All Articles Tagged "fraud"
Eddie Murphy’s Ex Conned out of Nearly Half of Divorce Money
Nicole Murphy took away $15 million from her marriage to comedian Eddie Murphy when they divorced in 2006, but now she’s been conned out of nearly half of that in just five years.
Acting as her financial manager, Troy Stratos defrauded Nicole out of $7 million—telling her he had invested her money overseas, when he actually just transferred most of it to his personal accounts.
Stratos also promised to help Nicole sell her home in Granite Bay, CA; instead he lived there in secret, rent free, and leased luxury cars in her name, TMZ reports.
As if that wasn’t enough, he also convinced Nicole to refinance that home and another in Sacramento, and then he used the money for his own personal expenses.
Luckily, Nicole finally caught on and the conman was indicted on charges of money laundering, mail fraud, and obstruction of justice, but I can’t even imagine the blow to her ego, not to mention her bank account. I can barely stand when I lose $5, I can’t even imagine what losing $7 million must feel like.
Brande Victorian is a blogger and culture writer in New York City. Follower her on Twitter at @be_vic.
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Black Man Swindles Swiss Bank out of $2 Billion
(Wall Street Journal) — An alleged trading scheme at UBS AG went undetected for three years before it was finally discovered, triggering a $2 billion loss, U.K. authorities indicated Friday as they charged a 31-year-old trader at the Swiss bank with fraud. Flanked by a newly hired lawyer from a top London firm, Kweku Adoboli briefly gaped at reporters at his court hearing and said little beyond providing his birth date and address. Mr. Adoboli, who didn’t enter a plea, dabbed his eyes with a tissue during a roughly 30-minute hearing at the City of London Magistrates’ Court in London’s financial district. The charges came as an early picture began to emerge of lapses inside one of the world’s largest banks that allegedly allowed a young trader on a small stock desk to cause huge losses over three years, a much longer period than initially suspected.
Once at 500, Number of City Credit Cards Down to 8 After Crackdown
(Chicago Sun Times) — Local government employees who once passed around 500 credit cards will now get by on just eight, under a crackdown that exceeded Mayor Rahm Emanuel’s expectations. Two months ago, Emanuel reduced the number of credit cards to 30 after alleged abuses that ousted the chiefs of the CHA and Chicago Park District. The plan called for five credit cards to be issued to top executives of each of six agencies: the CTA, CHA, Park District, Chicago Public Schools, City Colleges and Public Building Commission. Monthly expenditures are posted on the Internet. Now, the number of credit cards has been further reduced to “no more than eight” with three of the six agencies joining City Hall in going cold turkey.
Ghanaian-Born, Rogue Trader Allegedly Cost Swiss Bank $2 Billion
By Charlotte Young
Turns out that a Swiss bank may not be the place you want to hide your money. UBS, Switzerland’s largest bank, revealed on Thursday that the bank lost about $2 billion at the hands of a rogue trader. According to Forbes, the banking giant cautioned that this loss could result in a huge setback for the entire third quarter.
“From the scale of this case you can be sure that it’s the biggest we’ve ever seen for a Swiss bank,” Tobias Lux, a spokesman from the Swiss banking regulator told the Associated Press.
Shortly after the bank revealed the large-scale loss, UBS AG shares dropped 8.7 percent to 9.98 francs. The case is a shock for the global financial industry. Banks across the world have begun to tighten their oversight rules in an attempt to catch any future trading schemes.
In London police arrested 31-year-old Kweku Adoboli, the UBS trader allegedly behind the fraud.
Much of the information about Adoboli was gathered through social networking sites. He was a British man of Ghanaian decent. His Facebook page showed he was interested in photography, cycling and boutique wines. The page became unavailable a few hours after his arrest.
According to his LinkedIn profile, he worked on Delta One, an equities desk at UBS. In his position he traded in Exchange Traded Funds. These are cheaper mutual funds that track underlying assets such as the stock exchange or commodities such as gold. They provide easy access to products for retail investors.
Adoboli’s landlord reportedly said that he was a “well-dressed quiet man,” who rarely partied or caused problems. Although he fell behind on his $1600/month rent twice, he always managed to pay.
