Elder Abuse - Russell L. Forkey

Seniors are at risk for scams when banking online

Russell L. Forkey — Wed, 26 Aug 2020 11:01:45 GMT

In our digital era, many tasks that used to require face-to-face interaction have moved online. Take banking. Driving to the bank and waiting in line to speak to a teller is no longer necessary for many transactions.

Online banking is the way of the future, and many senior citizens are following suit. However, our elderly loved ones face a higher risk of suffering online scams. If your mother, father or another relative who is a senior citizen has made the jump to online banking, this is how you can help them avoid fraud.

Why seniors are at risk

Anyone can fall victim to fraud. Senior citizens, however, are particularly vulnerable. They make popular targets for criminals, scammers and unscrupulous individuals who would take advantage of them via online banking. Why?

Seniors have spent a lifetime accumulating assets and property. This is tempting to anyone looking to line their own pockets. What’s more, many seniors do not have the technological savvy to recognize common online scams such as phishing. Old age is also when many people begin to experience intellectual decline or physical disability, which leaves them less capable of defending themselves.

How to protect seniors from scams

Fortunately, there are steps that you can take to help your loved one avoid online banking scams. These include:

Educate your loved one about internet safety
Install security software on their computer and other devices
Communicate regularly about their finances
Keep watch for any suspicious transactions
Help them to change their passwords regularly
Consider seeking a guardianship or conservatorship if they have lost their capacity

Granted, these precautionary measures cannot prevent every instance of fraud. If your elderly parent or relative fell prey to internet bank fraud, report the scam to authorities immediately. Consider your legal options, as you may need to file a lawsuit against the perpetrator to recover compensation for your loved one’s damages.

Investment Advisor – Fraud and Breach of Fiduciary Duties.

Russell L. Forkey — Sun, 17 Nov 2019 16:23:17 GMT

True investment advisers have fiduciary obligations that they owe to their clients. As such, they have an obligation to make full and fair disclosure to clients and prospective clients concerning their material conflicts of interest, including conflicts arising from financial incentives, and to act consistently with those disclosures. This principle is reflected in Form ADV, which reminds advisers of their general obligation to fully disclose material facts relating to their advisory business and specifically requires disclosure concerning the compensation and fees that advisers and their supervised persons receive, including from asset-based charges and service fees.

The chance of a conflict of interest arising increases based upon the number of rolls that a professional assumes in dealing with a client. This is especially true for attorneys. Some attorneys attempt to provide estate and tax planning advice to clients and then offer investments to those clients through broker/dealer or investment advisory firms with which they are associated. When does the attorney’s legal advice end and his investment activities commence? This is a question that is difficult to answer. Every factual situation will be different. If you have any questions concerning an investment that you have made based upon the recommendation of your attorney/advisor, please feel free to contact us.

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With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Boca Raton Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

1 Global Capital, LLC and Carl Ruderman – Fraud in the Sale of Unregistered Securities – South Florida Securities and Commercial Litigation Attorney

Russell L. Forkey — Mon, 03 Sep 2018 15:23:07 GMT

SEC Charges Florida Cash Advance Company, Former CEO with Defrauding Thousands of Retail Investors

Securities and Exchange Commission v. 1 Global Capital, LLC, Carl Ruderman, et al., No. 18-civ-61991 (S.D. Fla. filed August 23, 2018)

The Securities and Exchange Commission today announced charges against 1 Global Capital LLC and its former chief executive officer for allegedly defrauding at least 3,400 retail investors, more than one-third of whom invested their retirement funds. The Florida-based cash advance company and former CEO Carl Ruderman allegedly fraudulently raised more than $287 million since 2014 in unregistered securities sold through a network that included barred brokers.

On August 23, 2018, the Honorable Judge Beth Bloom of U.S. District Court for the Southern District of Florida granted the SEC’s request for a temporary asset freeze against Ruderman and other Ruderman companies charged by the SEC as relief defendants. The Court also granted the SEC’s request to appoint a receiver over certain of the relief defendants – Bright Smile Financing, LLC, BRR Block, Inc., Digi South, LLC, Ganador Enterprises, LLC, Media Pay LLC, and Pay Now Direct LLC. The Court scheduled a hearing for September 7, 2018, for Ruderman and the relief defendants to show cause, if any, why the asset freeze Order should not continue for the pendency of the litigation or until otherwise ordered by the Court.

According to the SEC’s complaint unsealed yesterday, although investors were promised profits from 1 Global’s loans to small and mid-sized companies, a large portion of their money went to Ruderman’s lavish personal spending and to his consumer-loan companies, Bright Smile Financing LLC and Ganador Enterprises LLC, which had nothing to do with 1 Global’s cash advance business. Investors in 1 Global allegedly were given bogus account statements and were falsely told that it had an independent auditor, and that its secured loans, typically for small amounts, had low default rates. According to the complaint, in contrast to what it told investors, 1 Global marketed itself to business borrowers as a low-hassle way to access cash quickly, often made large, unsecured loans, and had significant problems with collections. 1 Global declared bankruptcy in July and Ruderman resigned from the company.

The SEC’s complaint charges 1 Global and Ruderman with violations of Sections 5(a), (c) and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a)(1) and Rule 10b-5 thereunder of the Securities Exchange Action of 1934 (“Exchange Act”). Additionally, the complaint charges Ruderman with aiding and abetting 1 Global’s violations of Section 10(b) and Rule 10b-5, and with violating Section 20(a) of the Exchange Act. The SEC seeks disgorgement of allegedly ill-gotten gains and prejudgment interest from the defendants and relief defendants, and financial penalties against the defendants.

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With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

John C. Maccoll – High Pressure Sales Primarily Directed at Elder and Retired Clients – South Florida FINRA Arbitration Attorney

Russell L. Forkey — Sat, 18 Aug 2018 15:20:19 GMT

Securities and Exchange Commission v. John C. Maccoll, No. 2:18-cv-12473-SFC-DRG (E.D. Michigan filed August 9, 2018)

The Securities and Exchange Commission recently charged a former registered representative with defrauding his brokerage customers out of nearly $4 million in a long-running investment scam.

