The Securities and Exchange Commission has charged an Internet-based investment company with securities fraud for soliciting several million dollars from U.S. investors while promising guaranteed returns of 1.2 percent per day. In reality, the company siphoned the funds into foreign bank accounts, never paying a cent back to investors. The firm allegedly raised more than $7 million from approximately 14,000 investors worldwide, more than half from U.S. members of the deaf community. The company offered the deal through its website, touting the possibility of turning a $50 investment into $134,000 in six months. On its website, the firm listed fake business addresses in both the Bahamas and Vanuatu.
Three Texas advisors have been charged in federal court with mail fraud, securities fraud, and money laundering in connection with a life-settlement scam that victimized more than 800 U.S. and Canadian investors. The advisors allegedly bought life settlements from a wholesaler and then began selling interests in those settlements back to investors. The men claimed they had set aside money to pay the premiums, but they had insufficient funds and filed for bankruptcy. Before authorities dismantled their scheme, the advisors used investor money to fund a lavish lifestyle, including buying a Lamborghini, a Porsche, a Bentley, a 5.6-carat diamond ring, a diamond Cartier watch, and a Steinway grand piano.
A former California life insurance agent was sentenced to five years formal probation, ordered to perform 1,000 hours of community service and pay $11,034.32 in restitution, plus $11,000 in reimbursements to the Department of Insurance for submitting fraudulent life insurance applications and collecting more than $10,000 in ill-gotten commissions. From April 2007 through November 2007, the agent stole the identity of a former employee and licensed agent in order to sell life insurance policies and collect commissions from a life insurance company. He used his former employee’s identity to submit seven applications, which netted more than $11,000 in commissions. The names used on the seven applications were either previous applicant names or the names of relatives from prior applications he submitted.