Delaware Business Lawyer Blog

Yusaf Acar, acting Chief Security Officer of the D.C. Office of the Chief Technology Officer, and Sushil Bansal, former D.C. employee and current President and CEO of Advanced Integrated Technologies Corp., have been charged for their roles in a bribery scheme and money laundering

Congressional Staffer Pleads Guilty to Conspiracy to Commit Honest Services Fraud - Ann Copland admitted to being lobbied by Jack Abramoff and others on matters involving Native Americans and took a variety of official actions beneficial to them. She also admitted accepting items of value in exchange for her actions.

Viken Keuylian, owner of two Lamborghini dealerships, agreed to plead guilty to a scheme to bilk the finance company out of millions of dollars. In connection with the investigation, the FBI has taken into custody 13 Lamborghinis.

Former Hockey Team Owner Charged With Bankruptcy Fraud - Peter Hugh Pocklington, former owner of the Edmonton Oilers, was arrested on charges of bankruptcy fraud for allegedly concealing assets during bankruptcy proceedings.

West Point Graduate Indicted for Money Laundering and Theft of Government Property - Capt. Michael Dung Nguyen was charged with theft of government property, money laundering and structuring financial transactions. While deployed to Iraq, Nguyen stole more than $690,000 from the Commander’s Emergency Response Program

CPA Sentenced in Massive Fraud Against HSBC - Richard Po-Chun Wong was sentenced for defrauding HSBC Business Credit out of approximately $46 million through several elaborate schemes. Through his accounting practice, he prepared false financial documents for his clients, “redid” their books and helped them secure credit lines.

Why was I not surprised?

A few days ago I stopped at the Office Max near Christiana Mall and was shocked to see a sign announcing that later this month the store would be closing its doors forever. On my way to Office Max, I drove through the intersection of Limestone Road and Kirkwood Highway. The Gulf station on the corner is now out of business, as is the Steak & Ale and the Century Buffet across the street.

Speaking of the mall, Circuit City is going out of business. Circuit City follows KB Toys and Linens ‘N Things. And don’t forget that Mitchell’s up on Concord Pike went out of business a few months ago.

And who would have thought that Chrysler would close its doors in Newark after 56 years?

The simple answer is that one billion equals 1,000 millions. But even that doesn't really help. To put the number 1 billion in perspective, take a look at these examples:

A billion seconds ago it was 1959.

A billion minutes ago Jesus walked the earth.

A billion hours ago our ancestors were living in the stone age.

Here are some comments about the rule:

"Officials at hospitals and clinics predicted the regulation will cause widespread disruptions, forcing family planning centers and fertility clinics, for example, to hire employees even if they oppose abortions or in vitro fertilization procedures that can destroy embryos." from the Washingtonpost.com

"This gives an open invitation to any doctor, nurse, receptionist, insurance plan or even hospital to refuse to provide information about birth control on the grounds that they believe contraception amounts to abortion." from the Los Angeles Times

“Bernard Madoff’s amazing Ponzi scheme has put him in a league of his own, for now. He shouldn’t be alone for long. In the end, as with all the great frauds, Madoff’s undoing was that he ran out of cash. For years, he paid returns to early investors with money he raised from new investors, which is the hallmark of every Ponzi scheme. When the economy got tough, and his customers sought about $7 billion in redemptions, Madoff didn’t have the funds.”

To learn more about Ponzi schemes, pyramid schemes, and other common fraud schemes, a good resource is the FBI's website.

Other links of interest include:

The U.S. Postal Inspection Service - Mail Fraud Schemes

United States Secret Service - Financial Crimes Division

“Bernard Madoff’s amazing Ponzi scheme has put him in a league of his own, for now. He shouldn’t be alone for long. In the end, as with all the great frauds, Madoff’s undoing was that he ran out of cash. For years, he paid returns to early investors with money he raised from new investors, which is the hallmark of every Ponzi scheme. When the economy got tough, and his customers sought about $7 billion in redemptions, Madoff didn’t have the funds.”

The SEC’s website has the following explanation of Ponzi schemes and pyramid schemes.
Ponzi schemes are a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s. Ponzi thought he could take advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons. Ponzi told investors that he could provide a 40% return in just 90 days compared with 5% for bank savings accounts. Ponzi was deluged with funds from investors, taking in $1 million during one three-hour period—and this was 1921! Though a few early investors were paid off to make the scheme look legitimate, an investigation found that Ponzi had only purchased about $30 worth of the international mail coupons.

