The Wall Street Legal & Regulatory Feed
Securities Industry Commentator by Bill Singer Esq
March 1, 2018
Dallas Man Sentenced for East Texas Investment Fraud Scheme (DOJ Press Release)
https://www.justice.gov/usao-edtx/pr/dallas-man-sentenced-east-texas-investment-fraud-scheme
Starting in 2009, Carlton Chadbourne Sayers a/k/a Chad Sayers solicited loans/investments for the purchase and/or renovation of residential real properties, to be secured by an interest in the property. Sayers did not invest the funds or provide the secured interests as promised. Sayers, pleaded guilty in the United States District Court for the Eastern District of Texas to wire fraud and bank fraud and was sentenced to 132 months in federal prison and ordered to pay $2,102,617.27 in restitution.
https://www.justice.gov/usao-edtx/pr/dallas-man-sentenced-east-texas-investment-fraud-scheme
Starting in 2009, Carlton Chadbourne Sayers a/k/a Chad Sayers solicited loans/investments for the purchase and/or renovation of residential real properties, to be secured by an interest in the property. Sayers did not invest the funds or provide the secured interests as promised. Sayers, pleaded guilty in the United States District Court for the Eastern District of Texas to wire fraud and bank fraud and was sentenced to 132 months in federal prison and ordered to pay $2,102,617.27 in restitution.
Non-Attorney Representatives Involved In FINRA Arbitration Blight (BrokeAndBroker.com Blog, March 1, 2018) Readers of the BrokeAndBroker.com Blog know that our publisher, Bill Singer, Esq., is a critic of mandatory arbitration before the Financial Industry Regulatory Authority, whether the coerced litigants are public customers or industry participants. As such, readers might expect to find these words in a article penned by Bill:
This Arbitration Award is a blight on FINRA Arbitration proceedings. The Award that was obtained by the Respondents was procured by fraud and deceit when the Arbitrators turned a blind eye to needs of the individuals, the elderly public investors, that FINRA is charged with protecting. The relief that is requested is extraordinary but so are the facts of this case.
The thing about expectations is that they don't always turn out to be correct. Those acerbic words above did not flow from Bill's poison pen but from lawyers representing aggrieved public customers. You better sit down before your read today's blog. You're in for quite a trip.
SEC Charges Penny Stock Company, Control Person, and Former Officer With Fraud In Filing False Reports and Selling Unregistered Securities (SEC Litigation Release No. 24058) / February 28, 2018
https://www.sec.gov/litigation/litreleases/2018/lr24058.htm
https://www.sec.gov/litigation/litreleases/2018/lr24058.htm
The SEC filed a Complaint in the United States District Court for the District of Columbia alleging that from 2013 to 2014, Douglas Murdock, an undisclosed control person of Analytica Bio-Energy Corp., fraudulently procured Analytica shares and sold them in unregistered transactions. The Complaint further alleged that Murdock fraudulently induced Analytica's transfer agent to remove the shares' restrictive legend. from company shares. Further, the Complaint alleged that Murdock Analytica's former President, Luiz Brasil, substantially assisted Analytica's filing with the SEC of misleading periodic reports.In a related matter, the SEC sought a court order requiring Analytica's accountant, Marvin Winick, to comply with an SEC suspension order from 2006.Without admitting or denying the SEC's allegations, Murdock and Brasil agreed to the entry of judgments permanently enjoining them from future violations of federal securities laws; pennystock bars and officer-and-director bars; and possible disgorgement and/or a civil penalty. Winick consented to the entry of a court order enforcing the SEC's 2006 suspension order. READ the FULL TEXT Complaint in Securities and Exchange Commission v. Analytica Bio-Energy Corp., et al., DDC, 18-CV-00472 )
https://www.sec.gov/litigation/complaints/2018/comp24058
SEC Charges Texas Companies and Individuals in Oil-and-Gas Offering Fraud (SEC Litigation Release No. 24057)
https://www.sec.gov/litigation/litreleases/2018/lr24057.htm
In a Complaint filed in the United States District Court for the Eastern District of Texas ("EDTX") the SEC alleges that AmeraTex Energy, Inc., Lewis Oil Corp., Lewis Oil Company, Thomas Lewis (the CEO of all three entities), and former AmeraTex President, William Fort, misappropriated over $1 million from over 150 investors via sales of unregistered securities and the use of misleading statements. Lewis and Fort allegedly suppressed Internet search results that would have cautioned potential investors about their fraud. The SEC also alleges that accountant Damon Fox and compliance coordinator Brian Bull played key roles in the $11.7 million offering fraud for oil drilling and operations projects allegedly located in Kentucky. Securities and Exchange Commission v. AmeraTex Energy, Inc.,(Complaint, EDTX, 18-CV-00129 (E.D. Tex., filed February 27, 2018). READ the FULL TEXT COMPLAINT.
