Securities Industry Commentator by Bill Singer Esq.
November 6, 2017
https://www.justice.gov/opa/pr/former-ceo-arthrocare-corporation-sentenced-20-years-prison-role-750-million-securities-fraud
Evidence at trial showed that, beginning in 2005 and continuing until 2009, Baker, along with his co-conspirators, masterminded and executed a scheme to artificially inflate sales and revenue through a series of end-of-quarter transactions involving several of ArthroCare's distributors. Baker, along with his co-conspirators, determined the type and amount of product to be shipped to distributors based on ArthroCare's need to meet Wall Street analyst forecasts, rather than distributors' actual orders. Baker and others then caused ArthroCare to "park" millions of dollars' worth of ArthroCare's medical devices at its distributors at the end of each relevant quarter. ArthroCare reported these shipments as sales in its quarterly and annual filings at the time of the shipment, enabling the company to meet or exceed internal and external earnings forecasts.The trial evidence further showed that ArthroCare's distributors agreed to accept shipment of millions of dollars of products in exchange for special conditions, including substantial, upfront cash commissions, extended payment terms and the ability to return products, allowing ArthroCare to falsely inflate revenue by tens of millions of dollars. In the case of ArthroCare's largest distributor, DiscoCare, Baker caused ArthroCare to acquire DiscoCare specifically to conceal from the investing public the nature and financial significance of ArthroCare's relationship with DiscoCare. In addition to falsely inflating ArthroCare's revenue, Baker lied when he was deposed by the U.S. Securities and Exchange Commission in November 2009 about ArthroCare's relationship with DiscoCare, the evidence showed.
(BrokeAndBroker.com Blog)
http://www.brokeandbroker.com/3647/paige-pierce-nac/
Commodities Fraud Sentencing / Word of Warning to Investors: Do Your Due Diligence (FBI News Release)
https://www.fbi.gov/news/stories/commodities-fraud-sentencing
After pleading guilty to commodities fraud in April 2017, self-professed investment professional Pedro Jaramillo was sentenced to 12 years in federal prison. As set forth in the FBI News Release:
Crash Cows: Connecticut Group Staged Car Accidents for Insurance Money (FBI News Release)[T]hrough a slickly produced online video, phony office space on Wall Street, and promises of unrealistic financial returns, this Peruvian national living in New York managed to convince more than two dozen investors to trust him with more than $1.2 million of their hard-earned money.
Jaramillo, however, never invested a dime of their money-instead, he used it to line his own pockets and keep his Ponzi scheme going. Even his claim to be an investment professional was false-he wasn't licensed to do anything remotely connected to financial advising and/or investing.
https://www.fbi.gov/news/stories/staged-accident-ring
From 2011 through 2014, insurance companies paid out between $10,000 to $30,000 for some 50 car crashes in Connecticut that involved late-night, single-car crashes on remote roads without witnesses with drivers claiming during fall months to have swerved in order to avoid hitting a deer and claiming during winter months that they lost control on a snow-covered street. The vehicles involved tended to be used older, European cars, which tend to hold their value over time. Given the similarities in the accident reports, the National Insurance Crime Bureau ("NICB") shared its crash data with the FBI and the U.S. Attorney's Office for the District of Connecticut. Turned out that the accidents were staged. The ringleader was convicted of conspiracy to commit mail and wire fraud and sentenced to four years in prison; six other co-conspirators have been charged and convicted to date.