JD Journal » defrauding investors

Man Accused of Massive Ponzi Scheme to Remain in Jail to Await Trial

aostler — Wed, 16 Mar 2011 00:40:07 +0000

R. Allen Stanford, former Texas financier, tried to post bond and be released from jail while awaiting trial, but was refused by a federal appeals court. Stanford has been accused of a massive Ponzi scheme, which he was arrested for in 2009. He was charged by the SEC with “massive ongoing fraud” that involved a total of about $8 billion in certificates of deposits. His company, Stanford Financial Group, is accused of being a front for his Ponzi scheme, allowing him to misappropriate the money given to him by investors.

Stanford’s trial date was originally set for January 2011, but due to health problems it has been delayed until a later court appointed date. Psychiatrists examined him and said that he has been suffering with delirium associated with an addiction to a strong medication he has been taking for anxiety, and has suffered an injury to his brain after being beaten by a prison inmate in 2009, which would make him incompetent to stand trial.

There have been 21 counts of money laundering, fraud, and obstruction charged against Stanford, although he has pled not guilty to all of them. If he is convicted, he could face up to 375 years in jail. He is currently awaiting his trial at the Federal Detention Center in Houston.

More Bad News for Scott Rothstein

joshua — Tue, 10 Nov 2009 01:26:24 +0000

Scott Rothstein, the lawyer whose firm has gone into receivership after he was accused of defrauding investors through a ponzi scheme, faces more bad news today. The government is seeking civil forfeiture of eight properties belonging to Rothstein, alleging that they were financed with ill gotten gains.

Meanwhile, the court has ordered Toronto Dominion Bank to turn over all records related to Rothstein and his firm to the cour appointed receiver.

This is an update to a story we’ve been following for a week. Earlier reports can be found here and here.

Disbarred Attorney Caught in Madoff Web

Erik Even — Wed, 28 Jan 2009 17:01:11 +0000

A former lawyer, who was disbarred in the 1980s taking client escrow funds, has been charged with defrauding investors of out of millions of dollars as a hedge fund manager.

Say, Buffy, let us invest our wealth with the fellow who was disbarred for stealing funds!

Arthur G. Nadel, 76, made his initial appearance before a federal magistrate judge in the Middle District of Florida in Tampa. He turned himself in after spending two weeks on the lam. Next he will be charged in New York’s Southern District, where he faces securities and mail fraud allegations brought by prosecutors who say more than $200 million is missing.

Nadel, prominent in Sarasota, Florida social and philanthropic circles, claimed to investors and partners that returns on investments in two groups of funds he managed from 1999 through 2007 averaged more than 20% per year. Sound familiar?

FBI Special Agent Kevin G. Riordan tied Nadel’s flight to the publicity from the December arrest of Bernie Madoff in a multi-billion dollar Ponzi scheme. Nadel fled after a business partner, concerned about the Madoff affair, asked Nagel to audit the funds he ran.

Nadel left a note telling his family he would not return, and advising his wife to get a hold of certain funds before it was too late. He also said he might kill himself.

Nadel advised six funds divided into two groups. Hundreds of investors put $210 million into one group, several gave $60 million to Nadel to invest in the other. But by the end of 2008, there was less than $125,000 left in the two groups.

A 1957 graduate of New York University School of Law, Nadel was admitted to the New York bar in 1958, but lost his license to practice for taking client escrow funds.

Photo via May Blog.