

Alvin Allister Ambrose isn’t the first person to lie about what he is doing with people’s money, and he won’t be the last.

Dina Wein-Reis (Photo: fraudtalk.blogspot.com)

Beg, borrow or steal. How do you make it, financially?

Of course that trio of choices paints an incomplete picture. Hard work and dedication are an ideal path toward success. But borrowing doesn’t hurt from time to time. For instance, if you need to borrow short term loans or payday loans, such resources are available. Begging, while unbecoming, is also an option, but doing so in public can lead to panhandling charges.

Then there’s stealing. Lately, we’ve seen our share of high-profile financial thieves, people who appear legitimate but are as felonious as cat burglars. Bernard Madoff and Allen Stanford make that list, and now we must add Dina Wein-Reis. She scammed multi-national consumer product companies for as much as $15 million per year. Considering that the companies she scammed likely wrote off the losses, Wein-Reis was in effect stealing from American taxpayers. No get out of jail free card for you, woman.

Distribution to self

A recent story at BusinessInsider.com indicates that Dina Wein-Reis of upper Manhattan allegedly duped companies like Procter & Gamble, Unilever and Hershey out of millions in a diversion scheme where she and her associates would convince primarily male executives to allow her company to supposedly distribute their products on college campuses, military bases and in aid packages at shelters and similar places.

What she actually did with the merchandise was quite different, however. She would sell the products to middlemen and retain the profits. For some strange reason, such diversion is not illegal in itself, but New York City prosecutors are attempting to get Dina Wein-Reis on fraud charges.

How did she pull it off?

Apparently, Dina Wein-Reis is an extremely charismatic woman. She would appeal to male executives by offering them a high-paying job with her company. She’d fly the executive in for the interview, where she and her handpicked underlings (all female, all well-educated  and all attractive) would work into the mark’s confidence. At that point, the offer to obtain heavily discounted merchandise would be made, ostensibly for charitable redistribution. Wein-Reis would also assure the men that if her redistribution program was successful, they’d gain “exclusive access to these hard-to-reach markets.” Of course that was no distribution program.

From what I’ve read, Dina Wein-Reis was good enough to fool some of the same companies more than once. Either these executives were stupid, they were somehow complicit in the schemes, they were being blackmailed or there was something other commodity being exchanged. Ego stroking can certainly be intoxicating, but I’d like to think multi-million dollar executives would think with their brains at some point, rather than with another part of their anatomy.

But let’s not leave the blackmail option behind quite yet. Considering that Dina Wein-Reis and her people would lead off with the job offer, it would come place them in a compromising position with their employer (or at least embarrass them) if they came back later to call her bluff.

How bad did Dina do them?

Just a few of Dina Wein-Reis’s marks were Roche, who handed over $10 million in diabetes-testing equipment; Unilever, who lost $2.23 million worth of detergent; and Procter & Gamble, who coughed up “several million dollar’s worth” of shampoo. If you got samples of it with your morning paper, at a doctor’s office or on a college campus, it’s likely Dina Wein-Reis found a way to profit off something similar.

The spoils of deceit

Here’s just some of what is known about the extent of the Dina Wein-Reis operation:

• She has over 100 different banks accounts and as many aliases used to run shell companies
• The FBI has seized “scores” of necklaces, watches, two Louis XVI footstools, two Bugatti throne chairs, two Empire sleigh beds, and a 1920s cast-iron vanity… and that’s just from her Upper West side condo
• She has homes in Westhampton Beach, New York, Bal Harbor, Florida and Jerusalem. Her Manhattan townhouse once was featured in Architectural Digest
• She was a New York socialite with a multitude of connections

Now the game is over

And short term loans and payday loans won’t get her out, if she’s convicted. For you and loved ones, however, these types of loans can come in handy in a pinch – such as for bail. Hopefully that doesn’t happen to you, but if it does, try Personal Money Store for your payday loan needs.

You may have seen an infomercial for any number of Kevin Trudeau products. He has hawked several books, including “Natural Cures ‘They’ Don’t Want You to Know About.”

Kevin Trudeau’s books have made it onto the best-sellers list as consumers seeking help hit up payday lenders so they could buy the books as soon as possible. Unfortunately for Kevin Trudeau, a couple of his books have also been labeled fraud by consumer agencies, and he has been fined tens of millions of  dollars for violating an agreement to refrain from being in any way involved with more infomercials.

