Hedge Fund Manager Sentenced for Operating Multimillion-Dollar Ponzi Scheme
A Florida man was sentenced today to one year and one day in prison for using his hedge fund management company as part of a years-long, multimillion-dollar Ponzi scheme.
According to court documents, Michael Wayne Williams, 48, of Miami, was the founder and operator and investment manager of Highguard Capital and its affiliated entities, Guardian Opportunity Fund and Guardian Opportunity Management. Williams convinced his victims to invest over $3.6 million in Guardian Opportunity Management and used their money for undisclosed and unauthorized purposes, including to settle civil lawsuits accusing him of fraud and to repay investors from discontinued funds that he previously managed.
Williams pleaded guilty in October 2023 to wire fraud.
Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division and Assistant Director in Charge David Sundberg of the FBI Washington Field Office made the announcement.
The FBI Washington Field Office investigated the case.
Trial Attorney David A. Peters of the Criminal Division’s Fraud Section and Trial Attorney Elise Kent Bernanke of the Environment and Natural Resources Division prosecuted the case.
If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at victimassistance.fraud@usdoj.gov.
Press release by DOJ.
Featured image: by Got Credit.
Dark Web Vendor Sentenced for Distributing Narcotics and Ordered to Forfeit $150M
An Indian national was sentenced today to five years in prison for selling controlled substances on dark web marketplaces and ordered to forfeit approximately $150 million.
According to court documents and in statements made in court, Banmeet Singh, 40, of Haldwani, India, created vendor marketing sites on dark web marketplaces, such as Silk Road, Alpha Bay, Hansa, and others, to sell controlled substances, including fentanyl, LSD, ecstasy, Xanax, ketamine, and tramadol. Customers paid with cryptocurrency for drugs ordered from Singh using the vendor sites. Singh then personally shipped or arranged the shipment of the drugs from Europe to the United States through U.S. mail or other shipping services.
From at least mid-2012 through July 2017, Singh controlled at least eight distribution cells within the United States, including cells located in Ohio, Florida, North Carolina, Maryland, New York, North Dakota, and Washington, among other locations. Individuals in these distribution cells received drug shipments and then re-packaged and re-shipped the drugs to locations in all 50 states, Canada, England, Ireland, Jamaica, Scotland, and the U.S. Virgin Islands.
Over the course of the conspiracy, the Singh drug organization moved hundreds of kilograms of controlled substances throughout the United States and established a multimillion-dollar drug enterprise that laundered millions of dollars of drug proceeds into cryptocurrency accounts, which ultimately became worth approximately $150 million.
Singh was arrested in April 2019 in London at the request of the United States and subsequently extradited to the United States in March 2023. He pleaded guilty on Jan. 26 to conspiracy to possess with intent to distribute controlled substances and conspiracy to commit money laundering.
Principal Deputy Assistant Attorney General Nicole Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Kenneth L. Parker for the Southern District of Ohio; Administrator Anne Milgram of the Drug Enforcement Administration (DEA); Acting Special Agent in Charge Karen Wingerd of the IRS Criminal Investigation (IRS-CI) Cincinnati Field Office; Acting Special Agent in Charge Shawn Gibson of Homeland Security Investigations (HSI) Detroit; and Postal Inspector in Charge Lesley Allison of the U.S. Postal Inspection Service (USPIS) made the announcement.
The DEA, IRS-CI, HSI, USPIS, and the Upper Arlington and Columbus, Ohio, Police Departments investigated the case. The United Kingdom’s National Crime Agency, Crown Prosecution Service, and Central Authority provided significant assistance.
The Justice Department’s Office of International Affairs provided significant assistance in securing the arrest and extradition of Singh from the United Kingdom.
Trial Attorney Emily Cohen of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorney Michael J. Hunter for the Southern District of Ohio prosecuted the case.
Press release by DOJ.
Featured image: by ccPixs.com.
Man Convicted for $110M Cryptocurrency Scheme
A federal jury in New York convicted a man residing in Puerto Rico today of commodities fraud, commodities market manipulation, and wire fraud in connection with the manipulation on the Mango Markets decentralized cryptocurrency exchange.
