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Washington D.C. — The Securities and Exchange Commission has charged Haverford, PA-based Egan-Jones Ratings Company, a nationally recognized statistical rating organization (NRSRO) registered with the Commission in certain ratings classes, with violating conflict of interest provisions. The SEC also charged the company’s founder and chief executive officer, Sean Egan, with causing certain of those violations.
The SEC’s order finds that, in 2019, Egan, who at the time headed Egan-Jones’s ratings group, became involved in business and marketing activities concerning a client and was influenced by sales and marketing considerations while participating in determining a credit rating for that client, which created a prohibited conflict of interest. The order finds that by issuing and maintaining a rating for the client under those circumstances, Egan-Jones violated the SEC’s NRSRO conflict of interest rules and, further, that Egan caused the company’s violations.
The SEC’s order also finds that, in 2018, Egan-Jones violated another conflict of interest provision by continuing to issue and maintain ratings for another client even though that client had contributed ten percent or more of the company’s net revenues during the prior fiscal year. Finally, the order finds that Egan-Jones failed to establish, maintain, and enforce policies and procedures reasonably designed to manage such conflicts of interest.
“Credit rating agencies play a vital role in assessing the credit risk of an issuer and must be vigilant in avoiding potential conflicts of interest to promote the integrity, impartiality, and quality of credit ratings,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “As the SEC’s order finds, both Egan-Jones and Sean Egan violated the securities laws related to credit rating agency conflicts of interest and now are being held accountable for their actions.”
Without admitting or denying the SEC’s findings, Egan-Jones agreed to settle the matter by paying a $1.7 million penalty and more than $146,000 in disgorgement and interest. It also committed to conduct training, retain an independent consultant to assess its policies and procedures concerning conflicts of interest, and prohibit Egan from, among other things, participating in determining or monitoring credit ratings issued or maintained by Egan-Jones or developing or approving procedures used for determining credit ratings issued or maintained by Egan-Jones. Separately, and also without admitting or denying the SEC’s findings, Egan agreed to pay a $300,000 penalty to settle the SEC’s charges against him.
The SEC’s investigation was conducted by Greg Hillson and Avron Elbaum, and supervised by Peter Rosario and Yuri B. Zelinsky. Dean M. Conway of the Enforcement Division’s Trial Unit and staff of the SEC’s Office of Credit Ratings assisted with the investigation.
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Brokerage firm sold $13.3 million worth of high-risk bonds to retirees and other retail investors
Washington D.C. — The Securities and Exchange Commission has charged registered broker-dealer Western International Securities, Inc. and five of its registered representatives, or brokers – Nancy Cole, Patrick Egan, Andy Gitipityapon, Steven Graham, and Thomas Swan – with violating Best Interest Obligation regulations (commonly referred to as Regulation Best Interest or Reg BI) when they recommended and sold an unrated, high-risk debt security known as L Bonds to retirees and other retail investors. From July 2020 through April 2021, Western sold an aggregate of $13.3 million of L Bonds.
The SEC’s complaint alleges that, between July 2020 and April 2021, Western and the brokers recommended and sold L Bonds to retail customers, many of whom were on fixed incomes and had moderate risk tolerances, despite the issuer, GWG Holdings, Inc., stating the L bonds were high risk, illiquid, and only suitable for customers with substantial financial resources. The defendants allegedly failed to comply with Reg BI’s “Care Obligation” both because they did not exercise reasonable diligence, care, and skill to understand the risks, rewards, and costs associated with L Bonds, and also because they recommended L Bonds to at least seven particular customers without a reasonable basis to believe the bonds were in their customers’ best interests. The complaint also alleges Western failed to comply with Reg BI’s “Compliance Obligation” because it did not adequately establish, maintain, and enforce written policies and procedures reasonably designed to achieve compliance with Reg BI.
“Reg BI is clear: broker-dealers must act in the best interest of their customers,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “When they fail to do so, as we allege happened here, they put retail investors at risk and we’ll hold them accountable.”
“Reg BI is an essential tool for the protection of the best interests of retail investors,” said Regional Director, Daniel R. Gregus. “Protecting retail investors is one of the fundamental duties of the SEC, and a top priority of the Chicago Regional Office.”
