Stuck in Prison – Gordon Grigg scheduled for Release…Early!

May 28, 2014

Gordon Grigg…scheduled for release 9/29/2014.

Gordon GriggSeems the court has had a change of heart when it comes to Mr. Grigg.  Wonder what his victims have to say about his early release?

Here’s the earlier report:  https://chuckgallagher.wordpress.com/2010/05/10/gordon-grigg-staying-in-prison-says-judge-aleta-trauger-looks-like-the-good-deeds-dont-outweigh-the-bad/


Whatever Happened to the Criminal Justice System in the USA? Dan Frishberg’s Biz Radio Folly goes Unpunished and Dan’s still on the Radio… Go Figure!

July 20, 2012

It’s been a while…a long while since I turned my attention to Daniel ( Dan ) Frishberg – the radio personality who, with his partner Al Kaleta, caused many an investor to lose substantial funds in the failed Biz Radio debacle.  I received an email today from a defrocked investor in Dan Frishberg’s failed scheme asking “Whatever happened to the criminal justice system in the USA?  Dandy question, cause it seems that Dan Frishberg has effectively walked away with no criminal consequence to his very public investor fraud.   If you want to see background go to these wordpress posts on “The Money Man“.

In Dan Frishberg’s most recent report he states the following:

The key is to hold the right assets for enough time so that the investment can reap its full reward. It takes a lot confidence for an investor to believe that the company will not only be in business years from now but will continue to create an increasing amount of value several business cycles into the future. Successful investors are only able to hold on to stocks for the long term if they are able to create conviction with the proper due diligence, generate income, and protect their capital during uncertain times.

Hum…I read the words written and wonder!  You state, “It takes a lot confidence for an investor to believe that the company will not only be in business years from now but will continue to create an increasing amount of value several business cycles into the future.”  Yet, I wonder how the folks feel that listened to your advice on Biz Radio and your podcasts and YouTube and believed that you had a sustainable business model that would create an increasing amount of value to sustain them into the future.  Seems from all accounts that you and your cronies led folks into investing into nothing more than a Ponzi scheme and today they have lost.  But have you?

“Successful investors are only able to hold on to stocks for the long term if they are able to create conviction with the proper due diligence, generate income, and protect their capital during uncertain times.”  Dan those are your words.  Yet, you solicited investments that did not protect capital, generate income and were void of due diligence.  Shame on you…!  You survived, but what about those who trusted you?

I believe in Second Chances – in fact I wrote a book about it!  I know with every fiber of my being how you operate as (sadly) I was you at one time.  But there is one BIG DIFFERENCE.  I acknowledged my unethical actions, made restitution and changed my choices.  Seems accepting responsibility – which is the first step to recovery – is something that continues to allude you.  Isn’t it time – Dan Frishberg – to face the truth of your lies and deceptions – take responsibility – make restitution and then move forward with your life in an honest and ethical way.

You – Dan Frishberg – could be a leader in ethical business practice, sharing the truth of your folly and how unethical practice can be turned into societal good.  Sadly, Dan, it seems that you only know one thing – how to be a talking head on the radio.  Every choice has a consequence and the consequences of your choices are not over…cause karma’s a bitch.

If you have been defrauded by Dan Frishberg and Al Kaleta – feel free to share your experience so others can at least be warned!


$30 Million FOREX investment fraud – David R. Lewalski pleads guilty – prison likely to follow…

August 5, 2011

From time to time I wonder what motivates someone to perpetrate such a significant fraud?  Having been there, I understand that once the illusion is created it’s difficult to escape from the lack of reality that sets in, but still – what motivated it to start with?

David R. Lewalski, formerly of Gainesville, Fla., pleaded guilty today to mail fraud in connection with his operation of a $30 million investment fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Robert E. O’Neill of the Middle District of Florida.

Lewalski, 47, pleaded guilty before U.S. Magistrate Judge Mark A. Pizzo in the Middle District of Florida and faces a maximum penalty of 20 years in prison.

According to court documents, the defendant, who operated a company called Botfly LLC, willfully engineered and executed a scheme to defraud by promising victim investors that he could generate returns of up to 10 percent per month, compounded monthly, through his trading in the foreign currency (forex) market.  In fact, the defendant operated an investment fraud scheme.  The defendant and others working at his direction raised approximately $29,851,598 from victim investors, but the defendant used only a small percentage of those funds for forex trading (approximately $2.6 million), the vast majority of which he lost.

Lewalski admitted that instead of trading in the foreign currency market as he promised, he used the bulk of victim investor funds to make payments to other investors in order to perpetuate the scheme and make it appear as if he was generating the promised returns.  Lewalski paid investors $14,339,887 in “returns” that he led them to believe were generated by his forex trading when, in reality, he was merely paying them with other victim investors’ funds.  Lewalski also spent millions of dollars of victim investor funds on personal expenses, including high end real estate, private jet travel, luxury automobiles, computer equipment and jewelry.

YOUR COMMENTS WELCOME!