According to the SEC’s complaint, John C. Maccoll, who was affiliated with the Birmingham, Michigan branch of a nationwide registered broker dealer and investment adviser, used high pressure sales tactics to solicit at least 15 of his retail brokerage customers to invest in what he described as a highly-sought-after private fund investment. Most of the injured customers were elderly and retired and invested through their retirement accounts. Maccoll told his customers that the purported fund investment would allow them to diversify their portfolios, receive annual investment returns as high as 20%, and give them investment growth potential that was better than the growth they received in their brokerage accounts. As alleged in the complaint, Maccoll’s statements to his customers were false – he did not invest the customers’ money but stole it for his own personal use. In total, the customers invested nearly $4 million in the fraudulent scheme. To conceal the scheme, Maccoll allegedly instructed his customers not to tell others about the purported fund investment, provided some of his customers with fake account statements reflecting fictitious returns, and paid over $400,000 in Ponzi-like payments to certain of the customers to keep the scheme alive.

The U.S. Attorney’s Office for the Eastern District of Michigan today filed criminal charges against Maccoll.

The SEC’s complaint, filed in federal district court in the Eastern District of Michigan, charges Maccoll with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC is seeking a judgment ordering Maccoll to disgorge his ill-gotten gains with prejudgment interest, and to pay civil penalties.

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Mohamud Abdi Ahmed and 2waytrading, LLC. – South Florida Unregistered Investment Adviser Fraud and Misrepresentation Attorney

Russell L. Forkey — Sun, 14 May 2017 23:15:43 GMT

South Florida Unregistered Investment Adviser Fraud and Misrepresentation Attorney.

Securities and Exchange Commission v. Mohamud Abdi Ahmed and 2waytrading, LLC, No. 17-cv-1478 (D. Minn. filed May 4, 2017)

SEC Halts Fraudulent Conduct by Recidivist and Unregistered Investment Adviser Firm

The Securities and Exchange Commission recently announced that it obtained an asset freeze and court order halting an ongoing investment fraud, orchestrated by a recidivist, that falsely promised safe and unrealistic returns to convince clients to provide access to their brokerage accounts.

According to the SEC’s complaint, filed in federal court in Minneapolis on May 4, 2017, Mohamud Abdi Ahmed and 2waytrading, LLC have been offering investment advice to clients since 2014. The complaint alleges they have been falsely promising unrealistic double-digit investment returns and assuring clients that Ahmed’s risky options trading investment strategy is safe and secure. The complaint alleges that Ahmed and 2waytrading are also using these false claims to convince clients to give them access to their clients’ brokerage accounts so Ahmed can place trades on their behalf. The complaint further alleges that Ahmed hid the fact that the SEC previously stopped him from orchertrating a securities fraud targeting investors in the Somali immigrant community in San Diego, Seattle, and elsewhere and that Ahmed had been convicted of wire fraud and ordered to pay restitution of $551,250, serve 21 months in prison, and remain on three years’ supervised release after his release from prison.

The Honorable Paul A. Magnuson, Senior Judge of the U.S. District Court, issued a temporary restraining order that imposed the freeze on Ahmed’s and 2waytrading’s assets and prohibits them from making any investment decisions or accessing any brokerage accounts they do not own. The order also temporarily prohibits Ahmed and 2waytrading from violating the antifraud provisions, and Judge Magnuson has scheduled a hearing on May 18 for Ahmed to show cause why a preliminary injunction should not be entered against him.

The SEC’s complaint charges Ahmed and 2waytrading with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and Sections 206(1) and (2) of the Investment Advisers Act of 1940. The SEC is seeking financial penalties and disgorgement of ill-gotten gains as well as permanent injunctive relief.

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Richard G. Cody – Boca Raton, Florida Elder Financial Abuse and Breach of Fiduciary Duty Litigation and Arbitration Attorney

Russell L. Forkey — Fri, 16 Dec 2016 21:01:49 GMT

Richard G. Cody – South Florida, including Boca Raton, Boynton Beach, Lake Worth and West Palm Beach, Elder Financial Abuse and Breach of Fiduciary Duty Litigation and Arbitration Attorney Russell L. Forkey, Esq.

Securities and Exchange Commission v. Richard G. Cody, et al., Civil Action No. 16-cv-12510-FDS (D. Mass., filed Dec. 12, 2016)

SEC Charges Investment Adviser with Defrauding Massachusetts Retirees

The Securities and Exchange Commission recently announced that it filed a complaint in federal court in Boston charging investment adviser and broker representative Richard G. Cody, a former resident of Massachusetts and current resident of New Jersey, with defrauding his retired clients. The Commission has asked the court to consider whether to impose certain preliminary relief against Cody and his company, Boston Investment Partners, LLC, including an asset freeze.

The SEC’s complaint alleges that Cody defrauded at least three of his retired clients over a twelve-year period by concealing the fact that their retirement accounts had suffered extensive losses. According to the SEC’s complaint, the clients did not know that their accounts had lost substantial value and were being rapidly depleted. Cody concealed these losses by leading the clients to believe that their investments were maintaining steady value and that the clients were living off income from their investments. By 2014, two of the retirees’ accounts had essentially run out of funds. Cody allegedly continued to hide that the retirees’ money was gone by making wire transfers of monthly deposits to the retirees’ bank accounts and sending the clients fabricated tax forms. The SEC alleges that these deceptive acts caused Cody’s clients to believe that their retirement savings were secure when, in fact, they were not.

The SEC’s complaint alleges that Cody violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and seeks disgorgement of ill-gotten gains plus interest and penalties as well as permanent injunctive relief. The SEC also seeks a court-ordered asset freeze against Cody and Boston Investment Partners, which was named as a relief defendant, a temporary restraining order, and a detailed accounting of Cody’s assets.

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Joseph Andrew Paul, John Ellis, James Quay and Donald Ellison – Boca Raton, Florida Senior and Retirement Investment Fraud Attorney

Russell L. Forkey — Mon, 04 Apr 2016 19:59:28 GMT

Joseph Andrew Paul, John Ellis, James Quay and Donald Ellison – Boca Raton, Florida Elder, Senior and Retirement Investment Fraud Litigation and Arbitration Attorney

The Securities and Exchange Commission recently announced that it has charged four individuals in a fraud whose victims included seniors who were solicited at “free dinner” investment seminars in Florida.

The SEC alleges that Philadelphia residents Joseph Andrew Paul and John D. Ellis, Jr. lied about the track record of their investment advisory firm and recruited James S. Quay of Atlanta and Donald H. Ellison of Palm Bay, Florida, to lure potential victims with promises of lofty returns.

