May 24, 2018
In complaints filed in the United States District Courts for the Sourthern District of California and the Northern District of Iowa, the SEC alleged that Bud Genius and Aaron "Angel" Stanz issued false and misleading press releases about a purported licensing agreement with comedian Tommy Chong, who was described as falsely characterized as a partner. The SEC further alleged that an unregistered offering sold billions of shares of Bud Genius stock for more than a $540,000 profit, of which about $140,000 was paid to Bud Genius and Stanz. Without admitting or denying the SEC's allegations, Stanz, Bud Genius, Moffitt, Febles, and U.S. CoProducts agreed to a judgment enjoining them federal securities laws/ Additionally Stanz agreed to a five-year officer-director and penny stock bars, and ordering disgorgement and prejudgment interest of $158,829. Also, Moffitt, Febles, and U.S. CoProducts agreed to be jointly and severally liable for $435,595 in disgorgement and prejudgment interest. Further, Moffitt and Febles agreed to penny stock bars of three years and one year respectively, and to pay civil penalties of $35,000 and $20,000 respectively. READ the FULL TEXT Complaints:
I'm sure that you've read about crooks stealing personal identification and then running around charging all sorts of stuff on credit cards that they loaded with the information that they stole. Sure, I could do that -- you've probably said to yourself -- but if I applied for that job, they'd never hire me. I got the talent but not the know-how. Some of you may have even gone online to see if there's some kind of how-to guide you could read and learn the ropes yourself. A word of caution, if there's a free app showing you how to bust out credit cards but it requires you to provide your name, address, social security number, and father's middle name, I would likely decline but, you know, I'm just a suspicious kind of fellow. Maybe you're more trusting? If so, bust that move and go for it. And while you're busting your moves, consider United States of America v. Talat Ali Maan, Syed Rehman, Kashif Idrees, Jaweed Wahed Ahmed, and Fatou Djambo (Criminal Complaint, United States District Court for the District of New Jersey, No. 18-6095)
Following a two-week trial, a federal jury in Denver, Colorado, has convicted Kenneth Brewington of one count of conspiracy to commit mail and wire fraud, one count of mail fraud, five counts of wire fraud, one count of conspiracy to commit money laundering, one count of laundering monetary instruments, and two counts of engaging in monetary transactions in property derived from specified unlawful activity. As set forth in part in the DOJ Press Release:
[B]eginning in approximately 2009, the defendant told victims that he required millions of dollars in supposed fees in order to access his extraordinary wealth abroad, which in turn could be used for financing. During the scheme, the defendant and his co-conspirators sold promissory notes to victims, including through a financial-services marketing company based in Denver called Compass Financial Solutions (CFS). The defendant and his co-conspirators falsely represented to their victims that their money would be used to pay for, among other things, bank transaction fees and tax penalties to the IRS. To conceal the nature of their scheme, the defendant and his co-conspirators told victims to wire their funds into an attorney-trust account. The funds from that account, however, were then sent to the defendant and his co-conspirators and spent on, among other things, repayments to other investors and personal expenses. The evidence presented at trial showed that the defendant was not, in fact, wealthy and instead struggling to pay his personal debts. The defendant's victims lost over $3 million to his fraud scheme.
Leonard Wimmer Jr. pled guilty to securities fraud in the United States District Court for the District of South Carolina in connection with allegations that about 25 individuals invested $3.6 million with Wimmer, who pooled the money into one bank account from which he traded in high-risk securities and futures contracts. Of the $3.6 million invested, Wimmer lost approximately $3 million. Instead of reporting his losses, Wimmer emailed his investors monthly account statements that falsely listed gains of 8-10 percent on an annualized basis.
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority ("FINRA"), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Lawrence Eugene Murphy submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Lawrence Eugene Murphy, Respondent
(AWC 2016051227701, May 21, 2018).
In accordance with the terms of the AWC, FINRA imposed upon Murphy a $7,500 fine and a suspension for 20 business days with any FINRA member in any capacity. The AWC asserts that Murphy was first registered in 1984 and by 2004, he was registered with FINRA member firm MSI Financial Services, Inc. f/k/a MetLife Securities Inc., where he remained until August 2016. The AWC alleged in pertinent part that:
After his son had been terminated by MSI and had become associated with
another member firm, Murphy provided him with the files of approximately 87 of
his son's former MSI customers. The MSI customer files contained "nonpublic
personal information," such as account numbers, social security numbers, and
birth dates, and Murphy acted without the knowledge or consent of MSI or any
customer. Accordingly, Murphy caused MSI to violate Regulation S-P and
thereby violated F1NRA Rule 2010.
James A. Nickels was indicted on 18 counts of wire fraud and one count of money laundering in the United States District Court for the Eastern District of Wisconsin. Federal prosecutors allege tht Nickels fraudulently induced investments in "The Fiscal Concierge," but did not disclose that he was running what amounted to a Ponzi scheme using new investors' funds to pay interest and principal promised to previous investors, and to pay his personal expenses. Allegedly, Nickels obtained over $5 million and the investors' net loss was $3,193,616.