Results tagged “fraud”

While you were busy doing Sudoku at your temp job, industrious 19-year-old computer whiz Adeniyi Adeyemi was using his three month temp job to launch a $1.1 million fraud scheme, according to a 149-count indictment. During his stint in the IT department at Bank of New York Mellon in November 2001, Adeyemi allegedly stole personal identifying information from dozens of employees, using the information from more than 30 bank and brokerage accounts in their names. Over the next eight years he used the stolen identities to set up more than 30 fraudulent bank and brokerage accounts, prosecutors say.

In an apparent first, six women posed as victims of domestic violence in order to jump to the top of the wait-list for government subsidized apartments, officials say. Over 127,000 families are on the New York City Housing Authority’s waiting list for Section 8 vouchers, which can be worth thousands of dollars a year. Qualifying tenants who get the vouchers pay 30 percent of their adjusted gross income toward the rent, and the government picks up the rest. And these women, who were all arrested over a period of four months, almost got away with it!

Irving Picard, the trustee in charge of liquidating Ponzi schemer Bernard Madoff's assets, now says many other people—not just Madoff's CFO Frank DiPascali—were involved with perpetrating the scheme. The NY Times reports, "According to a court document filed late on Friday, other longtime Madoff employees were in charge of managing 245 accounts for Madoff friends and family, and for them at least a few of the reported trades actually occurred."

The son of a Harlem landlord is accused scamming potential buyers by trying to sell a building he did not own. The commercial property, located on a triangular lot just north of Central Park at 21-41 Lenox Avenue, was entirely owned by another man. But alleged grifter Henry Vargas told buyers the man, Manuel Duran Jr., was just an elderly farmer from the Dominican Republic whose share was only 10 percent.

The Pepto pink palatial palace on Garfield Place is now off the market! That's not because it sold, either — the Brooklyn Paper reports that 92-year-old owner Bernie Henry's grandson is now "under investigation for forging key documents that have put a cloud over who has legal ownership of the building." Yikes! Some neighbors may be pleased to see the house stay pink for longer — one told the paper, “At first, you hate it because it’s new. But then you come to love it. And then you don’t want it to ever change.”

Hindsight is 20/20: The NY Times reports the country's "largest independent securities regulator found that its staff members had missed numerous red flags that would have uncovered frauds run by Bernard L. Madoff and the Texas billionaire R. Allen Stanford." Apparently the Financial Industry Regulatory Authority’s "predecessor, NASD, did not act from 2003 to 2005 on 'credible information from at least five different sources claiming that the Stanford C.D.’s were a potential fraud.'" While no whistleblowers specifically contacted Finra about Madoff (the SEC was warned), Finra did find " several facts worthy of inquiry...that, with the benefit of hindsight, should have been pursued."

Irving Picard, the trustee who is liquidating whatever can be found of Ponzi king Bernard Madoff's fortune for in order to repay his thousands of victims, says that he's going to sue Madoff's two sons, Mark and Andrew, as well as his brother Peter and niece Shana, noting that they made $150 million over the years. All four were employed at Madoff's firm and Picard said he'll sue them for negligence and breach of fiduciary duty, "Whether or not they have a criminal problem we will pursue them as far as we can pursue them and if that leads to bankrupting them, then that's what will happen."

Once a victim of Bernard Madoff's Ponzi scheme, alway a victim of Bernard Madoff's Ponzi scheme, but even the people trying to figure out the victims' claims are messing up: A laptop containing "names, addresses, Social Security numbers and some Madoff account information on 2,246 investors" was stolen from a car.

Back in 2005, it was the biggest residential land deal in the history of the city—Hudson Waterfront Associates, the Hong Kong-based consortium that worked with Donald Trump to develop and market the massive Trump Place development on the West Side, sold a 77 acre parcel of land to Extell for $1.76 billion. Now the Manhattan DA's office revealed it just arrested the project director for tax evasion and are looking into whether Hudson Waterfront evaded taxes on a $17 million portion of deal.

