Securities Fraud

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After I wrote my November 28th, 2009 “Asset Search News Roundup” about Minneapolis money manager Trevor Cook, he was incarcerated on January 25, 2010 for civil contempt of court.  As the Court stated in its January 25, 2010 Opinion, the Securities and Exchange Commission and the Commodity Futures Trading Commission previously filed for injunctive relief against Mr. Cook.

They sought injunctive relief because Mr. Cook had allegedly participated in a Ponzi-like securities fraud which might have involved at least $190 million taken from 1000 or more victims.  Also according to the January 25th Opinion, Mr. Cook violated a November 23, 2009 asset freeze by dissipating assets.  The Court therefore remanded Mr. Cook to jail until “he purges himself of the contempt” by turning over:

  • $27,061,728.35 in foreign accounts;
  • $670,000 in cash;
  • $62,000 transferred to Mr. Cook’s brother;
  • $6,141,470 paid to preferred persons;
  • $2,005,857.88 in domestic accounts;
  • $53,000 from the sale of a Maserati & Hummer;
  • a computer and documents formerly possessed by Mr. Cook’s assistant;
  • a houseboat & a submarine;
  • his BMW, Lexus 430 & Lexus SUV;
  • his Bon Jovi tickets purchased in 2009;
  • and his collections of Faberge eggs and watches;

Continue Reading Mr. Cook Continues His Incarceration For Civil Contempt

This "Asset Search News Roundup" contains a copy of the indictment filed against Minneapolis auto magnate Dennis Hecker.  It also discusses the securities fraud complaints pending in New York against Bank of America.
 

  1. A press release from the U.S. Department of Justice announced that Mr. Hecker was indicted last Wednesday for allegedly hiding his

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The securities fraud complaint in Nesbeth v. USMIO, Docket No: 09−cv−62042−WJZ, alleges that Wachovia Bank caused damage to the supposed victims of a Ponzi scheme. This complaint, (referred to hereinafter as “the Florida Complaint“), also asserts claims against: MasterCard Worldwide, Mr. David Smith of Jamaica, Overseas Locket Corporation formed in Jamaica, Former Premier Michael Misick of the Turks and Caicos Islands, etc.

The Florida Complaint alleges that Mr. David Smith had operated a Ponzi scheme which reportedly involved six thousand victims from the Jamaican community and might have caused $220 million in losses. Florida Complaint at  ¶¶31, 37 & 38.  The suspected illicit proceeds of the scheme may have been used to invest in businesses and possibly pay for: real property, a lavish cruise, valuable watches (i.e. portable valuable commodities), ornamental furniture and exotic automobiles.  Florida Complaint at ¶52.

According to the Florida Complaint at ¶49, proceeds from the scheme had additionally been laundered through bank accounts, including one maintained at Wachovia.  Like the Wisconsin Complaint earlier provided at “Associated Bank Sued For Supposedly Ignoring Red Flags“, the Florida Complaint essentially claims that a bank’s anti-money laundering program / Customer Identification Program pursuant to 31 CFR 103.121 ¶ (b) (2) (i), failed.Continue Reading Lawsuit Claims Wachovia Bank Facilitated Alleged Ponzi Scheme

The January 9th "Asset Search News Roundup" provides an update on a couple of matters from Minnesota:

  1. Both "Money Laundering By Minneapolis Managers?" and "Associated Bank Sued For Supposedly Ignoring Red Flags" described pending civil complaints against suspected securities fraudsters Trevor Cook, Patrick Kiley and their companies.  Another complaint filed against

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The Polish power and telecommunications company Elektrim SA has been in bankruptcy proceedings since 2007.  It still controls, (and owns an estimated 47% of),  Zespol Elektrowni Patnow-Adamow-Konin SA (“ZE PAK”).  ZE PAK generates about 8.5% of all of Poland’s electricity, as was just mentioned by “Enea, ‘Several’ Others Bid for Polish Power Group PAK (Update2)“.

Elektrim is also the subject of a criminal investigation by Warsaw prosecutors who have uncovered alleged irregularities believed to have occurred between 1999 and 2002.  They claim that Elektrim may have failed to perform trade agreements and conceivably caused property loss in violation of Article 296 paragraphs 1 & 3 of Poland’s Criminal Code.

These same prosecutors additionally appear to be focused on U.S. businesswoman Barbara J. Lundberg, who had been Elektrim’s president from 1999 until she was fired in 2001.  Time Magazine’s “Mrs. Big’s Big Deals” published in 2000, had characterized Ms. Lundberg as “one of Warsaw’s most influential executives“.  The Warsaw prosecutors meanwhile claimed via their March 21, 2006 letter rogatory pictured below, that there were “changes in the existing profile of the company’s business” after Ms. Lundberg became Elektrim’s president:

 

 (To Read The Letter Rogatory Click On The Image Above)Continue Reading Alleged Irregularities At Elektrim Lead Warsaw Prosecutors To Delaware

My article "Money Laundering By Minneapolis Money Managers?" reports that a lawsuit against Patrick Kiley, Trevor Cook and other money managers, had raised the question of whether Associated Bank breached a duty to prevent suspected money laundering.  As I mentioned in that article, Associated Bank could have conceivably failed to follow a written Customer Identification Program under 31 CFR 103.121 ¶ (b) (2) (i).

After I wrote "Money Laundering By Minneapolis Money Managers?", two lawsuits were filed against Associated Bank raising these same issues.  The gravamen of said lawsuits, was that Associated Bank had supposedly been negligent in allowing suspected securities fraudsters to open and maintain a nominee bank account in the name of Crown Forex LLC.  Crown Forex LLC was reportedly a sham business entity and its Associated Bank account was possibly used as a laundering link to wash some of the proceeds of a suspected securities fraud.

The first of these lawsuits was briefly filed in Minneapolis federal court via a November 4, 2009, third amended complaint.  That Minneapolis lawsuit against Associated Bank, was soon voluntarily dismissed pursuant to a December 9, 2009 filing and the Court’s December 10, 2009, Order.  The second lawsuit against Associated Bank, (Herman Grad vs. Associated Bank NA, Brown County Case #2009-CV-002949), is however, still pending in Wisconsin. Continue Reading Associated Bank Sued For Supposedly Ignoring Red Flags

On November 23rd the U.S. SEC commenced its enforcement action by filing the following civil complaint for suspected securities fraud against Minneapolis money managers Trevor Cook and Patrick Kiley:

 

(To Read The SEC’s Complaint, Click On It)

As I last wrote in my  October 29th "Asset Search News Roundup", Mr. Cook and Mr. Kiley could conceivably also face money laundering charges.  If this happens, they would be following in the footsteps of other suspected Ponzi schemers who were named in SEC civil complaints and then criminally prosecuted for alleged money laundering or other suspected financial frauds.Continue Reading Asset Search News Roundup: November 28, 2009