[B]urrell advertised his business on Localbitcoins.com, and communicated with his customers through email and text messages, often using encrypted applications. He negotiated a commission of 5 percent above the prevailing exchange rate, and accepted cash in person, through nationwide ATMs, and through MoneyGram. Burrell admitted that he had no anti-money laundering or "know your customer" program, and performed no due diligence on the source of his customers' money.Burrell admitted that, at first, he purchased his supply of Bitcoin through a U.S.-based, regulated exchange, but his account was soon closed because of the large number of suspicious transactions. He then resorted to a cryptocurrency exchange in Hong Kong, where he purchased a total of $3.29 million in Bitcoin, in hundreds of separate transactions, between March 2015 and April 2017.Finally, Burrell admitted that he exchanged his U.S. cash, which he kept in Mexico, with Joseph Castillo, a San Diego-based precious metals dealer, and that between late 2016 and early 2018, he and others imported into the United States, on an almost daily basis, a total of over $1 million in U.S. currency, in amounts slightly below the $10,000 reporting requirement.
This case arose out of an investment fraud scheme Herman operated with her co-conspirator Gregg D. Caplitz. From 1994 to 2012, Herman was president and CEO of Insight Onsite Financial Solutions, a Commission registered investment adviser. Caplitz was the adviser's chief compliance officer.In October 2013, Herman and Caplitz were indicted on charges including investment adviser fraud, wire fraud, impeding the administration of the tax laws, and conspiracy to commit investment adviser fraud, submit false statements to the Commission, commit wire fraud, and defraud the IRS. During Herman's jury trial, the evidence established that Herman induced investment by telling investors that their money would be invested in a hedge fund. But Herman instead used investor funds for her own benefit. And when four investors complained and threatened to report Herman and Caplitz to appropriate authorities, Herman and Caplitz returned approximately $61,000 to them. The jury found Herman guilty of single counts of conspiracy, investment adviser fraud, and impeding the administration of the tax laws, and four counts of wire fraud.During Herman's sentencing hearing, the district court increased Herman's offense level because her offense involved vulnerable victims and substantial hardship to at least five people and because she was an investment adviser when her misconduct occurred. The court also heard from Herman's victims. Victim evidence presented during sentencing revealed that Herman's adviser fraud victims included a 75-year-old veteran who lost $500,000 that he had saved so that he could live comfortably in retirement. Further victim evidence indicated that other victims included a cancer patient who has since died, a paralyzed woman, and a man with dementia residing in a nursing home.The district court offered Herman the opportunity to address the court at the conclusion of her sentencing hearing. Herman initially said she was "extremely sorry," before blaming Caplitz and saying she "had no idea he was stealing money and forging people's signatures," and adding, "I cannot believe and I am horrified by his ruthless and heartless acts." Herman concluded by saying, "I have lost everything I worked 35-plus years for and I hope everyone believes how sorry I am for what Mr. Caplitz did."Immediately following Herman's statement, the district court sentenced her to seven years' imprisonment and ordered her to pay over $1.8 million in restitution. That figure included nearly $500,000 to the IRS. Nearly all of the balance was to be paid to individuals. The district court then addressed Herman, saying that she was "in denial," and that she "knew what was going on was criminal from the get-go, and … knew that [she was] stealing people's money, for years and years."
In the Matter of James B. Eichner, Jr., Respondent (AWC 2017053208001, April 5, 2019). http://www.finra.org/sites/default/files/fda_documents/2017053208001The customers were husband and wife. After the husband died, his son contacted Claimant because the son wanted to transfer all of his mother's assets to the company where he worked, so he could handle the remaining assets. The customers executed a section 1035 exchange of an annuity for a mutual fund. The son demanded that Claimant waive the contingent deferred sale charges ("CDSCs") associated with the exchange. Claimant did not have the authority to waive the charges, and the son filed a complaint. The complaint was legally defective, the son made no showing whatsoever that he had the authority to act on behalf of his mother. Moreover, the son wasn't in privity with either Claimant or Respondent Prudential. As a result, Respondent Prudential owed no duty to the son, and by extension, Claimant owed no duty to the son. The son's complaint was a pretext to bully Prudential and Claimant into waiving the transfer fee. Respondent Prudential made a business decision to settle the complaint for its nuisance value. Claimant did not participate in the negotiations, did not sign the settlement agreement, and Claimant did not contribute to the settlement amount. Accordingly, the claim, allegation, or information is factually impossible or clearly erroneous. The complaint should be expunged.
Between May 2015 and April 2016, while associated with National Securities, Eichner exercised discretion in at least ten customer accounts. Eichner had not obtained prior written authorization from the customers to exercise discretion in their accounts, and National Securities had not accepted the accounts for discretionary trading. Eichner's exercise of discretion is aggravated by the fact that he completed two compliance questionnaire for National Securities attesting that he did not exercise discretion in his customers' accounts during the period of May 2015 through April 2016.Additionally, in March 2016, Eichner exercised discretion in a deceased customer's account by accepting, on a single occasion, trade instructions from an unauthorized third party. Neither the customer nor the customer's estate had given written authorization allowing Eichner to exercise discretion by accepting instructions from a third party, and National Securities had not approved the account for discretionary trading.
