Investment Warning - US Update

Latest additions to the SEC Investor Complaints List

The following company names have been added to the Public Alert: Unregistered Soliciting Entities (PAUSE) in the USA.

FinTrade Advisors Inc.
Morisson Ventures Inc.
Nevada Transfer Agent.
Quantum Reliance Group.
U.S. Financial Management Service.
York & Williamson.
Alliance Group Inc. / Alliance Insurance Agency.
Alliance Transfer Inc.
Capgemini Law Mergers & Acquisitions.
Colonial Trust Transfer Agency LLC.

The SEC (Securities Exchange Comission) has looked into these complaints and has learned that in many cases, the soliciting entities are not registered in the United States as they claim or imply. In an effort to warn the public about these entities, the SEC is publishing information it has learned in reviewing these complaints.

For each of the entities named below, our staff has determined either (1) that there is no US registered securities firm with this name, or (2) that there is a US registered securities firm with the same (or a similar) name but that solicitations appear to have been made by persons who are not affiliated with the US registered securities firm.

Any call out of the blue to sell or even offer to buy any shares you may hold is likely to be a boiler room. With the downturn in the economy it is important to be more careful than ever. Elaborate stories of takeovers of what would appear to be worthless companies are on the increase from fave investment firms, only later to require a security deposit of trading fee of some kind. This is an extention of the traditional boiler room scam.

Been contacted by a boiler room? Find out what you can do.

Investment Warning - Latest Updates

Investment Warnings Update

The following companies have had warnings issued about them from the relevant authorities regarding their trading activities.

Brentwood Group Ltd

By publication in the official gazette "Amtsblatt zur Wiener Zeitung" of 03 April 2009, the FMA is exercising this right and warns against financial service transactions requiring a licence with the following provider:

Brentwood Group Ltd.
Level 15,
Tokyo Ginko Kyokai Building,
1-3-1 Marunouchi,
Chiyoda-Ku,
Tokyo,
Japan
100-0005
Tel: +813-4580-1760, +813-6688-4521
Fax: +813-4496-6228

This provider does not possess a licence issued by the FMA to provide investment services in Austria. Therefore, it is neither allowed to provide investment advice regarding financial instruments, nor portfolio management, i.e. managing portfolios for individual customers who authorise a room for manoeuvre, provided that the customer portfolio contains one or several financial instruments. Furthermore, the provider is also not entitled to accept or transmit transactions, provided that such activity involves one or several financial instruments.

Reality National Bank (RNB)

According to the Jersey Financial Services Commission RNB is carrying on or holding out that it is carrying on deposit taking business in Jersy when it is not authorised to do so pursuant to the provisions of the banking business law.

Global Asset Group

Global Asset Group is not authorised by Finansinspektionen (the Swedish Financial Supervisory Authority) and is therefore not entitled to provide financial services.

Global Asset Group has a website (www.global-asset-group.com) using the following address:

Beulstrasse 20,
Hergisvil,
Switzerland
6052.

Global Asset Group's representatives contact investors in Sweden by telephone, cold calling.

Silverman International

Silverman International has been listed on the FSA warning list, unfortunately there is no further information available from the authority to inform investors.

Lehman Brothers & Associates Corp

The Danish Financial Supervisory Authority has been informed that a company named Lehman Brothers & Associates Corp, unsolicited has contacted a Danish citizen. The company appears to operate from Montréal in Canada and the company's homepage is http://lehmanbrotherscorp.com

According to the information given to The Danish Financial Supervisory Authority, the company has offered transmission of orders in shares.

Lehman Brothers & Associates Corp. does not have authorization from the Danish Financial Supervisory Authority in accordance with the Financial Business Act to carry out such services in Denmark.

Have you been mis-sold an investment? Find out more about what you can do about it.

Turkish Investment Property Fraud Goes To EU Parliment

DİDİM - Claiming they were victims of a property scam, a group of British and Irish expatriates take their legal battle to the next level. They are about to start interviews at the EUParliament, while one couple is taking the case to the European Court of Human Rights.

A group of British and Irish residents in Aydın’s Didim claim they were deceived when buying property in the area and were going to the European Parliament on the grounds their rights were not equally observed in Turkey. The group said they would also complain to governments and the press in their own countries and have named themselves the "Association Seeking Justice." Three members of the group have left for Brussels for a series of interviews at the EU Parliament to present their case.

Meanwhile, Irish parliamentarian, Jim Allister, has also sent a letter to Justice Minister Mehmet Ali Şahin asking him to take the complaints into consideration. Didim is a popular town in Turkey’s Aegean region for British and Irish pensioners looking to retire, but for some the seaside paradise has been marred by property scam nightmares.