According to the SEC’s complaint, Paul and Ellis created fraudulent marketing materials including some with performance numbers that were “cut and pasted” from another firm’s website. The complaint further alleges that Quay and Ellison used these materials to mislead seniors who responded to their mass-mailing offer of a free dinner at a Tampa restaurant.

According to the SEC’s complaint filed in the U.S District Court for the Eastern District of Pennsylvania, Quay used an alias, “Stephen Jameson,” to conceal his true identity from potential victims. Quay was previously convicted of tax fraud in 2005 and found liable for securities fraud in a 2012 SEC enforcement action.

“Jameson” was not registered as an investment professional during the relevant period of fraudulent conduct, and Ellison also was not registered for the majority of that period. Investors can easily and quickly check the registration status and disciplinary history of investment professionals by using the SEC searchable data base Investor.gov.

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Retirement Planning Fraud – South Florida Retirement Financial Fraud Attorney

Russell L. Forkey — Sat, 21 Nov 2015 01:48:50 GMT

Retirement Planning Fraud – South Florida Retirement Financial Fraud and Financial Exploitation Attorney:

Securities and Exchange Commission v. Bobby M. Collins, Civil Action No. 3:15-cv-3620-D (N.D. Tex. November 10, 2015)

SEC Charges Texas Man with Orchestrating Fraud Scheme Targeting Senior Investors

The Securities and Exchange Commission announced today that it has charged a Texas-based insurance agent with operating a multi-year offering fraud out of his insurance and retirement planning business.

According to the SEC’s complaint, filed in the Northern District of Texas, Bobby M. Collins (“Collins”), a resident of Wichita Falls, TX, orchestrated a scheme targeting elderly investors through his unincorporated retirement planning business, Collins Insurance Companies a/k/a BMC Retirement Planning dating back to at least 2010. Collins lured at least 36 investors, most of whom are older than 65 years of age, to invest more than $4.6 million by offering high-yield, unsecured notes. Collins assured investors that he would use their funds to grow his business, and in turn pay significant returns to investors from new business generation and revenue growth.

The SEC’s complaint alleges that Collins’s promises were false and that he rarely used investor funds to expand his business, spending less than 2% of investors’ funds for this purpose. Instead, he used investor funds on a number of personal expenditures, including mortgage and luxury car payments, and to make principal and interest payments to earlier investors. Collins kept the scheme alive for several years by relying on a stream of new and repeat investors, as well as two “personal loans” from a friend to avoid missing monthly payments to investors.

Collins has agreed to settle the SEC’s action against him by consenting to an injunction against violations of Sections 5(a), 5(c), and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and agreeing pay disgorgement and prejudgment interest of $573,234.16, and a $160,000 civil penalty. The settlement is subject to court approval by the United States District Court for the Northern District of Texas.

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Boca Raton, Florida – Elder Financial Abuse FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Sun, 23 Aug 2015 14:42:37 GMT

The Financial Industry Regulatory Authority, Inc. (FINRA) is a self-regulatory authority assigned the responsibility, by the Securities and Exchange Commission, to license, regulate and discipline securities broker/dealers and their employees, including account executives. In the event that FINRA elects to institute an enforcement action, firms and licensed individuals have the responsibility to reflect such action on their U-4 and/or U-5 filings, which can be viewed on the FINRA website under the broker-check section of the site or by viewing the monthly disciplinary information also provided on the FINRA site.

The monthly disciplinary information is referenced on the FINRA site generally in alphabetical order. This post relates to the following company or individuals. If the reader would like to review the entire FINRA release or the broker-check information concerning this matter, you can follow these highlighted links:

February 2015 Disciplinary and Other FINRA Actions

Broker Check: http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/

Daryl Richard Lemon (CRD #2473133, Los Angeles, California) submitted an AWC in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Lemon consented to the sanction and to the entry of findings that he executed 1,236 transactions in an elderly customer’s discount brokerage account maintained at another broker-dealer without providing prior written notice, or any notice at all, to his member firm. The findings stated that Lemon periodically charged the customer amounts that he characterized as “advisory fees.” (FINRA Case #2013036632201).

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Retirement and Senior Financial Abuse Litigation and Arbitration Attorney

Russell L. Forkey — Tue, 09 Jun 2015 02:47:57 GMT

South Florida Retirement and Senior Financial Abuse Litigation and Arbitration Attorney

How You Can Help Others Who May Have Diminished Financial Capacity

You may have a parent or other loved one with diminished financial capacity, or who you worry may face that issue in the future. If so, consider the following steps to help.

Have an open conversation about investments and other financial matters sooner rather than later. Even if it feels awkward, it is important to have an honest conversation about finances. Ask your loved one to consider taking the steps outlined above. Even if he or she does not want to take these steps, ask your relative or friend to consider how he or she wants to maintain control of his or her finances in the future. Explain that advance planning is a way to make sure that a trusted person makes decisions if he or she no longer can.
Help your relative or friend with managing finances. You may also offer to take a more active role in helping your loved one manage his or her financial accounts. Be alert both to mistakes that your loved one may make in managing finances and to any signs of elder financial abuse. It can be hard to tell whether actions are the result of confusion or of financial exploitation. For example, if you find that a loved one has paid the same bill twice by mistake, you should help him or her fix the error. But beware that multiple or unusual payments could also be a sign of financial exploitation, so don’t rule out that possibility without looking into it. Be on guard for any sudden changes in investments that seem out of keeping with the loved one’s longstanding goals, values and investment style. These changes may have come about because of confusion or may be a sign of financial exploitation.
If your family member or friend has named you to manage money or property, understand your responsibilities and how you can protect your loved one from financial exploitation. For example, your loved one may have named you as an agent under a power of attorney or a trustee under a revocable living trust. Read the Consumer Financial Protection Bureau’s Managing Someone Else’s Money guides. They walk you through your duties, tell you how to watch out for financial exploitation and scams, and tell you where you can go for help.

If you’ve been asked by a loved one or friend to help out with his or her finances, here are some things you can do to help.

Help with ongoing financial responsibilities. You may need to take on immediate tasks, such as helping to pay bills, arranging for benefit claims, preparing tax returns, or helping with investment decisions.

