Posts Tagged: fraud
‘Sophisticated’ iPhone fraud involving fake handsets leads to convictions
A scam that defrauded Apple out of millions of dollars’ worth of iPhones has led to the convictions of two of the perpetrators.
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Sam Bankman-Fried pleads not guilty to latest fraud, bribery charges
FTX founder and former CEO Sam Bankman-Fried (aka SBF) pleaded not guilty to five additional criminal charges this morning, according toCNBC. Prosecutors accuse the disgraced crypto exec of fraud and bribery for conspiring to send at least $ 40 million to Chinese government officials so they would unfreeze more than $ 1 billion in cryptocurrency, which he allegedly used to fund loss-generating trades.
On Tuesday, the U.S. Attorney’s Office for the Southern District of New York (SDNY) unsealed the third round of criminal charges against SBF in a superseding indictment; SBF has now pleaded not guilty to all 13 charges. Additionally, he faces civil charges from the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). His attorney, Mark Cohen, claimed he would file a motion that SBF can’t be tried on charges brought after his extradition from the Bahamas in December.
Federal prosecutors allege SBF and his partners tried “numerous” legal and personal methods to unfreeze the funds before moving forward with the bribe. They say SBF directed Alameda Research, FTX’s sister company, to transfer more than $ 40 million to a private wallet. Of course, it’s illegal for US citizens to bribe foreign officials to generate business. The new charges ramp up pressure on the 31-year-old Bankman-Fried, who reportedly “arrived at the courthouse about an hour before the hearing, looking disheveled after an intense media scrum.”
Three former FTX executives, Caroline Ellison, Zixiao “Gary” Wang, and Nishad Singh, have pleaded guilty to fraud and conspiracy charges and have agreed to cooperate with the prosecution. There’s no word yet on the judge’s ruling about whether SBF will be forced to use a feature phone and limit internet access as part of his bail terms. After it was revealed SBF was using a virtual private network (VPN) and possibly tampering with witnesses, District Judge Lewis Kaplan previously said he didn’t want SBF “loose on his garden of electronic devices.”
This article originally appeared on Engadget at https://www.engadget.com/sam-bankman-fried-pleads-not-guilty-to-latest-fraud-bribery-charges-165445328.html?src=rss
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Disgraced FTX founder Sam Bankman-Fried pleads not guilty to federal fraud charges
Sam Bankman-Fried, the disgraced founder and former CEO of crypto exchange FTX, has pleaded not guilty to federal wire fraud charges and other crimes. Bankman-Fried appeared before a Manhattan court on Tuesday, nearly two weeks after he was granted bail on a $ 250 million bond, and said he was innocent of charges laid against him by US prosecutors.
In addition to a civil suit from the Securities and Exchange Commission, SBF faces a criminal indictment from the Justice Department. Prosecutors have accused Bankman-Fried of leading a multiyear scheme to defraud investors and customers of FTX. SBF faces a total of eight criminal charges, including multiple counts of wire fraud. He is also accused of attempting to commit commodities fraud, as well as breaking federal election laws by donating more than is legally allowed and in the names of other people.
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US prosecutors are reportedly investigating FTX founder Sam Bankman-Fried for fraud
US federal prosecutors could be building a fraud case against FTX founder and former CEO Sam Bankman-Fried. Bloomberg reports Justice Department officials met with the crypto exchange’s bankruptcy team this week to discuss documents investigators aim to obtain from the company.
The meeting included prosecutors from the Southern District of New York, Assistant US Attorney Roos, agents from the Federal Bureau of Investigation, and lawyers from FTX. Roos, notably, was involved in the prosecution of Nikola founder Trevor Milton, who was convicted of misleading investors earlier this year. According to Bloomberg, potential charges were not discussed at the meeting that occurred this week.
The Justice Department is “closely” examining whether FTX improperly transferred hundreds of millions of dollars around the time the company declared bankruptcy on November 11th. It’s also probing whether the exchange broke the law when it moved funds to sister company Alameda Research.