The SEC’s investigation was conducted by Jonathan Epstein, Scott Tandy, Ariella Guardi, and Josh Wagoner and was supervised by C.J. Kerstetter and Paul Montoya, all from the SEC’s Chicago Regional Office. The litigation will be led by Ariella Guardi. EXAMS staff from the Chicago Regional Office conducted the examination that led to the investigation. The examination team included Stephen Bilezikjian, Craig Carlson, Tom Meier, Joseph Tholl, and Mike Wells.
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Software Engineer Traded, Tipped Friend of Company’s Acquisition Plans
Washington D.C. — The Securities and Exchange Commission today announced insider trading charges against David Roda, a former software engineer at Penn National Gaming’s subsidiary Penn Interactive Ventures, in connection with the parent company’s $2 billion acquisition of Toronto-based Score Media and Gaming, Inc.
The SEC’s complaint, filed in federal district court in Philadelphia, alleges that, while employed at Penn Interactive, which provides online and mobile gambling experiences for Penn National, Roda was given confidential information about Penn National’s interest in acquiring Score Media along with admonitions not to trade on that information. In breach of his duties, Roda purchased 500 out-of-the-money call options on Score Media in the weeks and days leading up to the announcement of the acquisition. Additionally, Roda tipped his longtime friend, Andrew Larkin, also charged by the SEC, who then purchased 375 Score Media shares. According to the SEC’s complaint, Score Media’s stock price increased nearly 80 percent after Penn National and Score Media publicly announced their deal, following which Roda and Larkin sold their holdings for unlawful profits of $560,762 and $5,602, respectively.
“As we allege in our complaint, Roda was entrusted by his employer with critical, market-moving information, and he betrayed that trust by using the information to trade and also tip his friend so they could both profit,” said Scott A. Thompson, Co-Acting Regional Director of the SEC’s Philadelphia Regional Office. “When employees like Roda misappropriate and trade on confidential information, it erodes market confidence. The SEC remains committed to finding, investigating, and charging those who engage in insider trading.”
The SEC’s complaint charges Roda and Larkin, both of Philadelphia, with violating the antifraud provisions of the securities laws. Roda has agreed to be permanently enjoined from violating those provisions and has agreed to pay disgorgement, prejudgment interest, and a civil penalty to be determined by the Court at a later date. Without admitting or denying the allegations in the SEC’s complaint, Larkin has agreed to be permanently enjoined from violating the antifraud provisions of the securities laws and to pay more than $11,000 in disgorgement and penalties. The settlements are subject to Court approval.
In a parallel action, the U.S. Attorney’s Office for the Eastern District of Pennsylvania today announced criminal charges against Roda.
The SEC’s investigation was conducted by Norman P. Ostrove with assistance from John S. Rymas of the Market Abuse Unit’s Analysis and Detection Center. It was supervised by Scott A. Thompson of the Philadelphia Regional Office and Julia C. Green and Joseph G. Sansone of the Market Abuse Unit. The litigation will be led by Gregory Bockin. The SEC appreciates the assistance of the Financial Industry Regulatory Authority, the Federal Bureau of Investigation, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania.
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A federal jury in Detroit convicted a Michigan man today for a wire fraud and money laundering scheme to obtain more than $4.1 million in Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
According to court documents and evidence presented at trial, Johnny Ho, 41, of Novi, engaged in a conspiracy to submit falsified PPP and EIDL loan applications in order to obtain COVID-19 relief funds that he was not entitled to receive. The evidence showed that Ho, who owned Diva Nails & Spa III LLC, located in Northville, submitted inflated payroll information, and otherwise falsified loan application information. Ho personally submitted two fraudulent PPP and EIDL loan applications seeking nearly $350,000 in funds that were intended to help small businesses and their employees impacted by the COVID-19 pandemic. In total, Ho and his co-conspirators submitted 29 different fraudulent PPP and EIDL loan applications on behalf of 16 businesses totaling over $4.1 million.