Kevin Trudeau history

Let’s take a look at the beginning of Kevin Trudeau’s career. In 1991 Kevin Trudeau was convicted of credit card fraud. Christopher Pascale of suite101.com reports that after Kevin Trudeau completed his sentence, he and his former cell mate “started an illegal pyramid scheme based around the concept of multi-level marketing, selling vitamins.”

This began Kevin Trudeau’s stint in selling “health care” products.

The many products of Kevin Trudeau

In thousands of hours of infomercials, Kevin Trudeau sold products to cure hair loss and to cure addiction. He advertised books on improving your memory and released best-selling “The Weight Loss  Cure ‘They’ Don’t Want You to Know About.’ That’s when Trudeau’s Troubles Part II began.

Long story short, in 2004, Kevin Trudeau was ordered by a federal judge “to pay more than $5 million and banned him, for three years, from producing or publishing infomercials for products in which he has an interest,” according to the FTC web site. Basically, this was the result of misrepresenting his book and making false claims about other health-related products.

Violating court orders

In 2005 he released the book “Natural Cures ‘They’ Don’t Want You to Know About.” Once again, he hawked his wares on late-night infomercials, violating his court order. Now he owes $37 million, thanks to a court decision from January.

Into the financial sector

Kevin Trudeau’s latest book, “Debt Cures ‘They’ Don’t Want You to Know About,” seems to be veering more toward the truthful side of things. It does contain some good information and advice about getting out of debt.

However, “Debt Cures” has been heavily criticized for only containing information that is easily accessible by anyone with an internet connection or a basic understanding of finance. I haven’t seen any legal action pending regarding this book, but I do know that in the United States it is not illegal to charge people money for something they could get for free somewhere else. I’ve seen it happen frequently.

So, what do you think of Kevin Trudeau? Savvy salesman? Saint? Or Fraud? Leave your comments here.

Reuters reports that the FTC Capital Markets offices in New York have been searched by U.S. postal inspectors. FTC Capital Markets is suspected of investment fraud, and the postal inspectors were looking for evidence.

An anonymous source, who wished to remain so because of the ongoing investigation, says the allegations involve hundreds of millions of dollars.

Details from Reuters:

Officers from the U.S. Postal Inspection Service were looking into whether two FTC Capital executives misled companies over purported investments.

One of the executives, Lina Lopez, was arrested in Miami, the source familiar with the case said.

No further details were immediately available about the search, which took place on Tuesday night.

Criminal charges have not been filed. The case stems from a civil lawsuit by Citgo Petroleum Corp and PDV Holding Inc in March that accused FTC, several related entities and two executives of fraud.

Lawsuit

Apparently investors with FTC Capital Markets would have been safer getting no fax payday loans with no credit check. FTC Capital Markets might end up needing installment loans for bad credit when this whole thing is over.

This investigation has been launched in response to a civil lawsuit that was filed March 9. From Reuters:

In a civil lawsuit … Citgo and PDVH alleged that FTC executives Lopez and Guillermo David Clamens “diverted and misused” the plaintiffs’ investment funds. … The lawsuit charges the two with creating a “slush fund to finance self-interested, unauthorized and speculative trading in unregistered, risky, illiquid investments in which they had financial interests, the full extent of which remain unknown.”

Clamens and Lopez made undisclosed and unauthorized purchases into the Citgo account of $10 million worth of bonds issued by Venezuela, the complaint said. It said they diverted $19.3 million of Citgo’s $100 million investment to “self-dealing, risky and unauthorized note and bond purchases.”

It said that in April 2008, FTC opened accounts at BNP Paribas bank in the name of Citgo and PDVH. The complaint said that instead of investing $200 million into 7-day BNP CD’s for Citgo, Clamens and Lopez deposited the money into a daily income money market fund.

Scam after scam

Strange that as soon as the public’s and officials’ attention became focused on the economy, and thus money, scams started to come to light. Big ones. Bernie Madoff bilked customers out of an estimated $65 billion in his Ponzi scheme. He was convicted of fraud this year and will get his sentence in June.

Wikipedia states that Madoff’s scheme “has been called the largest investor fraud ever committed by a single person.” Madoff doesn’t need to worry about losing his title to FTC Capital Markets, though. At least two people are accused of being involved in the alleged investment fraud. Also, sources say the case involves millions, not billions.

