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Article Archive: Crime

Financial cancellation
11/12/23   Crime
"Banks generally won't say how often they are closing accounts this way, and they're not tracking how often they get it wrong. But federal data offer clues."

Almost had me
10/13/23   Crime
"Stay calm. Scammers thrive on creating panic and urgency. It's crucial to remain composed and not let fear cloud your judgment."

So many cheaters
11/27/22   Crime
"It feels like we can.t go a week without some crazy cheating scandal popping up."

Not Buffett
11/20/22   Crime
"bubbles are masters of disguise. Still, they often draw from the same playbook. Here are four reasons FTX succeeded in fooling so many."

11/20/22   Crime
"The FTX scandal is on a par with the Madoff fireworks of fifteen years ago in terms of the amount of people affected, the institutions duped and the money that's missing. There might be as much as $10 billion missing and no one knows exactly where it went."

An old story in modern times
10/23/22   Crime
"Duncan Mavin's great book on the Greensill Capital debacle - tells us - as if we need to be told - that the illusion of omniscient bankers is just an illusion - and that dross masquerading as financial innovation continues well after the financial crisis."

Bull market grift
06/24/22   Crime
"Stock markets have a long history of fraud and grift during bull markets. Grifters find it easier to entice would-be 'suckers' when everyone seems to be making a fortune but them. One such example took place at the start of the 1900s that has played out in some form or another in every bull market since."

Conspicuous corruption
09/05/21   Crime
"People can exhibit their status by the consumption of particular goods or experiential purchases; this is known as 'conspicuous consumption'; the practice is widespread and explains the market characteristics of a whole class of goods, Veblen goods, demand for which increase in tandem with their price. The value of such positional goods lies in their distribution among the population - the rarer they are, the more desirable they become. At the same time, higher income, often associated with higher status, has been studied in its relation to unethical behavior. Here we present research that shows how a particular Veblen good, illicit behavior, and wealth, combine to produce the display of illegality as a status symbol. We gathered evidence at a large, country-level, scale of a particular form of consumption of an illictly acquired good for status purposes. We show that in Greece, a developed middle-income country, where authorities cannot issue custom vanity license plates, people acquire distinguishing plate numbers that act as vanity plate surrogates. We found that such license plates are more common in cars with bigger engines and in luxury brands, and are therefore associated with higher value vehicles. This cannot be explained under the lawful procedures for allocating license plates and must therefore be the result of illegal activities, such as graft. This suggests a pattern of 'conspicuous corruption', where individuals break the law and use their gains as status symbols, knowing that the symbols hint at rule-breaking, as long as the unlawful practice cannot be incontestably established."

A famous con man
05/09/21   Crime
"But though the movie claims to be based on a true story, creating the myth of Frank W. Abagnale Jr. might be the best con that Abagnale actually pulled. A new book contends that the story of the charming teen running from the FBI and pulling off all those impersonations without getting caught is mostly made up."

My worst investment
04/25/21   Crime
"Everything went along swimmingly, with Mr. B sending me monthly statements indicating the steady rise in the value of my coins. I went to a few more seminars, where now he was advocating that, in addition to gold and silver, I may want to invest in a couple of small-cap stocks listed on the Toronto Stock Exchange..."

The imposter
12/12/20   Crime
"Shaun MacDonald was an ambitious tech innovator whose start-up was going to revolutionize the crypto economy. His wealthy investors had no idea that their charismatic founder was really Boaz Manor, a notorious Canadian white-collar criminal. It was only a matter of time before they discovered the truth"

Playing dirty
09/26/20   Crime
"You would imagine that one of the best players you've ever seen in your life would have no issues saying, Let's play then. I can't really figure out an answer to why he won't do that."

The wildest insurance fraud scheme
08/30/20   Crime
"Over a decade, Theodore Robert Wright III destroyed cars, yachts, and planes. That was only the half of it."

Fire and fraud
07/26/19   Crime
"The May 11 fire at Enloe State Bank set off a chain of events unlike anything the town.s 2,000 residents had ever seen. Before the month ended, the Texas Department of Banking had closed the bank, citing 'insider abuse and fraud by former officers.'"

Why did Enloe State Bank fail?
07/07/19   Crime
"The failure of Enloe State Bank is fascinating, and after a little digging I'm convinced there's a lot more here than meets the eye. First off in the FDIC's press release they note that the bank had assets of $36m and deposits of $31m. So then why did Legend Bank (the acquiring bank) only take $5.2m in assets and why did this little bank incur a $27m hit to the FDIC's insurance fund? Secondly if you Googled the bank news articles from two weeks ago appeared saying that the ATF was investigating a suspicious fire at the bank. Someone was seen burning papers inside. Suddenly this is starting to sound like a movie plot and merited further investigation."