Review their investment portfolio. This might be a good time to help reevaluate the person’s portfolio in light of his or her financial and medical situation. Does the person expect a big increase in health care, personal care or other costs as a result of his or her illness or disability? If so, will he or she have enough cash or liquid assets on hand to cover those costs? (Liquid investments are assets that the owner can sell readily and without paying a hefty fee to get money when it is needed.) These can be complex questions and you may wish to discuss them with a financial professional. Keep in mind that buying and selling investments on behalf of a loved one requires legal authority, through a power of attorney, a trust or similar arrangement.
Assess the riskiness of their investment portfolio. All investments involve some level of risk. But do the investments present the right level of risk at this stage of the person’s life? If not, you may wish to consider contacting a registered investment adviser representative or registered broker-dealer representative for help.
Contact their investment professional. If your loved one has a financial professional and has authorized that person to speak with you, make the professional aware of your loved one’s condition. This is critical so that the financial professional can make recommendations appropriate to the client’s financial needs and can watch for signs of declining financial skills or potential abuse.

Your financial professional, or that of your loved one, may raise topics discussed in this article. Financial services firms are paying increasing attention to improving communications on this subject. If a financial professional does not raise these topics, however, you should feel free to raise them yourself.

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Senior and Retirement Financial Exploitation and Financial Fraud Attorney

Russell L. Forkey — Tue, 09 Jun 2015 02:15:46 GMT

South Florida Senior and Retirement Financial Exploitation and Financial Fraud Litigation and Arbitration Attorney:

What is diminished financial capacity?

“Diminished financial capacity” is a term used to describe a decline in a person’s ability to manage money and financial assets to serve his or her best interests, including the inability to understand the consequences of investment decisions. While the inability to manage one’s money is clearly a problem in itself, when people of any age lose the capability to manage their finances, they may also become more vulnerable to investment fraud and other forms of financial abuse.

Preparing for Your Own Financial Future: Hope for the Best, But Plan for the Worst.

Losing the ability to manage your finances may be something you’d rather not think about. We often think about our financial capabilities, like our ability to drive, as an important measure of our independence. But planning ahead may help you stay in control of your finances, even if diminished financial capacity becomes a serious problem. Taking the steps listed below now may help avoid or minimize problems for you and your family.

Organize your important documents. Organize and store important documents in a safe, easily accessible location. That way, they are readily available in an emergency. Give copies to trusted loved ones or let them know where to find the documents. Typically, the following documents will be most relevant to your finances:

Bank and brokerage statements and account information. Make a list of your accounts with account numbers. Keep a separate list of online bank and brokerage passwords and PINs and keep the lists in a safe place. In addition, make a list of the locations of your safe-deposit boxes, including where the keys to the safe-deposit boxes are located. Also, keep your recent bank and brokerage statements available, as well as information about how to get those statements online if you access them electronically.
Mortgage and credit information. Make a list of your debts and regular payments, with account numbers and names of the financial institutions that issued the loans or credit cards.
Insurance policies
Pension and other retirement benefit summaries
Social Security payment information
Contact information for financial and medical professionals, such as doctors, lawyers, accountants, and securities professionals.
Provide your financial professionals with trusted emergency contacts. If you have a financial professional, such as a broker or investment adviser, provide that person with emergency or alternate contact information in case he or she cannot contact you or suspects something is wrong. You may wish to discuss with your financial professional what you would consider to be an “emergency,” and specify when he or she may contact someone on your behalf. Discuss what information can be shared with your emergency contact. For example, you might provide your financial professional with a simple written instruction, such as: “Please call my son Mark at (222) 555-5555 if: (i) you are unable to reach me and there appears to be unusual activity regarding my account; (ii) you are unable to reach me for two weeks irrespective of any unusual account activity; or (iii) if you think I am confused or acting strangely.” Providing an emergency contact generally will not enable the person to make investment decisions on your behalf – so be sure to take other steps if you want someone else to manage your accounts if you cannot.
Consider creating a durable financial power of attorney. A financial power of attorney gives someone the legal authority to make financial decisions for you if you cannot. That person is called your agent. The document is called “durable” because it remains in effect even if you become incapacitated. You retain the ability to change it or cancel it as long as you are still able to make decisions. A financial power of attorney differs from a health care power of attorney, which only covers health care decisions. You may want to consult with a lawyer to determine whether a durable financial power of attorney is right for you. After signing a durable financial power of attorney, you can still manage your money and property as long as you have the ability to make decisions. Also, it is important to remember that you always have the option to change who you choose to act as your appointed representative and the individuals you allow to access your financial information. As you are essentially giving financial decision-making authority to your agent, it is critical that he or she be someone you can trust.
Think about involving a trusted relative, friend, or professional. Besides listing them as emergency contacts, you may wish to give a trusted relative, friend, or professional an overview of your finances (even if you don’t want to share all the details). For example, you might ask your broker or bank to send duplicate statements to your daughter or accountant. You might also consider asking a trusted friend or relative to join you on periodic visits to your financial professional. This would give someone you trust a sense of your financial situation and with whom you’ve been doing business. If you choose to involve a relative or friend, it is very important it is someone you are sure you can trust. Consider discussing the selection of the person with a number of other trusted friends or relatives.
Keep things up to date. Be sure that if something changes (for example, you open a new account) you keep your information as current as possible. Also, your trusted contact may change over time. Keep your financial professionals informed of changes regarding who has authority to review your account or whom they should contact in case of an emergency.
Speak up if something goes wrong. If you ever think someone is taking advantage of you, or that you’ve been the victim of a fraud, speak up. Sadly, sometimes even financial professionals and people we know commit financial crimes. There’s no shame in being a victim, and the sooner you let someone know about it, the better chance there is of putting an end to it. Contact information for reporting abuse appears at the end of this document.

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Annuity Basics – South Florida Annuity Fraud, Misrepresentation and Twisting Litigation and Arbitration Attorney

Russell L. Forkey — Sun, 03 May 2015 15:44:08 GMT

Boca Raton, West Palm Beach, Fort Lauderdale, Hollywood, Florida Annuity Fraud, Mismanagement and Twisting Litigation and Arbitration Attorney:

Annuity Basics:

An annuity is a contract in which an insurance company agrees to make a series of payments in return for a premium (or premiums) that you have paid. Many consumers buy annuities so that they will have a regular income after they retire. An annuity is an investment and shouldn’t be used to reach a short-term financial goal. Buying an annuity may or may not be right for you. Contact a licensed agent or broker to be sure an annuity is the right choice for your financial future. If you have questions regarding retirement planning, you should consult a reputable financial planner to make sure you are on target to meet your goals.