Financial Fraud earns Edward Louis Molz, III – aka Frank Sullivan 96 months in federal prison!

August 4, 2011

ETHICS AND WHITE COLLAR CRIME NEWS RELEASE:

Edward Louis Molz, III, aka “Frank Sullivan,” 29, of Plano, Texas, was sentenced by U.S. District Judge Sam A. Lindsay to 96 months in federal prison and ordered to pay $1,074,725 in restitution following his guilty plea in January to one count of wire fraud in connection with a fraudulent advance fee scheme he ran.

In addition, according to the plea agreement, Molz will be ordered to forfeit property that was derived from proceeds traceable to his offense, including funds seized on September 7, 2010, from the 3rd Street Financial LLC account at JPMorgan Chase, as well as a 2007 BMW 650, a 2005 Maserati and real estate located on Cartwright Street in Irving, Texas.

Molz was arrested in September 2010 at his home by FBI agents on wire fraud and mail fraud charges outlined in a federal criminal complaint, and was released on a personal recognizance bond. A federal grand jury returned a six-count indictment the following month charging Molz with four counts of wire fraud and two counts of mail fraud. In March 2011, Molz’s bond was revoked.

According to the factual resume filed in the case, from November 2009 through May 2010, Molz ran a scheme in which he induced small business owners, who were seeking alternative means of financing, to pay a fee to purchase an “aged” corporations. These “aged” corporations purportedly had access to lines of credit that were available to the purchaser.

To carry out his scheme, Molz established 3rd Street Financial, LLC, and, using the assumed name of “Frank Sullivan,” held himself out as its chief financial officer. He marketed 3rd Street Financial through a website and a loose association of financial brokers. He represented to potential purchasers that he had established and maintained a number of “aged” corporations which had been in existence for four to five years and had access to lines of credit between $250,000 and $400,000. For a $3250 acquisition fee, a purchaser could acquire a “Tier 1″ corporation with a minimum line of credit of $150,000. However, for a $6500 acquisition fee, a purchaser could acquire a “Tier 2″ corporation with a $250,000 minimum line of credit.

Molz represented that upon payment of the fees, he could deliver the aged corporation to a purchaser within nine to 12 weeks. He also represented that each “aged” corporation had additional benefits, including established “business trade lines,” a complete financial and business plan, a Dun & Bradstreet listing and three years of valid tax returns. He furnished potential purchasers with false and fictitious documents, including service agreements, testimonials from satisfied purchasers and letters from financial institutions confirming the issuance of lines of credit.

During the time frame mentioned above, approximately 247 individuals mailed or wired money to Molz and he deposited those funds into JPMorgan Chase and Compass Bank accounts. Molz did not deliver any “aged” corporations as promised. Instead, he used the money almost exclusively for his personal benefit, including the acquisition of personal assets and real estate.

YOUR COMMENTS ARE WELCOME


Social Security Fraud – Gaylynne Gale faces up to 10 years in federal prison…ouch…heavy price for a small benefit.

August 1, 2011

A 63-year-old Longview, Texas woman has pleaded guilty to social security fraud charges in the Eastern District of Texas, announced U.S. Attorney John M. Bales.  Facing up to 10 years in prison, Gaylynne Gale pleaded guilty to theft of government property charges today before U.S. Magistrate Judge Chad Everingham.

According to the indictment, from February 2004 until June 2010, Gale intentionally concealed her living arrangements with her ex-husband in order to receive more than $47,000 from the Social Security Administration in the form of Social Security Supplemental Security Income payments.  Her misrepresentation also caused a significant loss to the Texas Medicaid Program.  Gale was indicted by a federal grand jury on Sep. 1, 2010.

The Social Security Administration’s Supplemental Security Income (SSI) program is a federally administered cash assistance program designed to provide a floor of income for the aged, blind, or disabled who have little or no income or resources.  The Texas Medicaid program helps pay for reasonable and necessary medical procedures and services provided to individuals who are deemed eligible under state low-income programs.

YOUR COMMENTS ARE WELCOME!


Russell E. Mackert, Brent Oncale, David White, Eric M. Kruz, and Tomme Bromseth sentenced to significant prison sentences for $100 million fraud scheme!

August 1, 2011

Five employees for A&O Resource Management Ltd. and various related entities – including two executives – were sentenced recently for their roles in a $100 million fraud scheme with more than 800 victims across the United States and Canada.

The sentences were announced by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Assistant Attorney General Lanny A. Breuer of the Criminal Division.

The five individuals were sentenced by U.S. District Judge Robert E. Payne.  Russell E. Mackert, 52, general counsel for A&O, was sentenced to 188 months in prison; Brent Oncale, 36, former owner and founder of A&O, was sentenced to 120 months in prison; David White, 41, the former president of A&O, was sentenced to 60 months in prison; Eric M. Kurz, 47, a wholesaler of A&O investment products, was sentenced to 60 months in prison; and Tomme Bromseth, 69, an A&O sales agent in the Richmond area, was sentenced to 36 months in prison.