According to court documents and evidence presented at trial, Avraham Eisenberg, 28, engaged in a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from Mango Markets and its customers by artificially manipulating the price of certain perpetual futures contracts.
“Avraham Eisenberg executed a manipulative trading scheme on a cryptocurrency exchange, defrauding the exchange and its investors out of $110 million,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Manipulative trading puts our financial markets and investors at risk. This prosecution—the first involving the manipulation of cryptocurrency through open-market trades—demonstrates the Criminal Division’s commitment to protecting U.S. financial markets and holding wrongdoers accountable, no matter what mechanism they use to commit manipulation and fraud.”
“Moments ago, Avraham Eisenberg was found guilty by a unanimous jury in the first-ever cryptocurrency open-market manipulation case,” said U.S. Attorney Damian Williams for the Southern District of New York. “This ground-breaking prosecution epitomizes this office’s ability to employ innovative methods and cutting-edge law enforcement tools to continue to protect all financial markets. The career prosecutors of this office continue their expertise in prosecuting financial fraud, one of our core priorities, and would-be financial criminals should think twice before daring to engage in illicit conduct on our watch.”
“The FBI and its partners will not stand by when criminals engage in illicit activity at the expense of the American people and our financial institutions,” said Executive Assistant Director Timothy Langan of the FBI’s Criminal, Cyber, Response, and Services Branch. “If you engage in fraudulent activity, whether that be in the cryptocurrency space or through other forms of market manipulation, you will be held accountable for your ill-gotten gains.”
Eisenberg is scheduled to be sentenced on July 29 and faces a maximum penalty of 10 years in prison on the commodities fraud count and the commodities manipulation count, and a maximum penalty of 20 years in prison on the wire fraud count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI investigated the case, with assistance from Homeland Security Investigations and IRS Criminal Investigation.
Trial Attorney and Special Assistant U.S. Attorney Tian Huang of the Criminal Division’s Fraud Section, a member of the National Cryptocurrency Enforcement Team (NCET), and Assistant U.S. Attorneys Thomas Burnett and Peter Davis for the Southern District of New York are prosecuting the case.
The NCET was established to combat the growing illicit use of cryptocurrencies and digital assets. Within the Criminal Division’s Computer Crime and Intellectual Property Section, the NCET conducts and supports investigations into individuals and entities that are enabling the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers. The NCET also works to set strategic priorities regarding digital asset technologies, identify areas for increased investigative and prosecutorial focus, and lead the department’s efforts to collaborate with domestic and foreign government agencies as well as the private sector to aggressively investigate and prosecute crimes involving cryptocurrency and digital assets.
Press release by DOJ.
Featured image: by Crypto360.
Advisory Firm Senvest Management Charged with Recordkeeping and Other Failures
Washington D.C. — The Securities and Exchange Commission has announced charges against registered investment adviser Senvest Management LLC for widespread and longstanding failures to maintain and preserve certain electronic communications. The SEC also charged Senvest with failing to enforce its code of ethics. To settle this matter, Senvest admitted the facts set forth in the Commission’s order, acknowledged that its conduct violated the federal securities laws, and agreed to pay a $6.5 million penalty and to implement improvements to its compliance policies and procedures.
According to the Commission’s order, from at least January 2019 through December 2021, Senvest employees at various levels of authority communicated about company business internally and externally using personal texting platforms and other non-Senvest messaging applications in violation of the firm’s policies and procedures. Senvest also failed to maintain or preserve the off-channel communications as required under the federal securities laws and the firm’s policies and procedures. In one instance, three senior employees engaged in off-channel communications on personal devices that were set to automatically delete messages after 30 days. Additionally, the order finds that certain Senvest employees failed to adhere to provisions of the firm’s code of ethics requiring them to obtain pre-clearance for all securities transactions in their personal accounts.
“The Commission continues to focus on regulated entities’ compliance with the recordkeeping requirements. Adherence to these requirements is essential for the Commission to effectively exercise its regulatory oversight and enforce the federal securities laws,” said Eric Werner, Director of the Fort Worth Regional Office.