There are several types of annuities, all of which carry varying levels of risk and guarantees. To find the annuity that will best suit your needs, it is important to know the difference between each and the benefits offered.

Single Premium Annuity: You pay the insurance company only once.
Multiple Premium Annuity: You pay the insurance company multiple payments.
Immediate Annuity: You will begin to receive income payments no later than one year after you pay the premium.
Deferred Annuity: After the initial savings phase, you receive income payments once you choose to receive them.
Fixed Annuity: Your money, minus any applicable charges, earns interest at rates specified in your contract.
Variable Annuity: The insurance company invests your money, minus any applicable charges, into a separate account based upon the amount of risk you want to take. The money can be invested in stocks, bonds, or other investments.
Equity-Indexed Annuity: A variation of a fixed annuity in which the interest rate is based on an outside index, such as a stock market index. The annuity pays a base return, but it may be higher if the index increases.

Buying an Annuity:

Many state laws require a suitability analysis before the sale or replacement of any annuity product. This analysis includes an evaluation of your financial position, income needs and the cost of liquidating any assets. This can help you determine which annuity is right for you. You can also contact your state insurance department to get a list of the information your agent or broker should provide before you make a decision.

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False Investment Scheme Targeting Military Personnel – South Florida Retirement and Elder Financial Abuse Litigation and Arbitration Attorney

Russell L. Forkey — Tue, 14 Apr 2015 17:01:21 GMT

SEC Halts Investment Scheme Targeting Military Personnel

The Securities and Exchange Commission recently announced fraud charges and an asset freeze against a man living in central Texas accused of telling false tales about his stockbroking experience to lure current and former U.S. military personnel into investing with him.

The SEC alleges that Leroy Brown Jr. touted his own military connection as an Army veteran while soliciting members of the military and other investors through his firm LB Stocks and Trades Advice LLC. Brown falsely assured investors, including some stationed at nearby Fort Hood, that he had many years of experience in the securities markets. He specifically claimed to have all the necessary licenses and registrations to conduct securities business. In reality, Brown is not a licensed securities professional and his firm is not registered with the SEC, Financial Industry Regulatory Authority, or any state regulator. Brown and his firm have no evident experience with investments.

The SEC further alleges that Brown falsely guaranteed investors that he would double or triple their money within 120 days.

The SEC’s complaint, filed in U.S. District Court for the Western District of Texas, charges Brown and LB Stocks and Trades Advice with securities fraud and conducting an unregistered securities offering. The SEC is seeking financial penalties and disgorgement of ill-gotten gains as well as permanent injunctive relief. The court has issued an order temporarily freezing all assets of Brown and LB Stocks and Trades Advice.

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Boca Raton, Florida Senior, Retirement and Elder Financial Abuse and Financial Exploitation Attorney

Russell L. Forkey — Sun, 08 Feb 2015 17:10:47 GMT

Boca Raton, Florida Senior, Retirement and Elder Financial Abuse and Financial Exploitation Attorney:

Social Media and Investing – Tips for Seniors:

More and more older Americans are using social media every day, including to help guide investment decisions. Whether it is to research particular stocks, to find background information on financial professionals, to gather up-to-date news, or to discuss the markets with others, social media – web-based platforms that allow interactive communication, such as Facebook, YouTube, Twitter, LinkedIn, bulletin boards, and chat rooms – has become an important investing tool. While social media can provide many benefits, it also presents opportunities for fraudsters targeting older Americans. As a result, seniors need to proceed with caution when using social media as part of their investment process. The following tips can help.

Tips to Help Avoid Investment Fraud Online:

The key to avoiding investment scams on the Internet is to be an educated investor. Below are five tips to help seniors avoid securities fraud:

1. Look out for “Red Flags”:

Wherever you come across a recommendation for an investment on the Internet, the following “red flags” should cause you to use caution in making an investment decision:

It sounds too good to be true. Any investment that sounds too good to be true probably is. Be extremely wary of claims on the Internet that an investment will make “INCREDIBLE GAINS” or is a “BREAKOUT STOCK PICK.” Claims like these are hallmarks of extreme risk or outright fraud.

The promise of “guaranteed” returns with little or no risk. Every investment entails some level of risk, which is reflected in the rate of return you can expect to receive. Most fraudsters spend a lot of time trying to convince investors that extremely high returns are “guaranteed” or that the investment “can’t miss.” Don’t believe it.

Offers to invest outside the United States. You should carefully examine any unsolicited offer to invest outside of the United States. Many fraudsters set up operations outside the United States to make it more difficult for regulators to stop their fraudulent activity and recover their victims’ money. This is especially true in today’s investment environment. By way of example, land fraud in foreign countries is on the rise.

Pressure to buy RIGHT NOW. Don’t be pressured or rushed into buying an investment before you have a chance to think about – and investigate – the “opportunity.” Be especially skeptical of investments that are pitched as “once-in-a-lifetime” opportunities.

2. Be Wary of Unsolicited Offers:

Investment fraud criminals look for victims, including seniors, on the Internet. If you see a new post on your wall, a tweet mentioning you, a direct message, an e-mail, or any other unsolicited – meaning you didn’t ask for it and don’t know the sender – communication regarding a so-called investment opportunity, you should exercise extreme caution. An unsolicited sales pitch may be part of a fraudulent investment scheme

3. Look out for “Affinity Fraud”:

An investment pitch made through an online group of which you are a member, or on a chat room or bulletin board catering to an interest you have, may be an affinity fraud. Affinity fraud refers to investment scams that prey upon members of identifiable groups, often seniors, religious or ethnic communities, professional groups, or combinations of those groups. Even if you know the person making the investment offer, be sure to check out everything – no matter how trustworthy the person seems who brings the investment to your attention. Remember, the person making you the offer may not know that the investment is a scam.

4. Be Thoughtful About Privacy and Security Settings:

Seniors who use social media as a tool for investing should be mindful of the various features on these websites that can help protect privacy. Understand that unless you guard personal information, it may be available not only to your friends, but for anyone with access to the Internet – including fraudsters.

5. Ask Questions and Check Out the Answers:

Be skeptical. Never judge a person’s integrity, or the merits of an investment, without doing thorough research on both the person selling the investment and the investment itself. Investigate the investment thoroughly and check the truth of every statement you are told about the investment. You can check out many investments using the SEC’s EDGAR filing system or through your state’s securities regulator. You can check out registered brokers at the Financial Industry Regulatory Authority’s (FINRA) BrokerCheck website and registered investment advisers at the SEC’s Investment Adviser Public Disclosure website. Finally a simple internet search might be all that you need to do.