Ho was convicted of one count of conspiracy to commit wire fraud, two counts of wire fraud, and two counts of money laundering. He is scheduled to be sentenced on Sept. 27 and faces up to 20 years in prison for each of the wire fraud counts, and up to 10 years in prison on the money laundering counts. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Dawn Ison for the Eastern District of Michigan; Special Agent in Charge James A. Tarasca of the FBI’s Detroit Field Office; and Special Agent in Charge Sharon Johnson of the SBA-Office of Inspector General (SBA-OIG) made the announcement.
The case was investigated by the FBI and the SBA-OIG.
Trial Attorney Patrick J. Suter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ryan A. Particka for the Eastern District of Michigan are prosecuting the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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SEC Charges New Jersey Software Company and Senior Employees with Accounting-Related Misconduct
Synchronoss Technologies to Pay $12.5 Million to Settle Charges, Former CEO to Reimburse Company
Washington D.C. — The Securities and Exchange Commission today charged Bridgewater, NJ-based Synchronoss Technologies, Inc. and seven senior employees, including the former CFO, in connection with their roles related to long-running accounting improprieties that ran from 2013 to 2017. In addition, the company’s founder and former CEO, Stephen Waldis, while not charged with misconduct, agreed to reimburse the company for more than $1.3 million in stock sale profits and bonuses as well as to return previously granted shares of company stock pursuant to Section 304 of the Sarbanes-Oxley Act (SOX).
The SEC filed a complaint in federal district court in Manhattan against former CFO Karen Rosenberger and former Controller Joanna Lanni. Among other things, the SEC’s complaint alleges that Rosenberger engaged in fraud through her role in improperly recognizing revenue on multiple transactions and that she also misled Synchronoss’s auditor about multiple transactions. The SEC alleges Lanni was involved in improper accounting for one transaction.
“Investors are entitled to rely on financial statements that are free of accounting improprieties, and when an issuer and its executives and employees engage in accounting gimmicks, we will use every available tool, including significant corporate penalties and individual accountability, to address such misconduct,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “Today’s action should also put public company executives on notice that even when they are not charged with having a role in the misconduct at issue, we will still pursue clawbacks of compensation under SOX 304 to ensure they do not financially benefit from their company’s improper accounting.”
In a July 2018 SEC filing, Synchronoss, a technology company that primarily provides products, software, and services to telecommunications companies, announced a restatement of its audited financial statements for the fiscal years ended December 31, 2015 and 2016 and restated selected financial data for the fiscal years ended 2013 and 2014 totaling approximately $190 million in revenues. Synchronoss acknowledged that during this period it had accounted for numerous transactions improperly and thus filed with the Commission materially misleading financial statements along with having material weaknesses in its internal controls over financial reporting.
As alleged in the various charging documents filed today, Synchronoss’s improper accounting primarily concerned three categories of transactions: (1) transactions for which there was not persuasive evidence of an arrangement; (2) acquisitions/divestitures in which Synchronoss recognized revenue on license agreements rather than netting those purported amounts against the purchase prices; and (3) license/hosting transactions, in which it improperly recognized revenue upfront, instead of ratably over the term of the multi-year arrangement. In addition, the SEC alleged that certain Synchronoss employees entered into “side letter” arrangements, concealing facts indicating that the revenue that Synchronoss recognized upfront was in fact contingent on future events. The impact of the improper accounting was material and in many instances allowed the company to meet earnings targets.
Without admitting or denying the SEC’s findings, Synchronoss agreed to cease and desist from violating Section 10(b) of the Securities Exchange Act of 1934 and other provisions of the securities laws, and to pay a civil penalty of $12.5 million. The following parties also agreed to settle:
Ronald Prague, the company’s former general counsel, settled charges stemming from his involvement, along with others, in misleading the company’s auditors regarding two transactions and to pay a civil penalty of $25,000 and to be suspended from appearing and practicing before the SEC as an attorney for 18 months; and
Clayton “Charlie” Thomas, Marc Bandini, Daniel Ives, former senior employees of the company, along with current employee, John Murdock, settled charges from their participation in at least one side letter agreement that concealed the revenue that Synchronoss recognized upfront was in fact contingent on future events and to pay civil penalties ranging from $15,000 to $90,000.