A fake goose
01/28/19   Crime
"When the coat arrived, it was army green instead of the forest green I had ordered. It was heavy, not lightweight. It didn't fit. It smelled of chemicals. And the white Canada Goose patch? It looked off; it's the patch on the right at the top of this article. On Canada Goose's website, a page dedicated to the dangers of counterfeiting explains that every one of its products has a hologram label with a polar-bear image, proof of authenticity. With a $925 pit in my stomach, I checked my coat. It had a hologram sewn into the seam but, sure enough, no polar bear."

Longest fraud sentence in Canada
07/02/18   Crime
"The former Waterloo Region financial adviser fleeced 41 people - many with little investing experience - out of $10 million."

The reporter who took down a unicorn
05/28/18   Crime
"How John Carreyrou battled corporate surveillance and intimidation to expose a multibillion-dollar Silicon Valley start-up as a fraud."

Enron, 10 years after
12/04/17   Crime
"I lost roughly 90% of my net worth in a week. I never recovered. My marriage of 22 years blew up, and my entire network was nuked. I realized almost immediately that [complete] financial recovery wasn't possible... Even today, I worry that I might not be able to find a financial road to provide adequately for my son [who is in second grade]."

Frank Abagnale interview
12/04/17   Crime
"His transformation from one of the world's most notorious con men to an international cybersecurity expert trusted by the FBI has been mythologized in film and literature - but the takeaways he shares are the real deal." [video]

The dangerous world of tiny IPOs
11/11/17   Crime
"One executive was convicted of filing false tax returns, another for obstructing justice and a third accused of selling unregistered stock. But three tiny companies with ties to the executives have now gone public in the U.S. in what may just be the zaniest little market on Wall Street: mini-IPOs."

The latest investment scam
03/05/17   Crime
"Canadian securities regulators have started a task force to raise awareness and protect Canadians from the latest investment scam, so-called binary options that can cost investors everything they have."

The Pigeon King
12/19/15   Crime
"Galbraith's reign as Pigeon King lasted seven years, from 2001 to June 2008, when his empire imploded. The prosecution likened his company, Pigeon King International, to a Ponzi scheme - much like Bernard Madoff's operation, which happened to crumble just months after Galbraith's, except that where Madoff's scheme centered on stocks and securities, Galbraith's used live birds. Pigeon King International sold breeding pairs of pigeons to farmers with a guarantee to buy back their offspring at fixed prices for 10 years."

Insider trading
11/15/15   Crime
"The idea is that if you're an insider and you disclose information for your own personal benefit, or just trade on it yourself for profit, then that sure looks like a breach of duty to your company. But if you don't get a personal benefit from the disclosure, then odds are that you're doing it for some legitimate, or legitimate-ish, business reason. It might be a misguided business reason, or one that the company doesn't like -- in Dirks itself, the insider was disclosing fraud to an investment analyst -- but it's probably not the sort of corrupt breach of duty that the law punishes."

Beware phony CRA tax owing calls
10/24/15   Crime
"The Canada Revenue Agency can be tough, but it won't call you to threaten court fines or arrest for tax evasion."

How I was almost suckered into a pyramid scheme
04/04/15   Crime
"This got me thinking. What makes people like this so effective? How is it that smart people routinely lose their life savings to hucksters? How can we identify their strategies in advance so that we don't fall into these traps? While I don't have all the answers, the presenter at this event used many classic emotional-manipulation techniques discussed by Robert Cialdini in his book, Influence"

No, that's not the IRS calling. Just hang up.
03/20/15   Crime
"Phone calls by fraud artists posing as Internal Revenue Service employees and demanding money have surged in recent months"

Ways investors can avoid being duped
08/24/14   Crime
"In the investment world, there is no way to avoid the occasional fraud. It is simply a numbers game. The more companies you evaluate, the more likely you are to encounter one. Moreover, it is usually difficult to detect which companies are fraudulent, as companies can have duplicitous management teams and aggressive financials without necessarily breaking the law."

The FBI pump-and-dump scam
07/18/14   Crime
"So the main lesson here is, if you want to run a pump-and-dump scam, the FBI is not a great partner. That or "just don't run a pump-and-dump scam," I guess, take your pick. There are other lessons, though. One is how strangely close this all was to being legal."

Cynk and short selling
07/12/14   Crime
"If you spot what you think is a penny stock pump-and-dump scam, don't short it! It might be a trap!"

Stock promoters make inroads
03/22/14   Crime
"Several finance websites have published articles by guest contributors who were allegedly paid to promote the stocks they were writing about, raising ethical concerns."

Optimism and credibility of stock spam
01/12/14   Crime
"This study examines attention-driven investment decisions using a sample of firms essentially unknown to investors prior to becoming the target of a stock spam campaign. We show that the market reaction to spam varies predictably with the content of the spam message. Spam date returns and volume are significantly higher for stocks targeted by spam emails containing optimistic target price projections bundled with ostensibly credible information quoted from a previously issued company press release. There is also some evidence that disclaimers in spam messages reduce, but do not eliminate, the market response. Attention effects also contribute to spammers. selection of stocks to target and to spam.related enforcement actions by the Securities and Exchange Commission."