6. A Few Common Investment Scams Using Social Media and the Internet:

While fraudsters are constantly changing the way they approach victims on the Internet, there are a number of common scams of which you should be aware. Here are a few examples of the types of schemes you should be on the lookout for when using social media:

“Pump-and-Dumps” and Market Manipulations:

“Pump-and-dump” schemes involve the promoting of a company’s stock (typically small, so-called “microcap” companies) through false and misleading statements to the marketplace, in order to sell the cheaply purchased stock at a higher price. These false claims could be made on social media such as Facebook and Twitter, as well as on bulletin boards and chat rooms.

Fraud Using “Research Opinions,” Online Investment Newsletters, and Spam Blasts:

While legitimate online newsletters may contain useful information about investing, others are merely tools for fraud. Some companies pay online newsletters to “tout” or recommend their stocks. Touting isn’t illegal as long as the newsletters disclose who paid them, how much they’re getting paid, and the form of the payment, usually cash or stock. But fraudsters often lie about the payments they receive and their track records in recommending stocks.

High Yield Investment Programs:

The Internet is awash in so-called “high-yield investment programs” or “HYIPs.” These are unregistered investments typically run by unlicensed individuals – and they are often frauds. The hallmark of an HYIP scam is the promise of incredible returns (30 or 40 percent – or more) at little or no risk to the investor.

Internet-Based Offerings:

Offering frauds come in many different forms. Generally speaking, an offering fraud involves a security of some sort that is offered to the public, where the terms of the offer, such as the likelihood of a return, are materially misrepresented.

What Seniors Should Know About Professional Designations:

Some financial professionals use social media to attract new clients. These financial professionals may use designations such as “senior specialist” or “retirement advisor” to imply that they are experts at helping seniors with financial issues. Seniors should be aware that some of these titles require little or no training or education.

In some cases, a financial professional may need to study and pass several rigorous exams-after working in a designated field for several years-to receive a particular designation. In other cases, it may be relatively easy in terms of time and effort to receive a “senior” designation, even for an individual with no relevant experience. We encourage you to always look beyond a financial professional’s designation and determine whether he or she can provide the type of financial services or product you need. You should thoroughly evaluate the background of anyone with whom you intend to do business-before you hand over your hard-earned cash.

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10 Ways for Seniors to Protect Themselves From Fraud – South Florida Senior and Retirement Financial Abuse and Exploitation Attorney

Russell L. Forkey — Thu, 27 Nov 2014 19:36:54 GMT

10 Ways for Seniors to Protect Themselves From Fraud – South Florida Senior and Retirement Financial Abuse and Exploitation Attorney:

Know who you’re dealing with.

Try to find a seller’s physical address (not a P.O. Box) and phone number. With internet phone services and other web-based technologies, it’s tough to tell where someone is calling from. Do an online search for the company name and website, and look for reviews. If people report negative experiences, you’ll have to decide if the offer is worth the risk. After all, a deal is good only if you get a product that actually works as promised.

Know that wiring money is like sending cash.

Con artists often insist that people wire money, especially overseas, because it’s nearly impossible to reverse the transaction or trace the money. Don’t wire money to strangers, to sellers who insist on wire transfers for payment, or to anyone who claims to be a relative or friend in an emergency and wants to keep the request a secret.

Read your monthly statements.

Scammers steal account information and then run up charges or commit crimes in your name. Dishonest merchants bill you for monthly “membership fees” and other goods or services without your authorization. If you see charges you don’t recognize or didn’t okay, contact your bank, card issuer, or other creditor immediately.

After a disaster, give only to established charities.

In the aftermath of a disaster, give to an established charity, rather than one that has sprung up overnight. Pop-up charities probably don’t have the infrastructure to get help to the affected areas or people, and they could be collecting the money to finance illegal activity.

Talk to your doctor before you buy health products or treatments.

Ask about research that supports a product’s claims – and possible risks or side effects. In addition, buy prescription drugs only from licensed U.S. pharmacies. Otherwise, you could end up with products that are fake, expired, or mislabeled – in short, products that could be dangerous to your health. Learn more about buying health products online.

Remember there’s no sure thing in investing.

If someone contacts you with low-risk, high-return investment opportunities, stay away. When you hear pitches that insist you act now, that guarantee big profits, that promise little or no financial risk, or that demand that you send cash immediately, report them at ftc.gov.

What Not to Do.

Don’t send money to someone you don’t know. Not to an online seller you’ve never heard of – or an online love interest who asks for money. It’s best to do business with sites you know and trust. If you buy items through an online auction, consider using a payment option that provides protection, like a credit card.

If you think you’ve found a good deal, but you aren’t familiar with the company, check it out. Type the company or product name into your favorite search engine with terms like “review,” “complaint,” or “scam.” See what comes up – on the first page of results as well as on the later pages.

Never pay fees first for the promise of a big pay-off later – whether it’s for a loan, a job, a grant or a so-called prize.

Don’t agree to deposit a check and wire money back. By law, banks have to make funds from deposited checks available within days, but uncovering a fake check can take weeks. You’re responsible for the checks you deposit: If a check turns out to be a fake, you’re responsible for paying back the bank. No matter how convincing the story, someone who overpays with a check is almost certainly a scam artist.

Don’t reply to messages asking for personal or financial information. It doesn’t matter whether the message comes as an email, a phone call, a text message, or an ad. Don’t click on links or call phone numbers included in the message, either. It’s called phishing. The crooks behind these messages are trying to trick you into revealing sensitive information. If you got a message like this and you are concerned about your account status, call the number on your credit or debit card – or your statement – and check on it.

Don’t play a foreign lottery. It’s illegal to play a foreign lottery. And yet messages that tout your chances of winning a foreign lottery, or messages that claim you’ve already won, can be tempting. Inevitably, you have to pay “taxes,” “fees,” or “customs duties” to collect your prize. If you must send money to collect, you haven’t won anything. And if you send any money, you will lose it. You won’t get any money back, either, regardless of promises or guarantees.

