Professional Athletes Suing Financial Advisors

A gallery of athletes’ photos akin to a wall of fame came into focus today in an OnWallStreet story about investment fraud entitled, Cautionary Tales: Pro Athletes who Sued Their Advisor. Studies show that professional athletes, doctors, lawyers, high profile business owners and other busy professionals make up a high percentage of investment fraud victims.  They have the money, they have the character and, most importantly, they don’t have the time to watch their investments carefully. They trust their advisor to make sound decisions and sometimes they get burned.

The OnWallStreet article talks about Terrell Owens, a six-time Pro Bowl selection, NFL wide receiver who sued his advisor, Jeff Rubin, and his form, Pro Sports Financial for mismanaging his accounts. Vince Young, the Tennessee Titans and Buffalo Bills quarterback filed claims against his Houston agent and his advisor in North Carolina for outright fraud. Five time MLB all-star Mike Sweeney, a relative youngster, claims that his advisor took advantage of his inexperience and invested his money in private equity and start-up companies that later failed.  Mike Tyson and his wife fought against Live Nation Entertainment and its subsidiary SFX Financial Advisory Management claiming breach of fiduciary duty, fraud and unjust enrichment. Similarly, Denny Neagle, former MLB pitcher filed suit with his ex-wife Jennifer Neagle in Illinois Circuit Court after they discovered large sums of money in risky and illiquid assets including hedge funds and private equity funds.

In another story, Steve Gordon, a former special assistant for the Seattle Supersonics  was charged with a $4 Million Ponzi scheme which he reportedly perpetuated by falsely claiming a business relationship with Los Angeles Clippers owner Steve Ballmer.

High net worth can put you at greater risk of investment fraud. Lead Investor Defender Attorney Robert S. Banks has represented professional athletes among many other individual and institutional clients he has represented across the nation. If you have concerns about your investments, contact our office so we can evaluate your situation and let you know what your options might be for recovery: 800.647.8130 or info@investordefenders.com

Investor Defender Attorneys make up the securities litigation practice group at Samuels Yoelin Kantor LLP. Your choice of attorney could be the most important decision you make in recovering your loss. Visit our securities litigation website at investordefenders.com

FINANCIAL ALERT: Michael Oppenheim Charged With Fraud

Investor Defender Attorneys encourage investors who had money with Michael Oppenheim when he was with J.P. Morgan Chase to call us at 800.647.8130. We can help you understand your options for recovery of your investment.

Recent news reports reveal that Oppenheim effectively stole more than $20 million from customers. Oppenheim convinced clients to allow millions of dollars in transfers from their accounts with promises that he would invest the funds in low-risk bonds.

The SEC’s complaint alleges that Oppenheim took intentional action to conceal his fraud.  Evidence suggests that he created false account statements and transferred money from one customer to another to replenish missing dollars.The SEC and the FBI continue to investigate this situation. Investor Defender attorneys will be focused on helping investors explore their options for recovery.

Investor Defender attorneys Robert S. Banks, Jr. and Darlene Pasieczny represent investors in securities industry disputes in FINRA arbitrations across the U.S.   Bob Banks himself has over 33 years of experience in securities litigation and FINRA arbitration, and has served multiple times on the National Arbitration and Mediation Committee, an advisory board to FINRA on its rules, regulations, and procedures.  We know the rules, and we fight for our clients in recovering investment losses. Contact us at 800.647.8130

Investor Alert – Pacific West Capital Group and Owner Andrew Calhoun IV Charged With Fraud in Sale of Life Settlement Investments

We are investigating Pacific West Capital and their sales agents after the SEC announced fraud charges related to their sale of life settlements. Investors with life settlement investments are encouraged to contact us at 800.647.8130 or by email at info@investordefenders.com.

The SEC alleges that Pacific West and Andrew B. Calhoun IV, a life insurance agent, raised $100 million from investors who purchased life settlement contracts.  The alleged fraud occurred when Pacific West used proceeds from the sale of new life settlements to continue funding life settlement investments sold years earlier, without informing would-be buyers of this practice.

According to the SEC, Calhoun and West used false and misleading statements about the risk of the life settlements, and they misled investors as to the annual returns. They are charged with violating broker-dealer and anti-fraud securities registration provisions of the federal securities laws.

