Chembur police have arrested a Sion-based chartered accountant and his brother-in-law for swindling three investors to the tune of Rs50 lakh. The duo had promised them that they would invest their money in the stock market and get them handsome returns.
Police said Jignesh Bharat Shah, 34, a stock broker, had taken the money from the investors in May last. But instead of returning it, he diverted it into the Oriental Bank account of his brother-in-law Apoorva Harish Shah, 28.
The duo has been charged under sections 34 (common intention), 406 (criminal breach of trust), 419 (cheating by personation), 420 (cheating and dishonesty) of the IPC and would be remanded in police custody till December 16.
Chembur-based Dr Suresh Oberoi, who lost Rs 11 lakh, said in his complaint that he met Jignesh through his neighbours. “They (neighbours) told me that Jignesh was an expert in share market and he could double my money. Jignesh gained my trust in due course. Later, I also introduced him to others,” he stated.
Oberoi said when he approached Jignesh for the returns, the latter gave cheques that bounced. It was then, he went to the police. The same was the case with the other two investors, whose cheques too bounced. This case is registered with the Andheri police.
When the police went to question Jignesh, his mother-in-law said that both had been missing from November 2006. According to her, Jignesh left behind a letter stating that he was leaving the city, being unable to return the investors’ money.
Assistant Police Inspector Ravindra Sangle of the Chembur police station, told DNA, “The letter led us to Rajkot where Jignesh had holed up with his parents. Both were brought to Mumbai on December 12 and a case was registered against them,” Sangle said.
Police said Jignesh Bharat Shah, 34, a stock broker, had taken the money from the investors in May last. But instead of returning it, he diverted it into the Oriental Bank account of his brother-in-law Apoorva Harish Shah, 28.
The duo has been charged under sections 34 (common intention), 406 (criminal breach of trust), 419 (cheating by personation), 420 (cheating and dishonesty) of the IPC and would be remanded in police custody till December 16.
Chembur-based Dr Suresh Oberoi, who lost Rs 11 lakh, said in his complaint that he met Jignesh through his neighbours. “They (neighbours) told me that Jignesh was an expert in share market and he could double my money. Jignesh gained my trust in due course. Later, I also introduced him to others,” he stated.
Oberoi said when he approached Jignesh for the returns, the latter gave cheques that bounced. It was then, he went to the police. The same was the case with the other two investors, whose cheques too bounced. This case is registered with the Andheri police.
When the police went to question Jignesh, his mother-in-law said that both had been missing from November 2006. According to her, Jignesh left behind a letter stating that he was leaving the city, being unable to return the investors’ money.
Assistant Police Inspector Ravindra Sangle of the Chembur police station, told DNA, “The letter led us to Rajkot where Jignesh had holed up with his parents. Both were brought to Mumbai on December 12 and a case was registered against them,” Sangle said.
Larry King too fell 'victim' to $50bn Madoff investment scam
Larry King is reportedly the latest name to join the victims of Bernard Madoff's 50 billion dollar Wall Street investment scam.
The CNN host of Larry King Live was said to have lost "over 1 million dollars with Madoff", the perpetrator of the biggest financial fraud in history who had been arrested and charged with securities fraud on December 11 last year.
Madoff allegedly headed the fraud through Ponzi schemes, which involves paying abnormally high returns to investors out of the money paid in by subsequent investors, rather than from the profit from any real business.
And now King, who has faced bankruptcy in 1978, was reported to have been cheated as well along with many other wealthy victims from all over the world including the wealthiest woman in the world Liliane Bettencourt, Alicia Koplowitz, the Spanish billionaire, and director Steven Spielberg.
"It was a lot of money," The New York Post quoted a source as saying,
King's rep, Howard Rubenstein, refused to comment.
The CNN host of Larry King Live was said to have lost "over 1 million dollars with Madoff", the perpetrator of the biggest financial fraud in history who had been arrested and charged with securities fraud on December 11 last year.
Madoff allegedly headed the fraud through Ponzi schemes, which involves paying abnormally high returns to investors out of the money paid in by subsequent investors, rather than from the profit from any real business.