The SEC’s investigation was conducted by James Burt IV, Kenneth Gottlieb, Theresa Gue, Desiree Marmita, Lindsay S. Moilanen, and Richard Primoff, and supervised by Lara S. Mehraban and Sheldon Pollock. The investigative team appreciates the assistance of Eduardo Martinez of the Office of Market Intelligence. The litigation against Rosenberger and Lanni will be led by Ms. Gue, Ms. Moilanen, and Mr. Primoff under the supervision of Mr. Pollock. The SEC appreciates the assistance of the Public Company Accounting Oversight Board.
Nominan la serie de investigación de Aitana Vargas que destapa el presunto entramado fraudulento de Hadari Oshri
Los Ángeles (CA) – En junio de 2021, la empresaria israelí Hadari Oshri pidió una orden de alejamiento contra la corresponsal española Aitana Vargas. Su objetivo era frenar en seco e impedir cualquier cobertura mediática de la periodista, cuya serie de investigación distribuida en este medio destapa un presunto entramado corporativo fraudulento en el que Oshri y Marc Lubaszka estarían implicados y a través del cual habrían tratado de vender equipamiento de protección personal (PPE en inglés) por más de 370 millones de dólares y del cual carecían.
El día que Oshri presentó la querella mordaza, no debió medir bien sus acciones y, en septiembre de 2021, acabó sucumbiendo al sistema judicial californiano, que protege celosamente la Primera Enmienda de la Constitución Estadounidense y custodia la libertad de expresión, incluyendo el ejercicio periodístico, en particular toda información difundida en “interés público” (anti-SLAPP en inglés).
La guinda al pastel la colocó hace unos días el Club de Prensa de Los Ángeles, que nominó el trabajo de la reportera a un premio y reconfirmó por qué la serie de Vargas merece estar en la palestra pública.
Hadari Oshri y el Efecto Streisand
En 2021, la jugada judicial le salió tan mal a Oshri que, además de ser desestimada, la empresaria está obligada a pagar todos los gastos legales de la periodista madrileña. La factura, según documentos judiciales, asciende a más de 23.000 dólares.
Pero las acciones de Oshri acarrean implicaciones de mayor envergadura. Aunque la israelí lograra posponer la publicación de la cobertura mediática durante tres meses (que ya de por sí no debiera haber ocurrido), su modus operandi es un ejemplo idílico del llamado Efecto Streisand: Cuando un individuo trata de silenciar o encubrir un hecho, logra el objetivo contrario, no sólo generar mayor interés sino también una mayor cobertura mediática.
La vergonzosa denuncia de Hadari Oshri con acusaciones incomprensibles, indemostrables y bochornosas contra la periodista
Durante la vista, la jueza recalcó que la declaración jurada que Oshri presentó el 22 de junio de 2021 contra la periodista “no era clara”. De hecho, la magistrada le recriminó a los abogados de la empresaria que ni siquiera habían “incluído pruebas” y que, de haberlo hecho, éstas “carecían de fundamento” y eran inadmisibles.
En su denuncia escrita, Oshri se cubrió de gloria y le dedicó todo tipo de perlas a la galardonada periodista, incluyendo calificativos como “Mis Vergas” y “Señorita Vergas”. También la acusó de ser una “mujer muy peligrosa”, “desesperada” y una “reportera corrupta” sin ninguna prueba, e incluso identificó a Vargas como un miembro de la inexistente raza “española”. Pero las acusaciones de Oshri también incluyeron otras declaraciones incomprensibles y memorables como:
“(Vargas) está cavando en lugares que no están aquí ¡¡ no es AUTÉNTICA, NO ES EL FBI NI LA CIA, que puede perseguirme así por todas mis cuentas en las redes sociales, perseguir mis artículos en las redes sociales, y contactar con todos los implicados ¡¡¡”
“Mis Vergas es tan peligrosa, que está hablando de la situación públicamente en aquí su FB, diciendo que ella es un SLAPP y que la ley la protege, Mis Vargas no es el FBI y no es la CIA, sus historias sobre mí son mentira, y no tiene motivo para contactar con nadie en mi red”.
“Aitaina Vergas es una periodista corrupta, no es auténtica, HAY QUE PARARLA YA!!!”
“Un vistazo rápido a su post reciente en su página de Facebook es una evasión para aquí proceso de pensamiento y aquí urgencia”.