Philip Barry, accused of running a $40 million Ponzi scheme out of a Bay Ridge storefront, was charged with securities fraud by the feds yesterday. Barry allegedly promised his investors—many from his neighborhood—12-21% returns based on investments with stock options but he actually used the money to pay his own bills, speculate on real estate in Sullivan County... and start a mail-order porn business. The Daily News reports, "Duped investors [said] they knew he had a side business selling DVDs and CDs on eBay - and some said they always suspected something fishy. 'He said that prisons were his best customers,' said a shopkeeper near Barry's office who lost about $30,000 in the scheme and saw Barry walk by daily with a hand truck loaded with boxes on his way to the post office. 'He said they were videos, but he never said what kind.'" Barry's scheme fell apart in 2007 when clients wanted to cash out and the investigation began last year, when Barry himself told the feds he was running a Ponzi scheme.

The Inspector General for the Securities and Exchange Commission said the agency failed to conduct "competent and thorough" investigations about Ponzi schemer Bernard Madoff, even after at least six warnings. IG David Kotz wrote in his report, "Despite numerous credible and detailed complaints, the SEC never properly examined or investigated Madoff’s trading and never took the necessary, but basic, steps to determine if Madoff was operating a Ponzi scheme," adding that even Madoff himself was "shocked" that the SEC didn't check his trading records, which would have revealed the $65 billion fraud.

New York investor Hassan Nemazee, whose prolific political fundraising for Democrats like Bill Clinton, Hillary Clinton, Barack Obama and Charles Schumer, was released on $25 million bond yesterday. Nemazee is " accused of lying about his assets to obtain a $74 million loan from Citibank." The NY Times further explains, he "orchestrated the fraud by using forged documents showing that he held accounts with collateral worth hundreds of millions of dollars," but the accounts never existed or were closed. Nemazee did end up paying the money back to Citibank on Monday, but was arrested on Tuesday. He is under house arrest—monitoring device plus no computer or Internet access—at his Upper East Side duplex, which the Daily News says is worth $20 million (that plus his $8 million Katonah estate are what's securing his bond). Vice President Joe Biden, Rep. Carolyn Maloney and Sens. Barbara Boxer, Chris Dodd and Schumer told Politico they plan to return his donations. Time has a 2-minute look at Nemazee.

Today, the NY Post reported that Ponzi schemer Bernard Madoff was "dying of cancer"—according to its sources. And now the federal Bureau of Prisons says the Post's sources are wrong, with a spokeswoman saying, "While the NY Post story is full of inaccuracies, and we can’t specifically address all of them, we can tell you that Bernie Madoff is not terminally ill, and has not been diagnosed with cancer.." However, the Wall Street Journal's Law Blog spoke with a source "familiar with the situation...who reiterated that Madoff does, in fact, have a 'serious' form of cancer, though the source could not confirm that it was life threatening." Of course, the WSJ and Post are both owned by News Corp., so who knows? And now we are left to wonder if the BOP's statement is also referring to Madoff befriending the Native American inmates and visiting the sweat lodge shirtless and hanging out with the "homosexual posse."

The NY Post reports that Ponzi schemer Bernard Madoff is "dying of cancer"—at least according to its sources—and that's why he took the blame for the $65 billion fraud that landed him a 150 year prison sentence. One inmate claims, "He's been taking about 20 pills a day for his cancer. He talks about it all the time. He's not doing very well," but Madoff's lawyer or his wife's lawyer haven't commented. Additionally, prison sources say that he's "participating in Native American religious purification ceremonies held at an on-grounds 'sweat lodge'" (while shirtless!), "making new friends at the prison complex through another unlikely clique -- the homosexual posse, although the relationships are purely platonic," and being recruited to various gangs at Butner Correctional Complex. Still, one inmate questioned some of Madoff's thinking, "In prison, you stick to your own kind, but he's doing the exact opposite by hanging with the Indians and [homosexuals] -- so who is going to have his back?"