After a rise in property scams, victims in Didim established the "Association Seeking Justice" to protect their rights. The popularity of seaside resorts has led to similar problems in other countries. In Spain, "Abusos-Urbanisticos No!" is a group of mostly foreign nationals who have suffered real estate injustices and have been fighting their way through the EU Parliament for years.

Fighting fraud

One British couple in Turkey is prepared to take their case the European Court of Human Rights, as real estate fraud increases internationally. The 150-member association’s spokesman who went to Brussels yesterday, Robert Bailei, explained the reason for their visit to the European Parliament: "We are going to have talks to ask the European Parliament to take a firm and active role in preventing real estate fraud in Turkey and push the Turkish government to punish these people who scam foreigners. "Our next stop will be the Turkish Parliament. We will ask Turkish parliamentarians to take action to clarify the law on property ownership of foreigners and increase controls on real estate. If Turkey cannot solve this real estate corruption, I am afraid it will be very hard for Turkey to enter the European Union because EU citizens are being deceived here."

Most of the association’s members claim that two people involved, Irishman Kevin O’Kane and his Turkish partner, Kubilay Atmaca, used fake title deeds in selling property. O'Kane and Atmaca are being judged in both Turkey and Ireland.

Courtesy of Hurriyet Daily News

Worldwide Destinations - Peter Morris Held In Egypt

"I’M LOCKED UP OVER PROPERTY CON BUT I DID NOTHING WRONG"

A BRITISH businessman is being held in an Egyptian jail after being arrested in connection with a suspected multi-million pound property fraud.

Peter Morris, 46, has been locked in a filthy cell for five weeks after Egyptian authorities said he was behind an international scam involving Sean Woodhall, a convicted conman who went missing in a mysterious plane crash in Brazil last year.

Mr Morris became the sole director of Worldwide Destinations, a property company owned by the Woodhall family, in February following a request from administrators. He pleaded last night: “Please help me. It is killing me to be in here. I have committed no crime.” During the past three years, the company based in Cambridgeshire has sold hundreds of off-plan apartments to British investors in the Red Sea resort of Hurghada. Some 300 investors paid an average of £40,000 as deposits, but the builders El Riad claim that more than £2million of the money failed to reach them and is now refusing to hand over any keys until it has been paid. El Riad invited Mr Morris to Egypt for negotiations last month, but soon after touching down he was arrested and accused of fraud.

Mr Morris, who shares a cell with 50 others, including alleged murderers, claims he was entrapped. Woodhall, 43, received an 18-month suspended sentence in 2001 for an advertising fraud in Birmingham. Worldwide Destinations foundered and half-brother Mark Lovelock ran Worldwide, but revenues dried up. When clients started complaining about problems completing their deals, Mr Morris was asked to help by Grant Thornton administrators.

After five weeks’ sleeping on a cell floor and sharing one toilet with 50 other inmates, Mr Morris is in poor health. Yet no formal charges have been made. He said: “I only came out here to try to help people who were having problems with their properties and I ended up being arrested.”
His wife Helen, 36, and daughter Danni, 11, are anxiously waiting for news at their home in Great Cambourne, Cambridgeshire. Mrs Morris, who has only had one two-minute phone call with her husband and an email in which he told her a visit would be too distressing, said: “We are both distraught.

“I just hope he holds it together out there and this all ends as quickly as possible. I just wish Peter had never got involved with the Woodhall family.”

Builders El Riad claim that Mr Morris, when he was Worldwide’s master agent, was not legally entitled to sign purchase contracts with British investors, but he insists he had full power of attorney from Sean Woodhall.

El Riad has now told hundreds of British customers that if they do not fly to Egypt to sign new contracts and pay “maintenance and legal costs” of £4,000, they risk losing their apartments.
Mohamed Hussein, a partner in El Riad, said: “I cannot understand why people who have paid around £40,000 for their apartments would not spend £400 on a plane fare to come and sort out the problem.

“I like the British and I want to do more business with them. I am trying to help these people. I have lost a lot of money already because I have not been paid by them.”
Britons living in Wordwide Destinations’s Desert Pearl resort claim that El Riad has cut their power supplies. They are also concerned that their properties were not “free of encumbrance”, as their contracts claimed, as the landowners had taken out a prior mortgage on the site, which now risks being called in.

Former printer Gary Barrett, 41, and his wife Kim, 40, of Romford, Essex, spent £35,000 on one apartment and £19,000 on a second, which is still under construction. Kim said: “We were told out of the blue that the builder had padlocked the gates and changed the locks and that the apartment is no longer ours. The same is going to happen to the second.”

A Foreign Office spokesman said it has monitoring Mr Morris’s situation.