The order finds that Senvest violated certain recordkeeping and ethics provisions of the Investment Advisers Act of 1940 and failed to reasonably supervise with a view to preventing and detecting violations. In addition to the $6.5 million penalty, Senvest was censured and ordered to cease and desist from future violations of the relevant provisions of the federal securities laws. The firm also agreed to retain a compliance consultant to, among other things, conduct comprehensive reviews of its policies and procedures relating to the retention of electronic communications found on personal devices and the framework for addressing non-compliance by its employees with those policies and procedures.
The SEC’s investigation was conducted by Tom Keltner, Jaime Marinaro, and Jeaneen Kappell of the Fort Worth Regional Office and was supervised by Timothy McCole, B. David Fraser, and Mr. Werner.
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Press release by SEC.
Featured image: by Ecole polytechnique.
Five Investment Advisers Charged for Marketing Rule Violations
Washington D.C. — The Securities and Exchange Commission today announced settled charges against five registered investment advisers for Marketing Rule violations. All five firms have agreed to settle the SEC’s charges and to pay $200,000 in combined penalties.
The five advisory firms are:
- GeaSphere LLC
- Bradesco Global Advisors Inc.
- Credicorp Capital Advisors LLC
- InSight Securities Inc.
- Monex Asset Management Inc.
The SEC’s orders found that the five firms advertised hypothetical performance to the general public on their websites without adopting and implementing policies and procedures reasonably designed to ensure that the hypothetical performance was relevant to the likely financial situation and investment objectives of each advertisement’s intended audience, as required by the Marketing Rule. Bradesco, Credicorp, InSight, and Monex received reduced penalties because of the corrective steps they undertook in advance of being contacted by the SEC staff.
According to the order, GeaSphere also violated other regulatory requirements, including by making false and misleading statements in advertisements, advertising misleading model performance, being unable to substantiate performance shown in its advertisements, and failing to enter into written agreements with people it compensated for endorsements. The order further finds that GeaSphere committed recordkeeping and compliance violations and made misleading statements about its performance to a registered investment company client and that the misleading statements were included in the client’s prospectus filed with the Commission.
“The Marketing Rule’s provisions are crucial to protecting investors from misleading advertising claims,” said Corey Schuster, Co-Chief of the SEC Enforcement Division’s Asset Management Unit. “Today’s actions show that we will continue to employ targeted initiatives to ensure that investment advisers fully comply with their obligations under the rule. They also serve as a reminder of the benefits to firms that take corrective steps before being contacted by Commission staff.”
Without admitting or denying the SEC’s findings, all of the firms consented to the entry of orders finding that they violated the Investment Advisers Act of 1940 and ordering them to be censured, cease and desist from violating the charged provisions, and comply with certain undertakings. GeaSphere agreed to pay a civil penalty of $100,000. Bradesco, Credicorp, InSight, and Monex agreed to pay civil penalties ranging from $20,000 to $30,000, which reflected certain corrective steps taken by each of these firms prior to being contacted by the Commission staff.
This is the second set of cases that the Commission has brought as part of an ongoing targeted sweep concerning Marketing Rule violations after charging nine advisory firms in September 2023.
The SEC’s investigations were conducted by Marilyn Ampolsk, Anne Hancock, Jonathan Menitove, Donna Norman, and Emily Shea under the supervision of Colin Forbes, Brianna Ripa, Mr. Schuster, and Andrew Dean, all of the Division of Enforcement’s Asset Management Unit. The team was assisted by accountant Rory Alex; Alex Lefferts of the Division of Enforcement’s Office of Investigative and Market Analytics; Janet Grossnickle, Julia Gilmer, Jennifer Paul, and Jennifer Sawin of the SEC’s Division of Investment Management; Stuart Jackson of the SEC’s Division of Economic and Risk Analysis; and Robert Baker, Michael McGrath, and Kamran Beikmohamadi of the SEC’s Division of Examinations.
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Press Release by SEC.
Featured image: by Ecole polytechnique / Paris / France.
