Briefings
MISHCON FRAUD WATCH
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28 July 2009
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Welcome to the July 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)
The SFO has obtained a restraining order over $100m of assets, which are believed to have been acquired in connection with an alleged $7bn investment fraud operated by Robert Allen Stanford, Stanford International Bank and others.
SFO press release, 30 June 2009
Alan Gardner has been found guilty of defrauding four British and Canadian expatriates living in Indonesia. Mr Gardner used Aegis Forex Fund, a fictitious foreign currency trading scheme to defraud investors of $800,000.
SFO press release, 23 June 2009
Four men have been given prison sentences totalling over 10 years after they admitted defrauding investors worldwide of over $10m. The fraud, which involved Maincrest Investments Ltd and London & General Finance Ltd, ran between 1996 and 1998 and centred on a scheme to extract gold from spent ore.
SFO press release, 19 June 2009
NORTH AMERICA
Banking and Finance
Bernard Madoff has been sentenced to 150 years in prison after being found guilty of orchestrating a £65bn ponzi scheme fraud. The US Attorney's office is continuing its investigation into the fraud.
James Quinn
The Daily Telegraph, 30 June 2009
Securities and Exchange Commission (SEC)
The SEC has charged Cohmad Securities Corporation, Maurice J. Cohn, Marcia B. Cohn and Robert M. Jafa in connection with an alleged securities fraud. The SEC allege that the men continued to market investment opportunities with Bernard Madoff while knowing, or recklessly disregarding facts indicating, that Madoff was operating a fraud.
SEC press release 2009-141, 22 June 2009
The SEC has charged Mark Kuhrt and Gilberto Lopez, accountants for companies affiliated to Robert Stanford, in connection with the alleged fabrication of financial statements. The SEC has also charged Leroy King, the administrator and chief executive officer of Antigua's Financial Services Regulatory Commission, with accepting bribes in connection with an alleged ponzi scheme run by Mr Stanford.
SEC press release 2009-140, 19 June 2009
The SEC has charged Angelo Mozilo, David Sambol and Eric Sieracki, former executives with Countrywide Financial, in connection with an alleged securities fraud. The charges relate to assurances made to investors that Countrywide was primarily a prime quality mortgage lender.
SEC press release 2009-129, 4 June 2009
MIDDLE EAST
Government
Avraham Hirchson, the former Israeli finance minister, has been found guilty of theft, fraud and money laundering, in connection with allegations he stole Shk2.5m while working as head of the National Workers Organisation.
Financial Times, 9 June 2009
ASIA
Shipping
Forty-six people in Taiwan have been charged in connection with allegedly fraudulently inflating cargo figures claim government incentives. Those charged include officials from Evergreen Marine, Wan Hai, Yangming Marine and APL. Shieh Ming-hui, director-general of the Kaoh-siung harbour bureau has also been charged.
Robin Kwong, Taipei
Financial Times, 19 June 2009
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.