Courtesy of The Daily Express

UPDATE: An extensive forum can be seen on Worldwide Destinations at Propertyhotspotsworldwide.com

Investment Warning - IntraTech Capital

Investment Warning against IntraTech Capital

IntraTech Capital is not authorised by Finansinspektionen (the Swedish Financial Supervisory Authority) and is therefore not entitled to provide financial services.

IntraTech Capital has a website (www.intratechcapital.com) using the following address:

Place Mozart,
2 Bis Avenue,
Durante 06000
Nice,
France.

IntraTech Capital's representatives contact investors in Sweden by telephone and offer them to buy shares in an American OTC company.

Courtesy of The Swedish Financial Supervisory Authority.

Have you been called by an unlicenced broker offering Over The Counter shares?

Investment Warning - Hua-tong Finance and Investment Company Limited

Warning against Hua-tong Finance and Investment Company Limited.

According to The Securities and Futures Commission (SFC) Hua-tong Finance and Investment Company Limited is an unlicensed entity, claiming to be a financial investment company set up in Hong Kong in November 1985 and have HK$9.8 billion in its investment portfolio. It appears to target overseas investors to provide gold and futures trading.

The Company details are given as;

1 International Finance Centre.
1 Harbour View Street,
Central.
Hong Kong.

www.hk-huatong.com

Courtesy of The Securities and Futures Commission (SFC)

Investment Warning - Peninsula Capital Limited

Warning against Peninsula Capital Limited.

According to Invested and The Securities and Futures Commission (SFC), Peninsula Capital Limited is an unlicensed entity.

Contact details used by the company are;

Room 3607,
The Center.
99 Queen's Road.
Central
Hong Kong

www.peninsulacapitalhk.com

The Company is said to be targeting non-US investors to buy over the counter (OTC) stocks.

Courtesy of the investor portal of the SFC.

Investment Warning - Partners and Ru Asset Management

Warning against Partners & Ru Asset Management

Partners & Ru Asset Management is not authorised by Finansinspektionen (the Swedish Financial Supervisory Authority) and is therefore not entitled to provide financial services.

Partners & Ru Asset Management has a website (www.partnersruassetmanagement.com) using the following address:

1090 Vermont Ave N.W.
Washington DC 20005,
USA.

Partners & Ru Asset Management's representatives contact investors in Sweden by telephone, cold calling.

Courtesy of The Swedish Financial Supervisory Authority

Find out more about cold calls and investment offerings

Investment Warning - New York Capital Investment

Investment warning against New York Capital Investment.

New York Capital Investment is not authorised by Finansinspektionen (the Swedish Financial Supervisory Authority) and is therefore not entitled to provide financial services.

New York Capital Investment has a website (www.nycapitalinvestment.com) using the following address:

2 Penn Plaza
44 Wall Street
New York,
NY 10121.

New York Capital Investment's representatives contact investors in Sweden by telephone, cold calling.

Courtesy of The Swedish Financial Supervisory Authority

Find out more about this type unauthorized investment offering.

11 Year Sentence for Mortgage Scam

11 Years For Con Mastermind.

A BUSINESSMAN who masterminded a £800,000 mortgage scam has been jailed for 11 years.

Accountant and financial advisor Rashid Farid ran a sophisticated con using the internet to alter Land Registry records and obtain mortgages or remortgages on properties, netting £787,050.

During a nine-week trial at Bradford Crown Court a jury heard money paid out by Birmingham Midshires and The Mortgage Business, which were both part of the Halifax Bank of Scotland, was then laundered through other people's accounts and large sums sent to Pakistan. Prosecutor Tom Storey said legitimate householders then had to spend significant time and money persuading the Land Registry to put properties back into their names.

Farid, 30, of Lemans Drive, Batley, was a registered mortgage broker for Lifestyle Mortgages (Kirklees) in Daisy Hill, Dewsbury. His barrister Jonathan Mann accepted there had been victims of the fraud. Mr Mann said: "Mr Farid was a successful businessman before committing these offences," adding that his client did not need the cash or have a lavish lifestyle. "The root cause of the offending was more to do with the intellectual challenge of beating the system," said Mr Mann. Judge Jonathan Durham Hall QC called for an urgent review of the Land Registry Act which provided "a gaping opportunity" for the offences to be committed.

Farid used details of other people without them knowing or altered information held by the Land Registry to apply for the mortgages. He was found guilty of conspiracy to commit fraud by false representation, perverting the course of justice and transferring criminal property. He was jailed with his brother Mohammed Jahangir Farid, 26, and his father Mohammed Farid, 53, also of Lemans Drive. They were both convicted of a money-laundering offence and jailed for four years and two years respectively.