Also named as defendants are PWCG Trust, which held and serviced the insurance policies and five sales agents of Pacific West: Brenda C. Barry and her company BAK West, Andrew B. Calhoun Jr. of Anderson, Eric C. Cannon and his company Century Point, Michael Dotta, and Caleb A. Moody.

We have handled a number of life settlement cases with death benefits ranging from $50,000 to $4.5 million.   We’ve found life settlements to be an area where fraud and misrepresentation frequently occurs.

If you purchased life settlements from Pacific West Capital Group and have questions about your investment, contact us to learn more. We represent individual and institutional investors nationwide in FINRA arbitration and in court since 1985.

Florida Ponzi Worth $300M

The Securities and Exchange Commission’s Miami office has filed charges against five former Florida real estate executives for defrauding more than 1400 investors of $300M in a Ponzi scheme. The scheme guaranteed a 15% return on investments in five-star “Cay Clubs Resorts and Marinas” properties located in Florida and Las Vegas. The former CEO, Fred Davis Clark Jr., fled from Key Largo to the Cayman Islands in 2008 as the scheme collapsed. The Commission is likely to pursue a clawback against Clark, the four other executives, and any Cay Clubs investors who saw a net gain.

(Reuters at http://newsandinsight.thomsonreuters.com)

Adorean Boleancu – In Trouble With FINRA And In Court

Our original concerns about Wells Fargo Broker Adorean Boleancu have escalated. In March, Boleancu was ordered by FINRA to pay back a widowed client $650,000. He was indicted on charges of check fraud and money laundering in California and, in a civil complaint filed in August of 2012, it was alleged that Boleancu made an unsuitable investment of $2,000,000 in variable annuities and “risky equity funds.”

These actions leave no doubt that you should seek the help of an attorney who has a focused practice on investment recovery. In these situations the choice you make for representation is critical. Please give our office a call to discuss the details of your potential claim.

More on Craig Berkman

High-profile securities fraudsters are often repeat offenders.

The 71-year-old square-jawed former Oregon candidate for governor, Craig Berkman, recently pled guilty in a New York courtroom to one count of securities fraud and one count of wire fraud. This all relates to a scam that targeted investors eager to make early purchases of Facebook stock when it had its initial public offering. Berkman now faces forfeiting $13 million, paying restitution of $8.4 million, and perhaps ten years in prison. We’ve written about Mr. Berkman before.

This isn’t Berkman’s first multimillion dollar scam. In 2003, investors in Oregon received a $28 million judgment against Berkman for breach of fiduciary duty, conversion of investor funds, and misrepresentation in a completely unrelated securities scheme. In response, Mr. Berkman simply moved from Oregon to Florida and victimized a new group of people.

And there’s Russell Erxleben. We wrote about Erxleben, the well-known University of Texas Longhorns kicker, back in January 2013 when he was charged with multiple accounts of wire fraud, securities fraud, and related charges by the U.S. Attorney’s office in Austin. Erxleben was accused of defrauding investors of $2 million in a Ponzi scheme and a narrative involving Weimar-era German government gold bonds and Gaughin paintings. The Texas investors did not realize that Erxleben had been convicted, sent to federal prison, fined $1 million and ordered to pay restitution of $28 million to a previous round of victims in 2000.

And there’s Richard Vitale. On May 30, 2013 the SEC announced charges against Richard Vitale for obstructing justice and lying to investigators about his real estate securities offerings. The SEC went after Vitale back in 2004 for his part in a pump-and-dump gold-mine stock scheme. Vitale settled those charges and was barred from the securities industry. And yet he was back selling securities yet again.

And there’s Yusaf Jawed, another Oregonian like Berkman. Banks Law Office has represented multiple investors harmed by Jawed’s Grifphon hedge funds and related scams over the past few years. To quote attorney Robert Banks, “Grifphon’s owner, Yusaf Jawed, already had a documented history of securities violations before anyone invested in Grifphon. It is simply inexcusable to me that licensed securities salespeople would sell investments to their trusting clients from an individual who was a known violator.”

This incredible pattern of recidivism in the fraud “industry” is not all that unusual. There’s a crystal-clear message for investors here.

Regulators, investigators and prosecutors, at both the state and federal levels, have important roles and often work admirably with limited resources to fight financial fraud. But you cannot wholly depend on them to track each and every fraudster. BrokerCheck, FINRA’s public resource for certain background information on licensed brokers and RIAs, is a good but also limited tool.