SEC Encourages Investors to Plan for Their Financial Future During Financial Capability Month
During the month of April, SEC leadership and staff will highlight the importance of creating a saving and investing plan to help investors meet their financial goals, and will encourage them to take advantage of the free tools and resources available on Investor.gov. Investor education events will take place across the U.S. with various audiences, including students, underrepresented communities, older investors, and the military.
“Investors turn to our capital markets every day, whether to grow a nest egg, plan for retirement, save for an education, or prepare for the inevitable bumps along the way,” said SEC Chair Gary Gensler. “To be an informed investor is to be a more effective investor, and I encourage the public to take advantage of the many resources we offer on Investor.gov.”
Some of the SEC’s latest resources to educate investors about the importance of financial capability and avoiding fraud, include:
- April’s Financial Capability Month Investing Quiz;
- A new Guide for Older Investors;
- A Military Investor Bulletin, “Making the Most of Lump Sum Benefits”;
- An Investor Alert: “Artificial Intelligence (AI) and Investment Fraud”; and
- An article from OIEA Director Lori Schock, “Loud (and Proud) Budgeting May Help You Stick To Your Saving and Investing Plan”
“The loud budgeting concept can be an empowering way to take control of your financial future,” said Director Lori Schock. “Creating a saving and investing plan that helps you meet your financial goals and sharing those ideals and goals with your family and friends may not only help you stay more committed to your decision-making but can provide you with support to help you stick with your plan for the long term.”
Some of the SEC’s events planned for Financial Capability Month, include reaching out to the following:
Older Investors – As part of its ongoing Never Stop Learning initiative, OIEA leadership and staff will participate in interviews, webinars, and other events aimed at providing investor education and fraud prevention resources to older investors. OIEA leadership will appear on a Facebook Live event with the AARP Fraud Watch Network and The Senior Zone radio program. SEC regional office and headquarters staff will conduct webinars and give presentations to older adults at public libraries and community centers.
High School and College Students – OIEA staff will lead financial education activities for high school and college students throughout the month. OIEA staff will present to Washington, D.C., public high school students, leading lessons on investor education basics and concepts like the power of compound growth and avoiding scams. Staff will engage with additional schools to educate high school students about the importance of building wealth throughout their lifetime and help them realize the benefits of starting young to grow their money over time. OIEA staff will give guest lectures to college students at Haskell Indian Nations University, Kansas State University, and Dalton State College. Guest lectures will cover investor education topics, such as the relationship between paying down debt, saving and investing, how to avoid fraud, and the importance of creating a saving and investing plan. OIEA staff will also join financial education events for students and young adults hosted by the New York City Bar Association. SEC regional office and headquarters staff will also present to Historically Black College and University student groups at Morgan State University and other universities and community colleges.
Service Members – OIEA staff will present to service members at military installations across the country. Programs will focus on building wealth, protecting investments by recognizing and avoiding scams, and discussing the benefits of tax-advantaged retirement plans, including the military’s Thrift Savings Plan. Outreach events will include active duty, reserve, and retired service members, as well as veterans and military families. This work builds on the SEC’s ongoing investor education outreach with service members, veterans, and their families.
Community Organizations and Affinity Groups – OIEA staff will conduct “train the trainer” sessions for financial educators at the Creating Assets, Savings and Hope (CASH) Campaign of Maryland Financial Education Summit. OIEA staff will also present a Building Wealth Over Time workshop to Howard County, Maryland, community members as part of their Money Matters community event series. OIEA staff will participate in a Washington, D.C., job training and life skills event for formerly incarcerated citizens. SEC regional office and headquarters staff will engage in dozens of outreach events across the country, including investor education presentations to employee groups, women’s groups, and more.
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Press release by SEC.
Featured image: by kenteegardin.
Calgrows ofrece jornadas de capacitación e incentivos económicos en CA
Featured image: by ccPixs.com.
Las estafas financieras pueden perjudicar a individuos con Alzhéimer
Los individuos con Alzhéimer o demencia podrían exponerse a un mayor riesgo de ser víctima de una estafa financiera. Por ello, es importante combatir el estigma asociado a este tipo de enfermedades, buscar un diagnóstico y un tratamiento precoz y no aislarse de familiares y amigos.