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June 3, 2010 – Luis Felipe Perez allegedly operated his investment business, which he claimed financed jewelry stores and pawn shops, as a massive $40 million Ponzi scheme. The Securities and Exchange Commission (“SEC”) filed aDiamond Bracelet.jpg complaint, which alleges that from 2006 to June 2009 Perez operated his scam by recruiting primarily Hispanic investors from the Miami area. Allegedly, Perez told investors that their money would be used to finance his jewelry stores, Lucky Star Diamonds Inc. and Luis Felipe Jewelry Design Corp., as well as pawn shops in New York City.

According to the SEC, Perez was able to grow his scam primarily by word of mouth, especially in the Hispanic community. The complaint says that Perez enticed investors by offering “no-risk” loan agreements with annual returns ranging from 18 to 120 percent. The SEC claims that Perez falsely told investors that their loans were secured by diamonds that had specifically been set aside for them in New York City pawn shops, which he financed. Perez apparently even duped clients by providing them access to safety deposit boxes that contained, unknown by investors, fake diamonds. The SEC further claims that Perez misled investors by telling them they were added as beneficiaries to his life insurance policy, which had lapsed at the time.

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June 1, 2010 – Sonia Mouco, 36, from Dartmouth, Massachusetts, suffered serious personal injuries when her Volkswagen Jetta was side-swiped by a Honda Civic, which was apparently racing a Honda Accord along Route 18 South in New Bedford. Xaviel Quinones, 18, of New Bedford, was operating the Accord while traveling with two 2 year old boys in the back seat. Brittany Oliveira, 18, also from New Bedford, was riding as a passenger in one of the racing cars and was ejected from that vehicle. Carlos Rodrigues Jr.’s Acura, which was traveling northbound on Route 18, was struck with flying debris from the accident. The accident occurred on Sunday near the Purchase Street exit.

According to the Massachusetts State Police, the Civic, driven by an unidentified 17 year old, hit the right side of Mouco’s car and then collided with the Accord. The impact of the crash was so great that the engine from one of the racing cars flew out of the vehicle. The debris that hit Rodirigues Jr.’s car scratched its body and caused one window to break and another to crack. Mouco said she could hear the children screaming in the Accord, but was unable to get out of her own car to rescue them.

Both of the toddlers were taken from the scene by medical helicopter. One was flown to Massachusetts General Hospital in Boston and the other was transported to Hasbro Children’s Hospital in Providence. Oliveira was taken to Rhode Island Hospital, where she was listed in fair condition as of Monday. Mouco suffered injuries in the crash and is recuperating at her parent’s home. Apparently, none of the injuries suffered in the collision were life threatening.

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May 22, 2010 – Edward Allen and David Olson operated their real estate company, A & O Investments, LLC, as a Ponzi scheme according to the Securities and Exchange Commission (“SEC”). The SEC’s complaint filed in an Ohio federal court claims that from September 2005 to December 2008 Allen and Olson raised about $14.8 million from at least 100 investors.

Apparently, A & O Investments enticed buyers by offering promissory notes with annual interest rates of 20%. Allegedly, Allen and Olson claimed that the money raised from the notes would be used to purchase and rehabilitate real estate, primarily in Florida. The complaint further alleges that A & O would profit from sales of the refurbished real estate and Allen and Olson represented to clients that they had been making successful transactions.

The SEC alleges that Allen and Olson recruited investors by sending mass mailings and word of mouth. Also, Allen and Olson apparently solicited customer of their former employer World Group Securities, Inc., a Georgia based securities broker-dealer.

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May 16, 2010 – Keith Yorke, 55, from Sandwich, Massachusetts has died as a result of serious personal injuries sustained when he was struck by a 1997 Ford Escort, driven by Nicole Giles, 18, from Mashpee. The accident occurred at around 5:17 a.m. while Yorke was walking his dog along Asa Meiggs Road.

Yorke was transported by ambulance to Forestdale School and was then taken by a medical helicopter to Boston Medical Center, where he was pronounced dead. Giles was not injured in the crash. According to the Sandwich Police Department, Giles called police from the scene to notify them of the accident.

The crash is still under investigation by the Sandwich Police and no charges have been filed.

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May 10, 2010 – Victims of the Millennium Bank Ponzi scheme have survived a motion to dismiss filed by Defendant JPMorgan Chase Bank in their class action lawsuit. The complaint alleges that the bank aided and abettedThumbnail image for Thumbnail image for jpmorgan_logo.jpg the perpetrators of a $200 million Ponzi scheme which operated out of offices located in Napa, California. U.S. Magistrate Judge Edward Chen refused to dismiss four out of five of the counts, which will now proceed into a discovery phase requiring JPMorgan to produce documents and answer questions about its banking activities.

JPMorgan is the successor of failed Washington Mutual Bank (“WAMU”), which had branches in Napa, where Millennium’s mastermind, William Wise and his associates, carried out their banking activities. Wise lured over 250 investors by offering certificates wamu_logo.jpgof deposit (CDs) with unrealistically high interest rates. Millennium Investors were instructed to mail checks to Napa, which were presented for deposit at the WAMU branches. Millions were commingled and then either transferred offshore or used by Wise and his cohorts for personal expenses, including payments for a private jet, an extensive wine collection, and to support Wise and his family’s extravagant lifestyle.

