Police Blotter: Ponzi Schemes, Theft, Death
BOSTON (TheStreet) -- Bernie Madoff's $65 billion Ponzi scheme almost had been forgotten when, last month, Kenneth Starr -- a financial advisor to Hollywood stars including Sylvester Stallone, Ron Howard and Martin Scorsese -- was arrested on charges that he stole more than $30 million from clients.
His money-making acumen, it was alleged, was often no more than just a pyramid scheme.
Still, the media's focus on high-profile cases and stepped-up enforcement may do little to stem financial fraud. There are hundreds, if not thousands, of mini-Madoffs plying their fraudulent schemes across the country. Many prey on victims with less ambitious, but no less damaging, scams.
The Federal Bureau of Investigation doubled to 314 the number of investment-fraud cases in fiscal 2009 from a year earlier. The federal Financial Crimes Enforcement Network has said more than 1.28 million "suspicious activity reports" were filed in 2009 regarding terrorist funding and mortgage, check and credit-card fraud, among other cases.The following is a sample of the fraud investigations announced by law-enforcement officials within the past 30 days: Gold-mining shaft Four Canadian men and two others living in Florida were charged by the Securities and Exchange Commission with perpetrating a $300 million international Ponzi scheme that revolved around a purportedly successful gold-mining operation. It is alleged that Milowe Allen Brost and Gary Allen Sorenson of Calgary were the primary beneficiaries of a scheme that persuaded more than 3,000 investors across North America to invest their savings, retirement funds and home equity. Brost and his sales team held seminars in which investors were promised they could earn 18% to 36% annual returns. They were actually investing in shell companies owned or controlled by Brost or Sorenson who, in turn, diverted investor funds for their personal benefit, using millions of dollars to purchase and renovate extravagant homes, ranches and recreational vehicles. Sorenson also bought and outfitted a luxury fishing resort in South America. Pawn shop ripoff A Miami man was charged with orchestrating a $40 million Ponzi scheme with funds raised from investors in the local Hispanic community to purportedly support jewelry businesses and pawn shops. The SEC alleges that Luis Felipe Perez arranged "no-risk" loan agreements with investors and promised to pay them guaranteed annual returns of 18% to 120% through monthly interest payments.
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