“Mi abogado le envió una sesión de espiritismo y desistir, y ella siguió”.
“¡Deja de escribir sobre mí y contactar con mi red! ¡Suspensión de su licencia de periodista para que no pueda hacerle esto a nadie más!”
Hadari Oshri pidió medidas cautelares contra la periodista porque ésta se negó a retirar su serie de investigación
Court documents show that Hadari Oshri instructed her attorney, John Tamborelli, to silence news reporter Aitana Vargas.
Documentos judiciales –entre otros– demuestran que, desde febrero de 2021, la periodista ha estado sometida a constantes presiones legales dirigidas a impedir la publicación de su serie de investigación, cuya primera entrega se difundió el 30 de mayo de 2021.
El exabogado de Hadari Oshri, John Tamborelli, presionó a la periodista para que cesara cualquier cobertura mediática
Antes de que Oshri solicitara medidas cautelares ante un juzgado de Los Ángeles, Vargas ya había reiterado en las redes sociales que no renunciaría a su investigación como resultado de la presión que Oshri y su anterior abogado, John Tamborelli, estaban ejerciendo sobre ella.
La periodista se negó a acatar las exigencias legales de Tamborelli, las cuales éste también incorporó en un acuerdo extrajudicial que mencionaba a Vargas y del que ésta ni formaba parte ni había firmado. En dicho acuerdo, el abogado de Oshri exigía a una de las fuentes de la periodista que ésta retirara cualquier artículo que mencionara al letrado (Tamborelli), a Oshri o a Lubaszka.
Hadari Oshri’s former attorney, John Tamborelli, tried to silence reporter Aitana Vargas’s media coverage and online complaints about the legal pressure she was enduring.
A finales de junio de 2021, el Sindicato Nacional de Escritores (NWU en inglés) le envió una carta a Tamborelli exigiéndole que cesara todo intento de intimidación hacia la corresponsal.
“El NWU se toma cualquier intento por silenciar o amenazar a un periodista, especialmente a una mujer, de forma muy seria”, decía la carta. “También nos gustaría recalcar que, aunque cualquier fuente confidencial pueda retractarse en cualquier momento, incluso bajo coacción, ésta no tiene un derecho legal para exigir la retirada de un artículo. Te pedimos que ceses cualquier acto de intimidación contra nuestro miembro”.
Hadari Oshri cuenta con varias querellas legales
La empresaria israelí se ha enfrentado a varios procesos legales en el pasado, y algunos exsocios o antiguos trabajadores que han obtenido sentencias contra ella aún están tratando de recaudar sus respectivas indemnizaciones.
En 2020, Oshri y Tamborelli se enfrentaron a una querella vinculada a un accidente de tráfico ocurrido en Los Ángeles. En la audiencia contra Vargas, los abogados de Oshri negaron la existencia de dicha querella a pesar de estar judicialmente documentada.
En la actualidad, Oshri es la directora ejecutiva de Trade Safe Pro y de A1A Management. Al frente de esta última compañía también está el exmodelo Patrick Seller. Hasta 2019, Oshri fue la directora ejecutiva de Xehar, Inc., una compañía de modelos de talla grande (o “hadas de la moda”) que naufragó y se fue a pique en 2018.
Screenshot of a promotional video of Xehar University, one of Hadari Oshri’s many defunct business projects.
Al inicio de la pandemia, Oshri se asoció con Marc Lubaszka, un empresario que está acusado de estafar dos millones de dólares a decenas de personas que invirtieron en sus planes de pensión y que ha sido investigado por el FBI. Lubaszka es el presidente de la compañía de jets privados Fly Private X, cuya página web se encuentra “en construcción” desde que Vargas publicó la primera entrega de su serie de investigación. En los últimos meses, Lubaszka ha reanudado la venta de oro a través de Buy Gold Brightly.
La corresponsal española está representada por Michael Creamer, con oficinas en el condado de Orange.
Desde julio de 2021, Oshri está representada por Veronica Barton y Paul Adkins, con oficinas en los condados de Los Ángeles y Orange.