In his recent New York Times interview, Bankman-Fried denied knowingly misusing customer funds. “Clearly, I made a lot of mistakes. There are things I would give anything to be able to do over again,” he said. “I did not ever try to commit fraud on anyone.” He will testify before the House Committee on Financial Services next week, a panel that will also include testimony from FTX’s current CEO, John J. Ray III. Ray has accused Bankman-Fried of making “erratic and misleading public statements” about FTX.
Elizabeth Holmes sentenced to 11 years in prison on fraud charges
Elizabeth Holmes, the former CEO and founder of Theranos, has been sentenced to just over 11 years in prison for defrauding the investors of her blood testing startup. The sentence comes almost a year after Holmes was found guilty on four counts of fraud following a months-long trial.
In total, Holmes was sentenced to 135 months in prison, as well as three years of supervised release. A surrender date was set for April 27th. She will also be ordered to pay restitution, though Judge Ed Davila said that amount will be determined at a separate hearing. Prosecutors had asked for more than $ 800 million in restitution, accounting for 29 investors, but at the sentencing hearing, Davila said restitution would be based on $ 121 million in losses to 10 investors, according to The New York Times.
Ahead of her sentencing, prosecutors had pushed for a 15-year sentence, while Holmes’ attorneys argued she should get no more than 18 months of house arrest. Her probation officer had recommended nine years, The New York Times reported.
Throughout the trial, Holmes’ lawyers tried to portray the Theranos founder as a young and inexperienced entrepreneur who hadn’t intended to deceive investors or the public. During her testimony, Holmes blamed many of Theranos’ problems on others at the company, including her former partner Ramesh “Sunny” Balwani.
She also testified that Balwani was abusive during their romantic relationship, and that he had misled her about what was happening in Theranos’ lab. Balwani, who as COO also oversaw day-to-day operations of the company’s lab, was found guilty on 12 counts of fraud in a separate trial earlier this year. His sentencing is scheduled for December.
Even at her sentencing, Holmes proved she still has influential allies to defend her. Several Silicon Valley investors, including early Theranos backer Tim Draper, wrote letters of support urging the judge for a lighter sentence. New Jersey Senator Cory Booker also wrote in her support, asking the judge for “a fair and just sentence.”
Holmes delivered a brief statement at her sentencing hearing. “I regret my failings with every cell of my body,” she said, according to Law360’s Dorothy Atkins. Holmes was crying throughout her statement, according to multiple reporters in the courtroom.
Nikola founder Trevor Milton convicted on three charges of fraud
Trevor Milton, the founder and former executive chairman of Nikola, has been found guilty on three counts of fraud for misleading the electric vehicle company’s investors about its business and technology.
In total, he was found guilty on one count of securities fraud and two counts of wire fraud. He was acquitted on one charge of securities fraud. His sentencing has been scheduled for January 27th. He faces up to 20 years in prison.
Milton was indicted by a federal grand jury on the charges last year, with prosecutors citing numerous alleged lies, including many made on Twitter, in podcast interviews and other media appearances. Prosecutors alleged he had lied about “nearly all aspects of the business” in an effort to boost the stock of the EV maker.
The SEC began investigating the company in 2020, after Hindenburg Research publicly accused Nikola of staging an “elaborate ruse” to mislead the public about the status of its electric semi, Nikola One. While the company had published a video purporting to show the truck “cruising on a road at a high rate of speed,” Hindenburg said the truck had actually been “towed to the top of a hill on a remote stretch of road and simply filmed it rolling down the hill.” The company ultimately paid $ 125 million to settle civil charges with the SEC in 2021.
During the trial, Milton’s defense lawyer argued that the video was merely “special effects” and that “it’s certainly not a crime to use special effects.” But prosecutors raised several other false claims by Milton, who was extremely active on Twitter. According to The Times, prosecutors said Milton also lied about having “binding contracts with trucking companies” that in reality were cancelable reservations for vehicles. Prosecutors also cited Milton's claims about making “green hydrogen” when the company had not yet produced any.
Mining Capital Coin CEO indicted in $62 million crypto fraud scheme
Mining Capital Coin CEO and founder Luiz Capuci Jr. was — in an indictment unsealed yesterday — accused by the DOJ of allegedly running a $ 62 million global investment fraud scheme. He's the latest of severalcrypto company heads who have recently been similarly charged.