Before the recent financial mishap UBS had already been struggling to rebuild its name. According to the Wall Street Journal, after the financial crisis the bank was forced to “write down more than $50 billion in securities and shut some trading units.” It had been attempting to regain its strength when it was hit with a US tax probe and new global and Swiss regulations that forced it to slow its growth once again.
“UBS was seen to have recovered significantly from the credit crisis and to have improved its risk management in the investment bank in spite of its struggle to improve returns,” Fionna Swaffield, a banks analyst at RBC Capital Markets told Forbes. “This obviously brings this very much into question.”
UBS had already announced last month that it would be cutting 3,500 jobs over the next two years, but this new $2 billion loss, which does not affect clients, is sure to force a new deeper direction in cost savings and restructuring.
Black Citigroup VP Admits Theft
(Rolling Out) — Legally blind former Citigroup VP Gary Foster had no trouble seeing dollar signs when he devised a scheme to embezzle an estimated $22 million from his employer. Foster, 35, pleaded guilty in a Brooklyn, N.Y., federal courtroom to bank fraud charges, telling the judge, “I did this from my Citigroup office …” He faces up to 10 years in prison, and may be fined as much as $44 million, as part of a plea deal he worked out with federal prosecutors. Of the 12 years Foster spent working for Citigroup, the last eight were spent siphoning off cash — wiring it into his personal Chase bank account. He quit his job in January and was arrested by federal agents in June upon his return from a Bangkok vacation. As a Citigroup VP, Foster earned $100,000 annually, but he lived an extravagant lifestyle that included the purchase of a Ferrari, a Maserati GranTurismo and a BMW 550i — along with the services of a personal chauffeur to drive him around in the cars.
Former Citigroup Exec to Plead Guilty to Fraud Charges
By Charlotte Young
When Gary Foster left for his vacation in Bangkok, he was a wealthy and successful man who most likely thought he had it all. But his trip was cut short when he received information that his former employer suspected the secret behind his success was an elaborate embezzlement scheme.
Bloomberg reports that Foster, a former Citigroup Inc. vice president, is accused of stealing $19 million from the bank and transferring the money to his private account with JP Morgan Chase. The alleged fraud lasted from May 2009 to the end of 2010.
The NY Post reports he used the money to buy a Garden State house for his parents and pay off a mortgage for his ex-wife. He also spent $3 million on a six-bedroom mansion in Englewood Cliffs, NJ and $1.93 million on a Rockefeller Center apartment directly across from the Citi branch on West 48th Street.
“We are outraged by the actions of this former employee,” spokeswoman Shannon Bell from the Citigroup based in New York said in a June e-mail to Bloomberg. “Citi informed law enforcement immediately upon discovery of the suspicious transactions and we are cooperating fully to ensure Mr. Foster is prosecuted to the full extent of the law.”
The thirty-five year old New Jersey native came back from his Bangkok trip early upon hearing that he was under investigation. He was arrested in June at the John F Kennedy International Airport in New York and charged with bank fraud. On June 27, he was released on an $800,000 bond secured by his parents. One of his lawyers, Isabelle A Kirshner, told Bloomberg that her client does intend to plead guilty to the charge.
US Attorney Loretta Lynch says that Foster allegedly committed the “ultimate inside job,” given his position and knowledge of bank operations.
The criminal complaint asserts that Foster managed to move $900,000 from an interest expense account and $14.4 million from a debt-adjustment account to the bank’s cash account between July to December of last year. A fake contract was then created to cover up Foster’s scheme under a pre-existing contract. Through a series of eight transfers, he then had the money wired from the cash account to his personal account.
Foster, who was hired by Citigroup in 1999, left his role voluntarily in January. In his role he supervised the derivative’s unit of Citigroup’s treasury finance department which funds loans and various business transactions within the bank. An internal audit revealed Foster’s wire transfers to his account.
If prosecutors find Foster guilty of the crime, he could face a maximum sentence of 30 years in prison.