**Esta historia se va actualizando conforme se recibe información adicional. Last update: March 20, 2022.
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Washington D.C. — The Securities and Exchange Commission has charged New York-based SCWorx Corp. and its former Chief Executive Officer and Chairman of the Board, Marc S. Schessel, with making false and misleading statements about SCWorx’s plans to distribute COVID-19 rapid test kits in April 2020. SCWorx has agreed to settle the SEC’s charges and will pay a $125,000 civil penalty.
The SEC’s complaint alleges that, with SCWorx struggling financially, Schessel and SCWorx issued a press release on April 13, 2020, falsely stating that SCWorx had a “committed purchase order” from a purported buyer to purchase two million COVID-19 rapid test kits. The press release further stated that the purchase order included a “provision for additional weekly orders of 2 million units for 23 weeks, valued at $35M [million] per week.” Following the issuance of the press release, SCWorx’s stock price surged 425% from the prior trading day on volume of 96.2 million shares, which was more than 900 times the prior three-month average daily volume.
The SEC alleges that Schessel and SCWorx issued this press release despite having neither a legitimate supplier of COVID-19 test kits nor an executed purchase agreement with a buyer. The complaint further alleges that Schessel and SCWorx publicly repeated the false and misleading statements about the distribution of COVID-19 rapid test kits over the course of April 2020.
At the time, the SEC ordered that trading be suspended temporarily in the securities of SCWorx between April 21, 2020, and May 5, 2020, because of questions and concerns regarding the adequacy and accuracy of publicly available information in the marketplace concerning SCWorx.
“We allege that the defendants engaged in an age-old fraud—lying about their business prospects—to capitalize opportunistically on the COVID pandemic,” said SEC Chair Gary Gensler. “As the challenges from the pandemic continue, investors should be vigilant about COVID-related claims. The SEC will continue to root out fraud and prosecute those who attempt to use the surge of uncertainty from the pandemic to defraud the investing public.”
“As alleged in our complaint, Schessel and SCWorx repeatedly made false representations to the investing public about the distribution of COVID-19 rapid test kits at a time when the need for truthful disclosures was especially critical,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “Today’s filing is a testament to the resilience and dedication of the SEC staff who during the height of the pandemic uncovered the alleged fraud and expeditiously suspended trading in the securities of SCWorx soon after the first alleged misstatement.”
The SEC’s complaint, filed in federal district court in New Jersey, charges Schessel and SCWorx with violating the antifraud provisions of the federal securities laws. The SEC’s complaint seeks from both defendants permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties. The complaint also seeks an officer and director bar against Schessel. Without admitting or denying the allegations, SCWorx has agreed to a settlement, subject to court approval, that includes permanent injunctions, the payment of a $125,000 penalty, and disgorgement of $471,000 with prejudgment interest of $32,761.56. SCWorx is expected to satisfy its obligation to pay the disgorgement and prejudgment interest by contributing stock, valued at $600,000 at the time of issuance, to harmed investors in a private class action settlement in Yannes v. SCWorx Corp., et al., 1:20-cv-03349 (S.D.N.Y.).
In a parallel action, the U.S. Attorney’s Office for the District of New Jersey and the Fraud Section of the U.S. Department of Justice’s Criminal Division today announced criminal charges against Schessel.
The SEC’s investigation was conducted by Michael Brennan, with assistance from Robert Nesbitt, Howard Kaplan, Sachin Verma, and Peter Rosario, and supervised by Kevin Guerrero and Jennifer S. Leete. The litigation will be led by James Connor under the supervision of Olivia Choe. The SEC appreciates the assistance of Nasdaq’s Enforcement Department.
The SEC’s Office of Investor Education and Advocacy issued an alert urging investors to look out for false and misleading claims about purported COVID-19 related products.
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A New York man was sentenced to four years in prison for purchasing stolen or compromised credit cards and assisting other members of the Infraud Organization in monetizing their fraudulent activity. The Infraud Organization, a transnational cybercrime enterprise engaged in the mass acquisition and sale of fraud-related goods and services, including stolen identities, compromised credit card data, computer malware, and other contraband.
According to court documents, the enterprise boasted over 10,000 members at its peak and operated for more than seven years under the slogan “In Fraud We Trust.” The Infraud Organization is responsible for the purchase and sale of over four million stolen credit and debit card numbers. This scheme cost victims more than $568 million dollars.
