From at least 2013 through 2015, Kinslieh and Patel, who were store owners, and others, purchased winning lottery tickets from the ticket holders for cash, at a discount to the value of the tickets, thereby allowing the ticket holders to avoid reporting the winnings on their tax returns - a scheme known as "ten-percenting." Kinslieh and Patel gave the winning tickets to Jones, who presented them to the Massachusetts State Lottery Commission as his own, and collected the full winnings. Jones reported the winnings on his tax returns, but offset them with purported gambling losses. Jones and the store owners then shared the excess winnings.For the tax years 2011 through 2017, Jones paid less than $16,000 in federal tax on a total of approximately $52,000 of reported income. During this period, Jones claimed that he was a professional gambler and that all of his winnings were offset by alleged gambling losses. Patel and Kinslieh did not report to the Internal Revenue Service or pay taxes on the income that they received from the ticket scheme.
[F]or more than four years, Bronson traded securities in Strong's omnibus account but delayed allocating the securities to specific client accounts until he had observed the securities' performance over the course of the day. As alleged, Bronson reaped substantial profits at his clients' expense by "cherry picking" the trades, disproportionately allocating profitable trades to himself and unprofitable trades to Strong's clients. The complaint also alleged that Strong and Bronson misrepresented their trading and allocation practices in the firm's Forms ADV, including by falsely stating that all trades would be allocated in accordance with pre-trade allocation statements and that the firm did not favor any account, including those of the firm's personnel.. . .Bronson's brother and the former chief compliance officer of Strong, John Engebretson, was also charged in the complaint with failing to perform his compliance responsibilities and ignoring numerous "red flags" raised during the course of the fraudulent scheme. As a result, Engebretson was charged along with Bronson and Strong with violating the compliance requirements of the federal securities laws. Engebretson previously agreed to settle the charges against him and the Court entered a final judgment against him on June 15, 2018. As part of the settlement, Engebretson agreed to be enjoined, pay a civil monetary penalty in the amount of $15,000, and to be barred from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.
LaVigne, a Certified Public Accountant ("CPA") who practiced in the Ithaca, New York area for more than 30 years, filed for personal bankruptcy in 2004. At the time, he owed approximately $7.6 million to over 80 unsecured creditors following a failed scheme to use their money to purchase sports and entertainment memorabilia for resale. During the course of LaVigne's years‑long bankruptcy proceedings, he claimed that his only asset was his home. He paid back no money to his 80 investors. In pleading guilty, LaVigne admitted that during his bankruptcy he used his CPA practice's bank accounts to conceal between $3.5 and $9.5 million in assets from the United States Bankruptcy Court and the Office of the United States Trustee. LaVigne laundered money by depositing funds unrelated to his CPA practice into his business accounts and then using that money for his own benefit and that of his family, including buying himself sports memorabilia and writing checks to himself totaling tens of thousands of dollars that were never disclosed in his bankruptcy proceeding.In pleading guilty, LaVigne also admitted to defrauding an elderly client in a $4.6 million mail fraud scheme. Between 2014 and 2016, LaVigne convinced the elderly victim to pay $3.6 million for shares of a company that LaVigne created, which LaVigne claimed would develop a piece of waterfront property on Pier Road in Ithaca. After the victim bought 90% of the company, LaVigne obtained an additional $1 million from her, purportedly as a further investment in the company. LaVigne did not use the $1 million to invest in the company, and he never developed the property. Instead, he used the victim's money for his own purposes, including writing checks to himself, paying for the construction of a house for a family member, and funding payroll for his CPA practice. LaVigne also laundered payments he received from this scheme through his CPA practice accounts.
[B]etween October 2014 and November 2018, Byers solicited victims in the Baton Rouge area and elsewhere to invest with his company, WBI Associates, Inc., promising victims large returns in a short time frame. Byers focused his solicitations on older individuals and those who had been victims of prior schemes. He promised his victims that the money would be invested, variously, in gold production, a lottery company, foreign currency, or "dark pools" or "blind pools." Whenever his victims pressed for returns or refunds of their money, Byers gave various excuses for delays - the money was invested overseas, other individuals had to "sign off," or more money needed to be invested before any was paid out. In truth, instead of investing the money as promised, Byers spent the money on personal expenditures, including among others, approximately $10,000 per month in rent for his residence in a Miami hotel, the lease of luxury cars, and gambling in casinos. Byers admitted that he received between $3,500,001 and $9,500,000 as a result of his scheme, $3,000,000 of which he sent to a Swiss bank account he controlled. Byers also admitted that he had two prior federal felony convictions, one of which was for a similar wire fraud scheme.
[J]ames Alex Irvin, of Boca Raton, Florida, repeatedly traded in the securities of his employer, PetMed Express, Inc., on the basis of confidential information he obtained as PetMed's Director of Marketing and a member of its Management Committee. According to the SEC's complaint, Irvin purchased shares of PetMed common stock and call and put options in advance of six PetMed market-moving earnings announcements while in possession of confidential information concerning the Company's quarterly and year-end financial results. PetMed's Insider Trading Policy prohibited trading in PetMed options at any time. Additionally, all of Irvin's trades at issue took place during blackout periods, when Irvin was expressly prohibited from trading in PetMed stock. As a result, Irvin allegedly realized profits and avoided losses of $227,795. The SEC further alleges that Irvin engaged in insider trading based on tipping confidential information concerning PetMed's positive fiscal 2017 fourth quarter and year-end financial results to his close personal friend, who made modest profits from his trading.
[F]rom January 2015 through March 2017, Andres Fernandez ("Fernandez") and his companies, Kadaae, LLC and Kadaae Entertainment Corp. (together, "Kadaae"), raised $20.7 million from at least 56 investors through an unregistered offering of securities. Over the same two-year period, the complaint alleges, Edison Denizard ("Denizard") and his company, Ahead of the Game, LLC, conducted an unregistered offering of securities, raising approximately $10.4 million from at least 78 investors. Defendants allegedly told prospective investors in both offerings that their money would be used to fund music concert events for major artists at large venues across the U.S. In truth, however, only a small portion of investor money was used by Kadaae to produce a handful of concert events. Instead, the complaint asserts that defendants operated Ponzi schemes -- using new investor money to pay earlier investors -- and each misappropriated more than $1 million in investor money for his own use.
[T]he SEC previously charged Gibson, Rakowski, and two other defendants with fraud for intentionally excluding hundreds of millions of dollars of past due real estate loans from financial reports that Wilmington Trust filed. The SEC's complaint alleged that Gibson and Rakowski - who were both convicted in a criminal trial involving the same underlying facts alleged in the SEC's complaint, and who are appealing their convictions - made or substantially participated in making false or misleading disclosures of material facts concerning Wilmington Trust's loans which were 90 days or more past due.