Government To Crack Down on Water Dumpers
By Charlotte Young
Exploiting the government’s food stamp program is nothing new, although the tricks may change every now and then. Fox News reports on a scam the federal government is recently attempting to bring to an end: water dumping. Just as its name implies, the scam involves dumping water, and the government says the scam is wasting taxpayer’s money.
The water dumping fraud is simple: food stamp recipients buy bottled water, dump it out, and then redeem the empty bottles for cash. As each bottle is only worth about five to 15 cent, it takes quite a few bottles to begin to make money.
Not only are people wasting water and taxpayer money, they are also taking advantage of the “bottle deposit” system,” all offenses that the Department of Agriculture is attempting to bring to an end.
“They’re clearly abusing the program, and that’s just not tolerable to us,” USDA spokeswoman Jean Daniel told Fox News.
She says the crime is concentrated in a “handful of states.” While Daniel also acknowledged that “water dumping” is not costing the nation billions of dollars, it is enough of a problem to prompt the government to punish those who commit the deed. She also relays that water isn’t the only beverage people dump; there have also been cases of milk and soda dumping as well.
One proposal to the problem is a new rule that would deem “water dumping” a trafficking offense. Violators would be expelled from the food stamp program. The USDA hopes to finalize the rule by the close of this year.
The problem lies in the difficulty in making such a rule to be made effective as it’s difficult to catch offenders. Officials must rely on store owners and citizens to report the crime. In Maine, one community resident recorded a couple dumping out water bottles outside of a grocery store.
Bangor Police Department’s Sgt. Paul Edwards reported that the couple dumped $6 worth of water, in an attempt to return the bottles for $2.40. Edwards also says that the “water dumping” scam has been around for a while. The police department has caught scammers that take the money from dumping water to buy a bottle of beer.
There are those that suggest that water shouldn’t even be covered by the food stamp program such as Kristin Urquiza, director of the anti-bottled water “Think Outside the Bottle” Campaign for Accountability. Instead of the government worrying over bottled water purchases, she believes they should use public funds to create changes in the tap water system that would make water free and available for everyone.
Quinn Backs Council Member Accused of Stealing
(Wall Street Journal) — New York City Council Speaker Christine Quinn endorsed Council Member Ruben Wills for re-election Thursday, one day after he appeared in court to face a misdemeanor stealing charge. Quinn made the endorsement in response to a question from The Wall Street Journal about former Council Member Allan Jennings’s bid to unseat Wills in the Sept. 13 Democratic primary. Wills won a special election in southeast Queens last year to succeed Thomas White, who died in August, but he must win re-election this year to continue to serve the remainder of White’s four-year term.
Is Bachmann’s Attack on Black Farmers Racist?
(Huffington Post)– Is presidential candidate Michele Bachmann’s (R-MN) attack on the U.S. Department of Agriculture (USDA) settlement with African American farmers racist? Bachmann is coming under increasing fire for characterizing a settlement to black farmers who were discriminated against as mass “fraud.” For years, black farmers alleged that they were being denied USDA farm loans or that they were forced to wait longer for loan approval than other non-minority farmers. Some contended that they endured foreclosure and financial ruin as a direct result. Following a class action lawsuit that was initiated back in 1997 — the so-called Pigford Cases — a U.S. Court has established that between 1983 and 1997 the USDA discriminated against black farmers who applied for farm loans and other assistance on the basis of their race, and that the USDA also failed subsequently to investigate or properly respond to complaints.
Ex-School Official, Board Member Indicted in $800k Scheme
(Chicago Sun Times) — A former North Chicago school board member and her district’s transportation director were accused Thursday of taking kickbacks totaling at least $800,000 over 10 years from contractors who had been awarded lucrative school bus contracts. Gloria Harper, 59, of North Chicago, was a member of the board of North Chicago Community Unit School District 187, and Alice Sherrod, 59, of Gurnee, was in charge of transportation for the 4,000 students, prosecutors said in announcing a 26-count indictment against them and three contractors. It’s not the first time Harper has been linked to an education-based scheme. Just last month, she pleaded guilty to conspiring to defraud the federal E-Rate program that helps fund disadvantaged schools with computer and technology equipment.