The judge told Rashid Farid he had destroyed his family by involving them in the deceit which happened between March 2006 and October 2007. He added: "This was an utterly sophisticated, meticulously organised crime." Two other men who admitted an involvement and money-laundering, Mohammed Rafiq, 50, of Queens Road, Halifax, and Mohammed Ali, 42, of All Saints Court, Keighley, were jailed for three-and-a-half years. Imran Hussain, 31, of Burley Road, Leeds and another man, who cannot be named for legal reasons, also received three-and-a-half year after being found guilty of money laundering. Five other men were cleared of any involvement: Javed Iqbal, 43, of Wigan; Nadim Farid, 29, of Lemans Drive, Batley; Ihsan Meer, 45, of West Park Street, Dewsbury; Attif Ashraf, 31, of Brander Close, Bradford and Wasim Nazir, 31, of Moorend Lane, Dewsbury. The Crown Prosecution Service and its counsel worked with a specialist team from the Metropolitan Police, who uncovered the scam as part of a wider investigation into theft and money laundering.

After Tuesday's sentencing CPS prosecutor Julian Briggs said the complexity of the case had taken 18 months to unravel and it was believed the cash was invested in property overseas.

Courtesy of The Dewsbury Reporter

Problems with a mis-represented mortgage?

Investment Warning - Midas International

Investment warning against Midas International

Midas International is not authorised by Finansinspektionen (the Swedish Financial Supervisory Authority) and is therefore not entitled to provide financial services.

Midas International has a website (www.midasworldwide.com) using the following addresses:

33 Throgmorton Street,
London,
EC2N 2BR.
U.K.

Burjuman Tower,
18th Floor,
P.O. Box 121828,
Dubai, 43659
U.A.E.

One International Finance Centre 33rd Floor,
1 Harbour View Street,
Central,
Hong Kong

Sydney Citigroup Centre,
39th Floor,
2 Park Street,
Sydney,
NSW2000.

Australia Midas International's representatives contact investors in Sweden by telephone, cold calling.

Courtesy of The Swedish Finanacial Supervisory Authority

Sir Allen Stanford Claims "Not a Ponzi Scheme"

'Clients lost no money' said Sir Allen Stanford.

Sir Allen Stanford, accused of an $8b fraud by U.S. regulators, has insisted no money was lost by customers dealing with his financial services companies. In an emotional interview with ABC, the Texan financier wept as he spoke about how much he loved his employees.

He later threatened to punch anyone who repeated allegations that Sir Allen was involved in the laundering of Mexican drug money.

He has already denied any wrongdoing in the case. But the U.S. financial regulator, the Securities and Exchange Commission (SEC), has said Sir Allen is guilty of fraud of “shocking magnitude”, and criminal charges are expected to follow.

By court order, the Texan billionaire is denied access to his own money, and he said the seizure of his assets had left him with little money and few changes of clothing. Even though in the past he has reportedly owned both a castle and an island he insists his lifestyle was always frugal.
Throughout the interview Sir Allen ran rapidly across a wide spectrum of emotion from the mawkish to combative, says the BBC's Kevin Connolly in Washington.

He insisted any attempt to compare his investment companies with those of the disgraced Wall Street financier Bernard Madoff was unfair. He added that customers who have tried to recover their money from his banks have been able to do so.

In one of his more dramatic moments, he said he would “die and go to hell” if his investment plans were proved to be financial pyramid schemes, or Ponzis. “If it was a Ponzi scheme, why are they finding billions and billions of dollars all over the place?” he asked.

Sir Allen came to prominence last year when he sponsored a high-profile Twenty20 cricket tournament, which culminated in a match between England and an all-stars West Indies team that gave each winning player $1m.

His property in the Caribbean state of Antigua and Barbuda, where many of his business interests are based, has already been seized by the islands' government.

Courtesy of The BBC

Think you might be a victim of a Ponzi Scheme?

Investment Warning - Sumitomo International

Investment warning against Sumitomo International

Sumitomo International is not authorised by Finansinspektionen (the Swedish Financial Supervisory Authority) and is therefore not entitled to provide financial services.

Sumitomo International has a website, (www.sumitomoint.com) and using the following address:

20-1 Sakuragaoka-Cho
Shibuya Infos Tower 8F,
Shibuya-Ku,
Tokyo,
Japan.
150-0031.

Sumitomo International's representatives contact investors by telephone and offer to buy their holdings of shares. However, the investor must first pay a fee in advance. This is an advance fee fraud scheme. Information suggests that Sumitomo International takes over the operation of Masahiro International. Please, see warning against Masahiro International issued 16 November 2007.

Courtesy of The Swedish Financial Supervisory Authority

Have you been a victim of mis-sold investments? Contact us for a no obligation chat.

Investment Warning - Goldsmith and Harris

Investment Warning against Goldsmith and Harris.

Goldsmith & Harris is not authorised by Finansinspektionen (the Swedish Financial Supervisory Authority) and is therefore not entitled to provide financial services.

