FraudChronicles roundup – cases in the news to Jan 15, 2014

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The Fraud Chronicles roundup of recent fraud cases in the news…

The Madoff Affair

  • JPMorgan Chase & Co.’s quarterly profits fell 7.3 percent on $2.6 billion of settlements tied to Bernard Madoff’s Ponzi scheme. The firm has spent over $23 billion on legal settlements over the last year, coping with legal problems that include allegations that JPMorgan rigged markets, misled mortgage bond buyers, and fail to act on customers’ suspicious activities. (Bloomberg.com, Jan 14, 2014)
  • Madoff’s ex-finance chief changes testimony on scam insight: Frank DiPascali, the self-avowed “right hand man” in Madoff’s fraudulent investment-advisory business testified he learned of Madoff’s scheme in 1992 – contradicting previous testimony that he knew about the scheme since the 1970s. DiPascali is testifying against 5 former Madoff employees accused of complicity in the fraud. Former prosecutor Richard Scheff says, “Bottom line is that [DiPascali’s conflicting testimony] is a devastating change that helps the defense,” (Bloomberg.com, Jan 13, 2014)
  • Madoff trustee case against banks draws top court inquiry: Madoff trustee Irving Picard is seeking permission to sue three banks for $8 billion for allegedly helping funnel money into Madoff’s scheme. Picard argues these banks “are as responsible as Madoff for the enormous magnitude of customer losses”. The US Supreme Court is seeking guidance from the Obama administration. (Bloomberg.com, Jan 13, 2014)

Canada’s senate scandal

  • Mac Harb, former Liberal senator, target of RCMP fraud probe: RCMP allege Harb committed mortgage fraud against the Royal Bank of Canada. Evidence of the alleged fraud was uncovered by RCMP during an investigation into Harb’s inappropriate housing expense claims. (CBCNews, Jan 10, 2014)
  • On Nov 15, 2013, RCMP Corporal Greg Horton filed court documents alleging that Prime Minister Stephen Harper’s former chief of staff, Nigel Wright, and Senator Mike Duffy committed bribery, frauds on the government, and breach of trust. (read court documents filed Nov 13, 2013 and CBC article Nov 20)

Elsewhere in the world:

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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: http://ca.linkedin.com/in/vgoltmann/

32 thoughts on “FraudChronicles roundup – cases in the news to Jan 15, 2014”

  1. © The Canadian Press, 2013
    A massive penny stock fraud scheme that bilked Canadian and foreign investors of more than $140 million was masterminded by four Canadians and carried out with the help of five Americans. One of the Canadians was arrested in Ontario and another one was among six suspects arrested in the U.S. Two other Canadians are being sought in what the department is calling one of the largest international penny stock frauds in history.
    http://www.cbc.ca/m/news/#!/content/1.1336065

    1. The David Michaels case is now in the news again with the BC Securities Commission having opened it’s 2-week inquiry into David Michaels activities while doing business as Michaels Wealth Management Group. The inquiry began January 20 as is still ongoing.

      Vanessa

  2. The RCMP have reported two arrests and multiple charges laid against a mother and daughter duo who allegedly formed part of a Vancouver Island fraud ring responsible for fraudulent activities totaling approximately $90,000 across the island. The press release is available here: http://bc.cb.rcmp-grc.gc.ca/ViewPage.action?siteNodeId=50&languageId=1&contentId=30769

    Though I haven’t found any recent news reports or court documents regarding these two individuals, Karen Mauro’s trial is set for June 2014 while Christine Mauro entered a guilty plea for 6 of her 9 charges on Oct. 28, 2013, according to BC Court Services Online.

    1. This will be a good one to watch for in local Nanaimo and Victoria news reports when Mauro goes to trial in June.

      Vanessa

  3. Thanks for the following contribution submitted by Spencer via TheFraudChronicles.com’s contact form:

    Vancouver Sun columnist Derrek Penner profiles David Michaels investment fraud, which he promised returns of over 12 percent. He was quoted saying the “the only way it would fail would be if the oil and gas industry fell off the table”. He even advertised his Ponzi scheme on radio stations and the internet.

    The article is available at: http://www.vancouversun.com/business/Hundreds+people+invested+financial+adviser+only+lose+virtually+their+money/9423762/story.html

  4. Two Mexican citizens are alleged to have used account information stolen during the target security breach where 40 million credit and debit card accounts and the personal information of 70 million customers are believed to be involved. The two of them allegedly used the account information to buy tens of thousands of dollars worth of merchandise and were now arrested at the border.

    http://www.usnews.com/news/us/articles/2014/01/21/2-nabbed-at-texas-border-in-credit-card-fraud-case

  5. In Comox, BC, Victoria Ann Rutenberg was found guilty of fraud against the Ministry of Children and Family Development for $357,000. Rutenberg was billing for child care services provided to children that did not exist. As a contractor, Rutenberg was charging up to $900 a day for services that she was not providing and because these expenses were claimed online, there was no interaction between the ministry and Rutenberg. The Times Columnist artcile:

    http://www.timescolonist.com/details-emerge-on-comox-valley-daycare-operator-s-357-000-fraud-1.794790

  6. Major new credit card scam uncovered in BC

    ‘Web of criminal activity’ involves hundreds of credit cards and thousands of dollars in reward points. There are believed to be more than 100 victims of the scam, including some from Alberta and the United States whose credit card details were stolen from computers in B.C., in what police are calling “unbelievable access.”

    http://www.cbc.ca/news/canada/british-columbia/major-new-credit-card-scam-uncovered-in-b-c-1.2579214

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