Small but dangerous

Also, take proper precautions to avoid identity theft. Don’t give out information online, including passwords and credit card numbers, unless you’re on a trusted web site. Shred your credit card offers and other mail that has personal information on it.

A man in St. Catherine’s, Ontario, has been charged with fraud after a three-month police investigation.

Police have determined that the 51-year-old man cashed counterfeit bank drafts at a payday loan business. The company offers short-term loans, installment loans and cash advances along with check-cashing services.

Canadian newspaper news brief:

ST. CATHARINES — A 51-year-old St. Catharines man faces fraud charges after a three-month police investigation into complaints about counterfeit bank drafts.

Niagara Regional Police said a man cashed two counterfeit bank drafts at a St. Catharines payday loan business, and transferred the money to an account with a different financial institution.

Investigators from the fraud unit determined the bank drafts were counterfeit and identified the suspect with the assistance of the NRP’s forensic services unit.

Sarkis Kishishian is charged with two counts of fraud under $5,000. He was released on a promise to appear in court on July 10.

See the original copy of this news brief at WellandTribune.ca.

Payday loan crimes

This isn’t the first time a criminal has bilked a business that offers installment loans out of some money. However, most of the time the perpetrators simply walk in the door with a gun and demand money. Here are some earlier accounts I wrote of payday loan store robberies:

Payday loan robberies in Indiana

A Check into Cash store in Crown Point, Indiana, was robbed April 16. There was only one employee in the store at the time.

Armed robber

The employee reports that the robber pointed a handgun at him and demanded he empty the cash drawer. After the cash was put in the robber’s bag, the man ordered the employee to lie facedown on the floor for five minutes.

Popular crime in Indiana

Several payday loan stores in Indiana have already been robbed this year.  In Indianapolis,  in January, four payday loan stores were robbed within a week. On  Jan. 19, two stores were robbed within about 45 minutes of each other.

During the week before those robberies, two other payday loan stores were hit. The same two men were suspected of committing all four robberies as well as another robbery at an auto parts store.

Also this year, criminals have robbed payday loan stores in Iowa, Texas and Illinois.

Invest in security

In 2007, an employee at a payday loan store in Illinois was killed during a  robbery. The woman was working alone at the time she was shot. After that incident, many payday loan stores made a point of making sure employees were never left alone in stores. It is disturbing to hear that some store owners are not taking this precaution.

Niel Barofsky

So there’s good news and bad news. Obama is making good on his promise of transparency when it comes to distribution of TARP funds via Inspector General Neil Barofsky. The bad news is Barofsky has opened 20 criminal investigations to see whether tax dollars are being misused.

Barofsky is also conducting six audits. He says his goal is to “to inform, bring transparency and make appropriate recommendations.”

Job description

Barofsky has been appointed special inspector to oversee the Troubled Asset Relief Program. He says he wants taxpayers to understand where their money is going. He has detailed his concerns in a 250-page report.

Barofsky says he will expose any weaknesses in the TARP that could invite fraud.

TARP overview

TARP is mainly used to buy up defaulted personal loans and other bad accounts and assets that are hampering financial institutions. The 20 investigations Barofsky has opened could potentially lead to criminal charges if they find tax dollars are being pilfered or wasted.

What are the charges?

The investigations specifically address whether decisions about how TARP funds were awarded were influenced by people who stood to benefit from them. He is also looking into whether companies that received bailout funds are adhering to the policies regarding executive pay caps.

Additional duties

Barofsky has also compiled a list of recommendations for Treasury Secretary Tim Geithner and other officials involved with implementing the TARP.

His recommendations include requiring companies to report their usage of TARP funds. To me, this is a bit confusing because I thought they were already required to do that. Let’s hope this is just a reminder. Another recommendation is that officials should “safeguard a new mortgage rescue effort against scams.” Amen!

Noel knows "no thing"

…or hide the stink. If you need payday loans because you lost money to him, I offer my condolences

Associates of Ponzi scheme mastermind Bernard Madoff are now finding themselves in the crosshairs with no place to hide. Jessica Pressler writes in the “Daily Intel” column of New York Magazine that Madoff feeder fund Fairfield Greenwich Group must face the backhand of justice.

Massachusetts Secretary of the Commonwealth William Galvin filed a complaint against Fairfield Greenwich Group, alleging that their “flagrant and recurring misrepresentations to its investors rises to the level of fraud.” But this is not a criminal complaint. And amazingly, the filed complaint doesn’t indicate that  anyone at Fairfield “knew anything about anything.”