Decades later, the Ponzi scheme continues to work on the "rob-Peter-to-pay-Paul" principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses.

In the classic "pyramid" scheme, participants attempt to make money solely by recruiting new participants into the program. The hallmark of these schemes is the promise of sky-high returns in a short period of time for doing nothing other than handing over your money and getting others to do the same.

The process of contacting different mortgage companies and comparing the different offers can be somewhat confusing. At times, it may even seem like you're trying to compare apples and oranges.

The good faith estimate is a tool you can use to help make this comparison. In this regard, the U.S. Dept. of Housing and Urban Development announced last month that it will require mortgage companies and brokers to use a standard 3-page Good Faith Estimate (GFE). Here's an excerpt from the press release issued November 12, 2008:

"For the first time in more than 30 years, the U.S. Department of Housing and Urban Development today issued long-anticipated mortgage reforms that will help consumers to shop for the lowest cost mortgage and avoid costly and potentially harmful loan offers. HUD will require, for the first time ever, that lenders and mortgage brokers provide consumers with a standard Good Faith Estimate (GFE) that clearly discloses key loan terms and closing costs. HUD estimates its new regulation will save consumers nearly $700 at the closing table."

In addition to the new GFE, HUD is also requiring lenders to use a new HUD-1 Settlement Statement. Each designated line on the HUD-1 will include a reference to the relevant line from the GFE so that consumers can easily compare the estimated closing costs with the actual costs that they see at settlement.

To take a look at the new forms, click on the links:

Standard Good Faith Estimate
HUD-1 Settlement Statement

Seattle Times - 12/18/08
Former Entellium financial officer Parrish L. Jones pleaded guilty Wednesday to one count of wire fraud in U.S. District Court in Seattle, admitting to falsely inflating company revenues in a scheme to deceive investors over four years.

Atlanta Business Chronicle
An Alpharetta, Ga., man pleaded guilty late Wednesday in federal district court to conspiracy to commit wire fraud for his part in a scheme to defraud a California construction firm of nearly $13 million.

Wall Street Journal
Dealer Fraud Cases Expected to Rise Amidst Bleak Retail Season

Immediately after she fell, the owners (a husband and wife) ran over to my client, apologized, and said "this is what we have insurance for." They notified their insurance company, and expected that their insurance company would at least pay my client's medical bills. They were wrong.

The insurance company took the position that my client fell because she wasn't looking at the steps as she walked down them. They said it was her fault, and they refused to pay a dime.

And despite the exhaustion from late nights, the rain, the cold, and the excitement at the ball park, tomorrow I'll be back at Citizens Bank Park which is where the Phillies' parade will end and where there will be a tremendous ceremony.

One of my clients who wanted to refinance his mortgage submitted an application to a mortgage broker. The mortgage broker’s job was to find a lender who would approve the loan. In no time at all, the loan was approved, and my client and his loan officer from the mortgage broker came to my office for settlement.

During the settlement, one of the documents my client had to sign was the final application for the loan. This is a routine document to sign, and it certifies that the information about my client that the broker submitted to the lender was true. As my client looked at the application, something jumped off the page. His income was grossly overstated. He simply didn’t make anywhere close to what the broker had put on the application.

My client brought this to the broker’s attention, and the broker told my client to sign the application any way because it was a no income verification loan. Realizing what was happening, I asked the broker a series of questions in front of my client which resulted in the broker saying that he was aware that the income reported on the application was not correct, but there was no reason to worry about it because the lender was not going to attempt to verify his income. My client said he was not comfortable with this, and I pointed out to my client that regardless of whether anyone checked it for accuracy, the lender was relying on the truth of the application in deciding whether to lend the money. I also pointed out that there was a paragraph below the signature line advising that there were civil and criminal penalties for making a false statement on the application. When the broker continued to encourage my client to sign the form, I informed him that my client and I were not about to help the broker commit a fraud on the mortgage lender, and that settlement was cancelled.

I wonder how many other mortgage loans this broker and others like him were involved in?

Barron's

Bloomberg

Forbes

Fortune

Kiplinger

Wall Street Journal