Berkman’s Florida investors could have saved themselves heartache and hundreds of thousands of dollars if they had simply Googled his name. When was the last time you Googled your financial advisor’s name?

Fake Tweets Drop Stocks

For two days in a row, individual equities traded on NASDAQ fell sharply because of bad news published on fake Twitter accounts. On Tuesday the 29th, Audience Inc. dropped 25% within sixteen minutes, in a pattern that suggested human targets disregarded the bad information, which was afterward found and acted on by trading bots. The tweets falsely accused Audience Inc. of being the target of a fraud investigation by the DOJ, from a Twitter account similar to the name of a relatively influential research company and short-seller. Trading in Audience’s stock was briefly halted, immediately recovered. The next day Sarepta Therapeutics stock sank almost 10% on a similar phony tweet. No immediate fix is clear for this interplay between social media hacking and automated trading. New York equity trader Tim McClure’s opinion was “Not really an efficient market when fake twitter accounts can crash stocks.” McClure tweeted that message.

(Reuters at http://newsandinsight.thomsonreuters.com)

Former NFL Kicker Charged

As an excellent example of affinity fraud, the once-legendary University of Texas Longhorns kicker Russell Erxleben has been charged with multiple accounts of wire fraud, securities fraud, and related charges by the U.S. Attorney’s office in Austin. Erxleben, who also spent six years with the New Orleans Saints, is accused of defrauding investors of $2M in a Ponzi scheme involving Weimar Era German government gold bonds and Gaughin paintings. Texan investors were undoubtedly so distracted by the former player’s glory days of the late 70s that they even forgot that he’d been caught, tried, convicted, sent to federal prison, fined $1M and ordered to pay restitution of $28M to a previous round of victims, back in the year 2000. That’s the kicker.

(Dallas Morning News at www.dallasnews.com)

$135M Ponzi Crosses Canadian Border

A Canadian woman, Doris Elizabeth Nelson, ran an extensive Ponzi scheme based in her payday loan company, taking $135M from about 800 investors on both sides of the international border, according to a statement released today by British Columbia Securities Commission. Nelson’s “Little Loan Shoppe” promised investors returns of up to 60% risk free. After redistributing $118M of the total, Nelson ceased payments to investors in 2009, went bankrupt, then was charged by the SEC and Washington State Department of Financial Institutions for 110 counts of wire fraud, mail fraud, and money laundering. She is currently under house arrest in the Spokane area while awaiting a June trial in U.S. federal criminal court. Canadian charges are also pending.

(CBC news at http://www.cbc.ca)

First Annual Fraud Buster Award

FOR IMMEDIATE RELEASE
FIRST ANNUAL FRAUD BUSTER AWARD

Banks Law Office PC is pleased to present Detective Mercy McDonald of the Eugene, Oregon Police Department with its First Annual Fraud Buster Award.

Detective McDonald’s work in her community culminated in an arrest and the filing of four felony charges by the Lane County District Attorney in February 2012, against an individual who committed repeated acts of fraud against victims in Oregon, Washington, California, and North Carolina. Based largely on Detective McDonald’s work, District Attorney William Warnisher had the grand jury issue an indictment with another nine counts of aggravated theft, 27 counts of securities fraud, and one count of theft in the first degree. The fraud that Detective McDonald investigated and helped to uncover was complex, involving a number of different investments, numerous victims, and a web of interrelated financial transactions that had to be unraveled in order to understand the depth of the deception. This particular fraudster was a skillful con man, and many of his victims refused to believe he was abusing them when the investigation began. Detective McDonald worked long hours to put the case together, with the full support and encouragement of the EPD and her Sergeant, Sgt. Mark Montes.

Detective McDonald is an exceptional citizen who has gone the extra mile to protect investors from investment fraud and financial elder abuse. In choosing a winner for this award, we considered whether a bad actor has been brought to justice, the difficulty of the task, the diligence that the person demonstrated to stop the fraud, and whether the nominee’s conduct saved future victims from being defrauded. Detective McDonald scored high on all of these criteria. The name of the perpetrator is being withheld because criminal and civil charges are pending.

On behalf of all of the investment fraud victims we have represented over the last year, Banks Law Office salutes all the law enforcement agencies and securities regulators whose work helps to curtail investment fraud in the United States. In honor of one particularly effective detective, Banks Law Office is proud to donate $500 in the name of Mercy McDonald to the charity of her choice.