It all checks out!

Even though Fairfield Greenwich fed the Madoff monster $7 billion, they never took the time to know who they were sending it to or why. Perhaps it’s as they say in the Patrick McGoohan TV series “The Prisoner”: “Questions are a burden to others, answers are a burden to oneself.”

According to Pressler, all Madoff’s auditor had to tell Noel and his Fairfield Greenwich Group is that Madoff had “hundreds of clients” and was “well known in the local community.” Then Fairfield CFO Dan Lipton did his due diligence – he looked it up on the Internet! This is a prime example of the significantly “higher level of due diligence work” that’s made Fairfield Greenwich Group an agency worthy of a fraud investigation. They must be proud.

No need for alarm

What else didn’t they want to know? Well, Pressler fills us in there, too – Harry Markopolous:

The complaint says that Mr. Madoff coached Fairfield officials in 2005 on how to respond to questions from SEC attorneys who were looking into concerns voiced by Harry Markopolos, later credited with bringing information to the agency raising questions about Mr. Madoff’s operations.

When that much money is flying around, you need to ask questions. A lack of knowledge at the executive level is an intentional cover.

Related Videos:

The Stimulus Scam

This is Age of the Scam. We tried honest business and look where that got us. So let’s try something a little different. If you can’t beat ‘um, join ‘um. No, it’s time to fight back!

The fight begins

I was at the Consumer Federation of America conference in Washington, DC last week, and I listened to consumer protection regulators speak about the current increases in financial and consumer scams. Listed below are some of the scams, some of the things these scammers will say to you and tips to avoid them.

The Get-A-Stimulus-Grant Scam

There is 787 billion dollars out there for the taking. Let us help you get your hands on some of this loot. Our fee includes getting your website up and running, offering advice (for a fee) on how to get government grants on everything from small business initiatives to paying off your son’s student loan debt.

We will show you how to bill unsuspecting consumers $70 a month on their credit cards for information they thought was free.

The Mortgage Foreclosure Consulting Scam

This one is a no-brainer. As the number of home foreclosures rise, so the business of Foreclosure Rescue leaps to the fore. Ignore the number of foreclosure rescue companies that have already been shut down and concentrate on the potential.

Here is a quick overview of what is involved:

• Signing over the title of the home.
• Negotiating with the lender for an upfront fee.
• Pocketing the money.
• Instant disappearance southwards across the border.
• Secrets of the cold-call system.
• Building a convincing story to help stop a foreclosure.

The Great Auto Repair Fraud

Auto repair fraud is a staple of our society. The minute you have your greasy hands deep in the belly of some poor sucker’s engine, his wallet is open to you. This one is easy.

• Times are tough and money is short.
• New cars are expensive.
• Keep using the old car.
• Get regular routine maintenance for unnecessary repairs.

The Property Tax Reassessment Fraud.

Home prices are still tumbling but cities and towns are being super-slow in decreasing property taxes. Let us re-assess the value of your property for tax purposes. We guarantee to get the property taxes lowered on your house in exchange for a steep fee or cut of whatever is recovered. Do not think about taking a lawyer or third-party to fight your assessment. We can handle it without a team of Super Duper Assessors. You can then file an appeal on property taxes at no cost.

The Retail Closeout Scam.

Retail fraud is a winner. As the number of retailers going bust rises, the number of phony sales with false prices and low quality merchandise in the final “going out of business” sale is on the rise. There are retailers who are taking deposits on big ticket items like furniture and appliances. They then shut down and re-open a few days or weeks later for business under another name. Customers’ deposits are not returnable under any circumstances.

The Sting

Rent the DVD and watch the movie a few times. Call Robert Redford and offer him a partnership.

One thing that is not a scam is using a No Fax Cash Advance for the financing of a new business or for emergencies. Thankfully, there are still legitimate businesses out there.

David Friehling's office

Bernard Madoff’s accountant, David Friehling, has been arrested in relation to the Ponzi scheme that bilked billions out of clients and landed Madoff in jail.

Friehling, sole proprietor of the Friehling & Horowitz, is being charged with securities fraud. He turned himself in to authorities today.

Unwitting participant

Authorities do not accuse Friehling of knowing about the scheme. Rather, they say he certified Madoff’s firm’s financial statements without completing an audit. Accusers say this deceived investors and allowed the scheme to continue undetected because he “rubber stamped” Madoff’s falsified numbers.