Concrete Equities fraud
03/08/12   Crime
"Viewers of the early seasons of CBC's Dragons' Den will remember the oft-repeated ad wherein an improbably young, somewhat swarthy company president touted the safe, superior returns of an investment company called Concrete Equities. Between static promo shots of office buildings, Vincenzo De Palma extolled the security of investing in income-producing real assets in lazy diction, as if an up-and-comer like him lacked the time to pronounce every consonant. But Concrete Equities was the entrepreneurial reality show's lead sponsor, and that lent it a sheen of respectability. Had the producers at the CBC put the company's management in front of the Dragons, they likely would have discovered De Palma and Co. were neither licensed nor qualified to market and manage a portfolio of real estate investments. Following a two-year investigation, he and three other principals in Calgary-based Concrete Equities were disciplined in January by the Alberta Securities Commission - including the largest fine ever imposed on an individual in the province - for having sold investments without being registered, and lying to investors. But their comeuppance didn't occur before they had raised $118 million from 3,700 people and come close to losing it all."

Scammers no match for sense of humour
10/24/11   Crime
"Rob received a call from "Jim" in India. Jim launched into his spiel: Rob's Windows operating system was infected. Rob told Jim he has no windows. Jim insisted that he did. Rob deadpanned that his computer had no windows...nor doors."

Grandparents scam
10/06/11   Crime
"Last week my 83-year old mother almost became a victim of the "grandparent scam." She picked up the phone and the caller said he was her grandson. When she asked if it was Charles, my son, the caller said yes. Mom sometimes has trouble hearing on the telephone, but she said it sounded just like him. As we later found out, he gave her the classic story. He said he had an accident with a rental car in Montreal and was in jail. He said needed $4,000 wired via Western Union to his court-appointed lawyer to be released and provided a name. The caller asked my mother not to call either my husband or I as we would be too upset. ..."

The roots of the Sino-Forest mystery
09/03/11   Crime
"Part of what is so astonishing is that Sino-Forest and its business activities failed to arouse serious suspicions or concerns with most investors until June of this year when a short seller named Carson Block and his firm, Muddy Waters LLC, first levelled accusations of fraud against the company."

Betting against flimsy Chinese firms
08/31/11   Crime
""Historically, stock scams are promoters promoting stories. The actual numbers will tell a more truthful story," he said. "If it's a mining company and there is nothing in ground and the numbers don't lie. The people do. The trick here is that the numbers are made up.""

Madoff of the Midwest
08/02/11   Crime
"The indictment charges that from 2005 to 2009, Durham masterminded a Ponzi scheme that defrauded 5,000 investors in Fair Finance out of some $207,246,329, of which only a fraction may be reclaimed. If convicted, Durham and his alleged conspirators could each face 45 years in prison and $3 million in fines. The case is due to go to trial next year, and the court has registered not-guilty pleas for the three defendants, all of whom declined or did not respond to interview requests. But from interviews with numerous associates, a profile of Durham, who Indianapolis has taken to calling the "Midwest Madoff," has emerged. In retrospect, Durham's alleged fraud is almost as impressive for its size as for how obvious it should have been."

Catch and release
07/22/11   Crime
"Spencer Lanthier, who serves on a variety of boards, recently asserted during a speech in Toronto that, despite recent advances in regulation and enforcement, large frauds still unfold in Canada largely with impunity. He claimed this country has "the weakest standards of enforcement in the G8." Other critics routinely call for speedier investigations, more charges and more serious punishments. Even IMET superintendent Dean Buzza concedes that his units haven't lived up to expectations. "We overpromised and underachieved," he says."

Nothing for money
07/22/11   Crime
"While the major stock exchanges, securities regulators and police have made significant progress in the past dozen years purging the old-style boiler rooms and pump-and-dump schemes from the public markets, the marketing of suspect securities continues to thrive in the private domain. Typically, a company advertises or otherwise promotes a particular venture to investors, usually at a fixed price and for a fixed term. At the end of the term, the asset (usually real estate) is meant to be sold, and investors get their money. Sometimes, it begins producing an income stream for the investors. At least, that's how it works in theory."

A dirty business
06/25/11   Crime
"In the language of hedge funds, Galleon's strategy was to "arbitrage reality" with the consensus on the Street - to find information about a given company that diverged from Wall Street's view, allowing Galleon to cash in when the company's stock price rose or fell."

