Mishcon Fraud Watch - August 2010
Welcome to the August edition of Mishcon Fraud Watch, prepared by the Fraud & Insolvency Group at Mishcon de Reya. Its aim is to provide businesses and their advisors with a snapshot of what has been happening in the world of fraud in the last month.
We make no judgment whatsoever as to the morality, legality or appropriateness of the conduct which forms the subject matter of this bulletin. We simply aim to bring these matters to the attention of those involved in the prevention, detection and investigation of fraud.
UNITED KINGDOM
Serious Fraud Office (SFO)
The SFO has reported that former Imperial Consolidated Group director William (Bill) Godley has pleaded guilty to charges of alleged conspiracy to defraud investors at Blackfriars Crown Court.
SFO Press Release, 5 July 2010
Financial Services
Business Consulting International owner Kautilya Pruthi has been accused of using his business to mastermind one of Britain's biggest "Ponzi" schemes to defraud hundreds of investors of over £100 million.
The Times, 31 July 2010
In a judgment that paves the way for Asil Nadir, former chairman of Polly Peck, to face prosecution over an alleged £34m fraud, Mr Justice Bean has ordered Mr Nadir, who denies the allegations, to appear over long-standing theft charges rather than of fleeing bail.
The Times, 30 July 2010
NORTH AMERICA
Securities and Exchange Commission (SEC)
The SEC has charged Samuel E. Wyly and Charles J. Wyly, Jr. of Dallas over allegations of obtaining more than $550 million in undisclosed gains violating federal securities laws governing ownership and insider trading.
SEC press release 2010-137 29 July 2010
The SEC has charged General Electric Company over allegations of violation of the Foreign Corrupt Practices Act for its involvement in a $3.6 million kickback scheme with Iraqi government agencies to win contracts.
SEC press release 2010-133 27 July 2010
The SEC has announced that Goldman Sachs & Co. will pay $550 million and reform its business practices to settle SEC charges that Goldman misled investors in a subprime mortgage product.
SEC press release 2010-123 15 July 2010
The SEC has charged Italian company ENI, S.p.A. and its former Dutch subsidiary Snamprogetti Netherlands B.V. with multiple violations of the Foreign Corrupt Practices Act (FCPA) over allegations that bribes were funnelled to Nigerian government officials to obtain several contracts.
SEC press release 2010-119 7 July 2010
Art
In what has been described by prosecutors as one of the biggest art frauds in New York State history, art dealer Larry Salander faces judgment over obtaining money under false pretences by juggling art, money and creditors.
Colin Gleadell
Daily Telegraph, 27 July 2010
Insurance
American International Group Inc. (AIG) and some of its directors and officers have agreed to a $725m (£475m) settlement to resolve allegations of wide-ranging fraud laid out in a class action suit led by three Ohio pension funds.
Francesco Guerrera and Justin Baer
Financial Times, 29 July 2010
EUROPE
Financial Services
A Société Générale investment banking boss, Jean-Pierre Mustier, embroiled in the French bank's rogue trader case, has been fined £82,000 for insider trading.
Christine Seib
The Times, 1 July 2010
Mishcon de Reya
Mishcon's Fraud Watch is published by the Fraud & Insolvency Group of Mishcon de Reya Solicitors. Widely recognised as the leader in the field of fraud investigations, the Group has pioneered the use of financial fraud techniques in numerous fields, including the rapidly growing areas of theft of confidential information and counterfeiting. The Group founded and run both the Fraud Network, made up of international legal fraud specialists and the Financial Risk Group, for risk and compliance officers.