https://www.sec.gov/litigation/litreleases/2018/lr24057.htm
In a Complaint filed in the United States District Court for the Eastern District of Texas ("EDTX") the SEC alleges that AmeraTex Energy, Inc., Lewis Oil Corp., Lewis Oil Company, Thomas Lewis (the CEO of all three entities), and former AmeraTex President, William Fort, misappropriated over $1 million from over 150 investors via sales of unregistered securities and the use of misleading statements. Lewis and Fort allegedly suppressed Internet search results that would have cautioned potential investors about their fraud. The SEC also alleges that accountant Damon Fox and compliance coordinator Brian Bull played key roles in the $11.7 million offering fraud for oil drilling and operations projects allegedly located in Kentucky. Securities and Exchange Commission v. AmeraTex Energy, Inc.,(Complaint, EDTX, 18-CV-00129 (E.D. Tex., filed February 27, 2018). READ the FULL TEXT COMPLAINT.
https://www.sec.gov/litigation/complaints/2018/comp24057.pdf
SEC Files Charges Seeking to Halt Recidivist and Associates in Scheme to Defraud Small Businesses (SEC Press Release 2018-27)
https://www.sec.gov/news/press-release/2018-27
https://www.sec.gov/news/press-release/2018-27
The SEC filed a Complaint in the United States District Court for the Middle District of California charging Steven J. Muehler with operating an unregistered broker-dealer, facilitating an unregistered securities offering, and defrauding small businesses, while promising to help them raise money from investors. Three companies under Muehler's control, his wife Claudia M. Muehler, and his associate, Koorosh "Danny" Rahimi, were also charged. Also, the Complaint alleges that Steven Muehler violated a 2016 SEC cease-and-desist order barring him from associating with any broker-dealer. READ the FULL TEXT Complaint.
https://www.sec.gov/litigation/complaints/2018/comp-pr2018-27
https://www.sec.gov/litigation/complaints/2018/comp-pr2018-27
Deloitte & Touche Agrees to Pay $149.5 Million to Settle Claims Arising From Its Audits of Failed Mortgage Lender Taylor, Bean & Whitaker (DOJ Press Release)
https://www.justice.gov/opa/pr/deloitte-touche-agrees-pay-1495-million-settle-claims-arising-its-audits-failed-mortgage
https://www.justice.gov/opa/pr/deloitte-touche-agrees-pay-1495-million-settle-claims-arising-its-audits-failed-mortgage
Deloitte & Touche LLP has agreed to pay the United States $149.5 million to resolve potential False Claims Act liability arising from Deloitte's role as the independent outside auditor of Taylor, Bean & Whitaker Mortgage Corp. (TBW), a failed originator of mortgage loans insured by the Federal Housing Administration (FHA) in the Department of Housing and Urban Development (HUD). As set forth in part in the DOJ Press Release:
Under HUD's Direct Endorsement Lender program, TBW was authorized to originate and underwrite mortgage loans insured by the FHA. When a borrower defaults on an FHA-insured loan underwritten and endorsed by a Direct Endorsement Lender such as TBW, the holder of the loan can submit a claim to the United States to recoup losses resulting from the default. To maintain its status as a Direct Endorsement Lender, a lender is required to submit to HUD annual audit reports on its financial statements and related reports on its internal controls and its compliance with certain HUD requirements.Deloitte served as TBW's independent outside auditor, and issued audit reports for TBW's fiscal years 2002 through 2008. The United States alleged that during that time period TBW had been engaged in a long-running fraudulent scheme involving, among other things, the purported sale of fictitious or double-pledged mortgage loans, and as a result, TBW's financial statements failed to reflect its severe financial distress. The United States alleged that Deloitte's audits knowingly deviated from applicable auditing standards and therefore failed to detect TBW's fraudulent conduct and materially false and misleading financial statements. The United States alleged that Deloitte's audit failures extended to the specific financial arrangements through which TBW carried out its fraudulent conduct. By failing to detect TBW's misconduct, Deloitte's audit reports allegedly enabled TBW to continue originating FHA-insured mortgage loans until TBW collapsed and declared bankruptcy in 2009.
Grand Jury Indicts Four Brazilian Men in ATM Skimming Conspiracy (DOJ Press Release)
https://www.justice.gov/usao-sdoh/pr/grand-jury-indicts-four-brazilian-men-atm-skimming-conspiracy
https://www.justice.gov/usao-sdoh/pr/grand-jury-indicts-four-brazilian-men-atm-skimming-conspiracy
Ricardo C. De Andrade, Sandro L. Trancoso Da Silva, Diego M. Dacosta, and Leonardo W. Targino were indicted in the United States District Court for the District of Ohio ("DCOH") on one count of conspiracy to defraud the United States via"ATM Skimming," a fraud involving their installation of ATM skimming devices and pinhole cameras on commercial ATMs and then encoding the stolen information onto magnetic strips on counterfeit cards.The defendants purchased clothing, luggage, watches, jewelry, electronics, hotel accommodations, food, rental cars and other associated travel expenses, and would ship some of the items to counterparts who resold them on the Internet.