The audacity of Chinese frauds
05/27/11   Crime
"Frauds and audit failures can, and do, happen in many countries, including in the United States. But the audacity of these frauds, as well as the efforts to intimidate auditors, stand out. If investors such as Goldman Sachs and Hank Greenberg cannot fend for themselves, something more needs to be done if Chinese companies are to continue to trade in American markets."

U.S. Arrests Online Seller Who Scared Customers
12/12/10   Crime
"Federal law enforcement agents on Monday arrested a Brooklyn Internet merchant who mistreated customers because he thought their online complaints raised the profile of his business in Google searches."

Toyota hybrid horror hoax
03/14/10   Crime
"Journalism schools are supposed to teach that skepticism is paramount. "If your mother says it, check it out," goes the old adage. Yet comments on Web sites across the country reveal that practically everyone thought the Prius incident was a hoax--though they couldn't prove it--except for the media. They have been as determined to not investigate Sikes' claims as Sikes was to not stop his car. It's a Toyota media feeding frenzy and the media aren't about to let little things like incredible stories and readily-refutable claims get in the way."

Earl Jones: In Trust
02/06/10   Crime
"Disgraced Montreal financial advisor Earl Jones awaits sentencing for orchestrating a Ponzi scheme that defrauded his investors of $50 million for more than two decades. The fifth estate investigates Jones' life, how he created his scheme and how he was able to get away with fraud for so long."

Paying zero for public services
01/30/10   Crime
"For people to speak up against corruption that has become institutionalized within society, they must know that there are others who are just as fed up and frustrated with the system. Once they realize that they are not alone, they also realize that this battle is not unbeatable. Then, a path opens up - a path that can pave the way for relatively simple ideas like the zero rupee notes to turn into a powerful social statement against petty corruption."

Institute for Financial Learning Ponzi Scheme
12/03/09   Crime
"Predictably, mostly elderly people seem to have been the biggest victims of this scam and it is outrageous that crimes such as this that are so devastating on so many people does not seem to result in punishment that fits the severity of the crime."

Is 'honest services fraud' a bogus charge?
10/25/09   Crime
"Critics of the law say it unfairly gives prosecutors a way to bring vague charges when they can't build a case for more conventional crimes like bribery. "It's been very, very broadly applied," says Patricia Pileggi, a former U.S. prosecutor who is now an attorney with the firm Schiff Hardin in New York. "It's useful to prosecutors because they are not required to prove that somebody got a tangible, monetary benefit" from their actions."

Bond, Fake Bond
10/22/09   Crime
"It sounds like something out of a summer caper flick: Two men carrying Japanese passports were apprehended trying to enter Switzerland from Italy via commuter rail in June. The men looked out of place on the train, which tends to carry low-income manual laborers. That was enough to raise the suspicions of the Italian authorities, who detained the passengers and rifled through one of their briefcases. Inside was what appeared to be $134 billion in U.S. Treasury bonds labeled with denominations of $500 million and $1 billion. (This despite the fact that the Treasury has never produced bonds in denominations greater than $100,000.) Later this summer, history seemed to repeat itself when Italian authorities intercepted another cache of false T-bills from the Philippines destined for the United States worth an alleged $116 billion. Why on earth would anybody create fake Treasury bonds - in such eye-popping denominations?"

Galleon case ushers in wiretaps
10/17/09   Crime
"U.S. prosecutors who used wiretaps to make their insider trading case against billionaire Raj Rajaratnam, founder of hedge fund firm Galleon Group, said they will use similar tactics to fight future crimes on Wall Street."

Freedom Investment Club wavering on ruin
09/25/09   Crime
"The Vancouver-based Freedom Investment Club has turned into a tar-pit for its 5,500 members. Far from providing them with financial freedom, it has bound them with debt, foreclosure action and the prospect of losing their entire investment."

Las Vegas' medical mafia
08/21/09   Crime
"Prosecutors charge that a group of top Las Vegas plaintiffs lawyers and doctors, with the 64-year-old Awand at its center, conspired in an audacious fraud. The participants appeared to act independently but instead colluded. Unwitting accident victims were recruited as plaintiffs and then persuaded to undergo serious, sometimes needless, surgeries. The procedures, in turn, helped inflate the size of personal-injury claims. The result was multimillion-dollar insurance settlements, even for dubious cases, and lucrative fees for the doctors, the lawyers, and, of course, Howard Awand."

See no evil and pay no penalty
07/10/09   Crime
"For years, Beazer Homes USA was much more than a builder of houses. It was a veritable crime wave. The company defrauded buyers, particularly poor people being sold homes they could not afford. It defrauded the federal government by getting government-guaranteed mortgages for those buyers. It created subdivisions now dominated by dozens of foreclosed homes. And while it was at it, Beazer lied to shareholders about how much money it was making. First, it lied by claiming it was making less than it was. Then it lied by hiding losses when the housing bubble began to burst. To keep the lies going, the government says, the company prepared fraudulent documents to mislead its auditors."

