This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

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.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.03 0.21%
FB $116.73 0.00%
GOOG $691.02 0.00%
TSLA $247.54 -0.07%
YHOO $36.59 0.00%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs