The Justice Department is now announcing the details of their latest crackdown on fraud schemes like market manipulation and ponzi schemes.
The big announcement we’ve all been waiting for is a bit of a letdown because its almost all ponzi schemes and the biggest we’ve read about is a $880 million scheme – nothing compared to the billions Madoff scammed from investors.
The name the DOJ has given to this “huge crackdown” is a poignant (and funny) indication of what this is all about. It’s called, “Operation Broken Trust.”
We’re still waiting on the announcement about what the crackdown has to do with the ForEx market (apparently it does). UPDATE: The “crackdown’s” relevance to the ForEx market appears to be all but non-existent. It only relates to the market because some of the ponzi schemes the DOJ busted were ForEx schemes.
According to a recent press release, large number of ponzi schemes that are now defunct include Ponzi schemes, affinity fraud, prime bank/high-yield investment scams, foreign exchange (FOREX) frauds, business opportunity fraud and other similar schemes.
A few examples of the ponzi schemes the DOJ has busted as part of the crackdown:
- One man operating an $880 million Ponzi scheme in Florida duped investors from across the country – and used the money to buy floor seats at professional basketball games and to make payments on his personal yacht, his beach house, and his Mercedes.
- A New Jersey man charged with operating an investment scam allegedly used investor funds to make payments on three different luxury cars and to pay fees at two country clubs.
- In Florida, one defendant was convicted recently for his role in an investment scam that specifically targeted the local Haitian community.
- In Ohio, a former police officer operating a Ponzi scheme solicited investments from active and retired police officers and firefighters.
- In Chicago, another Ponzi scheme resulted in more than $30 million in losses to hundreds of victims – many of them elderly, Italian immigrants.
The DOJ says the operation sends a powerful message:
With this operation, the task force is sending two messages. A message to the public: be alert for these frauds, take appropriate measures to protect yourself, and report such schemes to proper authorities when they occur. And a second message to anyone operating or attempting to operate an investment scam: we will use every tool at our disposal to find you, to stop you, and to bring you to justice. Cheating investors out of their earnings and savings is no longer a safe business plan.
Click here to read the press release, which is a transcript of the DOJ’s opening comments.
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