You've got blackmail
07/02/09   Crime
"My advice: If AOL comes after you, then go after AOL."

More brazen than Madoff?
04/05/09   Crime
"In a year of fabulous frauds, the one that glitzy Manhattan attorney Marc Dreier has been charged with is in some ways the most fabulous of all."

Stanford attorney's exit 'screams fraud'
02/19/09   Crime
"Regulators pounced days after a lawyer at the Antigua bank at the heart of the case 'disaffirmed' everything he had told authorities. 'The attorney's withdrawal is a massive red flag' that 'screams fraud,' said Peter Henning, who teaches criminal and securities law at Wayne State University in Detroit."

$8 Billion fraud
02/17/09   Crime
"The Securities and Exchange Commission accused Robert Allen Stanford, the chief of the Stanford Financial Group, on Tuesday of conducting 'a massive ongoing fraud' in the sale of about $8 billion of high-yielding certificates of deposit held in the firm's bank in Antigua. Also named in the suit were two other executives and some affiliates of the financial group."

Why we keep falling for financial scams
01/03/09   Crime
"Intelligent people have long been ruined by frauds. Psychologist Stephen Greenspan, who specializes in gullibility, explores why investors continue to be swindled -- and how he came to lose part of his savings to Bernard Madoff."

The Perfect Ponzi
12/15/08   Crime
"As the investigations into Bernie Madoff's gigantic Ponzi scheme continue, one thing is becoming clear: The reason it lasted so long and got so huge is that it was superbly executed."

How can you spot a wall street crook?
12/13/08   Crime
"The key concept here, developed by MIT professor and noted hedge-fund theorist Andrew Lo, is "serial correlation." Simply put, serial correlation is the degree to which each month's returns in a fund mirror the results of the month before. A fund that returns the exact same amount every month is perfectly serially correlated. Madoff's returns were strikingly consistent month after month, year in and year out. That kind of performance - a nice, smooth line going up no matter what the market does - is a really good sign that you should look more closely."

'Financial psychopaths' wreak havoc
12/13/08   Crime
"Two of the most remarkable frauds in the history of finance were exposed this week. They are just beginning to unravel and as such we don't fully understand the magnitude of the crimes. But already I can tell you they are of epic, even cinematic, proportions. This is really from the "can't make this stuff up" school of news. These two miscreants aren't just every day corner-cutters, they are world-class whack."

'Illegal' glacier investment juiced returns
12/12/08   Crime
"His funds were the envy of the imploding hedge fund sector, managing to deliver a 159-per-cent return so far in a year marred by the worst bear market in decades. Now Otto Spork, a former dentist, is facing allegations that the fund's returns were juiced by unsubstantiated valuations in several underlying investments in Icelandic glaciers."

Top broker accused of $50 billion fraud
12/12/08   Crime
"Bernard L. Madoff, a former chairman of the Nasdaq Stock Market and a force in Wall Street trading for nearly 50 years, was arrested by federal agents Thursday, a day after his sons turned him in for running what they said their father called "a giant Ponzi scheme." The Securities and Exchange Commission, in a civil complaint, said it was an ongoing $50 billion swindle, and asked a judge to seize the firm and its assets. "Our complaint alleges a stunning fraud that appears to be of epic proportions," said Andrew M. Calamari, associate director of enforcement in the SEC's New York office."

Help wanted: compliance officer
10/04/08   Crime
"In these trying times, it will come as a great relief to many to learn that there will be at least one new hire on Bay Street between now and Christmas (2009). The subject of this post is a little unusual for PrefBlog, but I.m just trying to help out and spread the news of a vacancy. And besides, this is hilarious."

Trader, father, veteran, convict
06/11/08   Crime
"As famous CEOs marched off to jail, so did lots of guys like Craig Gile. The Citigroup trader had a wonderful life - until the Feds decided to make an example of him. Was it fair?"

Societe Generale reports EU4.9 billion trading loss
01/24/08   Crime
"Societe Generale SA said bets on stock index futures by a rogue trader caused a 4.9 billion-euro ($7.2 billion) trading loss, the largest in banking history. Jerome Kerviel, 31, was the trader responsible, the Paris- based bank said today. Societe Generale plans to raise 5.5 billion euros from shareholders after the loss and subprime- related writedowns depleted capital. The Bank of France, the country's banking regulator, is investigating the alleged fraud."

Inside a stock fraud
01/13/08   Crime
"His signature moves involved purchasing public shell companies and manipulating their shares in what the industry calls a "pump and dump" operation. The scheme, one of the oldest forms of stock market fraud, is a favourite of con artists. In Mitton's version, he would find a shell company, set up a personal network of buyers and sellers, release "news" and then direct the network's trading in company shares. The idea was to artificially create investor interest and trigger a jump in the company's stock price. Network players would unload any shares they held and pocket the profits before regulators, brokerages and average investors realized anybody had duped them. In the aftermath, Mitton usually left a trail of misery for victims who suffered everything from financial ruin to family breakups and humiliation."