A lengthy tenure

Friehling has served as Madoff’s auditor since 1991. Over the past few months a Ponzi scheme that swindled $65 billion out of money manager Madoff’s clients surfaced. Madoff has been convicted on 11 charges, including fraud.

Hefty charges

It’s unknown what kind of bail Friehling is facing, but if it’s anything like the $10 million Madoff is being held on until his sentencing trial, Friehling might have to pay it off in installment loans.

Friehling’s charges include securities fraud, aiding and abetting investment adviser fraud and four counts of filing false audit reports to the Securities and Exchange Commission, according to the U.S. Attorney for the Southern District and the Federal Bureau of Investigation.

Not getting off easy

Madoff, 70, essentially is facing life in jail for his crimes. His sentencing is scheduled for June, and he could get up to 150 years in prison.

If convicted, Friehling could face a similar fate. His charges could earn him up to 105 years in jail. Friehling, 49, would stay in prison for the rest of his life if he is found guilty and given the maximum sentence.

More on Madoff

Madoff

Madoff is locked up in the Metropolitan Correctional center in Manhattan. He is scheduled to remain there until his sentencing, June 16. But he’s not waiting quietly. He has a hearing tomorrow to appeal his $10 million bail. He says he should be released until his sentencing.

He is protecting his wife

Bernard Madoff has pled guilty to all 11 charges surrounding a $50 billion ponzi scheme, BBC News reports. The charges include four counts of fraud, three counts of money laundering, making false statements, perjury, making a false filing to the US financial watchdog, and theft from an employee benefit plan. Prosecutors are seeking a 150-year sentence for the 70-year-old financier. The exact sentence will not be known for a few months.

Madoff perpetrated a pyramid scheme where early investors were paid off with the money of new clients. He pled guilty before New York Judge Denny Chin on the morning of Thursday, March 12.

He would not plea, would not cooperate

What prosecutors had hoped for is a plea bargain where Madoff would agree to reveal others who were involved in this unprecedented operation. Madoff refused, which may exempt his wife Ruth Madoff, Bernard L Madoff Investment Securities employees and others from severe penalty.

Since his December arrest, Madoff had been confined to his luxury Manhattan apartment. Now, he’s enjoying the amenities of jail, a personal loan of his freedom for… what? Show them the money, Bernie!

“The greatest con artists in history”

Madoff, a former NASDAQ chairman, has been a big name on Wall Street for 40 years. He knows the ins and outs, all of the angles. ” Defrauded investor and former Fort Lee, New Jersey mayor Burt Ross referred to him as “the greatest con artist in the history of the world.”

Ross told the BBC he “did not expect to recover a single cent of the $5 million” he invested.

“(Madoff) created a mystique and associated with extraordinarily well-respected and revered people, and so he was given the benefit of the doubt by financial regulators who blew it badly.”

What about all the money?

Investigators continue their efforts to recover the stolen money. Unfortunately, experts predict that a large percentage of the money will never be recovered. It is hidden so well that only a confession would reveal it, and Madoff refused to do this so as not to implicate people close to him.

Madoff’s rich investors will feel the sting, but ultimately not destroy them financially. However, many of Madoff’s investors were average working people who were conned into investing their savings. For them, picking up the pieces will be excruciating. Mark Raymond, a lawyer representing some of Madoff’s victims, point to victims like on retired couple from Atlanta.

“He’s 82, she’s 78, and they are both looking for work because they have lost everything,” he said.

Picking up the pieces… in a down economy… during your final years? Madoff should at least be their butler. Prison isn’t good enough…

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Mike Levine of Fox News reports that the Director of the Innovative Nuclear Space Power and Propulsion Institute at the University of Florida may have defrauded NASA out of “hundreds of thousands” of taxpayer dollars for personal use. A court affidavit says there is “probable cause” that the money was laundered in violation of federal law.

The FBI and NASA are investigating Samim Anghaie, 59, and his wife Sousan Anghaie, 55. She is president of New Era Technology Inc. (NETECH) in Gainesville, Fla. Charges have not been filed as yet.

Contract for the high life

Sousan Anghaie talked NASA into awarding NETECH “several fully funded contracts.” This included about $600,000 to develop and study uranium-related technology. But the FBI and NASA allege that in reality, Sousan and Samim used that money for personal luxury use. Among the purchases made were a $480,000 home, a 2007 BMW, a 2005 Toyota Sienna, a 2008 Toyota Corolla, a 2007 Toyota Corolla and properties for their sons. Then there was another $528,000 project. Wow…

Not surprisingly, federal agents have raided the Innovative Nuclear Space Power and Propulsion Institute.

