Tag Archives: fraud

SEC charges former CalPers CEO in Agent Fee Scheme

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SEC Charges Former CalPERS CEO and Friend With Falsifying Letters in $20 Million Placement Agent Fee Scheme

According to http://www.sec.gov/news/press/2012/2012-73.htm website Buenrostro (former CalPers CEO) directed placement agent fees to Villalobos through falsification of documents with CalPers logo.  The placement fees paid were at least $20 million dollars.

The letter was a new requirement by this fund company for fees paid to placement agents that assisted in raising funds.

There seems to be no end of leading executives who continue to cross ethical lines to enrich themselves and their friends.  Kudos to the SEC for identifying this action and hopefully, if found guilty, will apply a sufficient deterrence to discourage others from crossing over this very clear ethical line.

Edi Alvarez, CFP®
BS, BEd, MS

www.aikapa.com

Debit Card Scam in the Bay Area

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Debit Card Scam in the Bay Area – monitor your finances regularly

The latest high profile debit card scam is a reminder of ‘buyer beware’.  We’ve always been concerned about debit cards because they provide direct access to your accounts.  The latest scam is specifically on self check counters at Lucky’s but it could have occurred at other locations.

We all know the advantages and speed of using the latest and greatest technological tool but we need to but some automatic roadblocks between our cash flow (and our financial information) and vendors or we must be prepared for nasty surprises.

Why have we been recommending the use of credit cards rather than debit cards?  Aren’t credit cards evil and to blame for much of America’s debt?  Tools are neither to blame nor inherently evil but improper use can make a tool dangerous.  Without financial awareness, credit cards can lull consumers into using them to meet emergencies or fulfill life long dreams/goals.  We recognize that credit and debit card transactions are electronic and are therefore quite different from cash. Each electronic transaction carries your electronic imprint and you need to be very careful who has access to that information.

So how do you protect yourself?
We recommend that clients use credit cards rather than debit cards because with credit cards (if you monitor them monthly) consumers have the time to work through the process and reject a fraudulent charge.  Such is not the case with debit cards where money is drawn directly out of your account.
In combination with use of credit cards we recommend that consumers establish a simple process to monitor their expenses regularly. We also encourage clients to setup credit card web email alerts on unusual credit card charges.
Overall, we recommend that consumers know their finances well enough so that they at any time have a good idea if their ongoing balances are aligned with their financial plan.

The latest debit crime wave on Lucky self checkout stores ...

More than 300 people have reported unauthorized withdrawals from bank accounts following Lucky’s first identifying the problem on Nov. 11 of account ‘skimming’ at their self checkout cashiers.

Hackers installed ‘skimming’ devices on selected self-checkout aisles, allowing them to collect personal data, like debit card numbers and PINs, remotely. The fraudulent withdrawals are being made from ATMs in Southern California and the San Francisco Peninsula.

The crimes are being investigated by the US Secret Service.

In the meantime, Lucky’s is asking anyone who used a self-checkout lane at an affected store to close out their accounts and change card numbers. Here’s a partial list of affected stores, courtesy of the Contra Costa Times.

MARIN COUNTY
Novato

SAN FRANCISCO
1515 Sloat Blvd.

SAN MATEO COUNTY
Daly City
Foster City
Millbrae
Redwood City
San Carlos

ALAMEDA COUNTY
Alameda
Union City
Fremont: 5000 Mowry Ave.; 35820 Fremont Blvd.
Hayward: 25151 Santa Clara St.

CONTRA COSTA COUNTY
El Cerrito
Pinole

SANTA CLARA COUNTY
San Jose: 5510 Monterey Highway; 200 El Paseo de Saratoga; 844 Blossom Hill Road; 3270 S. White Road.
Santa Clara: 234 Saratoga Ave.
Milpitas
Mountain View
Sunnyvale

SONOMA COUNTY
Petaluma: 939 Lakeville Highway

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Edi Alvarez, CFP®
BS, BEd, MS

www.aikapa.com

SEC v David Kugel (part of Madoff Ponzi Scheme)

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SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 22166 / November 22, 2011

Securities and Exchange Commission v. David Kugel, 11-Civ-8434 (S.D.N.Y.)

SEC CHARGES LONGTIME MADOFF EMPLOYEE FOR HIS ROLE IN THE MADOFF PONZI SCHEME: details – http://www.sec.gov/litigation/litreleases/2011/lr22166.htm

On November 21, 2011, the Securities and Exchange Commission charged a longtime Bernie Madoff employee with fraud for his role in creating fake trades to facilitate the massive Ponzi scheme.

The SEC alleges that David Kugel, who worked at Bernard L. Madoff Investment Securities LLC (BMIS) for nearly four decades, was asked by Madoff to provide the firm’s investment advisory operations with backdated arbitrage trade information to be formulated into fictitious trading on investors’ account statements. Kugel’s own account at BMIS was among those in which backdated trades were entered, and he withdrew nearly $10 million in “profits” from the fictitious trading over several years.

The SEC previously charged two other longtime Madoff employees Annette Bongiorno and JoAnn Crupi for their roles in producing phony account statements that were sent to Madoff investors. According to the SEC’s complaint against Kugel filed in U.S. District Court for the Southern District of New York, Bongiorno and Crupi and other staff in Madoff’s investment advisory (IA) operations used the information provided by Kugel to formulate fictitious trades to appear on investor account statements.

The SEC alleges that sometime in the early 1970s after Kugel began his career with Madoff as an arbitrage trader in the firm’s proprietary trading business, Madoff informed Kugel that BMIS managed money for outside clients. He asked Kugel to provide the firm’s IA operations with backdated convertible arbitrage trades for inclusion on investor account statements. Some of these trades replicated successful trades that Kugel had actually made for BMIS proprietary trading operations. Other trades were based on historical information that Kugel obtained from old newspapers.

According to the SEC’s complaint, Bongiorno and Crupi regularly asked Kugel for backdated information about trades amounting to millions of dollars. After Kugel provided the information, Crupi and Bongiorno would then design trades that totaled that amount. These fictitious trades were highly profitable on an annualized basis, and appeared on account statements and trade confirmations sent to investors. Kugel, who opened his own BMIS account, received these account statements and trade confirmations as well.

The SEC alleges that Kugel provided backdated trade information for IA accounts, including his own. He withdrew the purported “profits” of these trades even though he knew they weren’t proceeds of actual trading activity. One trade in S&P index options in 2007 earned Kugel a profit of more than $375,000 in just a few weeks. Kugel withdrew almost $10 million from his BMIS IA accounts from 2001 to 2008.

Edi Alvarez, CFP®
BS, BEd, MS

www.aikapa.com