The match king
01/01/08   Crime
"If Birgitta is the patron saint of Europe, Kreuger was the patron saint of sinners; he was arguably the most brilliant and ambitious swindler who ever lived. In the first three decades of the 20th century, he built up an industrial empire founded on the most humble of innovations, the Swedish-made safety match, that lit a fire of speculative excess around the world creating, then burning through, fortunes that would be measured now in the billions."

Con artists turn shell companies into cash
12/27/07   Crime
"Oklahoma lawyer John Heskett logged onto his computer one day in late June, 2005, to check out an inactive shell company owned by his clients who were considering using it in a business deal. What he saw made no sense. "I saw this wild trading going on, and I couldn't imagine why," he said. "I was in total disbelief. I knew there could not be that many shares in the market, not even close, not even 1/100th of those shares in the market ... I had to pinch myself and say, 'Am I crazy?' " After some online searching and a few phone calls to the company's transfer agent, Mr. Heskett contacted the U.S. Securities and Exchange Commission to report a bizarre crime: Someone, he said, had stolen his client's public company. Sixteen months later, the SEC and the British Columbia Securities Commission announced they had reached settlements with two Canadian men who admitted to illegally taking control of Greyfield Capital Ltd. and arranging to have 600 million new shares issued using the company's ticker symbol. Surprisingly, the unusual case is not the only one of its kind in Canada or the United States. Regulators say corporate identity theft has become another twist in the world of securities fraud, where criminals seem to find endlessly creative ways to dupe investors." [Another great day for Canadian regulators.]

Why the OSC so rarely gets its man
12/02/07   Crime
"Bruce McLaughlin took millions of dollars from the company he led to pay off personal debts. That was the conclusion of a court-appointed accounting firm that looked into suspicious transactions at Mississauga property developer Mascan Corp. The findings of the audit pressured the Ontario Securities Commission to take legal action on behalf of Mascan's minority shareholders. That was 23 years ago. The case is still on the OSC's books, listed on the commission's website under 'Current Proceedings.'"

Why white-collar crime team fizzled
12/02/07   Crime
"Today when the enforcement team makes the news, it's usually because of its dismal track record. Instead of reaping glory, the vaunted police squad is becoming a public whipping boy in the debate about Canada's perceived tendency to let white-collar crime go unpunished."

Canada's losing war against white-collar crime
10/05/07   Crime
"The system is pretty much non-existent. You can fix something that is hemorrhaging, but if the body is already lifeless, you have to start fresh. We need politicians to admit that the system is broken from the top to the bottom. Canadians have to understand that we have a two-tiered justice system, where people with money can play the system. Show me a person who has gotten any sort of satisfaction from going to the authorities after being victimized by a white-collar fraud.who got their money back in a timely fashion and didn't go through a lot of grief. I can't think of a single person like that."

New credit card scam
09/23/07   Crime
"The caller asks you to look for seven numbers on the back of your card. He reads you the first four, which are part of your card number, and asks for the last three - the security numbers that verify you are the possessor of the card. When you give the security numbers, he says, "That is correct. I just needed to verify the card has not been lost or stolen and you still have it." The scam is effective because you say very little. The caller already has your credit card number, your address and the issuer's name and gives you all the information - except for the one piece he wants."

Scam alert
09/11/07   Crime
"Pratkanis says these telemarketers gain victims' trust by calling often, boosting their self-esteem and by bad-mouthing their children and other watchdogs. He offers some tips for countering a relative's allegiance to scammers and protecting against repeated rip-offs."

Stealing from the dead
08/11/07   Crime
"In March 2006, the Tennessee board that regulates cemeteries got a five-page complaint, in neatly penned cursive longhand, from Geraldine Story, an elderly Memphis woman. Story's husband Ralph had died on January 22. In preparation for that day, he and she had each, more than thirty years earlier, purchased prepaid funeral services from the Forest Hill Funeral Home in Memphis, to make sure that each's burial expenses would not be a burden to the other or to their families. Six hours before her husband's wake, however, Story learned that the casket would not look anything like the bronze one promised in the contract. Instead, it would be made of brown painted wood, with "a single latch on the lid that resembled a cheap tool box," as she wrote. If she wanted an upgrade, the least expensive alternative would run $3,995.00. She bought that one, of course, but after the funeral she followed up and was eventually told by a candid funeral home staffer that the funds set aside to fulfill her contract had been "skimmed off the top several times," and now the home was stuck with more than 13,000 "pre-need" contracts just like hers with no way to pay them. "He said they had to operate the way they are doing," she wrote, "or go out of business in two months and we don't want that, do we?" The then-unraveling scam that victimized Ms. Story turned out to be worse than that, even. The same folks who looted Forest Hills, according to Michigan authorities, were also looting trust funds from 28 cemeteries in that state (including the final resting places of Rosa Parks and Henry Ford)."