More accountability with contracts

Among the contributions Sousan sought was $350,000 in order to pay three employees (including her son and brother-in-law). However, it is documented that those three workers received no monetary compensation for their work. Furthermore, it’s unclear whether any of the proposed work they were supposed to be doing was completed. This, according to an unsealed affidavit, is just one of “multiple fraudulent certified contract proposals” the Angahies made to NASA so that they would receive “maximum funds” for their “research projects.”

Conveniently, NASA would directly deposit funds into NETECH’s corporate account. Then the money would be funneled into the couple’s personal accounts, according to the affidavit. Perhaps soon, Samim Anghaie and Sousan Anghaie will be funneled into prison.

Related links:

• Couple Accused Of Scamming NASA

• Feds: UF prof, family stole millions in grants

Benjamin Weiser of the New York Times proves beyond a shadow of a doubt that even large organizations fall for those fly-by-night Internet scams and need quick loans to dig their way out. But, come on, seriously? You were taken in by a Nigerian con artist, Citibank?

That’s right. A con artist by the name of Paul Gabriel Amos worked with a team to create documents that fooled Citibank into wiring them money in transactions totaling about $27 million. The money came from a Citibank account in New York held by the National Bank of Ethiopia. The con artists posed as Ethiopian bank officials and approved the transactions. They could quickly get loans from the bamboozled financial megalith that never required them to repay.

Not-as-famous Amos has been arrested

He was charged with conspiracy to commit bank and wire fraud. If the Nigerian scammer is convicted, he could spend 30 years in prison.

According to Weiser, the prosecutors traced the scheme back to September of 2008, when Citibank received documents instructing them to accept instructions by fax from the Ethiopian bank. Included was a list of officials who would confirm the requested transactions (each of them a member of the con team, of course). The signatures of the officials on these documents even appeared to match those in Citibank’s records, so it was all accepted.

In October, Citibank received the faxed requests for money to be wired, and it transferred $27 million to accounts in Japan, South Korea, Australia, China, Cyprus and the United States. After the ruse was discovered, Citibank credited all lost funds. However, the damage to the bank’s already teetering credibility had long since been done. Now, with banks like Citibank nationwide crying to the government for quick loans to help them remain solvent, it makes you wonder why President Obama and his team continue to put up with bank leadership that fall for schemes like this. If it’s because the verification process itself is flawed, then FIX IT!

Related articles

• Citibank Sends Nigerian Scammer $27 Million [Whoops] (consumerist.com)
• DOJ: Nigerian Scammed Citibank Out of $27 Million (gothamist.com)
• 419 scammer impersonates the nation of Ethiopia, takes $27 million from Citibank (boingboing.net)

Here, let me take that money of yours...

BBC News reports that FBI agents in Virginia have located and served Sir Allen Stanford with civil papers, a quick loan courtesy of the SEC. They would like to see him pay it back with other people’s money… and jail time.

Stanford has been accused of $8 billion fraud against investors. The claim is that they were lured by the promises of “improbably and unsubstantiated high returns on certificates of deposit and other investments.” The SEC calls the case “fraud of shocking magnitude” that loans itself quickly and easily to the recent memory of Bernie Madoff’s $50 billion Ponzi scheme.

Richard Kolko of the FBI revealed that agents had served the legal papers to Stanford in Fredericksburg, Virginia, at the request of the Securities and Exchange Commission. This step was necessary in order to ensure that Stanford would turn in his passport and be made aware of what he faced, said the BBC’s Richard Lister from Washington. Criminal charges have yet to be filed, so Stanford is not currently being held in custody.

Bank terror bonanza

As a result of Stanford’s fraudulent operations, branches of banks controlled by the Stanford Group have been shut down or placed under national control in Peru and Venezuela. The former nation suspended operations for 30 days, while Venezuela has announced it will take control. Panama, Ecuador and Antigua have also have taken action against Stanford’s interests there.

Regulators would have liked to allay investor fears about the banks Stanford is associated with, but runs on banks were perhaps inevitable in light of the news.