Goldsmith & Harris has a website (www.ghasset.com) using the following address:

80 Pine Street,
New York,
NY 10005.

Goldsmith & Harris' representatives contact investors by telephone and offer to buy their holdings of shares in an American OTC company. However, the investor must first pay a fee in advance, "insurance policy $.50/share/warrants". This is an advance fee fraud scheme.

Courtesy of The Swedish Financial Supervisory Authority

Mis-sold an investment? Contact Missoldinvestments.com

Buy to Let Investment Fraud Sentencing

House scam bosses are sentenced

Five Gateshead company directors who conned property investors out of almost £80m have been sentenced. John Potts, Peter Gosling, Natalie Laverick, Eric Armstrong and Peter Graham ran Practical Property Portfolio (PPP), which was closed down in 2004. Investors were told their properties would be refurbished and rented out but much of the work was not done. The five admitted fraud charges - four were jailed and one defendant was given a 21-month suspended sentence.

The five had faced a four-month trial charged with conspiracy to defraud between January 2001 and March 2003. However, last month Potts of Silksworth Hall Drive, Sunderland; Gosling, 57, of Rothbury Gardens, Lobley Hill; and Laverick, 28, also of Silksworth Hall Drive, admitted the conspiracy charge.

Graham, 62, of Topcliffe, Sunderland, admitted three counts of fraudulent trading and Armstrong, 55, of Moorside North, Fenham, Newcastle, two fraudulent trading counts. Potts was jailed for five years; Gosling was jailed for three years and both Armstrong and Graham were jailed for two years.

Brazen fraud

Laverick was given a 21-month prison sentence suspended for two years for offering to give evidence against the others. The court heard PPP had been set up in the late 1990s and its offices were based at the Team Valley Trading Estate. The hearing heard that investors were asked to put money into derelict properties, but they were just left unoccupied. Judge Guy Whitburn QC said: "Where did the money go? The nature of what has been termed a pyramid scheme is that it may disappear into a black hole.

"It is abundantly clear - Potts in particular, Gosling to a lesser extent, and the others - led an extraordinary lifestyle.

"It was in particular a brazen fraud."

Courtesy of the BBC

FBI Comments on Investment Property Fraud

John S. Pistole. Deputy Director Federal Bureau of Investigation
Statement Before the House Committee on the Judiciary
April 1, 2009.

Good morning Mr. Chairman, Ranking Member, and Members of the Committee. I want to thank you for the opportunity to testify before you today about the Federal Bureau of Investigation’s (FBI) efforts to combat mortgage fraud and other financial frauds. Much the same as the Savings and Loan (S&L) Crisis of the 1980s crippled our economy, so too has the current financial crisis. Many of the lessons learned and best practices from our work during the past decade, such as the Enron investigation, will clearly help us navigate the expansive crime problem currently taxing law enforcement and regulatory authorities.

In the late 1980s and early 1990s, the United States experienced a similar financial crisis with the collapse of the savings and loans. The Department of Justice (DOJ), and more specifically the FBI, were provided a number of tools through the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) and Crime Control Act of 1990 (CCA) to combat the aforementioned crisis. As stated in Senate Bill 331 dated January 27, 2009, “in the wake of the Savings and Loan crisis of the 1980s, a series of strike forces based in 27 cities was staffed with 1000 FBI agents and forensic experts and dozens of federal prosecutors. That effort yielded more than 600 convictions and $130,000,000 in ordered restitution.”

However, today’s financial crisis dwarves the S&L crisis as financial institutions have reduced their assets by more than $1.2 trillion related to the current global financial crisis compared to the estimated $160 million lost during the S&L crisis. Mortgage and related corporate fraud were not the sole sources of the current financial crisis; however, it would be irresponsible to neglect mortgage fraud’s impact on the U.S. housing and financial markets.

As the FBI’s Assistant Director for the Criminal Division testified in 2004 before the House Financial Services Sub-Committee: “If fraudulent practices become systemic within the mortgage industry and mortgage fraud is allowed to become unrestrained, it will ultimately place financial institutions at risk and have adverse effects on the stock market. Investors may lose faith and require higher returns from mortgage backed securities. This may result in higher interest rates and fees paid by borrowers and limit the amount of investment funds available for mortgage loans.”

He also noted that the FBI supported new approaches to address mortgage fraud and its effects on the U.S. financial system, to include:

• a mechanism to require the mortgage industry to report fraudulent activity,
• and the creation of “ Safe Harbor” provisions to protect the mortgage industry under a mandatory reporting mechanism.

What has occurred has been far worse than predicted. Mortgage fraud and related financial industry corporate fraud have shaken the world’s confidence in the U.S. financial system. The fraud schemes have adapted with the changing economy and now individuals are preyed upon even as they are about to lose their homes. But what is mortgage fraud?

