"Vinny Gorgeous: The Ugly Rise and Fall of a New York Mobster" on Crime Beat Radio

On July 11th, journalist Robert Destafano discusses his new book, Vinny Gorgeous: The Ugly Rise and Fall of a New York Mobster. Also Margaret McClain, Special Correspondent, reports on the Bulger Trial.

Crime Beat is a weekly hour-long radio program that airs every Thursday at 8 p.m. EST. Crime Beat presents fascinating topics that bring listeners closer to the dynamic underbelly of the world of crime. Guests have included ex-mobsters, undercover law enforcement agents, sports officials, informants, prisoners, drug dealers and investigative journalists, who have provided insights and fresh information about the world’s most fascinating subject: crime.

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The Money Noose: The Collapse Of MF Global Was No Accident

Jon Corzine and other leaders at MF Global walked into a disastrous situation with their eyes wide open. Now, respected Wall Street veteran Scott Skyrm offers a detailed account of what really happened, and why. The Money Noose: Jon Corzine and the Collapse of MF Global (Bricktower Press) is like a car wreck: it’s hard to look at, and at the same time, hard to look away.

“MF Global had the wrong business model and the wrong people, at precisely the wrong time….
We did not deal with our central problem of unprofitable core business operations and out-of-control overheads….” A senior member of the MF Fixed Income management team is just one of many sources insider Skyrm has uncovered to explain the self-inflicted collapse of MF Global.

The demise of MF Global is a chaotic story, one in which individual actions taken in and of themselves are relatively minor. But the sum of those individual actions equal the same end result. Skyrm goes further, exploring the question of how investors can protect themselves from this outcome in the future. The best answer, he says, is education. Concise and informed, The Money Noose is a must-read for anyone who takes investing seriously.

Scott E.D. Skyrm is a leading figure in the repo and securities finance markets today, and regularly quoted in The Wall Street Journal, The Financial Times, Bloomberg News Service, Reuters, Market News, and Dow Jones. He is highly regarded as a former salesman, trader, trading desk manager, and global business head in fixed-income, securities finance, and securities clearing and settlement.

He recently left Newedge, where he was their Global Head of Repo, Money Markets, and Fixed Income Clearing. He is now writing commentaries on the repo market, the short-end of the Treasury market, Federal Reserve policy and general Wall Street topics. He has worked on Wall Street for over 22 years and has taken billion dollar risks on the trading floor, managed a multi-billion dollar balance sheet, and consistently ran one of the most profitable trading groups at every firm where he worked. Prior to Newedge, he managed the repo desk at ING Barings, worked summers at Shearson Lehman/American Express and started his full-time career at The Bank of Tokyo.

For more, please visit the website: www.scottskyrm.com.

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Abdul Walji and Reniero Francisco, CEO and President of Investment Fund, Plead Guilty in Federal Court to Orchestrating Nearly $10 Million Fraud Scheme

Abdul Walji and Reniero Francisco, the chief executive officer and president, respectively, of Arista LLC (Arista), a California investment fund, pleaded guilty in New York federal court to defrauding and misappropriating nearly $10 million from more than 35 investors by misrepresenting the nature and performance of the fund and issuing fraudulent account statements to investors to cover up massive losses, announced Preet Bharara, the U.S. Attorney for the Southern District of New York. Walji also pleaded guilty to perpetrating a multi-million-dollar fraudulent scheme with pension plan funds that he managed through three California-based trusts: Allied Benefits Inc., Allied Benefits Trust, and Stone Lamm Trust (collectively, the Trusts). Both defendants were charged in December 2012 and pleaded guilty today before U.S. District Judge Denise Cote.

“Abdul Walji and Reniero Francisco told one lie after another in order to squeeze millions of dollars out of their investors, even as they misappropriated nearly $10 million, including at least $2.7 million solely for their own personal benefit,” said U.S. Attorney Bharara. “Walji even went a step further and orchestrated a second scheme that ultimately cost his victims another approximately $9.5 million. With today’s guilty pleas, they will begin to be held responsible for their actions and repay those wronged by their unlawful conduct.”

According to the three-count superseding information to which Walji pleaded guilty, the indictment to which Francisco pleaded guilty, the defendants’ plea agreements, and other documents in the public record:

The Arista Fraudulent Scheme

Arista began operations as an investment firm in February 2010, with its principal place of business in Newport Coast, California. In April 2011, Arista became a registered commodity pool operator with the U.S. Commodity Futures Trading Commission and a National Futures Association member.

