Mishcon Fraud Watch - May 2010
Welcome to the May 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 judgement 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”)
Kevin Foster has been jailed for ten years for running an unauthorised investment business and for stealing investors' funds through his £34 million KF Concept scheme.
SFO press release, 16 April 2010
Financial Services
British businessman Charles Ridley and six others have been accused of allegedly defrauding Dubai Islamic Bank by misusing funds loaned to CCH by DIB and counterfeiting receipts of false deals.
Simeon Kerr
Financial Times, 6 April 2010
NORTH AMERICA
Securities and Exchange Commission (“SEC”)
The SEC has charged Nevin K. Shapiro, founder and president of Capitol Investments USA, Inc, over allegations of fraud for orchestrating a $900 million offering and Ponzi scheme.
SEC press release 2010-63 21 April 2010
The SEC has charged Goldman, Sachs & Co over allegations of defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages.
SEC press release 2010-59 16 April 2010
The SEC has charged private investment firms Quadrangle Group LLC and Quadrangle GP Investors II over allegations of participating in a widespread kickback scheme to obtain investments from New York's largest pension fund.
SEC press release 2010-58 15 April 2010
EUROPE
Telecommunications
The chief executive of Swisscom has stated that he expects the total exposure of its Italian subsidiary Fastweb to a complex fraud and tax evasion investigation in Italy to cost approximately €81m.
Vincent Boland
Financial Times, 12 April 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.