Through his company, Capuci convinced investors to purchase “Mining Packages," a global network of cryptocurrency mines that promised a certain return on investment every week. But instead of using investors’ funds to mine cryptocurrency as he promised, the DOJ alleges that Capuci diverted the funds to his own cryptocurrency wallets. Another MCC product known as “Trading Bots” operated under the same false pretenses. Capuci claimed that the bots operated in “very high frequency, being able to do thousands of trades per second” and promised investors daily returns.
“As he did with the Mining Packages, however, Capuci allegedly operated an investment fraud scheme with the Trading Bots and was not, as he promised, using MCC Trading Bots to generate income for investors, but instead was diverting the funds to himself and co-conspirators,” wrote the DOJ in its indictment.
MCC seemed to have all the workings of a pyramid scheme. Capuci recruited affiliates and promoters to lure investors. In return, he promised the promoters a number of lavish gifts, including Apple watches, iPads and luxury vehicles.
Currently the FBI’s Miami Field Office is investigating the case. The DOJ has charged Capuci, who is from Port St. Lucie, Florida, with conspiracy to commit wire fraud, conspiracy to commit securities fraud and conspiracy to commit international money laundering. If found guilty, he faces a maximum sentence of 45 years.
In a review of the cryptocurrency mining platform, crypto blogger Peter Obi noted that the combination of MCC’s $ 50 monthly fee for membership and its steep 3% withdrawal fee meant that investors were unlikely to make a profit unless they referred other investors. He pointed out that such a referral process was “particularly worrying” because it was consistent with other past crypto scams.
Indeed, a number of crypto leaders have been accused by authorities of running Ponzi schemes in recent years. Earlier this year the DOJ indicted Bitconnect founder Satishkumar Kurjibhai Kumbhani for allegedly running a $ 2 billion Ponzi scheme — believed to be the largest virtual currency pyramid scheme in history.
Capuci never registered his company with the SEC. The agency today issued a fraud alert for the company. According to the SEC press release, Capuci and his associates successfully convinced 65,535 investors to purchase mining packages worldwide and promised daily returns of one percent, paid weekly for over a year. In total, the group netted $ 8.1 million from the sale of the mining packages and $ 3.2 million from initiation fees.
Nigerians face US charges over online fraud worth ‘hundreds of millions’
US law enforcement is cracking down on a pair of alleged online fraudsters that appear to have been wildly successful. The United Arab Emirates has sent the US two Nigerian nationals, Ramon Olorunwa Abbas and Olakean Jacob Ponle, to face charges rela…
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Russia busts card fraud ring that included an infamous hacker
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AT&T will automatically block fraud calls for new customers
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Android ad fraud scheme drained users’ batteries and data
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US Secret Service is probing how crooks use smart credit cards for fraud
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Ticketmaster buys a blockchain company to guard against ticket fraud
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US regulators charge three bitcoin operators with fraud
Today the US Commodity Futures Trading Commission announced that it has filed a federal civil enforcement action against three virtual currency operators. The details of one case remain sealed, but the other two companies facing charges are CabbageTe…
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Fyre Festival founder arrested, charged with wire fraud
There has been one arrest following April's disastrous Fyre Festival event, as the Southern District of New York US Attorney's office announced the arrest of Fyre Media founder William McFarland. He's charged with wire fraud over allegedly lying to i…
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Former Epix exec pleads guilty over $7 million fraud
In 2009, Viacom, Lionsgate and MGM joined forces to launch a premium movie channel called Epix, with Emil Rensing as its Chief Digital Officer. Turns out hiring Rensing was a bad move: according to the Justice Department, he has just pleaded guilty t…
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French authorities raid Google’s Paris HQ over ongoing tax fraud case
French authorities this morning raided Google’s Paris HQ, seeking more information for an ongoing tax fraud case. Investigators have been at Google’s offices since 0500 am (0300 GMT), a source told Reuters. “A raid is underway at Google’s,” the source said. There are supposedly 100 investigators at the scene, all searching for more information regarding tax fraud. France is […]
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