And now King, who has faced bankruptcy in 1978, was reported to have been cheated as well along with many other wealthy victims from all over the world including the wealthiest woman in the world Liliane Bettencourt, Alicia Koplowitz, the Spanish billionaire, and director Steven Spielberg.
"It was a lot of money," The New York Post quoted a source as saying,
King's rep, Howard Rubenstein, refused to comment.
Home loan scam: SEBI probes insider-trading in shares of companies party to the scam
Market watchdog Sebi has initiated a probe into possible front-running and insider trading in shares of over two dozen companies, including some blue chips, by entities and persons involved in the housing-finance scam unearthed by CBI.
The initial findings, when corroborated with the charges made by the CBI, indicate towards a lage-scale front-running deals or shares being purchased or sold in these companies on the basis of prior knowledge about investment decisions being made by large institutional investors, a senior SEBI official said.
These large institutional investors could be LIC, whose secretary (Investments) figures among those arrested by CBI in connection with the multi-crore scam, as also those investors who participated in share or debt placements arranged by investment banking and financial services firm Money Matters, sources said.
The probe would encompass large dealings and any irregular spurt in volumes or prices of shares of all the companies where these institutional investors had bought or sold shares over the past two years, they said.
The top officials of Money Matters, a fast growing entity that boasts of having served a number of top-level corporate entities in the past including the likes of Tatas, Ambanis and Birlas, have emerged as the focal points of the scam.
Sources said that though the arrested official of the country's largest insurer LIC could have been used (by Money Matters) in terms of revealing the investment decisions already taken by the PSU, he might not have been in a position to know upcoming decisions by the company or influence its investments in stocks.
As LIC is not a listed company and is not obliged to disclose its purchase or sale of shares on day-to-day basis, the names of companies where it has invested or whose shares it has sold generally come to be known with a time-lag.
Besides front-running, the regulator is also looking into possibility of insider trading by the top officials, and in some cases, promoters of the companies whose names have surfaced in the CBI probe.
Given the sensitivity of the matter and the probe being in preliminary stages, the official declined to disclose the names of the companies, while adding that the companies whose shares have been manipulated might not be themselves at fault.
The SEBI official said that the regulator had begun probing insider trading possibilities in many of these companies, even before the arrests made by CBI two days ago, as it had feared irregularities in their share dealings over the past few months.
However, it was only after CBI unearthed the scam that SEBI could relate the alleged insider trading with the accused of loan bribery case.
CBI that earlier arrested at least eight persons in connection with the scam, has also issued notices to 21 companies to provide all the documents related to the case and explain any benefits received by them as also favours extended to the accused persons.
Sources said that SEBI suspected the unscrupulous activities to have begun in these companies' shares at least a year ago, when the stock market was still in dumps and the companies were finding it tough to raise funds due to extremely low valuations.
After shoring up the shares during the days of their distressed valuations, the accused entities could have started selling off these stocks to the unsuspecting investors at high valuations, they added.
The initial findings, when corroborated with the charges made by the CBI, indicate towards a lage-scale front-running deals or shares being purchased or sold in these companies on the basis of prior knowledge about investment decisions being made by large institutional investors, a senior SEBI official said.
These large institutional investors could be LIC, whose secretary (Investments) figures among those arrested by CBI in connection with the multi-crore scam, as also those investors who participated in share or debt placements arranged by investment banking and financial services firm Money Matters, sources said.
The probe would encompass large dealings and any irregular spurt in volumes or prices of shares of all the companies where these institutional investors had bought or sold shares over the past two years, they said.
The top officials of Money Matters, a fast growing entity that boasts of having served a number of top-level corporate entities in the past including the likes of Tatas, Ambanis and Birlas, have emerged as the focal points of the scam.
Sources said that though the arrested official of the country's largest insurer LIC could have been used (by Money Matters) in terms of revealing the investment decisions already taken by the PSU, he might not have been in a position to know upcoming decisions by the company or influence its investments in stocks.
As LIC is not a listed company and is not obliged to disclose its purchase or sale of shares on day-to-day basis, the names of companies where it has invested or whose shares it has sold generally come to be known with a time-lag.
