Special Reports

 

FINANCIAL CRIME NEWS

SPECIAL REPORTS

JUNE 2006: PENNY STOCK GANGS III: The Howe Street Mob

For years the Vancouver Stock Exchange was a den of Canadian penny stock schemes which preyed on small investors in Canada with hype and false hopes. The notorious VSE may have been closed down, but the attraction of its former schemers still lingers in Vancouver’s Howe Street financial district, where brokers began to offer their services across the border to penny stock fraudsters in the United States. Canadian regulatory actions against several large brokerage firms confirmed that Howe Street was still a penny stock haven and had expanded its dealings to provide accounts for a number of dubious dealers. Read more

MARCH 2006: THE PROMISSORY NOTE PYRAMID: A Network of Unlicensed Agents That Cost Small Investors Millions

In the late 1990s, lured by promises of hefty sales commissions, thousands of financial planners and insurance agents began to market and sell promissory note investments to their customers, who often relied on the trust they had placed in the seller through previous insurance or other financial dealings. The notes were made available through a network of financial product promoters who also had made sales commission deals with the issuing companies, some of which were real companies with bleak prospects and others which were just bogus. Without looking too closely, everybody accepted the claim that the note investments were insured by a respectable-sounding company called New England International Surety. Read more.

OCTOBER 2005: CHEMICAL TRUST: The scheme that sparked a chain reaction of prime bank investigations

Like penny stock schemers, promoters of so-called prime bank schemes also seem to operate in networks. The December 2004 Special Report outlined some worldwide connections among a group of fraud schemes that fed on each other and into a financial stew called Hammersmith Trust. The story of Chemical Trust is another example of this phenomenon.

Following the tracks of its promoters leads to a number of strange paths, including an elusive warehouse full of gold supposedly located in Las Vegas, an alleged Mafia-connected check-cashing operation in Florida, not to mention the essential character in a prime bank story – the crafty master trader, who was accused of telling some investors they could choose to have the CIA manage their investment. Read more.

JULY 2005: DOLLARS, DOLEIROS, AND DOMINOS: South American Money Scandals

A little-known series of banking and financial scandals in Argentina, Brazil, Paraguay, and Uruguay have crossed paths with bank fraud investigations in New York, allegedly harbored a notorious terrorist financier, and threatened the financial health of one of Europe’s largest conglomerates. From the “Mafia del Oro” to the “Tri-Border Area,” financial crime has been alive and thriving in South America. Read more.

JUNE 2005: FINANCIAL PIRATES OF THE CARIBBEAN: The Secret Shell Banks of Grenada and Antigua and the Fraudsters Who Used Them

The use of offshore shell banks by fraudsters, organized crime figures, and terrorists continues to pose problems for investors and law enforcement officials around the world. Some fraudsters, such as those who ran the First International Bank of Grenada in the 1990s, went to great lengths to fabricate an entire sham financial conglomerate including a fake offshore stock exchange and an imaginary entity to insure international bank deposits. Read more.

MAY 2005: ROGUE STATE: Warlords, Drugs, and Financial Crime in Burma

In January 2005 the United States indicted the United Wa State Army, which in addition to its claim to be an ethnic movement seeking political independence for the Wa people in northern Burma, is also allegedly one of the largest heroin and methamphetamine trafficking organizations in the world. The laundering of drug proceeds through the Burmese economy had reportedly become so pervasive that the entire country was designated a “primary money laundering concern” by the US Treasury Department in November 2003 at the urging of the Financial Action Task Force. Read more.

APRIL 2005: PENNY STOCK GANGS II: The Teletek Matrix

In the late 1990s, a tiny Las Vegas company called Teletek was at the center of a maelstrom of penny stock fraud, resulting in numerous SEC cases and three criminal cases over widespread bribery of brokers to aggressively promote Teletek to small investors. This report tracks the links between the brokerages, promoters, and others who were involved in Teletek to the other schemes they were involved in before or after Teletek. It shows how penny stock manipulations are sometimes not isolated events, but can occur in the context of an entire community of penny stock fraudsters.
Read more.

FEBRUARY 2005: MORTGAGE FRAUD MARATHON: The proliferation of flipping, forgery and phony appraisals

In every region of the United States, real estate swindlers have been recruiting inexperienced investors into flipping schemes with promises of profits with no downpayment required, then obtaining fraudulent mortgage loans with forged documents and inflated appraisals. Many of these schemes result not only in losses to lenders, but also in financial ruin for the novice investors. This special report describes the process using a classic New Jersey case. Read more.

JANUARY 2005: PENNY STOCK GANGS I: The Wolfson Pack

Penny stocks are low-priced stocks of tiny companies which may be real businesses or may just be fronts for stock swindlers. These are the hot stocks that boiler room cold callers tell you to grab up to “get in on the ground floor” or not miss out on. In the 1990s promoters tried to remove the odor attached to this seamy side of Wall Street by calling them “microcap” stocks. No euphemisms here. Penny stock swindlers work in networks that stretch back decades. This report shows the connections among a group of brokers and promoters linked to convicted penny stock swindler Allen Wolfson. Read more.

DECEMBER 2004: THE HAMMERSMITH CONNECTION: The international prime bank racket

Prime bank scheme promoters have invented exotic tall tales about a secret system of master traders licensed by the US Federal Reserve or the International Monetary Fund to buy financial instruments issued by major world banks at “deep discounts” and flip them to investors for instant,enormous profits. Fraudsters prey on the general ignorance of how the banking system works to overcome any skepticism small investors may have by promising an unrealistic combination of safety and high returns – all guaranteed by American or international regulators or organizations. Not true. This report shows how dozens of prime bank schemes promoted around the country were just feeding other prime bank schemes – another international network of fraudsters who may even have fooled each other. Read more.

NOVEMBER 2004: CHINESE FINANCIAL SCANDALS: The early 2000s frauds that rocked the Middle Kingdom

The Peoples Republic of China is preparing to participate more fully in world trade and financial circles, but its efforts to prepare for this momentous change have been hindered by scandal after scandal in its own financial system. Chinese banks have been looted by inside fraudsters and outsiders alike, while free-wheeling Chinese securities firms have collapsed in major scandals. China even resorted to imposing a death sentence on certain financial fraudsters. What has been going to provoke such drastic punishment? This report looks at the banks, the securities firms, the fraudsters, and the cases. Read more.

FINANCIAL CRIME NEWS

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