Although there is no specific statute that defines mortgage fraud, each mortgage fraud scheme contains some type of material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan.

The FBI delineates mortgage fraud in two distinct areas:

1) Fraud for Profit; and

2) Fraud for Housing.

Fraud for Profit uses a scheme to remove equity, falsely inflate the value of the property or issue loans relating to fictitious property(ies). Many of the Fraud for Profit schemes rely on “industry insiders”, who override lender controls. The FBI defines industry insiders as appraisers, accountants, attorneys, real estate brokers, mortgage underwriters and processors, settlement/title company employees, mortgage brokers, loan originators, and other mortgage professionals engaged in the mortgage industry.

Fraud for Housing represents illegal actions perpetrated by a borrower, typically with the assistance of real estate professionals. The simple motive behind this fraud is to acquire and maintain ownership of a house under false pretenses. This type of fraud is typified by a borrower who makes misrepresentations regarding the borrower’s income or employment history to qualify for a loan.

The FBI compiles data on mortgage fraud through Suspicious Activity Reports (SARs) filed by financial institutions and through the Department of Housing and Urban Development (HUD) Office of Inspector General (OIG) reports. The FBI also receives complaints from the industry at large.

While a significant portion of the mortgage industry is void of any mandatory fraud reporting and there is presently no central repository to collect all mortgage fraud complaints, SARs from financial institutions have indicated a significant increase in mortgage fraud reporting. For example, during Fiscal Year (FY) 2008, mortgage fraud SARs increased more than 36 percent to 63,173. The total dollar loss attributed to mortgage fraud is unknown. However, 7 percent of SARs filed during FY 2008 indicated a specific dollar loss, which totaled more than $1.5 billion. Only 7 percent of SARs report dollar loss because of the time lag between identifying a suspicious loan and liquidating the property through foreclosure and then calculating the loss amount. As of February 28, 2009, there were 28,873 mortgage fraud SARs filed in fiscal year 2009.

Fraud Trends

The current financial crisis has produced one unexpected consequence: it has exposed prevalent fraud schemes that have been thriving in the global financial system. These fraud schemes are not new but they are coming to light as a result of market deterioration. For example, current market conditions have helped reveal numerous mortgage fraud, Ponzi schemes and investment frauds, such as the Bernard Madoff scam. These schemes highlight the need for law enforcement and regulatory agencies to be ever vigilant of White Collar Crime both in boom and bust years.
The FBI has experienced and continues to experience an exponential rise in mortgage fraud investigations. The number of open FBI mortgage fraud investigations has risen from 881 in FY 2006 to more than 2,000. In addition, the FBI has 566 open corporate fraud investigations, including matters directly related to the current financial crisis. These corporate and financial institution failure investigations involve financial statement manipulation, accounting fraud and insider trading. The increasing mortgage, corporate fraud, and financial institution failure case inventory is straining the FBI’s limited White Collar Crime resources.

Although there are many mortgage fraud schemes, the FBI is focusing its efforts on those perpetrated by industry insiders who are part of organized enterprises engaged in Mortgage Fraud for Profit. Industry insiders are of priority concern as they are, in many instances, the facilitators that permit the fraud to occur. The FBI utilizes SAR data to help identify fraud schemes perpetrated by insiders. However, SAR data does not capture suspicious activity identified by the entire mortgage industry. Requiring the entire industry to report suspicious activity would give us a more complete data set to exploit. The FBI is engaged with the mortgage industry in identifying fraud trends and educating the public. Some of the current rising mortgage fraud trends include: equity skimming, property flipping, mortgage identity related theft, and foreclosure rescue scams.

Equity skimming is a tried and true method of committing mortgage fraud and criminals continue to devise new schemes. Today’s common equity skimming schemes involve the use of corporate shell companies, corporate identity theft and the use or threat of bankruptcy/foreclosure to dupe homeowners and investors.

Property flipping is nothing new; however, once again law enforcement is faced with an educated criminal element that is using identity theft, straw borrowers and shell companies, along with industry insiders to conceal their methods and override lender controls.

Identity theft in its many forms is a growing problem and is manifested in many ways, including mortgage documents. The mortgage industry has indicated that personal, corporate, and professional identity theft in the mortgage industry is on the rise. Computer technology advances and the use of online sources have also assisted the criminal in committing mortgage fraud. However, the FBI is working with its law enforcement and industry partners to identify trends and develop techniques to thwart illegal activities in this arena.