Hey, you've lost your life savings of $120,000 to $150,000 with an investor who was apparently running a $40 million scam out of a Bay Ridge storefront—what do you tell the Daily News? If you're Barbara Grebin, you say, "I don't hate him; I wouldn't want to waste my time hating anybody," but you make sure to add, "But I would like to throw him down the sewer." Philip Barry is accused of running a Ponzi scheme with dozens of victims—even NY State Conservative Party boss Michael Long lost $15,000, yet Long said, "I don't think he's a crook. I think he really felt that he was investing wisely and making money for people." Hence Barry's comment to the Daily News, "It's all in real estate. I'm going to keep on working to make sure everyone gets the profit they are entitled to." (Maybe his modest behavior had people hooked, too: "Investors said he was even too cheap to buy a sandwich for lunch... he brought in packets of cheese and bread to make his own.") While the authorities haven't charged him with a crime—though documents show he was promising clients returns of 12-36%—a judge ordered that he pay "hundreds of thousands of dollars in damages" to clients.

Now that Bernard Madoff's purported CFO Frank DiPascali has pleaded guilty to charges related to the $65 billion Ponzi scheme, speculation has begun about what he might be able to tell the feds. DiPascali's lawyer Marc Mukasey said in court that his client could be a cooperator "of a historic nature, somebody who can pull the curtain back on a fraud and answer a lot of questions"—the ones that "the whole world wants to be answered." The NY Times said that the feds have been look at some Madoff investors who are suspected of knowing they were participating in a Ponzi scheme. In other Madoff news, there's a tell-all book coming from a Madoff victim—and former extramarital fling! Bloomberg News reports that Sheryl Weinstein, an accountant whose family lost their savings, says she met Madoff 21 years ago when she was CFO at the Hadassah, the Women’s Zionist Organization of America Inc, "I now view that day as perhaps the unluckiest day of my life because of the many events set into motion that would eventually have the most profound and devastating effect on me, my husband, my child, my parents, my in-laws and all of those who depended on us."

As expected, Frank DiPascali, who acted as the chief financial officer for Madoff Investment Securities, pleaded guilty to helping Bernard Madoff (pictured) pull off a $65 billion Ponzi scheme. DiPascali, a self-described "kid from Queens" who landed a job with Madoff, said, "No purchases or sales of securities were actually taking place in their accounts. It was all fake. It was all fictitious. It was wrong, and I knew it was wrong at the time... I don't know how I went from being an 18-year-old kid who just happened to have a job to standing here in court. I regret everything I did. I hope my actions going forward with the government will make a difference."

Court papers reveal that Frank DiPascali, who said was the right hand man of $65 billion Ponzi schemer Bernard Madoff (pictured), will plead guilty. DiPascali, the chief financial officer of Madoff Investment Securities, waived his right to an indictment and will plead guilty to to criminal charges on Tuesday. Former federal prosecutor Andrew Hruska tells Bloomberg News, "It would be reasonable for him to cooperate. The evidence against Madoff was strong enough for Madoff to go down without a fight. That would make it very difficult for someone in DiPascali’s position to fight the charges," and notes that DiPascali has his usefulness, "He seems to have been the key player in executing the decisions that Madoff made." A source tells Newsday that DiPascali "was in charge of all the ladies who sent out [trading] confirmations. He had contact with the [hedge] funds." A spokeswoman for the law firm representing DiPascali—Bracewell & Giuliani LLP (yes, that Giuliani—had no comment.

Did you hear the one about the Coney Island Globe Tower? Today the Library of Congress posted a bunch of old New York Tribune covers in their Flickr pool, one displaying the ambitious tower, where the plans for it were announced in May 1906. Inside, investors were offered "a ground floor chance to share profits in the largest steel structure ever erected...the greatest amusement enterprise in the whole world...the best real estate venture." The Globe Tower would cost around $1,500,000 to erect, and the man behind it, Samuel Friede, was looking for the means to make it happen.

Here's another update about Bernard Madoff's condition in federal prison, courtesy of the lawyers representing the investment faker's victims. Only this update paints a less rosy picture; while attorney Joseph Cotchett told ABC News, "[Madoff] looked pretty good and seems to be working out. He looked a lot better than he has in some months since I've seen photographs of him," today Cotchett told the CBS Early Show, "Look, it's a prison. He's suffering the immediate throes of being thrust into this. It's a new world to him. It's not pleasant, as it shouldn't be. The man is distraught." That sounds about right, but Madoff has time to adjust.

