Offshore firms promised 318% return--in 190 day period
03.05.11
Mass. Sec. of State Securities
Division filed a complaint against offshore firms Eagle Trades Ltd.
and controlling member Terrance Osberger, as well as Osiris FX and
FX Capital Services (and Osiris' Evan Andersen, Glenn Manterfield
and Alberto Sciola). All are accused of violating state securities
laws and, in some instance, defrauding investors. Eagle Trades
claimed return rates between 299% and 318% --in just 190 days. The
firm’s promotional literature included remarks like “ .
. . we have reengineered the mold regarding HYIPS...think of it as
a full-throttle upgrade to the typical HYIP routine you may or may
not be familiar with....”
Due diligence by investors would have easily raised red flags: Andersen had been barred for life from the securities industry in Massachusetts after he and Manterfield were charged both by Massachusetts and the Securities and Exchange Commission with defrauding investors in 2007.
Due diligence by investors would have easily raised red flags: Andersen had been barred for life from the securities industry in Massachusetts after he and Manterfield were charged both by Massachusetts and the Securities and Exchange Commission with defrauding investors in 2007.
Kroll sued for conflict of interest & faulty due diligence
08.12.09
Kroll, a risk consultancy firm (which
is what private investigation firms morph into when they have
office space in New York City), has been accused of “gross
negligence” and of misleading investors via a “clean
report” on Sir R. Allen Stanford. Kroll has fired its Latin
American office chief Tom Cash over the incident.
Federal lawsuits allege Kroll engaged in a conflict of interest when it vetted Stanford for a trade group looking to protect its investments after the firm had previously worked for the Texas billionaire’s companies.
In a pair of lawsuits filed in May, the National Electrical Contractor’s Association reached out to Kroll in October 2006 to determine if it should continue buying high-interest certificates of deposit from Stanford International Bank. The association ended up losing all of its $2.5 million investment in what is believed to be a $8 billion Ponzi scheme.
NECA had paid Kroll $15,000 to perform due diligence on Stanford in April 2007. The contract had a stamped signature for Tom Cash, who took the money even though he and Kroll had been retained by Stanford in a prior case. “Kroll never disclosed Mr. Cash’s connection with Mr. Stanford and the obvious conflict that this relationship presented,” the NECA lawsuit states. NECA said Kroll’s due diligence report failed to reveal what industry experts have called “major, major, major red flags,” including:
~ The National Association of Securities Dealers levied a $20,000 penalty on Stanford
~ The U.S. Treasury Department issued an advisory in 1999 warning U.S. banks to scrutinize transactions involving Antigua due to corrupt regulation of offshore banks. The British Treasury issued a similar warning.
~ Kroll never highlighted the small size and unsophisticated nature of Stanford’s auditor, Antigua-based C.A.S. Hewlett.
The lawsuits also quotes one of Kroll’s own investigators, William Brittain-Catlan. “I’m amazed by the way people were taken in by ‘Sir Allen.’ There’s so much stuff out there that anyone who wanted to do a cursory check would have seen. Various allegations have been flying around for years,” said Brittain-Catlin, author of “Offshore: The Dark Side of the Global Economy.”
Federal lawsuits allege Kroll engaged in a conflict of interest when it vetted Stanford for a trade group looking to protect its investments after the firm had previously worked for the Texas billionaire’s companies.
In a pair of lawsuits filed in May, the National Electrical Contractor’s Association reached out to Kroll in October 2006 to determine if it should continue buying high-interest certificates of deposit from Stanford International Bank. The association ended up losing all of its $2.5 million investment in what is believed to be a $8 billion Ponzi scheme.
NECA had paid Kroll $15,000 to perform due diligence on Stanford in April 2007. The contract had a stamped signature for Tom Cash, who took the money even though he and Kroll had been retained by Stanford in a prior case. “Kroll never disclosed Mr. Cash’s connection with Mr. Stanford and the obvious conflict that this relationship presented,” the NECA lawsuit states. NECA said Kroll’s due diligence report failed to reveal what industry experts have called “major, major, major red flags,” including:
~ The National Association of Securities Dealers levied a $20,000 penalty on Stanford
~ The U.S. Treasury Department issued an advisory in 1999 warning U.S. banks to scrutinize transactions involving Antigua due to corrupt regulation of offshore banks. The British Treasury issued a similar warning.
~ Kroll never highlighted the small size and unsophisticated nature of Stanford’s auditor, Antigua-based C.A.S. Hewlett.
The lawsuits also quotes one of Kroll’s own investigators, William Brittain-Catlan. “I’m amazed by the way people were taken in by ‘Sir Allen.’ There’s so much stuff out there that anyone who wanted to do a cursory check would have seen. Various allegations have been flying around for years,” said Brittain-Catlin, author of “Offshore: The Dark Side of the Global Economy.”
Background Check Myths
05.03.09
After our recent post about a
background check that saved a client millions of
dollars , some clients have called to ask how firms can offer
"national criminal record checks" for $24.95.
The national criminal check is the unicorn of the industry-- a complete myth. Usually, these firms are checking a compilation of conviction data--people who actually spent time in prison. However, only a very small percentage of people charged with crimes ever do any time. National offender databases are misleading: they miss charges that have been pled out, dismissed, not prosecuted. A bit like taking a photo of someone's nose and selling it as a portrait.
The national criminal check is the unicorn of the industry-- a complete myth. Usually, these firms are checking a compilation of conviction data--people who actually spent time in prison. However, only a very small percentage of people charged with crimes ever do any time. National offender databases are misleading: they miss charges that have been pled out, dismissed, not prosecuted. A bit like taking a photo of someone's nose and selling it as a portrait.
Due diligence pays for Nardizzi client
03.07.09
We received a note from a grateful
client after our due diligence research helped them avoid an
investment last year with Westgate Capital Management. The SEC
released this statement regarding Westgate Capital
Management, LLC and its managing member, James M. Nicholson, who
was arrested by the FBI at his New Jersey home.