A US civil court judge has frozen Stanford’s assets and those of the Stanford Group, Stanford International Bank (SIB) and investment adviser Stanford Capital Management. Experts predict that criminal charges will be brought on Stanford soon. Until then, Bernie Madoff remains the sole charged financial shyster to light up the news boards from 2008. Eventually, when Stanford joins the club, perhaps both will go on quick loan to jail. Quick, because the resourceful never stay for long…

Related articles

• SEC files charges in another “massive” fraud (americablog.com)
• Stanford charges spark run on banks (guardian.co.uk)

UBS, owner of many Swiss banks that kept strict privacy standards and hid cash, personal loans and other assets of United States citizens will now turn over those records.

The bank also must pay $750 million in fines, penalties, interest and restitution. Federal authorities are saying USB conspired to create sham accounts to hide assets of U.S. clients from the U.S. government so the account holders wouldn’t have to report those assets on their taxes.

Banking giant speaks on allegations

Peter Kurer, chairman of Swiss-based UBS AG, said “We accept full responsibility for these improper activities.” Institutions that give out personal loans generally protect people’s privacy, but it appears USB may have gone too far.

“Client confidentiality, to which UBS remains committed, was never designed to protect fraudulent acts or the identity of those clients, who, with the active assistance of bank personnel, misused the confidentiality protections,” Kurer said Wednesday.

Under an agreement with federal prosecutors, UBS will pay the fines, turn over clients’ records and cease any similar cross-border banking activities.

Prosecutor’s case

U.S. officials say the scam began in 2000 when UBS acquired a  U.S. company. Prosecutors say UBS executives helped U.S. taxpayers open accounts under sham entities.

UBS executives are accused of using counter-surveillance techniques to prevent people from finding out they were marketing Swiss bank secrecy and tax evasion to U.S. taxpayers. Clients then omitted the income they earned in their Swiss accounts from their tax returns, according to the court papers.

Reparations

Internal Revenue Service Commissioner Doug Shulman says U.S. taxpayers who hid money overseas must pay taxes on those accounts.

“People who have hidden unreported income offshore need to get right with their government. They should come forward and take advantage of our voluntary disclosure process,” Shulman said.

Hidden offshore accounts and stashed personal loans cost the U.S. government nearly $100 billion a year in lost tax revenue, estimates Michigan Senator Carl Levin.

Depositors who have had dealings with Stanford Financial want fast cash in advance of the legal proceedings Allen Stanford will face. He has been charged with fraud because of $8 billion in notes he sold. Two other executives are accused as well.

Storming the banks

Hundreds of people lined up in Antigua and Caracas  to take their money out of affiliated with the Texas billionaire after they heard news of the fraud charges. Stanford Financial’s headquarters are in Houston, Texas, but the financial group has banks all over the world.

The U.S. Securities and Exchange Commission has accused Stanford of operating a fraud centered on the sale of certificates of deposit from his Antiguan affiliate, Stanford International Bank Ltd., according to Reuters.

Following the revelations of the charges, Stanford’s customers were set on getting their cash fast and in advance of any trial.

Financier disappears

It seems Stanford customers are getting their cash in advance of federal agents getting Allen Stanford. At the moment, Allen Stanford’s whereabouts are unknown. He tried to hire a private jet to fly out of Houston to Antigua, but the lessor would not accept his credit card.

Far-reaching impact

Houston-based Stanford Financial is the biggest private employer in the twin-island state of Antigua and Barbuda. Prime Minister Baldwin Spencer admitted the charges against Stanford could have “catastrophic” consequences, but he urged everyone to not panic.

The Eastern Caribbean Central Bank posted a statement at Bank of Antigua saying the bank had sufficient reserves.”If individuals persist in rushing to the bank in a panic, they will precipitate the very situation that we are all trying to avoid,” the statement said.

Details of impeding charges

In a civil complaint, the SEC said SIB sold $8 billion in “by promising high return rates that exceed those available through true certificates of deposits offered by traditional banks.”

It makes sense that the customers of a potential scam artist would want to pull their cash fast, in advance of any criminal charges.

Sir Allen Stanford

No Payday Loan for Texas magnate and cricket promoter Allen Stanford. He used the Bernie Madoff system and ripped off the very respectable amount of $9.2 billion.

Allen Stanford

The Securities and Exchange Commission says that Stanford is facing civil fraud charges for “promising improbable and unsubstantiated high interest rates.” Stanford has had his assets frozen.