In early 2010, Walji and Francisco began to solicit individuals to invest in Arista. From 2010 through 2011, the defendants carried out their fraudulent scheme through three methods. First, Walji and Francisco misrepresented to several Arista investors the nature of the company’s investments and the returns that investors would receive from investing in Arista. For example, Walji and Francisco falsely told investors that their money would be invested in safe, risk-free securities, when in fact, much of the money was invested in options and futures. Second, Walji and Francisco sent fraudulent account performance statements to Arista investors that misrepresented the value of their investments. In an effort to secure additional contributions, the defendants also concealed Arista’s trading losses and told investors that they were profiting from their investments when they were actually losing money. Finally, Walji and Francisco misappropriated at least $2.7 million from Arista’s investors through fees to which they were not entitled and which Walji and Francisco diverted for their own personal benefit. Based on their false representations, Walji and Francisco collected nearly $10 million from over 35 investors, and they ultimately misappropriated a large portion of the money.

From early 2008 through June 2013, Walji also perpetrated a separate fraudulent scheme using pension plan funds that he administered. Similar to the scheme set forth above, Walji executed his fraudulent scheme through three principal methods. First, Walji made oral misrepresentations to existing and potential clients of the Trusts concerning: (i) the nature of the Trusts’ pension plan investments; (ii) the investment value and past performance of the pension plans; and (iii) the source of funds distributed to plan participants who had reached retirement and/or who had requested distributions. Second, Walji distributed fraudulent statements to clients concerning the value of their accounts and the prior performance of their pension plans in order to forestall redemption requests, induce new clients to contribute to the plans, and induce existing clients to make additional contributions. As selected clients reached retirement age or requested disbursements, Walji sent those clients money that he represented to be proceeds of their individual pensions, when in fact, he knew that the purported disbursements were often funds contributed by other clients. Third, Walji misappropriated approximately $300,000 of client funds for his personal use. In total, this scheme caused losses to approximately 35 additional victims in an aggregate amount of approximately $9.5 million.

Walji, 60, of San Juan Capistrano, California, pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud, one count of commodities fraud, and one count of securities fraud. The securities fraud charge carries a maximum sentence of 20 years in prison; the commodities fraud charge carries a maximum sentencing of 10 years in prison; and the conspiracy charge carries a maximum sentence of five years in prison. Francisco, 57, of Newport Coast, California, pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud and one count of securities fraud.

In connection with their guilty pleas, Walji consented to forfeit $13.6 million and Francisco consented to forfeit $4.1 million. The defendants also agreed to forfeit the proceeds of several bank and trading accounts.

U.S. Attorney Bharara praised the investigative work of the FBI and also thanked the U.S. Commodities Futures Trading Commission for its assistance.

This case is being handled by the U.S. Attorney’s Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys David I. Miller and Christopher D. Frey are in charge of the prosecution. Assistant U.S. Attorney Paul Monteleoni is in charge of the asset forfeiture related to the prosecution.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which U.S. Attorney Bharara serves as a co-chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.

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Ingrid Lederhaas-Okun, Former Vice President of High-End Jewelry Company, Arrested and Charged with Stealing More Than $1 Million in Jewelry

Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (FBI), announced the arrest of Ingrid Lederhaas-Okun, a former vice president of Product Development at a high-end jewelry company, for stealing more than $1.3 million worth of jewelry from her former employer. Lederhaas-Okun was arrested this morning at her residence in Darien, Connecticut, and will be presented in Manhattan federal court later today before U.S. Magistrate Judge James C. Francis.

Manhattan U.S. Attorney Preet Bharara said, “As alleged, Ingrid Lederhaas-Okun went from a vice president at a high-end jewelry company to jewel thief. She abused her access to valuable jewelry in order to steal and then resell over one million dollars’ worth of items that she falsely represented as her own, as the complaint describes. Her arrest shows that no matter how privileged their position in a company, employees who steal will face the full consequences of the law.”

FBI Assistant Director in Charge George Venizelos said, “As alleged, Ingrid Lederhaas-Okun took advantage of the access her employment afforded her to expensive jewelry. She allegedly stole numerous items, sold them for over a million dollars, then engaged in a series of lies in an attempt to cover up the theft. A privileged position in a prestigious company does not insulate a thief from arrest and prosecution.”