“The impact of this massive fraud on many of A&O’s investor victims has been disastrous,” said U.S. Attorney MacBride.  “Hundreds of elderly investors invested their life savings with A&O and saw it all vanish in an instant.  These investors were not looking for quick cash, just a safe alternative to invest their retirement funds.  The safety, security, and no-risk nature of the investment was critical to the sales pitch, and it was all a big fat lie.”

“Brent Oncale and his co-conspirators operated a sham investment company that turned fraud and deceit into a business model,” said Assistant Attorney General Breuer.  “They stole millions from hundreds of unsuspecting investors, pocketing huge sums for themselves. Today’s sentences reflect the severity of these cowardly and costly crimes.”

All five men pleaded guilty in the fall of 2010 and early 2011 for their roles in the fraud scheme at A&O, which falsely marketed life settlement products to investors, many of whom were elderly.  The conspirators at A&O defrauded investors by making misrepresentations about A&O’s prior success, its size and office locations, its number of employees, the risks of its investment offerings, and its safekeeping and use of investor funds.

When state regulators began to scrutinize A&O’s investment products, conspirators manufactured a sham sales transaction to “sell” A&O to an offshore shell corporate entity named Blue Dymond and later to another offshore shell corporate entity named Physician’s Trust.  However, A&O and Physician’s Trust was still secretly controlled by A&O principals and their conspirators.

It was a bold scheme that saw Mackert, 52, create sham companies, make up the name “R.J. Stephenson” as a fictional representative, hire an actor who pretended to do due diligence on a sale, and slip $10 million in cashier’s checks past customs in Fort Lauderdale to deposit in a secret trust account in Nevis.

On June 6, 2011, the hedge fund manager of A&O, Adley H. Abdulwahab, 35, of Houston, was convicted by a jury in Richmond, Va., of one count of conspiracy to commit mail fraud, five counts of mail fraud, one count of conspiracy to commit money laundering, five counts of money laundering and three counts of securities fraud.   A founder of A&O, Christian Allmendinger, 39, was convicted by a jury on March 23, 2011, of one count of conspiracy to commit mail fraud, two counts of mail fraud, one count of conspiracy to commit money laundering, two counts of money laundering and one count of securities fraud.  Abdulwahab is scheduled to be sentenced on Sept. 28, 2011, and Allmendinger is scheduled to be sentenced on Aug. 14, 2011.  They face up to 20 years in prison on each count except the securities fraud counts, on which they face up to five years in prison.

YOUR COMMENTS ARE WELCOME!


Le-Nature’s fraud “the largest in the history of the Western District of Pennsylvania” – Robert B. Lynn found guilty of Bank Fraud!

July 31, 2011

Losses hidden by false documents leads to massive collapse and huge losses.  Every choice has a consequence and this scheme left many holding the bag with financial losses.

After deliberating 16 hours, a federal jury of nine women and three men found Robert B. Lynn guilty of 10 counts of bank fraud, wire fraud and conspiracy relating to the operations of Le-Nature’s, Inc., the Latrobe, Pennsylvania water bottler that collapsed in bankruptcy in 2006, United States Attorney David J. Hickton announced.

Lynn, 67, of Westmoreland County, Pa., was tried before Senior United States District Judge Alan N. Bloch in Pittsburgh, Pennsylvania.

“The Le-Nature’s fraud was the largest financial fraud in the history of the Western District of Pennsylvania,” said U.S. Attorney Hickton. “The public interest demands effective prosecution of all crimes, and this was one of special magnitude. At the end of this lengthy investigation and trial, we are gratified by the diligent work of the jury in reaching its verdict.”

According to Assistant United States Attorneys James Y. Garrett and Robert S. Cessar, who prosecuted the case, the evidence presented at trial established that the defendant ran Le-Nature’s sales operations.  While the company was losing millions on its products during the years 2001 to 2006, Lynn and other company executives provided false information about its business activity and financial condition to investors and lenders, making it seem the company was profitable and expanding.  As a result of the false information, lenders and investors advanced funding to Le-Nature’s of more than $800 million during the scheme.  When the company collapsed, the losses were approximately $600 million.

Five other defendants charged in the scheme pleaded guilty earlier.  They were Gregory J. Podlucky, 50, of Westmoreland County, Jonathan Podlucky, 37, of Westmoreland County, Andrew J. Murin, Jr., 54, of Washington County, Donald Pollinger, 67, of Charlotte, North Carolina, and Tammy Andreycak, 43, of Westmoreland County.

Judge Bloch scheduled sentencing for Dec. 1, 2011. Based on Lynn’s convictions, the law provides for a total sentence of 220 years in prison, a fine of $2.5 million, or both.  Under the Federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offenses and the criminal history, if any, of the defendant.

Pending sentencing, the court allowed Lynn to remain free on bond.

The Internal Revenue Service/Criminal Investigation and the United States Postal Inspection Service conducted the investigation that led to the prosecution of Robert B. Lynn.

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