Multi-billion dollar fraud

Stanford and three of his companies have been charged with “orchestrating a fraudulent, multi-billion dollar investment scheme centering on an eight billion CD program”.

No ordinary man

Look at Stanford’s companies:

• The Antiguan-based Stanford International Bank (SIB), Houston, Texas-based broker-dealer
• Investment adviser Stanford Group Company (SGC),
• Investment adviser Stanford Capital Management.

And that’s not all

There is also a SEC complaint about an additional scheme relating to $1.2 billion in sales by SGC advisers of a mutual fund program, called Stanford Allocation Strategy (SAS), by using “materially false” data.

The chief financial officer and the chief investment officer of Stanford Financial Group are also being investigated.

The charges

The director of the SEC’s enforcement division says that Stanford and his circle of family and friends with whom he runs his businesses, perpetrated a massive fraud based on false promises and fabricated historical return data to prey on investors.

An SEC regional director said, “We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world.”

We are not talking about allegations against Payday Loans here – this seems to be real fraud and is going to put Stanford behind bars for years.

This isn’t cricket

Cricket

Cricket is a game that began in England centuries ago and is considered the game of gentlemen. Arguments rage to this very day among aficionados of the game as to whether a player should voluntarily declare himself out or wait for the umpire to make the decision. Cricket is the epitome of honesty and good sportsmanship.

And Allen Stanford is one of the world’s major cricket supporters and benefactors, if not the greatest in the world. The charges against him are going to have devastating effects around the cricket playing world. Already the England and Wales Cricket Board has suspended its talks with him.

Up to his neck in it

Stanford is up to his neck in cricket. A West Indies domestic tournament bears the name of Stanford. He was the man behind the Stanford Super Series which ended with his team of Caribbean Superstars defeating England in a match which netted the winning side a million dollars each. Stanford had put up $20 million in prize money for that match.

Who is Stanford?

Sir Robert Allen Stanford, born in 1950, is a fifth-generation Texan who resides in St. Croix, U.S. Virgin Islands. He holds dual U.S. and Antigua and Barbuda citizenship. He was the first American to be knighted by Antigua and Barbuda. Stanford began his business career in Houston making his first fortune in real estate in the early 1980s.

Stanford Financial Group is the sponsor for such sporting events as the Stanford U.S. Open Polo Championship, the Stanford Antigua Sailing Week, the PGA TOUR Stanford St. Jude Championship, and the Stanford International Pro-Am.

Stanford sponsors professional golfers Vijay Singh, Camilo Villegas, David Toms, and Henrik Stenson as well as Morgan Pressel on the LPGA Tour.

Where to now?

I wonder where Stanford will decide to spend his years in jail – U.S. or the West Indies. I wonder if he will have a choice. Does he take his 2.2 billion dollar fortune in there with him?

About his application for a Payday Loan – Declined!

Allen Stanford

Billionaire Allen Stanford could find himself needing payday loans if his fortune is wiped away with the new revelation that Stanford is being charged with fraud.

The U.S. Securities and Exchange Commission says Stanford Financial Group fraudulently sold $8 billion in high-yield certificates of deposit. Stanford and two other top executives are being charged with fraud.

Ordered to the court

In the lawsuit the commission alleges that Stanford’s scheme stretched throughout the globe. Three of Stanford Financial Group’s companies are involved in the suit. There has been news recently of payday loans companies being involved in lawsuits recently, but they were nothing close to this magnitude.

The SEC was seeking to freeze the assets of the Stanford group and appoint a receiver “to take possession and control of defendants’ assets for the protection of defendants’ victims,” according to Reuters.

Whisked away

Fifteen federal agents descended on the company headquarters in Houston, Texas, to cart Stanford away. For the time being, financial operations are continuing at Stanford’s companies. However, a note on the door at the Houston headquarters said Standford Financial was “under the management of a receiver.”

Year of the scam

Stanford Financial claims to oversee $50 billion in funds.

Last year was filled with scams of all types. From Bernard Madoff’s $50 billion Ponzi scheme to individuals setting up fraudulent “work from home” companies, 2008 appeared to be the year of the scam. Now, only a few weeks in to 2009, it appears maybe the trend will continue. Many con artists have used the recession, mortgage crisis and credit crunch to prey on people. It is important to stay financially educated to avoid these scammers.

Personal Money Store’s Money Blog can help you in your quest for financial education with articles about payday loans, scams and other general financial news.