Foreclosure rescue scams are particularly egregious in that fraudsters take advantage and illegally profit from other individuals’ misfortunes. As foreclosures continue to rise across the country, so too have the number of foreclosure rescue scams that target unsuspecting victims. These scams include victims losing their home equity or paying thousands of dollars in fees, and then receiving little or no services, and ultimately losing their home to foreclosure. The FBI is again working with our law enforcement and regulatory partners along with industry partners to target, disrupt and dismantle the individuals and/or companies engaging in these fraud schemes.

Proactive Approach to Financial Frauds

The FBI has implemented new and innovative methods to detect and combat mortgage fraud. One of these proactive approaches was the development of a property flipping analytical computer application, first developed by the Washington Field Office, to effectively identify property flipping in the Baltimore and Washington areas. The original concept has evolved into a national FBI initiative which employs statistical correlations and other advanced computer technology to search for companies and persons with patterns of property flipping. As potential targets are analyzed and flagged, the information is provided to the respective FBI field office for further investigation. Property flipping is best described as purchasing properties and artificially inflating their value through false appraisals. The artificially valued properties are then sold at a higher price to an associate of the “flipper” at a substantially inflated price. Often flipped properties go into foreclosure and are ultimately repurchased for a fraction of their original value.

Other methods employed by the FBI include sophisticated investigative techniques, such as undercover operations and wiretaps. These investigative measures not only result in the collection of valuable evidence, they also provide an opportunity to apprehend criminals in the commission of their crimes, thus reducing loss to individuals and financial institutions. By pursuing these proactive methods in conjunction with historical investigations, the FBI is able to realize operational efficiencies in large scale investigations.

In December 2008, the FBI dedicated resources to create the National Mortgage Fraud Team at FBI headquarters in Washington, D.C. The Team has the specific responsibility for all management of the mortgage fraud program at both the origination and corporate level. This Team will be assisting the field offices in addressing the mortgage fraud problem at all levels. The current financial crisis, however, has required the FBI to move resources from other white collar crime and criminal programs in order to appropriately address the crime problem. Since January 2007, the FBI has increased its agent and analyst manpower working mortgage fraud investigations. The Team provides tools to identify the most egregious mortgage fraud perpetrators, prioritize pending investigations, and provide information to evaluate where additional manpower is needed.

Partnerships

One of the best tools the FBI has in its arsenal for combating mortgage fraud is its long-standing partnerships with other federal, state and local law enforcement. This is not a new tool employed by the FBI. Collaboration, communication, and information-sharing have long been a proven solution to the nation’s most difficult crimes. In response to a growing gang problem, for example, the FBI stood up Safe Streets Task Forces across the country. In response to crimes in Indian Country, the FBI developed the Safe Trails Task Force Program. In response to this new threat, the FBI stood up Mortgage Fraud Task Forces across the country.

Presently, there are 18 mortgage fraud task forces and 47 working groups in the country. With representatives of federal, state, and local law enforcement, these task forces are strategically placed in areas identified as high threat areas for mortgage fraud. Partners are varied but typically include representatives of HUD-OIG, the U.S. Postal Inspection Service, the Internal Revenue Service, FinCEN, the Federal Deposit Insurance Corporation, as well as State and local law enforcement officers across the country.

While the FBI has increased the number of agents around the country who investigate mortgage fraud cases from 120 Special Agents in FY 2007 to currently over 250 Special Agents as of February 28, 2009, this multi-agency model serves as a force-multiplier, providing an array of resources to adequately identify the source of the fraud, as well as finding the most effective way to prosecute each case, particularly in active markets where fraud is widespread. We are pleased to report that the model is working.

Last June, for example, we worked closely with our partners on “Operation Malicious Mortgage” – a massive multiagency takedown of mortgage fraud schemes involving more than 400 defendants nationwide. That operation focused primarily on three types of mortgage fraud: lending fraud, foreclosure rescue schemes, and mortgage-related bankruptcy schemes. Among the 400-plus subjects of “Operation Malicious Mortgage”, there have been 164 convictions and 81 sentencings so far for crimes that have accounted for more than $1 billion in estimated losses. Forty-six of our 56 field offices around the country took part in the operation, which has resulted in the forfeiture and/or seizure of more than $60 million in assets.

In addition to the effort placed in standing up mortgage fraud task forces, the FBI is one of the DOJ participants in the national Mortgage Fraud Working Group (MFWG), which DOJ chairs. The MFWG represents the collaborative effort of multiple Federal agencies and facilitates the information sharing process across the aforementioned agencies, as well as private organizations. Together, we are building on existing FBI intelligence databases to identify large industry insiders and criminal enterprises conducting systemic mortgage fraud.