Besides front-running, the regulator is also looking into possibility of insider trading by the top officials, and in some cases, promoters of the companies whose names have surfaced in the CBI probe.
Given the sensitivity of the matter and the probe being in preliminary stages, the official declined to disclose the names of the companies, while adding that the companies whose shares have been manipulated might not be themselves at fault.
The SEBI official said that the regulator had begun probing insider trading possibilities in many of these companies, even before the arrests made by CBI two days ago, as it had feared irregularities in their share dealings over the past few months.
However, it was only after CBI unearthed the scam that SEBI could relate the alleged insider trading with the accused of loan bribery case.
CBI that earlier arrested at least eight persons in connection with the scam, has also issued notices to 21 companies to provide all the documents related to the case and explain any benefits received by them as also favours extended to the accused persons.
Sources said that SEBI suspected the unscrupulous activities to have begun in these companies' shares at least a year ago, when the stock market was still in dumps and the companies were finding it tough to raise funds due to extremely low valuations.
After shoring up the shares during the days of their distressed valuations, the accused entities could have started selling off these stocks to the unsuspecting investors at high valuations, they added.
Enforcement Directorate to register money laundering case in Citibank fraud
The Enforcement Directorate will soon file a case of money laundering in connection with the Rs400 crore fraud allegedly perpetrated by a Citibank employee.
Official sources said the directorate, which has studied the details of the police FIR in the case and scrutinised other aspects of the scam, has decided to file a case under the stringent Prevention of Money Laundering Act.
The scam, which came to light late last year, shook the banking sector. Investigations into the irregularities at Citibank Gurgaon branch came in the wake of a complaint that the bank was offering abnormal returns on an investment scheme for investors.
It was found that relationship manager Shivraj Puri had allegedly collected the money, including from certain top corporates, on the basis of a fake SEBI circular that claimed the scheme had the market regulator's approval.
Securities and Exchange Board of India (SEBI) later wrote to the bank saying no such scheme was approved by it.
The sources said the ED case will focus on Puri and others who were involved in laundering of such huge amount of money.
Interestingly, the income tax department has already began scrutinising the investments and tax payments of some high net worth individuals who were allegedly duped by Puri.
Under the PMLA, the directorate has the right to attach both movable and immovable properties of the accused.
The entities whose funds were diverted by Puri into the accounts of his relatives include Hero Corporate Services (Rs13.75 crore), OKS Sapan Tech (Rs2 crore) and Satyam Auto (Rs25 crore).
Others include Mayar Infratech (Rs24 crore), Spaid (Rs62 crore), Karopat Pad (Rs8 crore), Sunil Kant and Sons (Rs3 crore), Aero Infratec (Rs25 crore), Hero Exports (Rs97 crore), Rekha Munjal (Rs5 crore), Munjal Investments (Rs2.5 crore) and Munab Braej (Rs71 crore).
In December last, Puri was taken into custody for allegedly duping about 40 high net worth investors and corporate entities to the tune of Rs400 crore.
Official sources said the directorate, which has studied the details of the police FIR in the case and scrutinised other aspects of the scam, has decided to file a case under the stringent Prevention of Money Laundering Act.
The scam, which came to light late last year, shook the banking sector. Investigations into the irregularities at Citibank Gurgaon branch came in the wake of a complaint that the bank was offering abnormal returns on an investment scheme for investors.
It was found that relationship manager Shivraj Puri had allegedly collected the money, including from certain top corporates, on the basis of a fake SEBI circular that claimed the scheme had the market regulator's approval.
Securities and Exchange Board of India (SEBI) later wrote to the bank saying no such scheme was approved by it.
The sources said the ED case will focus on Puri and others who were involved in laundering of such huge amount of money.
Interestingly, the income tax department has already began scrutinising the investments and tax payments of some high net worth individuals who were allegedly duped by Puri.
Under the PMLA, the directorate has the right to attach both movable and immovable properties of the accused.
The entities whose funds were diverted by Puri into the accounts of his relatives include Hero Corporate Services (Rs13.75 crore), OKS Sapan Tech (Rs2 crore) and Satyam Auto (Rs25 crore).
