Being part of an international bribery ring may sound exciting, but early morning arrests can quickly cast a pall. Police arrested a former Direct Access Partners’ managing partner Wednesday morning in Florida over allegations he participated in an international bribery scheme that generated $60 million in fees for his broker-dealer.
Ernesto Lujan allegedly helped bribe a senior official in Venezuela’s state economic development bank, Maria De Los Angeles Gonzalez De Hernandez, handing over $5 million in kickbacks in exchange for her funneling the bank’s financial trading business to the broker-dealer.
Earlier in May, Gonzalez and two other employees of the Direct Access were arrested on charges related to the bribery scheme, according to prosecutors.
Raiding Retirement Funds
A former Merrill Lynch seemed to have it all, a luxury home, expensive cars, money to burn. But turns out he was bankrolling his luxury lifestyle using $1.8 million lifted from client retirement accounts.
Greg Campbell pled guilty on Friday two felony counts of wire fraud, with a sentencing hearing scheduled for September. According to Missouri prosecutors, Campbell worked for Merrill Lynch from June 2006 until October 2011. During that time, Campbell transferred more than $1.4 million from clients’ loan management accounts that he oversaw into personal accounts.
The scheme continued after Campbell left Merrill for Four Seasons Wealth Management in November 11. At Four Seasons—an LPL Financial firm—Campbell racked up $360,000 from clients’ IRA accounts. Four Seasons fired Campbell in October, after the firm discovered the advisor’s fraud.
A Real Phony
A former LPL investment advisor is on the hook for $2.4 million in restitution to clients after a California judge handed down a 57-month prison sentence on Monday.
Fresno-based Janamjot Singh Sodhi allegedly swindled investors out of their assets through his business Elite Financial Inc., in which he invested client funds into various opportunities, but paid out the returns to himself and other investors. To cover up his fraud, he sent out fake financial statements.
Further, despite the New York Stock Exchange permanently debarring Sodhi in January 2006, followed by a similar actions by the California Department of Corporations in January 2009, Sodhi continued to advertise himself as a financial advisor who could buy and sell securities on behalf of clients.
Sham entity+Ponzi scheme=lots of jail time. Simple math, but a problem Maxwell Smith seemed to have trouble understanding. The former Cantone Research broker was slapped with an 84-month sentence last week after prosecutors uncovered the 73-year-old’s $9 million Ponzi scheme.
Smith set up a fake investment fund, Health Care Financial Partners (HCFP), and proceeded to recommend clients invest in HCFP bond offerings ranging from $25,000-$300,000. While a portion of client funds were used to pay investors via bank checks, Smith spent the rest of investors’ money on entertainment, gambling and international travel.