It's another report of how Bernard Madoff is doing behind bars! This time, instead of an inmate, we hear from a lawyer representing some of the victims in Madoff's $65 billion Ponzi scheme. Attorney Joseph Cotchett says he and an associate met with the scammer for four and a half hours at Butner Federal Correction Complex in North Carolina. And Madoff told them, "There were several times that I met with the SEC and thought 'they got me'" Of course, the SEC didn't!

In what Brooklyn DA Charles Hynes describes as "really a beaut of a scam," four friends from the NYU finance school are accused of ripping off Brooklyn banks for $422,000. Exploiting a regulation that requires banks to repay customers who claimed their ATM cards were lost or stolen within 10 days, the four allegedly made large withdraws from their accounts repeatedly over five years, then claimed that their cards had been stolen. "The scheme was as simple as it was brazen," Hynes told reporters today. The defendants were allegedly captured by video cameras when taking the money out, but they almost always wore motorcycle helmets or other covering to hide their identities. The accused are lawyer Eric Manganelli, 36; financial consultant Lam Dang, 37; bank employee John Tluczek, 37; and his wife, Marzena Tluczek, 35. They face multiple counts of grand larceny, falsifying business records and other charges, and each faces 2 1/3 to 7 years in prison for the top counts. The scheme was finally discovered after one bank investigator called another bank and they began comparing notes.

A couple more details and one sexy photo have emerged regarding the 25-year-old former Chase Bank financial adviser accused of siphoning over $100K from a millionaire's private account. While Robin Katz sits in Rikers Island on $50,000 bail, the Post is drawing from a bountiful stash of photos yanked from Katz's MySpace page. (It's unclear whether the Post grabbed the snapshots before Katz pulled her profile or if the tabloid's shared membership in the Murdoch family of companies yielded extra access.) A police source says that after arresting Katz, investigators found an ATM card and four withdrawal receipts connected to the account of Wall Street broker Dorone Ilan Farber. Auditors say Katz created the extra ATM card in Farber's name, making dozens of withdrawals from his account. Police think she used the money for shopping and partying, but a tipster claiming to be a friend of Katz's since 2005 tells us she saved up enough to put a down payment on a house!

David Friehling, the accountant who helped Bernard Madoff perpetuate his $65 billion Ponzi scheme by filing fake audit reports, has pleaded not guilty to fraud charges. However, he may be pleading guilty later down the road. Federal prosecutors and Friehling, who waived his right to a grand jury, are discussing a "possible disposition." Bloomberg News says Friehling's moves today are a "likely a prelude" to a guilty plea. A lawyer not associated with the case said, "There is nothing to be gained for Mr. Friehling to waive indictment except to placate prosecutors who are no doubt pressing him to plead guilty and cooperate with them in their investigation. It is the accountant who knows where the bodies are buried." Friehling, who is free on $2.5 million bail, and his family had accounts with Madoff (an SEC violation) and withdrew millions since 2000.

It's been two months, so let's recap. Kari Ferrell, aka the Hipster Grifter, charmed the pants off half of Brooklyn with the promise of mouth handjobs over the last year. No crime there. But it turned out she was a liar and a thief, and like, wanted in Utah for passing $60,000 in check fraud. Speaking of, the Salt Lake Tribune has even adopted the Hipster Grifter nickname, as they report that Ferrell was charged again yesteday in 3rd District Court on numerous felony counts. "Ferrell allegedly opened a Comcast cable account in 2007 using her ex-boyfriend's name and Social Security number without his permission, charging documents state. She allegedly also wrote three checks to three different people on bank accounts that were closed or had a zero balance. She faces one count of identity fraud and three counts of issuing bad checks, all are third-degree felonies." And hey, Gawker points out commenters in her hometown feel about the same as they do here.