Crooks with deep pockets
07/22/07   Crime
"Berger's case is one example of how difficult it can be for authorities to track down white-collar fugitives. They have advantages that more typical criminals lack, including ties to foreign countries, advanced degrees, and barrels of money that can help secure safe havens. Berger, now 35, was born in London and grew up in Salzburg, Austria. He managed hundreds of millions of dollars out of Park Avenue offices in New York before authorities charged him with misleading investors about his stockpicking prowess. Even as he reported stellar returns to his backers, Berger was hemorrhaging more than $400 million by betting against Internet stocks in the late 1990s. Using his connections and his persuasiveness, Berger was able to avoid legal authorities for years."

Imperfect union
04/05/07   Crime
"Lies, kickbacks, union corruption and tens of millions of dollars in ill-gotten gains are among the accusations laid out in a lawsuit that's likely to strike fear in the hearts of labor leaders and financial executives across the country."

Big insider-trading bust
03/02/07   Crime
"The case involves allegations that hedge funds bought information about impending rating changes on stocks from an executive at UBS, got tips about upcoming corporate mergers from a former Morgan Stanley compliance officer, and paid a Bank of America broker for the right to get shares in hot initial public offerings. There's even a charge that some day traders, who had gotten wind of the alleged activities, were shaking down other traders for money to keep secret their role in the purported insider-trading scheme."

New backdating scheme rips off stockholders
01/10/07   Crime
"It's tempting to roll your eyes at the latest options backdating news - more evidence that in certain ways American executives are still the world's most creative. But in fact it's worth a closer look, because this type of conniving, which involves backdating exercise dates rather than grant dates, is different and in some ways worse. Bizarrely, while this book-cooking appears to be a tax scam, it may actually leave the U.S. Treasury better off than if the executives had been honest. What it reveals most strongly is some executives' utter contempt for their shareholders."

Partners in crime
09/26/06   Crime
"The SEC figured out that many of the stocks were involved in mergers or acquisitions -- and that Merrill Lynch had worked on each of the deals. "It was an aha moment," says Markowitz. "It looked like there was a constant leak out of one of the biggest banks in the country." About a week into the investigation, Melissa Coppola, an SEC forensic accountant, came into Markowitz's office. While the Merrill Lynch explanation worked for five of the stocks the group traded, it didn't for the 22 others. Then Markowitz remembered an old scam he'd heard about: "Were any of these stocks mentioned in Business Week?" he asked. When Coppola checked, she unlocked much of the rest of the case."

Fat cat sleaze escapes our outrage
09/22/06   Crime
"We are in the midst of a slimy, sleazy, putrid scandal of corporate self-dealing and cronyism. It points up just how elitist and corrupt the power-suited set of the corporate boardroom can be. And it is widespread. Over 100 companies -- major corporations -- have been implicated so far. And yet ... where's the outrage? C'mon. Even a dead man was getting a piece of the pie."

Suspicions and spies in Silicon Valley
09/11/06   Crime
"HP has now admitted to spying on its own directors' personal phone records in order to root out a leaker. It did so by using private investigators who engaged in "pretexting - calling up phone companies and impersonating directors seeking their own records. HP late last week additionally admitted to spying on the phone records of nine journalists, including at The New York Times and Wall Street Journal, some of which date to 2005. HP's Dunn stands accused of orchestrating the investigation. Perkins quit in a rage over the surveillance and wants Dunn out as chairman; HP is painting him as an angry traitor with a vendetta against Dunn. Lying, spying, name-calling, finger-pointing - all of it is a tragicomedy that Shakespeare might've penned had he gotten an M.B.A."

After Enron, corporate wrongdoing still thrives
05/31/06   Crime
"Now, it would be nice if the Lay and Skilling convictions marked the end of this kind of fraud. The terrible part is that it's still going on in a huge way. Lately, investigative reporters at "The Wall Street Journal," aided by university professors, are discovering that top executives at some of the biggest companies in the nation are looting their companies in an almost unbelievably brazen way."

A broker battered
10/14/05   Crime
"The boss of Refco, one of America's leading futures brokers, has been arrested on fraud charges a couple of months after the firm's successful flotation. The scandal may damage the reputation of an industry that has lately begun to forge an image of respectability"

Sharks in the housing pool
08/25/05   Crime
"Deed thieves, property flippers, equity strippers -- these con artists are duping banks and homeowners, and there are lots of them"

Zero to a billion in two years flat
05/27/05   Crime
"Bob Rusko got an eerie feeling when he first stepped into the office of Portus Alternative Asset Management Inc. It was midnight on Friday, March 4, and Rusko's team had been trying to get into the company's two offices in downtown Toronto all evening. Portus had been put into receivership by an Ontario court that afternoon and Rusko, a senior vice-president at KPMG Inc., was named receiver. Things had gotten off to a bad start. The landlord at the company's main office wouldn't let Rusko's people in. Another team had gone over to Portus's other office, located a few blocks away on the 69th floor of First Canadian Place. This time no one stopped them. Rusko joined them. When he opened the door, he couldn't believe his eyes. The place had been stripped bare. There were no phones, no computers, no paper. Even the paintings had been ripped from the walls, leaving small gouge marks where the nails had been. Just about the only thing left behind was an empty tequila bottle."

