You are here: Home / ponzischeme

SEC Files Complaint Against Daren L. Palmer and Trigon Group

February 28, 2009 By Paul (Founder, WorkAtHomeTruth) Leave a Comment

Litigation Release No. 20918 / February 27, 2009

SEC v. Daren L. Palmer and Trigon Group, Inc., United States District Court for the District of Idaho (Civil Action No. CV 09-75-S-EJL) (February 26, 2009)

SEC Files Complaint Against Daren L. Palmer and Trigon Group, Inc. for Operating a $40 million Ponzi Scheme and Obtains Orders Freezing Assets, and Appointing a Receiver

The Securities and Exchange Commission filed a Complaint on February 26, 2009, in the United States District Court for the District of Idaho, alleging that Daren L. Palmer (“Palmer”), a resident of Idaho Falls, Idaho, and his investment business Trigon Group, Inc. (“Trigon”), a Nevada corporation, raised at least $40 million as part of a Ponzi scheme that has defrauded at least 55 investors. According to the Commission’s Complaint, from at least 1996 until October 2008, Palmer and Trigon defrauded investors by representing that invested funds would be used in a riskless trading program that earned annual returns of 20 percent or more. The Complaint alleges that Palmer and Trigon sold securities in the form of promissory notes and investment contracts in unregistered transactions, and told investors that their principal would be invested in indexes, S&P 500 options or futures, currency futures and stocks in a way that would generate high returns with no risk. The Complaint alleges that, instead, Palmer and Trigon were using funds put into the program by later investors to pay fictitious returns to earlier investors in a classic Ponzi scheme. The Commission’s Complaint further alleges that Palmer used investor funds to build a partially completed $12 million home in Idaho Falls, Idaho, to purchase snowmobiles, to pay himself compensation of $25,000 to $35,000 a month, and for other personal expenses. The Complaint also alleges that while Palmer told investors he was licensed to sell securities, he has never been licensed to sell securities and that neither Palmer nor Trigon is registered with the Commission in any capacity.

The Commission asked the court to order a preliminary injunction enjoining Palmer and Trigon from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and enjoining Palmer from future violations of Section 15(a) of the Exchange Act. In addition, on February 26, 2009, the court signed an order freezing all assets of Palmer and Trigon and appointing a receiver in the matter.

The Commission acknowledges the assistance of the U.S. Commodities Futures Trading Commission, the Federal Bureau of Investigation, and the Idaho Department of Finance in bringing this action.

http://www.sec.gov/litigation/litreleases/2009/lr20918.htm

Filed Under: SEC Releases Tagged With: , , , , , , , , ,

THREE MEN CHARGED WITH OPERATING $65 MILLION PONZI SCHEME

February 12, 2009 By Paul (Founder, WorkAtHomeTruth) Leave a Comment

2/5/2009 U.S. Department of Justice Press Release:

Scheme Solicited Investments for Development of Oil and Gas in Southeast Asia

A grand jury in Seattle, Washington, has indicted ROBERT MIRACLE, MUKHTAR KECHIK, and FAHIMI FISAL in a twenty-three count Indictment charging Conspiracy, Mail Fraud, Wire Fraud, Money Laundering, and Tax Evasion. The Indictment alleges that the men operated a $65-million “Ponzi” scheme. MIRACLE, 48, was arrested at his home in Bellevue this morning, and will be arraigned on the Indictment this afternoon at 2:30. KECHIK, 52, and FISAL, 32, both are Malaysian nationals. Warrants have been issued for the arrest of KECHIK and FISAL.

According to the Indictment, MIRACLE operated a number of companies allegedly involved in oil development in Malaysia and Indonesia, including: Laramie Petroleum, Inc.; MCube Petroleum, Inc.; Diski Limited Liability Company; Basilam Limited Liability Company; and Halmahera-Rembang Limited Liability Company. MIRACLE and his co-defendants represented to investors that these companies were making money from oil-field development and from the sale of oil-field services. In fact, the funds of later investors were used to pay off the investments of earlier investors. Between September 2004 and October 2007, MIRACLE took in more than $65 million from investors and paid out more than $36 million in returns to investors, using funds from later investors. The remainder of the investor monies—more than $28 million—was used in a failed effort to develop oil and gas on fields in Indonesia, as well as to pay for a lavish lifestyle for MIRACLE and his cohorts.

According to the Indictment, as part of the conspiracy, MIRACLE allegedly mislead investors both about his business background, and about the success of the companies he promoted. MIRACLE falsely claimed to have been employed by NASA and Disney. MIRACLE also allegedly falsely claimed that his companies actually were producing and selling oil and gas. Between 2004 and 2007, MIRACLE issued a number of press releases and “investor updates” touting his companies’ successes. According to e-mails referenced in the Indictment, the conspirators plotted to make false financial statements, which they referred to as “simulation files,” that falsely showed that the companies were producing oil and gas, and receiving revenues from the sale of that oil and gas. MIRACLE also allegedly created false bank documents to support their fraud.