John Telusma, 37, aka Peterelliot, of Brooklyn, pleaded guilty in the District of Nevada to one count of racketeering conspiracy on Oct. 13, 2021. According to court documents, the defendant joined the Infraud Organization in August 2011, maintaining his membership for five and a half years. Telusma was among the most prolific and active members of the Infraud Organization, purchasing and fraudulently using compromised credit card numbers for his own personal gain.
Telusma is the 14th defendant to be held accountable for his role in the Infraud scheme. Telusma’s co-defendants who have been previously sentenced include:
Infraud co-founder Sergey Medvedev, 34, aka Stells, of Russia, who was sentenced to 10 years in prison;
Malware developer Valerian Chiochiu, 32, aka Onassis, of California, who was sentenced to 10 years in prison;
VIP Member Arnaldo Sanchez Torteya, 35, aka Elroncoluna, of Mexico, who was sentenced to eight years in prison;
VIP Member Edgar Rojas, 31 aka Guapo, of Venezuela, who was sentenced to eight years in prison;
ATM skimmer Jose Gamboa, 35, aka Rafael101, of California, who was sentenced to eight years in prison; and
VIP Member Pius Wilson, 35 aka FDIC, of New York, who was sentenced to seven years in prison.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division and Acting Special Agent in Charge Lucia Cabral-DeArmas of Homeland Security Investigations (HSI) Las Vegas made the announcement.
The HSI Las Vegas and the Henderson, Nevada, Police Department investigated the case. The Justice Department’s Office of International Affairs provided significant assistance in the investigation and prosecution of this case.
Deputy Chief Kelly Pearson and Trial Attorneys Chad McHenry and Alexander Gottfried of the Justice Department’s Organized Crime and Gang Section prosecuted the case.
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Washington D.C. — The Securities and Exchange Commission this week proposed amendments to enhance and modernize the Investment Company Act “Names Rule” to address changes in the fund industry and compliance practices that have developed in the approximately 20 years since the rule was adopted. A fund’s name is an important marketing tool and can have a significant impact on investors’ decisions when selecting investments, and the Names Rule addresses fund names that are likely to mislead investors about a fund’s investments and risks. The proposal follows a request for comment the SEC issued to gather public feedback on potential reforms to the rule in March 2020.
“A lot has happened in our capital markets in the past two decades. As the fund industry has developed, gaps in the current Names Rule may undermine investor protection,” said SEC Chair Gary Gensler. “In particular, some funds have claimed that the rule does not apply to them — even though their name suggests that investments are selected based on specific criteria or characteristics. Today’s proposal would modernize the Names Rule for today’s markets.”
The Names Rule currently requires registered investment companies whose names suggest a focus in a particular type of investment (among other areas) to adopt a policy to invest at least 80 percent of the value of their assets in those investments (an “80 percent investment policy”). The proposed amendments would enhance the rule’s protections by requiring more funds to adopt an 80 percent investment policy. Specifically, the proposed amendments would extend the requirement to any fund name with terms suggesting that the fund focuses in investments that have (or whose issuers have) particular characteristics. This would include fund names with terms such as “growth” or “value” or terms indicating that the fund’s investment decisions incorporate one or more environmental, social, or governance factors. The amendments also would limit temporary departures from the 80 percent investment requirement and clarify the rule’s treatment of derivative investments.
The proposing release will be published in the Federal Register. The comment period will remain open for 60 days after publication in the Federal Register.
AN IMPORTANT NOTE:On June 22, 2021, Hadari Oshri –Marc Lubaszka’s business partner– filed a civil harassment restraining order (CHRO) against Investor News reporter Aitana Vargas to stop the publication of her investigative series “A Special Report: The Harrowing Impunity of White-Collar crime,” and any subsequent installments or future media coverage. On August 3, 2021, Vargas filed an anti-SLAPP motion to strike Oshri’s CHRO petition. In a hearing held on September 13, 2021, Los Angeles Superior Court Judge Doreen Boxer granted Vargas’s anti-SLAPP motion and denied Oshri’s civil harassment petitionfor failure to sustain the applicable burden of proof. Oshri will now have to pay Vargas’s attorney’s fees for filing a frivolous case. The Israeli entrepreneur also declined to go on a recorded interview or provide statements via email.