Others include Mayar Infratech (Rs24 crore), Spaid (Rs62 crore), Karopat Pad (Rs8 crore), Sunil Kant and Sons (Rs3 crore), Aero Infratec (Rs25 crore), Hero Exports (Rs97 crore), Rekha Munjal (Rs5 crore), Munjal Investments (Rs2.5 crore) and Munab Braej (Rs71 crore).
In December last, Puri was taken into custody for allegedly duping about 40 high net worth investors and corporate entities to the tune of Rs400 crore.
$100K stolen via investment scam in Centerville
A Washington Twp. man is accused of stealing more than $100,000 in an investment scam, Centerville Police announced today.
Police said they are investigating Daryl R. Harrison, 32, of Great Lakes Circle, for one alleged theft involving one potential victim, and that he could be involved in other investment scams.
Centerville Officer Matt Dunn said Harrison leased an office space and conducted business under the name H&H Commodities on East Spring Valley Road in the city.
“There is just the one person that we know of,” Dunn said of individuals who may have been scammed by Harrison. “We originally received a complaint, found wrongdoing and want to warn others.”
Harrison has been arrested but is not incarcerated, and formal charges have not been filed. Dunn said their investigation is ongoing.
Police are being assisted by the Montgomery County Prosecutor’s Office’s Consumer Fraud Unit.
Dunn said anyone who has had a business involvement with Harrison should contact Centerville Detective Nadia Dexter at (937) 433-7661.
Montgomery County Prosecutor Mathias H. Heck Jr. encouraged consumers to fully research companies or individuals before investing.
Police recommend consumers visit the Securities and Exchange Commission’s website, www.sec.gov, that provides advice about investment companies to avoid and what information to expect from them.
Police said they are investigating Daryl R. Harrison, 32, of Great Lakes Circle, for one alleged theft involving one potential victim, and that he could be involved in other investment scams.
Centerville Officer Matt Dunn said Harrison leased an office space and conducted business under the name H&H Commodities on East Spring Valley Road in the city.
“There is just the one person that we know of,” Dunn said of individuals who may have been scammed by Harrison. “We originally received a complaint, found wrongdoing and want to warn others.”
Harrison has been arrested but is not incarcerated, and formal charges have not been filed. Dunn said their investigation is ongoing.
Police are being assisted by the Montgomery County Prosecutor’s Office’s Consumer Fraud Unit.
Dunn said anyone who has had a business involvement with Harrison should contact Centerville Detective Nadia Dexter at (937) 433-7661.
Montgomery County Prosecutor Mathias H. Heck Jr. encouraged consumers to fully research companies or individuals before investing.
Police recommend consumers visit the Securities and Exchange Commission’s website, www.sec.gov, that provides advice about investment companies to avoid and what information to expect from them.
2 men accused of Alaska gold mine investment scam
Two Washington state men have been accused of conspiracy to commit securities and wire fraud in seeking investors for a gold mine involving placer mining beach sand at Sitkinak Island, which is near Kodiak Island.
William C. Lange of Gig Harbor, Wash., and Joseph Pascua of Lake Tapps, Wash., are charged in an indictment from Brooklyn, N.Y. They made their first court appearance Wednesday in federal Court in Tacoma, Wash.
Prosecutors say they persuaded their victims to invest in Black Sand Mine, Inc., by misrepresenting the profitability of the mine.
An Alaska mining official, Kerwyn Krause, told the Anchorage Daily News the Black Sand Mine company is not qualified to conduct business in the state.
William C. Lange of Gig Harbor, Wash., and Joseph Pascua of Lake Tapps, Wash., are charged in an indictment from Brooklyn, N.Y. They made their first court appearance Wednesday in federal Court in Tacoma, Wash.
Prosecutors say they persuaded their victims to invest in Black Sand Mine, Inc., by misrepresenting the profitability of the mine.
An Alaska mining official, Kerwyn Krause, told the Anchorage Daily News the Black Sand Mine company is not qualified to conduct business in the state.
Fenton man accused in alleged investment scam
A Fenton man is among three people facing securities fraud charges involving what officials call a multimillion-dollar investment scam.
