Fraud Chronicles Roundup – cases in the news to 5 Feb 2014

It was a busy week for fraudsters and those who work to undo their damage…

BCSC V. David Michaels DBA Michaels Wealth Management

David Michaels image, via

Other Canadian Fraud News

Bernard Madoff’s Former Aides on Trial

  • Madoff Ex-Aides Seen Facing Hurdle with “Duped” Defense. Five of Bernard Madoff’s former aides face an uphill battle persuading the jury they were merely innocent bystanders to Madoff’s giant fraud. Prosecutors present an “avalanche” of evidence against the defendants.  Despite the mountain of evidence, some former prosecutors worry that the complexity of evidence may confuse the jury.  (4 Feb 2014,
  • JPMorgan’s $543 million Madoff Trustee Settlement Approved. Thousands of investors accused JPMorgan of turning blind eye to the U.S.’s biggest Ponzi. The Madoff trustee’s recoveries for victims are now over $10 billion. (4 Feb 2014,

Investor Fraud via Mortgage Backed Securities – Allegations against Banks

  • Ex-Jefferies Trader Accused of Used Car Sales Tactics. Jesse Litvak, former Jefferies & Co. managing director, is the first person to be with fraud in connection with the US bailout program relating to mortgage-backed securities. (3 Feb 2014,
  • BofA Should Pay $2.1 Billion in Fraud Case, U. S. Says. Manhattan District Judge Jed Rakoff is considering what penalty should be levied against Bank of America for selling defective mortgage loans to Freddie Mac and Fannie Mae before the 2008 financial crisis. U. S. Attorney Preet Bharara argues for the maximum penalty as a deterrent to ” financial institutions and their executives who would engage in similar fraudulent mortgage schemes.” (30 Jan 2014,
  • Feds Probe Banks for Mortgage Misdeeds After Financial Crisis. Although banks have already paid billions in penalties and fines relating to their conduct leading up to the 2008 subprime mortgage crisis, U. S. SEC and the Troubled Asset Relief Program’s (Sigtarp) special inspector general are now investigating whether big banks deliberately mispriced mortgages “in the years following the financial crisis … The banks being probed include Barclays Plc, Citigroup Inc, Deutsche Bank, Goldman Sachs Group Inc, JPMorgan Chase, Morgan Stanley, Royal Bank of Scotland Group and UBS AG.” (8 Jan 2014, Reuters via
  • Credit Suisse Fraud Exceeded $1 Billion: N. J.’s Hoffman. New Jersey’s Attorney General John J. Hoffman alleges that Credit Suisse Group AG defrauded investors of over $1 billion by misrepresenting risks of mortgage-backed securities. (19 Dec 2013)

Recruiting Fraud Scheme – US Army

That’s The Fraud Chronicles roundup for the week ending February 5, 2014.

Do you have a news, court or regulatory body information on an interesting fraud case?   Comment on this posting or Tweet @fighting_fraud to share your Web links of publicly available fraud news and case information.

Vanessa G. Oltmann
Education and integrity – the best weapons against fraud and corruption

Author: V. G. Oltmann

V. G. Oltmann, MBA, CPA, CGA, CFI - Professor, Vancouver Island University 2002 - 2013 - Board Member, Association of Certified Forensic Investigators of Canada (ACFI): 2010-2013 - LinkedIn Profile:

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