Ponzi, Ponzi Everywhere:
The SEC either has a coincidental backlog of Ponzi scheme cases closing in the wake of Bernard Madoff, or the agency has put a premium on busting Madoff wannabes as quickly as possible. Since Madoff's arrest in December, the SEC has announced three Ponzi busts. Jacob Frenkel, a securities attorney with Shulman Rogers Gandul Pordy & Ecker, says he expects the apparent trend to continue. “I expect we'll see many more Ponzi schemes in the coming months, not just here but around the world,” says Frenkel. “Market-related redemptions and general investor concerns about their money will uncover them,” he says.
First there was Joseph Forte, a Pennsylvania man who never registered with the SEC and allegedly collected as much as $50 million from at least 80 investors in a Ponzi scheme that began in 1995; then came Richard Piccoli, an 82-year old Williamsville, N.Y., man who was charged with fraudulently raising more than $4.1 million from investors. More recently, the SEC charged CRE Capital Corporation and its President, James Ossie, with operating a Ponzi scheme. The SEC has obtained an emergency court order freezing their assets and appointing a receiver for CRE. According to the SEC's complaint, CRE and Ossie fraudulently obtained at least $25 million from investors during 2008 by claiming they would use the money to engage in a currency trading program. Most investors were advised that they would receive guaranteed returns of 10 percent every 30 days; some were promised as much as 20 percent.
Forgery And Other Good Stuff:
Mark Salyer, a broker and investment advisor for MetLife Securities in Kingsport, Tenn., settled with the SEC regarding allegations that he fraudulently diverted $6 million from the accounts of at least 33 MetLife customers. The funds were diverted to multiple entities, two of which Salyer directly controls. According to the complaint, Salyer was able to divert the money by forging customer signatures on wire transfer forms and by convincing customers to invest in a company he controlled by pretending it was a MetLife investment. The SEC complaint further alleged that Salyer attempted to conceal his fraud by falsifying brokerage account statements or by providing fraudulent explanations for discrepancies.