Casino Cheaters Caught / Dealer and Player Conspired to Cheat two Maryland Casinos out of More Than $1 Million (FBI Release)SEC Charges Eight Unregistered Brokers for Their Participation in Fraudulent Offerings of Microcap Securities (SEC Release)
Between approximately November 2014 and January 2018, McDonnell portrayed himself on social media as an experienced trader in virtual currency, promising investors he would provide trading advice and purchase and trade virtual currency on their behalf. Beginning in approximately May 2016, McDonnell made similar representations and promises to investors through his Staten Island-based company, CabbageTech, Corp., also known as Coin Drop Markets. However, neither McDonnell nor CabbageTech provided investment services. Instead, McDonnell sent investors false financial statements showing that their investments had been profitable, and stole their money for his personal use. In total, McDonnell defrauded at least 10 victims of at least $194,000 in U.S. currency, 4.41 Bitcoin, 206 Litecoin, 620 Ethereum Classic and 1,342,634 Verge currency, for a total loss of $224,350.32. In addition to lying to investors about his company's prowess, McDonnell also solicited customers using a false alias, "Jason Flack," an individual that did not actually exist.
The odds of winning any given hand of baccarat stand at just under 50 percent. But Ni and his tablemates won an astounding 18 of 21 hands-including one run of 14 straight wins.
[B]etween at least December 2014 and March 2018, Drake, Messier, Scoratow, St. Amour, and Wolfson ran boiler-room operations to carry out a matched-trading scheme to enable shareholders of microcap companies sell their shares. Solicitors working for the boiler rooms, such as Brooks, Grossman, and Moleski, allegedly cold called prospective investors and convinced them to purchase shares of microcap companies in the investors' own brokerage accounts at prices and volumes that were coordinated by the boiler-room operators and the selling shareholders. The complaint alleges that selling shareholders simultaneously entered sell orders at the coordinated prices and volumes, making it highly likely that the selling shareholders' sell orders and the solicited investors' buy orders would match. Through this matched trading, the selling shareholders were able to offload their shares into a ready market.
[F]rom 2012 through 2015, Lundervold, who currently resides in Arizona, raised nearly $9 million for ARP Wave, LLC, through selling unregistered ARP Wave securities to more than 100 investors in Minnesota and elsewhere. As alleged in the complaint, he was not registered as a broker-dealer or associated with a registered broker-dealer when selling these securities, as required by the federal securities laws. For his fundraising efforts, Lundervold received a 10% commission on the amount of funds raised, for a total of nearly $900,000.
[B]etween June 2008 and February 2009, the defendant conspired with others, including Alagi Samba, a realtor, and Daniel Badu, to devise a scheme to obtain eight loans for unqualified borrowers for homes in the Bronx, NY. As part of the scheme, Gibbons acted as the mortgage broker and altered income and asset documents of the borrowers before they were sent to financial institutions.For instance, Gibbons altered and created documents to make it appear that defendant Badu qualified for a mortgage on a property at 814 Faile Street in the Bronx. The defendant indicated that Badu was a research ophthalmologist and earned a specific income when in fact, Badu was not a research ophthalmologist nor did he receive the income stated on a loan application. Gibbons knew that these false loan documents were submitted toThe Funding Source, a mortgage bank, in order to secure a loan insured by the Federal Housing Administration. Based on that false application and supporting documentation, the loan was approved. The Funding Source then sold the loan on the secondary market to M &T Bank, which wired funds from New York through the State of Ohio to purchase the loan.The defendant and his co-conspirators arranged for additional fraudulent loans to be approved, including another loan for Badu, and caused wire communications to be transmitted in interstate commerce for those loans. These fraudulent transactions caused losses of approximately $4,800,007 affecting M&T Bank and other financial institutions including SunTrust Bank, JPMorgan Chase Bank, and Citibank.
Not quite captured in the "Overview" is the extent of the reps' misconduct. Pointedly, the AWC alleges that $3,8 million was stolen from four customers, of which one was a disabled widow. The two subject reps were sentenced to prison terms of 70 months and 87 months after pleading guilty in criminal proceedings. I urge all industry compliance professionals to review the AWC.Between 2009 and 2017 (the Relevant Period), two registered representatives at Royal Alliance, acting independently of each other, stole customer funds by directing wire transfers or checks from customer accounts into accounts for entities they created. Some of the transfers were made in violation of firm policies and procedures for third-party payments, which the firm failed to enforce, and in some instances the transfers were also accompanied by red flags to which the firm failed to reasonably respond. By virtue of the foregoing, Royal Alliance violated NASD Rules 3010 and 3012(a)(2) and FINRA Rules 3110, 3110(c)(2), and 2010.