As part of the Indictment the government is seeking to forfeit a two-carat diamond ring MIRACLE purchased for more than $38,000 and a painting that MIRACLE purchased in Italy for $27,000. The Indictment also alleges that MIRACLE used investor funds to take ten of his family members on a week-long cruise at a cost of more than $77,000, and that he evaded taxes on more than $527,000 of income in 2005 by falsely classifying the money that he received from his companies that year as loans to him from the companies, rather than as salary.

The charges contained in the Indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, and the Washington State Department of Financial Institutions.

The case is being prosecuted by Assistant United States Attorneys Carl Blackstone and Andrew C. Friedman, and Special Assistant United States Attorney Tyler Letey. For additional information, please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110 or Emily.Langlie@usdoj.gov.

Filed Under: FBI Releases, USDOJ Tagged With: , , , , , , , , , , ,

SEC Charges Joseph S. Forte for Conducting Multi-Million Dollar Ponzi Scheme

January 9, 2009 By Paul (Founder, WorkAtHomeTruth) Leave a Comment

January 8, 2009 S.E.C. Press Release:

Washington, D.C., Jan. 8, 2009 — The Securities and Exchange Commission has charged a Philadelphia-area investment fund manager and his firm for conducting a multi-million dollar Ponzi scheme, and has obtained an emergency court order freezing their assets.

Additional Materials

According to the SEC’s complaint, Joseph S. Forte of Broomall, Pa., fraudulently obtained an estimated $50 million from as many as 80 investors through the sale of securities in the form of limited partnership interests in his firm, Joseph Forte, L.P. The SEC alleges that Forte told investors that he would invest the funds in an account that would trade in securities futures contracts, including S&P 500 stock index futures. According to the complaint, despite the impressive and consistent returns he reported to investors, Forte consistently lost money in the limited trading that he did, withdrew millions of dollars in so-called fees for his personal use based on the falsely inflated value of Forte LP, and used investor funds to repay other investors.

“As alleged in our complaint, Forte engaged in lies, deception and rapacious behavior at the expense of innocent investors, many of whom considered themselves his friends and close acquaintances,” said Daniel M. Hawke, Director of the SEC’s Philadelphia Regional Office. “Using other people’s money, Forte promised and reported outrageous returns over more than a 10-year period, and because of his relationships with investors was able to lull them into trusting him with their funds.”

Judge Paul S. Diamond, U.S. District Judge for the Eastern District of Pennsylvania, issued an order on January 7 granting a preliminary injunction, freezing assets, compelling an accounting, and imposing other emergency relief. Without admitting or denying the allegations in the Commission’s complaint, Forte and Forte LP consented to the entry of the order.

The SEC�s complaint alleges that Forte has been conducting a Ponzi scheme since at least 1995. Forte, who has never been registered with the SEC in any capacity, has admitted that he misrepresented and falsified Forte LP’s trading performance from the very first quarter. From 1995 through Sept. 30, 2008, Forte and Forte LP reported to investors annual returns ranging from 18.52 percent to as high as 37.96 percent. However, from January 1998 through October 2008, the Forte LP trading account had net trading losses of approximately $3.3 million.

The SEC’s complaint further alleges that in addition to misrepresenting to investors that the trading was highly successful and making huge profits, Forte and Forte LP misrepresented the use of investor funds. Although Forte claimed that he raised approximately $50 million from investors for the purpose of participating in the trading program, Forte deposited only $25.8 million in the trading account between January 1998 and October 2008, and during that same time period withdrew $23.1 million. Forte claims that he took at least $10 to $12 million in so-called fees for his personal use based on the falsely inflated value of Forte LP. But Forte LP statements provided to investors reflect fees charged of $28.7 million between March 1995 and September 2008. He also claims he used approximately $15 to $20 million of investor funds to repay other investors — the hallmark of a Ponzi scheme. The SEC’s complaint alleges that Forte and Forte LP also lied to investors about the value of the partnership portfolio. For example, in September 2008, they reported to investors that the Forte LP portfolio had a value of more than $150 million. In fact, Forte LP’s trading account at that time had a balance of only $146,814.

The SEC’s complaint alleges violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition to the emergency relief, the Commission’s complaint seeks disgorgement of the defendants’ ill-gotten gains plus pre-judgment interest, financial penalties, and permanent injunctions barring future violations of the antifraud provisions of the federal securities laws.

The SEC’s investigation is continuing.

The SEC acknowledges the assistance of the Commodity Futures Trading Commission. The CFTC has filed a related action against Forte.

# # #

For more information, contact:

Daniel M. Hawke, Regional Director
Elaine C. Greenberg, Associate Regional Director
David S. Horowitz, Assistant Regional Director
SEC’s Philadelphia Regional Office
215-597-3100

http://www.sec.gov/news/press/2008/2009-5.htm

Filed Under: SEC Releases Tagged With: , , , , , , , , ,
« Older Posts