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Refund and Recovery Scams – Boca Raton, Florida Fraud and Misrepresentation Attorney

Russell L. Forkey — Thu, 27 Nov 2014 19:25:55 GMT

Refund and Recovery Scams – Boca Raton, Florida Fraud and Misrepresentation Attorney

Refund and Recovery Scams Which Promise You That You Will Get Your Money Back:

Phone Scams:

Scam artists buy and sell “sucker lists” with the names of people who already have lost money to fraudulent promotions, many focusing on elder or retired individuals. These crooks may call you promising to recover the money you lost or the prize or merchandise you never received – for a fee in advance. That’s against the law. Under the Telemarketing Sales Rule, they cannot ask for – or accept – payment until seven business days after they deliver the money or other item they recovered to you. Recently, this scam targeted individuals that lost money in leveraged precious metals scams.

How the Scams Work:

Many consumers might not know that they have been scammed by a bogus prize promotion, phony charity drive, fraudulent business opportunity or other scam. But if you have unknowingly paid money to such a scam, chances are your name is on a “sucker list.” That list may include your address, phone numbers, and other information, like how much money you’ve spent responding to phony offers. Dishonest promoters buy and sell “sucker lists” on the theory that people who have been deceived once have a high likelihood of being scammed again.

These scammers lie when they promise that, for a fee or a donation to a specific charity, they will recover the money you lost, or the prize or product you never received. They use a variety of lies to add credibility to their pitch: some claim to represent companies or government agencies; some say they’re holding money for you; and others offer to file necessary complaint paperwork with government agencies on your behalf. Still others claim they can get your name at the top of a list for victim reimbursement.

The Federal Trade Commission (FTC), the nation’s consumer protection agency, says claims like these often are false. Although some federal and local government agencies and consumer organizations help people who have lost money, they don’t charge a fee. Nor do they guarantee to get your money back, or give special preference to anyone who files a formal complaint.

Seeing Through a Recovery Scam:

Here are some tips to help you avoid losing money to a recovery scam:

Don’t believe anyone who calls offering to recover money, merchandise, or prizes you never received if the caller says you have to pay a fee in advance. Under the Telemarketing Sales Rule, it’s against the law for someone to request or receive payment from you until seven business days after you have the money or other item in hand.

If someone claims to represent a government agency that will recover your lost money, merchandise, or prizes for a fee or a donation to a charity, report them immediately to the FTC. National, state, and local consumer protection agencies and nonprofit organizations do not charge for their services.

Before you use any company to recover either money or a prize, ask what specific services the company provides and the cost of each service. Check out the company with local government law enforcement and consumer agencies; ask whether other people have registered complaints about the business. You also can enter the company name into an online search engine to look for complaints.

Don’t give out your credit card or checking account numbers in an attempt to recover money you have lost or a prize you never received.

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Investment Scams – South Florida Securities and Investment Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney:

Russell L. Forkey — Wed, 19 Nov 2014 16:47:39 GMT

Boca Raton and Delray Beach, Florida – Investment Scam, Investment Fraud, Misrepresentation and Elder Financial Abuse FINRA Arbitration and Litigation Attorney:

When it comes to making an intelligent investment decision, nothing is fool-proof. However, there are some basic sales tactics that should turn your “red light” on. Some of the most common include:

The “Phantom Riches” Tactic: Here the salesperson dangles the prospect of wealth, enticing you with something you want but can’t have. “These gas wells are guaranteed to produce $6,800 a month in income.”

The “Source Credibility” Tactic: Here the salesperson tries to build credibility by claiming to be a reputable expert. “Believe me, as a senior vice president of XYZ Firm, I would never sell an investment that doesn’t produce.”

The “Social Consensus” Tactic: Here the salesperson leads you to believe that other savvy investors have already invested. “This is how ___ got his start. I know it’s a lot of money, but I’m in-and so is my mom and half her church-and it’s worth every dime.”

The “Reciprocity” Tactic: The salesperson offers to do a small favor for you in return for a big favor. “I’ll give you a break on my commission if you buy now-half off.”

The “Scarcity” Tactic: The salesperson creates a false sense of urgency by claiming limited supply. “There are only two units left, so I’d sign today if I were you.”

If these tactics look familiar, it’s because legitimate marketers use them, too. However, when we are not prepared to resist them, these tactics can work subliminally. Little wonder that victims often say to regulators or their attorneys after they have been scammed, “I don’t know what I was thinking” or “it really caught me off guard.” Recently, we have seen a lot of this in precious metals scams. That’s why an important part of resisting these common persuasion tactics is to understand them before encountering them.

What are some Red Flags of Fraud:

Guarantees: Be suspect of anyone who guarantees that an investment will perform a certain way. All investments carry some degree of risk.

Unregistered products: Many investment scams involve unlicensed individuals selling unregistered securities-ranging from stocks, bonds, notes, hedge funds, oil or gas deals, or fictitious instruments, such as prime bank investments.

Overly consistent returns: Any investment that consistently goes up month after month-or that provides remarkably steady returns regardless of market conditions-should raise suspicions, especially during turbulent times. Even the most stable investments can experience hiccups once in a while.

Complex strategies: Avoid anyone who credits a highly complex investing technique for unusual success. Legitimate professionals should be able to explain clearly what they are doing. It is critical that you fully understand any investment you’re seriously considering-including what it is, what the risks are and how the investment makes money.

Missing documentation: If someone tries to sell you a security with no documentation-that is, no prospectus in the case of a stock or mutual fund, and no offering circular in the case of a bond-he or she may be selling unregistered securities. The same is true of stocks without stock symbols.

Account discrepancies: Unauthorized trades, missing funds or other problems with your account statements could be the result of a genuine error-or they could indicate churning or fraud. Keep an eye on your account statements to make sure account activity is consistent with your instructions, and be sure you know who holds your assets. For instance, is the investment adviser also the custodian of your assets? Or is there an independent third-party custodian? It can be easier for fraud to occur if an adviser is also the custodian of the assets and keeper of the accounts.

A pushy salesperson: No reputable investment professional should push you to make an immediate decision about an investment, or tell you that you’ve got to “act now.” If someone pressures you to decide on a stock sale or purchase, steer clear. Even if no fraud is taking place, this type of pressuring is inappropriate.

If you don’t feel comfortable in talking to the person that has contacted you and you can’t get off the phone, just hang up. The only thing that is going to happen is that you will more than likely save yourself money.