The FBI is also a member of the President’s Corporate Fraud Task Force which is comprised of investigators from the Securities and Exchange Commission, the Internal Revenue Service, the U.S. Postal Inspection Service, the Commodity Futures Trading Commission, and the FinCEN. The purpose of the Corporate Fraud Task Force is to maximize intelligence sharing between membership agencies and to ensure the violations related to corporate fraud are appropriately addressed. The FBI also participates in the Securities and Commodities Fraud Working Group, a national interagency coordinating body established by DOJ to provide a forum for exchanging information and discussing violation trends, law enforcement issues and techniques. In addition, since April 2007, FBI headquarters personnel have met with representatives from the Securities and Exchange Commission once a month to coordinate the respective Corporate Fraud inventories focused on the current financial crisis and to share intelligence.

Industry Liaison

In addition to its partners in law enforcement and regulatory areas, the FBI also continues to foster relationships with representatives of the mortgage industry to promote mortgage fraud awareness. The FBI has spoken at and participated in various mortgage industry conferences and seminars, including those sponsored by the Mortgage Bankers Association (MBA).
To raise awareness of this issue and provide easy accessibility to investigative personnel, the FBI has provided contact information for all FBI Mortgage Fraud Supervisors to relevant groups including the MBA, Mortgage Asset Research Institute, Fannie Mae, Freddie Mac and others. Additionally, the FBI is collaborating with industry to develop a more efficient mortgage fraud reporting mechanism for those not mandated to report such activity. The FBI supports providing a “safe harbor” for lending institutions, appraisers, brokers and other mortgage professionals similar to the provisions afforded to financial institutions providing SAR information. The “ Safe Harbor” provision would provide necessary protections to the mortgage industry under a mandatory reporting mechanism. This will also better enable the FBI to provide reliable mortgage fraud information based on a more representative population in the mortgage industry.

Lenders are painfully aware that fraud is affecting their bottom line. Through routine interaction with FBI personnel, industry representatives are aware of our commitment to address this crime problem. The FBI frequently participates in industry sponsored fraud deterrence seminars, conferences and meetings which include topics such as quality control and industry best practices to detect, deter, and prevent mortgage fraud. These meetings play a significant role in training and educating industry professionals. Companies share current and common fraud trends, loan underwriting weaknesses and best practices for fraud avoidance. These meetings also increase the interaction between industry and FBI personnel.

Additionally, the FBI continues to train its personnel and conduct joint training with HUD-OIG and industry on mortgage fraud. As a training model, the FBI seeks industry experts to assist in its internal training programs. For example, industry has assisted training FBI personnel on mortgage industry practices, documentation, laws and regulations. Industry partners have offered to assist the FBI in developing advanced mortgage fraud investigative training material and fraud detection tools.

Conclusion

Mr. Chairman, the FBI remains committed to its responsibility to aggressively investigate significant financial crimes which include mortgage fraud. We will continue to work with the Office of Management and Budget, and the Congress to ensure that adequate resources are available to address these threats. To maximize our current resources, we are relying on intelligence collection and analysis to identify emerging trends to target the greatest threats. We also will continue to rely heavily on the strong relationships we have with both our law enforcement and regulatory agency partners.The FBI looks forward to working with you and other members of this committee on solving this serious threat to our nation’s economy. Thank you for allowing me the opportunity to testify before you today. I look forward to taking your questions.

Courtesy of the FBI

Investment Warning - Shanghai Wang Venture Inc.

Investment Warning - Shanghai Wang Venture.

According to the FSA and the Finansinspektionen,

Shanghai Wang Venture Inc.

Located at;
Shui On Plaza,
333 Huai Hai Road,
Luwan District,
Shanghai.
China
200021
Phone: +86 21 5116 7111
Fax: +86 2161 6383 54
Web: www.asiamacn.com
Email: info@asiamacn.com

Complaints have been received about the above company. Although details issued are not specific, companies appearing on government regulator websites have either received complaints, or are known to be operating illegally in the jurisdictions where listed.

Securities and Exchange Commission looks to private sector to help uncover fraud

Securities and Exchange Commission looks to private sector to help uncover fraud.

(Reuters) - Mary Schapiro, the new chairman of the U.S. Securities and Exchange Commission (SEC), is looking to enlist private sector help in uncovering fraud, the Financial Times reported.

According to an interview posted on the paper's website, Schapiro said the SEC was exploring new approaches to enforcement, particularly in the oversight of investment advisors.
"We need to find some ways to increase staffing but beyond that, leveraging third parties without abdicating our responsibility," Schapiro told the paper.

Beyond ramping up staffing at the agency, Schapiro said that using third parties such as auditors, who can do compliance reviews, is one way of employing outside help.

Schapiro, whose agency came under harsh criticism for not uncovering Bernie Madoff's $65 billion investment fraud, has set an aggressive agenda to rebuild the SEC's credibility by strengthening rules for money market funds and investment advisers, as well as giving shareholders more rights.

Courtesy of Reuters