Anatomy of an ID theft
11/22/04   Crime
"Five months rolled by without incident, but then the red flags popped up in rapid succession. A call from her bank, Wells Fargo, inquiring about her application for a line of credit. The same question from Chase, where she had no accounts. Then a message from a local Ford dealer, who said he hoped to see her later that day with the additional paperwork they had discussed. Harding knew nothing about these transactions. Instead, she realized, she had become a victim of one of the fastest-growing crimes in the U.S.: identity theft."

Spitzer sues broker, insurers
10/14/04   Crime
"New York Attorney General Eliot Spitzer Thursday sued Marsh & McLennan Cos., the world's No. 1 insurance broker, for steering unsuspecting clients to certain insurers in exchange for lucrative payoffs."

Homes fall prey to identity thieves
08/15/04   Crime
"With a record, hot real estate market, the scum -- often in organized rings -- have set their sights on our homes."

Recovering from identity theft
08/09/04   Crime
"If you suspect your identity has been stolen, act fast as time may not be on your side."

419ers morph into Murder Incorporated
07/19/04   Crime
"It's easy to dismiss Nigerian 419 advance fee fraudsters as a bunch of chancers who prey on the gullible and the greedy and occasionally get lucky. After all, a fool and his money are soon parted, and the victims of these scams have brought financial misfortune on themselves, isn't that right?"

Suits on the lam
06/27/04   Crime
"Corporate chiefs wanted by the law can run, but can they hide?"

Thieves don't quit
04/21/04   Crime
"The G-men were all over Terry Dowdell. But their feverish efforts didn't stop him from running a $120 million Ponzi scheme."

Counterfeit new $20s debut
10/29/03   Crime
"Less than a month after the release of new $20 bills with features designed to deter forgeries, counterfeiters are already at work."

How safe is your identity?
09/21/03   Crime
"Identity theft is the latest trend in consumer fraud. PhoneBusters, an anti-fraud group set up by the Ontario Provincial Police, says there have been about 8,817 reporter incidents of identity theft across the country this year, up from 8,178 for all of 2002. The value of these thefts has risen to $14.1-million so far this year from $8.8-million last year."

Catch me if you can
08/16/03   Crime
"The hunt for an eBay scammer. Jay Nelson ripped off buyers on eBay and Yahoo until the Feds put him behind bars. We catch up with him in prison, where he'll be until 2007."

Fake bank site part of Nigerian scam
04/18/03   Crime
"They're certainly persistent. Another flavor of the well-known Nigerian scam has popped up, this one even more elaborate than the familiar e-mail solicitation. The scam appears to target former recipients who were initially drawn in by an e-mail offer, but abandoned the scheme half-way through. To ease potential victims' fears, scam artists have set up a fake online bank, and even deposited funds into a bogus account there."

Fake escrow site scam widens
12/18/02   Crime
"Six months later, the scam has widened considerably, and it now appears to be among the most successful Internet cons ever. By taking advantage of Net auction winners' inherent trust of escrow sites, the con artists are stealing as much as $40,000 at a time from big-ticket auction winners. Their total take may well reach into millions of dollars so far. And while federal authorities, including the Department of Commerce and FBI, are investigating, there seems to be no way to slow down the con artists."

Was the IPO frenzy rigged?
11/14/02   Crime
"Remember those high-flying stocks sold for the first time in the 1990s, the ones that soared from $20 a share to $100 a share in hours? Some insiders now say the great price leaps for these "initial public offerings" - IPOs - were the result of insider agreements designed to force prices artificially high. The scam is called "laddering.""

U.S. seizes Tri-West assets
11/08/02   Crime
"Approximately 400 Manitobans invested in Tri-West. The club required investors to invest in units of US$1,000 for a period of one year with a return of 10% per month. A referral program was also part of the scam, whereby investors could make more money if they referred people to the club."

Caveat investor
10/26/02   Crime
"Bad investment decisions, corrupt brokers and tax reassessments can occur whether the investor is a near-retirement schoolteacher or a crusty day-trader."

Special report on scams
08/23/02   Crime
"Too Good To Be True: Stratospheric returns touted by promoters attract investors by the thousands, but along with those big promises come huge risks and potential for big losses."

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