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder and senior abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

Luciano Andres Battioli – Boca Raton, Florida Account Executive Conversion and Theft FINRA Arbitration and Litigation Attorney

Russell L. Forkey — Sun, 05 Oct 2014 13:37:44 GMT

Luciano Andres Battioli – Boca Raton, Florida Account Executive Conversion and Theft FINRA Arbitration and Litigation Attorney

September 2014 Disciplinary and Other FINRA Actions

Broker Check: http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/

Luciano Andres Battioli (CRD #6229734, Huntington Beach, California) submitted a Letter of Acceptance, Waiver and Consent in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Battioli consented to the sanction and to the entry of findings that he converted funds belonging to customers of his member firm’s affiliate bank, and forged and falsified bank documents. (FINRA Case #2013039521501)

Wealth Strategy Partners, LC, Harvey Altholtz, Stevens Resource Group, LLC and George Stevens – Boca Raton, Florida Investment Fund and Investment Advisor Fraud and Mismanagement Litigation and Arbitration Attorney

Russell L. Forkey — Sun, 05 Oct 2014 13:18:59 GMT

Wealth Strategy Partners, LC, Harvey Altholtz, Stevens Resource Group, LLC and George Stevens – Boca Raton, Florida Investment Fund and Investment Advisor Fraud and Mismanagement Litigation and Arbitration Attorney

Securities and Exchange Commission v. Wealth Strategy Partners, LC, et al., Civil Action No. 14-CV-02427-JDW-TGW

SEC Charges General Partner and Investment Advisers to the Stealth and Adamas Funds with Fraud

The Securities and Exchange Commission filed a civil injunctive action on September 25, 2014 charging Wealth Strategy Partners, LC (“Wealth Strategy”), a Sarasota, Florida company, and its principal, Harvey Altholtz of Sarasota, Florida, and Stevens Resource Group, LLC (“Stevens Resource”), a Washington company, and its principal, George Stevens of Lacey, Washington, with securities fraud involving the fraudulent offers and sales of securities in two investment funds – The Stealth Fund, LLLP and The Adamas Fund, LLLP. Wealth Strategy and Altholtz controlled and managed the two funds and later served as investment advisers to the funds. Stevens Resource and Stevens also served as investment advisers to both funds.

According to the Commission’s complaint filed in the United States District Court for the Middle District of Florida, the Stealth and Adamas Funds, combined, raised approximately $30.8 million from over 143 investors nationwide between 2007 and November, 2009. The complaint alleges that, from October 2008 through April 2010, the defendants failed to disclose in offering materials distributed to investors that Stealth’s assets could be used to guarantee certain loans that Altholtz’s family made to two portfolio companies that Stealth invested in and that his family also made loans to Adamas and Stealth in violation of the funds’ operating agreements. The complaint also alleges that Wealth Strategy and Altholtz committed fraud by giving an Altholtz family trust, who was an investor in Adamas, preferential treatment with regard to redemptions over other investors. The complaint further alleges that the defendants made misstatements and omissions in newsletters to investors regarding the financial condition of some of the funds’ portfolio companies.

The SEC’s complaint charges the defendants with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, Section 17(a) of the Securities Act of 1933, and Section 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The complaint seeks permanent injunctions, disgorgement plus prejudgment interest, and civil penalties against all of the defendants, and officer and director bars against Altholtz and Stevens. Stevens and Stevens Resource have agreed to settle the case against them by consenting to, among other things, the entry of a judgment permanently enjoining them from future violations of the securities laws, imposing a permanent officer and director bar against Stevens, and ordering them to pay disgorgement and civil penalties, in amounts to be determined by the Court later.

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Oscar F. Villarreal – Boca Raton, Florida Investment and Investment Advisor Fraud Litigation and Arbitration Attorney

Russell L. Forkey — Sun, 05 Oct 2014 12:34:45 GMT

Securities and Exchange Commission v. Oscar F. Villarreal, Civil Action No. 14-cv-01891

Former Cleveland-Area Investment Promoter Oscar F. Villarreal Indicted

On September 16, 2014, the United States Attorney for the Northern District of Ohio obtained a Grand Jury indictment charging Oscar F. Villarreal with ten counts of wire fraud, seven counts of money laundering, one count of securities fraud, and one count of investment adviser fraud.

The Indictment’s allegations are based on the same conduct underlying the Commission’s August 26, 2014 Complaint against Villarreal filed in the United States District Court for the Northern District of Ohio.

The SEC’s Complaint alleges that from March 2009 through December 2010, Villarreal conducted a fraudulent offering, known as Fund III, which raised $9.2 million from 46 investors. According to the complaint, Villarreal told investors that their money was to be used to make private equity investments in companies in the petroleum, steel, and other industries in Mexico. Villarreal lied to these investors about the success of a previous fund he operated, lied in saying that he used their money to purchase and profitably operate a Mexican pipeline manufacturer, and lied by telling investors that Fund III had ownership interests in several U.S. and Mexican drilling companies. Villarreal instead used $7.4 million of Fund III assets to trade in publicly traded securities in a brokerage account-contrary to his representations to investors-and sustained heavy losses, and also stole $5.8 million for himself. By November 2011, Fund III was essentially insolvent.

The Commission’s complaint also alleges that, between August 2010 and March 2011, Villarreal conducted a second fraudulent offering, known as the Standard Asset Management Fund I, (“SAM Fund”), which raised $9 million from 11 investors, six of whom had previously invested in Fund III. According to the complaint, Villarreal told these investors that the SAM Fund would invest in companies listed on the Mexican stock exchange. Villarreal made numerous misrepresentations to these investors. Among other things, Villarreal repeated his earlier lies about Fund II and Fund III’s purported acquisition and profitable operation of a Mexican pipeline manufacturer, he stole at least $327,000 of SAM Fund assets, and Villarreal’s trading was a massive failure, resulting in an 83% loss for the SAM Fund.

The complaint also alleges that Villarreal defrauded the SAM Fund investors between March 2012 and May 2012 by offering to “exchange” limited partnership units he claimed he owned in Fund III for the SAM Fund investors’ limited partnership units in the SAM Fund. Eight SAM Fund investors accepted Villarreal’s offer and exchanged their SAM Fund units, which they had purchased for a total of $3.1 million. Villarreal, however, lied about the number of Fund III limited partnership units he owned and the value of the Fund III units. Villarreal did not disclose to these investors that the Fund III limited partnership units were worthless.

The SEC’s Complaint alleges that Villarreal violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The Commission’s complaint seeks a permanent injunction, disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties.

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