Jail records show 37-year-old Paul Liggett of Fenton was booked into the Baldwin County Corrections Center on Thursday and was released on $35,000 bail. On Jan. 28, 33-year-old Michael David Judd of Studio City, Calif., was booked and later released on $100,000 bail.
Both men are scheduled to be arraigned March 18 in Baldwin County Circuit Court.
Charges for both men stem from an alleged scheme involving 38-year-old Richard Tucker of Robertsdale, Ala., and his company, Synergy Finance Group. Tucker is due in court next week.
Officials say agents persuaded investors to wire money to Synergy accounts with the promise of multimillion-dollar returns.
Jail records show 37-year-old Paul Liggett of Fenton was booked into the Baldwin County Corrections Center on Thursday and was released on $35,000 bail. On Jan. 28, 33-year-old Michael David Judd of Studio City, Calif., was booked and later released on $100,000 bail.
Both men are scheduled to be arraigned March 18 in Baldwin County Circuit Court.
Charges for both men stem from an alleged scheme involving 38-year-old Richard Tucker of Robertsdale, Ala., and his company, Synergy Finance Group. Tucker is due in court next week.
Officials say agents persuaded investors to wire money to Synergy accounts with the promise of multimillion-dollar returns.
5 Ways to spot Investment Scams
I have to be honest. At my home, we’re fans of the Yankees, since that’s the team my husband grew up rooting for during is childhood in New York. But I still feel bad for the New York Mets. Or at least, I feel bad for Fred Wilpon, who is on the verge of losing the New York Mets as his finances spiral downward fast. Not only did he get taken in by scam artist Bernie Madoff, but he is also facing a lawsuit alleging that he should have known better — with the implication that maybe Wilpon was an accomplice.
This just goes to show that you might lose more than money when you are taken in by an investment scam. You could lose something that you really love (as Wilpon is likely to lose the Mets), and you could even lose your reputation. Before you invest, watch for these signs that you are being scammed:
This just goes to show that you might lose more than money when you are taken in by an investment scam. You could lose something that you really love (as Wilpon is likely to lose the Mets), and you could even lose your reputation. Before you invest, watch for these signs that you are being scammed:
1. You Are Part of an “Exclusive” or “Elite” Group
One of the signs of an investment scam is that you are told that you are part of an elite or exclusive group “chosen” to participate. The idea is to make you feel special, as though you are an insider. Scammers put up a front, acting as though only very specific people will be let in. In some cases, you really are “exclusive” since you have to put up a buy in. If someone comes to with a “special” investment opportunity, only open to a few, it’s time to be careful.2. Promise of High Gains with Low Risks
Watch out if you are being promised great riches at minimal risk. Investment works this way: The bigger the risk of loss, the bigger your chance of more money. In the investment world, big gains rarely come with low risks. If someone tells you that you can make a lot of money with almost know risk, or that it’s a “sure thing”, you might be looking at an investment scam.3. The Investment History Never Shows Losses
The truth is that during a down market, just about everyone is going to see some losses. Even during good years, gains in investments tend to vary a bit. If the investment opportunity shows a balance sheet of steady gains, or if the return is like clockwork, there could be a very real chance that you are looking at an investment scam. Everyone thought Bernie Madoff was so great because his fund never showed losses. It’s easy to show gains when you’re cooking the books.4. Complex Terminology
Look out for a lot of fancy sounding jargon. You should be able to understand what is being explained to you. If the promoter of this amazing investment opportunity can’t explain, simply, how the investment works (and “you give me money and earn a lot more” doesn’t count), you could be in trouble. Most standard investments, such as stocks, bonds, and funds are fairly easy to understand.5. Undue Pressure to Make a Decision Now
One of the biggest indications that you could be looking at an investment scam is pressure to make a decision immediately. You might be told that it will be too late to invest if you don’t act now. Pressure to make a fast decision — especially if you aren’t given time to study the merits of the investment — is a sure sign that you could be heading for trouble. A legitimate investment opportunity will still be there later. You may not get as good a deal, but it will still be there. Also, be wary if you are being pressured to quickly liquidate other assets so that you can afford the buy-in.Tips to avoid being victimized by an investment scam
No one likes to lose money - ever - so how can you avoid being caught up in the next investment fraud? We checked in with some fraud examiners and experts in due diligence to start a list of red flags to watch for before deciding on a broker, a money manager, a financial planner, or someone who claims to have a lock on the next can't-lose scheme.1 Your adviser's returns are consistently good, even in a volatile economy or a losing financial market.