Bernard Madoff's epic Ponzi scheme, which is still be investigated by federal prosecutors and securities regulators, has resulted in far more claims from victims than expected. 8,800 claims had been filed by victims by the start of last month, but the finally tally of claims is actually 15,400, according to an interim report [pdf] filed yesterday by the trustee overseeing the liquidation of Madoff’s estate. The trustee tells the Times he's "unearthed a labyrinth of international funds, institutions and entities of almost unparalleled complexity." The claims include 258 applications to the trustee’s hardship program, which is supposed to fast-track reimbursement to victims who are elderly, bankrupt, or unable to pay for basic living expenses or medical needs. (152 of those claims have been approved.) Meanwhile, Madoff's lawyers have announced that he won't appeal the 150-year sentence, which means he'll almost certainly die behind bars. But every six months he can look forward to a big shipment of letters from his irate victims; the website Madoff Mail is now accepting hate mail and e-mail, and promises to deliver them to the phony financier twice a year.

A lawyer for the $65 billion-dollar Ponzi scheme man says that there will be no appeal for 150-year sentence handed down to Bernard Madoff last week. Ira Lee Sorkin said, "The decision has been made, and that's it." Next up for Madoff is finding out where he'll spend the rest of his life—he requested to be sent to the Otisville federal prison. CNN Money notes that it's "70 miles northwest of New York City, where he used to reside in a $7 million apartment, ...and one of the closest medium-security prisons to New York City, where Madoff has family." Also, there's a "prison camp, textile factory, a full-time rabbi," and, according to a prison consultant, "one of the largest and most active religious programs for Jewish inmates in the Bureau of Prisons."

Federal prosecutors are still looking to make examples out of swindlers. After successfully nailing Bernard Madoff for 150 years, now they are seeking 145 years for Marc Dreier, a once prominent lawyer who pleaded guilty to a $700 million scam involving fake promissory notes. The feds pointed out, "This defendant, an officer of the court, engaged in a more than $740 million series of frauds over a seven-year period largely to finance a personal life of extraordinary lavishness," and that his investors lost $400 million. Dreier's defense lawyer, however, is hoping to get his 59-year-old client 12 1/2 years, "In seeking some measure of leniency we appeal not to sympathy but to reason. As colossal frauds capture national headlines, sentences for white-collar offenders must not become disproportionately long." CityRoom has Dreier's letter to the judge, which includes, "I have lost all my friends. I have lost my law firm, my law license and all that I ever owned. I have seen my family suffer the unimaginable. I have lost my past and my future. I have lost everything a man can lose. And now I will lose my freedom as well, and rightly so."

A couple more details from the U.S. Marshals' seizure of Bernard and Ruth Madoff's $7 million East 64th Street penthouse. According to the AP, "Disgraced financier Bernard Madoff's wife asked to stay in her $7 million Manhattan penthouse and wanted to take a fur coat with her before federal marshals seized the property. A federal official informed of Ruth Madoff's departure from her apartment Thursday tells The Associated Press that when marshals said she couldn't take her coat, she left carrying just a straw bag." However, her lawyer tells the Post, "This cheap effort to smear Ruth Madoff is meritless. And it was she who forfeited the furs last Friday as the publicly filed stipulation states." And the marshals do say she left voluntarily with all the apartment's contents there, including "$18,000 worth of bedding and $382,000 in rugs and curtains."

Guess Ruth Madoff is on the streets—the U.S. Marshals have seized her and her husband's East 64th Street penthouse apartment. The AP reports, "U.S. Marshal Joseph Guccione said Thursday that the marshals were at the property pursuant to a court order." Newsday explains that Ruth Madoff gets $2.5 million as soon as she vacates the Upper East Side duplex, which is worth $7 million, so maybe that's why the seizure happened so soon after her agreement giving up her three homes last week. However, it's been tough for her to find an apartment—apparently landlords aren't interested in having such a notorious tenant. Update: The U.S. Marshals say that they arrived at noon and that Ruth Madoff left all personal property, "We have possession of their furniture and everything in it." Her lawyer said, "Ruth moved out voluntarily pursuant to prior agreements we had reached with the government," but did not offer Madoff's forwarding address.