Oshri tried to stop the release of Vargas’s series exposing her alleged participation in a $370M PPE scheme
In June 2021, Investor News reporter Aitana Vargas was served with court papers to stop the release of her months-long investigative series exposing entrepreneur Hadari Oshri’s participation in an alleged multimillion-dollar PPE scam with conman Marc Lubaszka.
In September 2021, Oshri’s meritless legal effort to silence Vargas’s investigative series was thrown out by a Los Angeles judge, and Oshri will have to pay the journalist’s legal fees as ordered by California’s powerful anti-SLAPP statute, which protects First Amendment rights.
“This nomination is a step in the right direction, but it falls way short of expectations for Oshri’s and Lubaszka’s victims, who are still demanding accountability. They want law enforcement to resolve their years-long grievances,” the journalist said.
“Leslie Lawson, one of Lubaszka’s victims, just told me that all she wants is for her $215,000 IRA to be returned. This is a good time for law enforcement to reach out again to their many victims across the US.”
Hadari Oshri’s frivolous case delayed the release of Vargas’s exposé
In Oshri’s non-sense petition against the award-winning correspondent, the Israeli accused the reporter of being a “desperate,” “very dangerous woman” and “a corrupted reporter” without any proof. Oshri also referred to the journalist as “Miss Dicks” (Miss Vergas) and “My Dicks” (Mis Vergas) and fabricated a baseless theory that didn’t fly with the court.
“Oshri’s and her attorneys’ arguments sounded like a low-budget Hallmark movie script,” the reporter said. “Their arguments were simply pathetic. This is not about assigning symbolism to specific calendar dates. This is about widespread accusations of fraud, and there’s evidence of alleged fraud all over the place.”
Vargas, who is represented by the law offices of Michael Creamer in her anti-SLAPP case against Oshri, is still waiting for the judge to enter a $23,000 legal fees judgment against the entrepreneur for filing a meritless case.
Vargas was pressured by Hadari Oshri’s attorney, John Tamborelli, into quitting her investigative series
According to court documents, during 2021, the Spaniard was pressured multiple times into quitting her investigative work. Investor News had access to a cease-and-desist email that Oshri’s former attorney, John Tamborelli, sent her in February 2021 demanding that she stop reaching out and talking to sources. The email also threatened legal action against the reporter and one of her sources did they fail to comply.
Tamborelli was following orders from Oshri, whose email featured some memorable statements to the reporter and her source:
“You (Aitana) are putting your hands in places that is not belong to you !!!!!
You (Aitana) GOT to stop !!!!!
Also you you cucumber !!”
In a second email that Oshri sent to Vargas and her source the same day, the entrepreneur stated:
“This is officially !!! Attaching my new business as an opportunity what the fuck you contacting this guy Robert 80 years old Man that is doing my taxes !!!
You are crossing all the lines
Where should I serve your lawsuit Ariana
And Qucomber !!”
The journalist didn’t reply to any emails that Oshri and Tamborelli sent that day.
Exclusive documents obtained by this outlet also show that in June 2021, Tamborelli wanted one of Vargas’s sources (Fergal Furlong) to instruct her to remove all the information related to Oshri or Tamborelli and any articles mentioning Tamborelli, Oshri and Lubaszka, including the first part of Vargas’s exposé, which gave a voice to the victims of one of Lubaszka’s prior gold schemes for which he was never prosecuted by law enforcement nearly a decade ago.
The reporter took to social media to announce that she was not a party to the settlement agreement and would not be taking down any content. About two weeks later, Oshri filed against Vargas.
Hadari Oshri’s former attorney, John Tamborelli, tried to silence reporter Aitana Vargas’s media coverage and online complaints about the legal pressure she was enduring.
In response to Tamborelli’s cease-and-desist email and continued demands, the National Writers Union (NWU) sent him a letter demanding that he stop all intimidation attempts towards the female reporter.
“Hadari Oshri cornered me in every single possible way she knew how. Yet she failed,” Vargas said. “Fear tactics only work for so long, don’t they?”
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