The complaint alleges that WAMU continued to conduct business with Millennium even though it knew that investor monies were being siphoned away. Judge Chen determined that the allegations in the Complaint, if proved, would state a cause of action. Specifically, he permitted the claims of aiding and abetting fraud, aiding and abetting conversion, breach of fiduciary duty, and violation of California Business Code to proceed. However, he found no evidence to support the claim that there was a conspiracy to commit fraud.

The judge’s decision appears below:

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May 3, 2010 – Ashley Keohan, 25, from North Andover, Massachusetts apparently lost control of her vehicle and collided with a guardrail causing serious personal injuries to a male front seat passenger and her 15 month old son.  The male passenger, whose identity has not been released, was thrown from the vehicle.  Keohan was traveling northbound near 415 Ocean Boulevard in Hampton Beach, New Hampshire at around 6:30 p.m.
The child was strapped into a car seat and was transported by ambulance to Exeter Hospital and treated for non-life threatening injuries.  The male passenger was taken by a medical helicopter to Beth Israel Deaconess Medical Center in Boston.  He was apparently not wearing a seatbelt.  Keohan was not injured in the crash.
According to the Hampton Police Department, Keohan was arrested and charged with aggravated driving while intoxicated.  The accident remains under investigation by the Hampton Police.
Source: Union Leader

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April 22, 2010 – Nevin Shapiro allegedly operated Capitol Investments USA, Inc. (“Capitol”), a Miami based grocery diverter, as an investment fraud. According to the complaint filed by the

groceries.jpg

  Securities and Exchange Commission (“SEC”), Shapiro’s fraud raised $900 million from at least 60 investors across the country.
According to the SEC, from February 2003 to November 2009, Shapiro sold Capitol promissory notes with interest rates ranging from 10 to 26 percent. Apparently, Capitol couldn’t keep up with the payments to investors and in January 2005, Shapiro began operating Capitol as a Ponzi Scheme. The complaint claims that Shapiro used his business contacts and word of mouth to attract investors and told them that their money would be used to finance the purchasing and reselling of groceries.

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April 20, 2010 – Ryan Smith, 21, from Amesbury, Massachusetts, has died as a result of serious personal injuries sustained when he was ejected from a car on Sunday. Corey Nason, 22, from Sanford, Maine, was driving the car, which rolled over on the ramp from Route 1 North to Route 128 in Peabody. The accident occurred around 1:30 a.m.
Apparently, Nason lost control of the 2005 Saturn Ion causing it to roll over several times before coming to a stop on the median. During the rollover, Smith was ejected from the vehicle and was unfortunately pronounced dead at the scene. Nason was trapped in the car and had to be extricated by the responding firefighters. Nason was transported to Massachusetts General Hospital, where he is being treated for serious injuries.
According to the Massachusetts State Police, Nason was wearing a seatbelt at the time of the accident, while Smith was not. The cause of the accident is uncertain at this time and it remains under investigation.

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April 15, 2010 – A Tufts University student suffered serious personal injuries when he was struck by a vehicle as he was attempting to cross an intersection in Medford, Massachusetts. The accident occurred when the driver was trying to make a right turn from Boston Avenue onto College Avenue at around 3:45 p.m. on Saturday. The Medford Police Department and Tufts University Police Department responded to the scene.

 

The student was transported to Massachusetts General Hospital where he was treated for a broken jaw and ankle. The driver was apparently not injured during the accident.
According to the Tufts Police, the driver was a resident of Medford and was not affiliated with the school. Neither police department has released the identities of the driver or the student.
The busyness of the intersection is the likely cause of the collision, but police have not stated an official reason. The accident remains under investigation.
Source: Tufts Daily

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April 5, 2010 – IRA custodians, Zia Trust, Inc., Sunwest Trust, Inc., and Sterling Trust Company, hold funds as custodians for investors with self-directed Individual Retirement Accounts (“IRAs”). It is now being alleged that at least one of these companies actively promoted investments with Douglas Vaughan, and his fictitious entities, now accused by the Securities and Exchange Commission of being part of an $80 million Ponzi scheme. The SEC brought a
civil complaint against Vaughan last week, claiming that Vaughn defrauded at least 600 investors, using his companies, The Vaughan Company, Realtor’s Inc., and Vaughan Capital, LLC.
 
According to the complaint filed by the SEC, Vaughan offered promissory notes with interest rates ranging from 10 to 25 percent. Apparently, some investors structured their investments as self-directed IRA’s. To comply with federal laws, the notes were required to be held by third party custodians, in this case by Zia Trust, Sunwest Trust, and Sterling Trust.
 
In his recent bankruptcy filing, Vaughan lists the following creditors and amounts owed: Zia Trust Company for $6.63 million, Sunwest Trust Company for $2.78 million, and Sterling Trust for $3.78 million. Several of those investors are now claiming that it was their IRA custodians, who initially suggested that the Vaughn notes were a good place to earn high investment returns, and a safe one.  

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Posted in: INVESTMENT FRAUD
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