Jackson County Man Charged with Defrauding Investors in $50 Million Ponzi Scheme (DOJ Release)
Jason E. Adkins agreed to plead guilty in the United States District Court for the Southern District of Ohio to three counts of wire fraud and six counts related to money laundering. As set forth in part in the DOJ Release:
[B]eginning in 2012 and continuing through 2018, Adkins conspired to solicit millions of dollars from investors under false pretenses, failed to invest the funds as promised and misappropriated investors' funds for his own benefit and the benefit of others.
Adkins and others claimed that they bought and sold over-sized tires commonly known as off-the-road tires, which are used on earth moving equipment and/or mining equipment. Investors were told their money would be used to buy the tires at a steep discount, and that the tires would then be re-sold to a buyer at a much higher rate.
Investors were promised a 15 to 20 percent rate of return on investment, generally within 180 days. Adkins would sometimes pay the return on investment for the first transaction with investor victims.
. . .
Adkins used several methods to conceal the scope of the Ponzi scheme and to minimize associated tax liabilities. For example, he and others sent various amounts of investor funds through a long series of wire transfers to many bank accounts. He created more than 15 corporate bank accounts to receive and distribute fraudulently obtained funds from investors.
Adkins also laundered his ill-gotten proceeds for at least five years, including by investing in front businesses created by co-conspirators.
Adkins bought cars, vacations and property with the funds from the scheme. For example, he paid for the construction of a pool at his personal residence and also paid more than $20,000 to lease a private jet.
Further, Adkins failed to file individual income tax returns reporting his income derived from the scheme. In 2013, specifically, Adkins earned at least $1.1 million, which caused a tax loss of nearly $237,000 to the IRS. . .
Proposed Rule Change to Adopt Remaining Legacy NASD and Incorporated NYSE Rules as FINRA Rules (FINRA SR-FINRA-2019-009)
FINRA is proposing to adopt without change the following NASD Rules as FINRA Rules:
NASD Rule 1010 Series (Membership Proceedings) into the FINRA Rule 1000 Series;
NASD Rule 1090 (Foreign Members) as FINRA Rule 1021;
NASD Rule 2340 (Customer Account Statements) as FINRA Rule 2231;
NASD Rule 2510 (Discretionary Accounts) as FINRA Rule 3260;
NASD Rule 3140 (Approval of Change in Exempt Status Under SEA Rule 15c3-3) as FINRA Rule 1020;
NASD Rule 3150 (Reporting Requirements for Clearing Firms) as FINRA Rule 4540; and
NASD Rule IM-3150 (Exemptive Relief) as Supplementary Material to FINRA Rule 4540.
Also, FINRA would adopt the Incorporated NYSE Rules and Interpretations in the consolidated FINRA rulebook without any substantive changes as a separate Temporary Dual FINRA-NYSE Member Rule Series; and would delete four Incorporated NYSE Rule definitions (Incorporated NYSE Rules - Rule 4 ("Stock"), Rule 5 ("Bond"), Rule 9 ("Branch Office Manager"), and Rule 12 ("Business Day")) that are not used in the FINRA rule set as well as Incorporated NYSE Rule 375 and related Interpretation. Cross-references would be updated and other non-substantive changes would make conforming changes per the adoption of new consolidated FINRA rules.
'An urgent message to me from Wu Hongbo, Under-Secretary-General for Economic and Social Affairs about the need to follow the United Nations's '100% trusted officials by the Name of Mrs. Yemisi Edunis'" Okay . . . look, I get a lot of dumb crap in my email inbox. I'm sure you do to. But there's Spam and then there's Spam, and, hey, call me old fashioned, but I appreciate a well-thought-out scam just as much as the next victim. On the other hand, there's nothing more annoying than derivative, second-rate spam. Here's an urgent message that found its way into my In-box yesterday:
Re:Director in Charge Of Your ATM Card
United Nations-Compensation-Unit, Emergency Relief Coordinator, United Nations.
We have previously sent you emails in respect of your outstanding compensation payment which has since been assigned to you.We were going through your payment portfolio and came to a logical conclusion that you are yet to receive your compensation-payment.We must get you informed that your email was listed among those that are yet to receive their compensation payment. The United Nations in Affiliation with World-Bank have agreed to compensate each with the sum of USD1.5 Million (One Million Five Hundred Thousand United States Dollars) only.
For this reason, you are to receive your-payment through a certified ATM MASTER CARD PAYMENT. Note, with this Master Card you can withdraw money from any part of the World without any problem and please for no reason should you disclose your account information as your account information is not and can never be needed before you receive your card payment. All that is required of your now is to contact our 100% trusted officials by the Name of Mrs. Yemisi Edun. Below is here contact information:
Name: Mrs. Yemisi Edun
Below is the tracking numbers of different beneficiaries from different countries that have received their ATM Master Card payment without any problem. Please tracking the number below for your perusal:
Beneficiary Name: Linda
Tracking number : 6323133062
Beneficiary Name: ANYONIA
Country: SAUDI ARABIA
Tracking number : 6323135206
You are required to contact the above person and furnish him with the information that will be required to avoid any mistakes:-
1. Your Full Name :
2. Your Home/Mobile Telephone No:
3. Your Home or Office Address :
4. Age/Occupation/Marital Status:
5. Scanned copy of your identification:
Please ensure that you follow the directives and instructions of Mrs. Yemisi Edun
Mr. Wu Hongbo
Under-Secretary-General for Economic and Social Affairs
NOTE: If you received this message in your SPAM/JUNK folder, that is because of the restrictions implemented by your Internet Service Provider, treat it genuinely