A signpost of fraud is consistency: That is, promises that you're going to get good returns, or even mediocre returns, consistently - week after week, month after month, or year after year.
Markets go up and down; investments can lose money; few, if any, consistently make money. Bernie Madoff's billion-dollar Ponzi scheme relied on investors' expectations of 10 percent gains year after year, even in 2002, when the Internet bubble burst and the market slumped. Why wasn't Madoff's hedge fund down that year also?
2 Your adviser's investment strategy is complex and not clearly explained. You are turned away for asking questions.
"Take note if they don't explain to you how the money is being invested, and if you ask questions, they ignore you or dismiss your concerns and say, 'This is confidential,' " says Leon LaRosa, a partner in the litigation and valuation group at EisnerAmper L.L.P. in Philadelphia.
"They don't share the strategy, or if they do, it sounds complex."
Solomon Dwek, son of a rabbi and a real estate investor from Monmouth County, N.J., used to turn away new money, saying he "didn't need it." Dwek's real estate deals were fake, and he pleaded guilty to fraud in 2009.
Among his victims was PNC Bank. He admitted to fraudulently placing a $25.3 million check in his account. His saying he didn't need new investors only made them more eager to invest with him. Dwek is now an FBI informant.
Michael Allison of International Business Research (USA) adds other red flags in this category: A person boasts of his or her ability to raise "venture capital" or maintain "international connections," both difficult for a client to confirm.
3 Your adviser claims you are now part of an exclusive club. He or she shares your views on politics, religion, or sports, or was recommended by a member of your country club or affinity club - who, like yourself, has done no due diligence.
Anthony "Tony" Young used the money he scammed to support a "lavish lifestyle," according to a Securities and Exchange Commission filing, including horses, boats, limousines, chartered aircraft, and membership in the prestigious Mr. Stewart's Cheshire Foxhounds group and the Brandywine Polo Club.
Young preyed on the polo crowd; Madoff preyed on the Palm Beach Country Club. Do your own due diligence and background checks, beyond club membership.
4 Your adviser asks you to write the check to him or her directly, or to a separate account over which he or she has control.
A Philadelphia Ponzi schemer, John G. Bennett Jr., ran a classic philanthropy scam: He began offering individual benefactors a chance to double their gifts to charity, allegedly matched by a group of wealthy "anonymous donors." (See a full explanation of his scheme at the FBI's website http://philadelphia.fbi.gov/new_era.htm).
Later, he drew in churches, colleges, museums, and other nonprofit groups, telling them funds would be returned after a holding period in a "semi-escrow" account.
Yep, the anonymous donors never existed and New Era was nothing more than a $350 million nationwide pyramid scheme, with new investors paid by old investors' money.
5 Monthly statements are sent by the adviser and not by a custodian, bank, or independent third party.
From 1995 until he was arrested, Joseph Forte of Broomall operated a scheme that took in about $50 million, stolen from 80 investors. Investors wrote checks to Forte L.P., over which he had control. From the start, Forte lied to investors about the returns, telling them he had earned more than 38 percent. He created and sent his own statements - another clear warning sign.
6 Pending civil judgments or involvement with shell companies are not deal-breakers but should warrant further investigation, according to a new book by former FBI agent Kenneth Springer called Digging for Disclosure: Tactics for Protecting Your Firm's Assets from Swindlers, Scammers and Imposters (FT Press, 2010).
Springer notes that frauds such as Allan Stanford of Stanford Financial actually have black marks on their names before being discovered to be involved with a much larger scam. He recommends consulting the website of the Financial Industry Regulatory Authority (www.finra.org), starting with a simple search under its "BrokerCheck" tab.
"Spend at least one-tenth of 1 percent of your investment on due diligence," he said. "Don't rely on others for your due diligence either, don't fall in love with the bottom line, and don't invest impulsively.
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