According to the allegations in the complaint unsealed in Manhattan federal court:

From at least January 2011 until February 2013, Lederhaas-Okun worked as a vice president of Product Development at the midtown Manhattan headquarters of one of the world’s premier high-end jewelers (the “jewelry company”). Her duties and responsibilities included ensuring that product designs could be manufactured and, to that end, she had authority to check out jewelry belonging to the jewelry company for work-related reasons, such as to provide the jewelry to potential manufacturers to determine the cost of production.

Between November 2012 and February 2013, Lederhaas-Okun abused her position and authority at the jewelry company to check out more than 165 pieces of jewelry with a retail value of over $1.2 million, including numerous diamond bracelets, platinum or gold diamond drop and hoop earrings, platinum diamond rings, and platinum and diamond pendants. She then sold some, if not all, of this jewelry for $1.3 million to another company, a leading international buyer and reseller of jewelry with an office in midtown Manhattan (the “jewelry reseller”). The jewelry reseller paid for the merchandise that Lederhaas-Okun had stolen either by paying her or her husband in transactions arranged either by Lederhaas-Okun or a friend working on her behalf.

In addition to this jewelry, in November 2012, following an announcement by the jewelry company that it was going to undertake a full physical inventory review, Lederhaas-Okun also reported that approximately $1.5 million worth of jewelry that she had checked out would have to be written off. However, none of that jewelry was ever returned to the jewelry company, contrary to the usual practice of accounting for inventory, such as damaged jewelry, that would have to be written off because it had been rendered unusable in some way.

To conceal her theft, Lederhaas-Okun made repeated false statements to the jewelry company. For example, after her termination in February 2013, she told the jewelry company that she had only recently checked out the missing jewelry in anticipation of creating a PowerPoint presentation for her supervisor and that a draft of the presentation could be found on her office computer. However, the missing pieces of jewelry had been checked out months earlier, her supervisor was unaware of any such presentation being worked on by Lederhaas-Okun, and there was no draft presentation on her computer. In addition, Lederhaas-Okun claimed the jewelry in question could be found in a white envelope in her office, but a search of her office shortly after her departure did not yield any white envelope.

Lederhaas-Okun, 46, of Darien, Connecticut, is charged with one count of wire fraud, which carries a maximum penalty of 20 years in prison; and one count of interstate transportation of stolen property, which carries a maximum penalty of 10 years in prison.

Mr. Bharara praised the investigative work of the FBI. Mr. Bharara also noted the investigation is ongoing.

The prosecution of this case is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorney Rosemary Nidiry is in charge of the prosecution.

The charges contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

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Jeffrey Liskov Charged in Fraud Scheme That Caused More Than $3 Million in Losses

A Plymouth man was charged yesterday in connection with an investment fraud that caused retired clients more than $3 million in losses.

Jeffrey A. Liskov, 42, was charged in an information with investment adviser fraud.

It is alleged that from November 2008 through August 2010, Liskov defrauded retired advisory clients. In 2008, despite sustaining large personal losses in risky, highly volatile foreign currency exchange trading, Liskov is alleged to have begun advising retired clients with conservative investment goals to allow him to engage in such trading with a portion of their retirement money. Liskov received significant performance fees for conducting this volatile trading on behalf of clients based on short-term gains, without regard to the long-term performance of his trading in the clients’ accounts.

In late 2009, after sustaining large trading losses for long-time clients, Liskov started liquidating securities in the brokerage accounts of these clients and investing the proceeds in foreign currency exchange trading without the clients’ knowledge or authorization. In order to fund these investments behind his clients’ backs, Liskov used white-out correction fluid and other methods to create fraudulent documents that allowed him to open new foreign currency exchange trading accounts and/or to transfer funds from client brokerage accounts to foreign currency exchange trading accounts. This allowed Liskov to secretly engage in additional foreign currency exchange trading on behalf of long-time clients for whom he had already lost significant amounts of money—additional trading from which, in some instances, Liskov was able to pocket large performance fees. The trading Liskov engaged in with the funds from this fraud caused over $3 million in losses to the long-time clients but garnered Liskov over $200,000 in performance fees.

The statutory maximum offense for investment adviser fraud is five years in prison, followed by three years of supervised release, a $250,000 fine, and restitution.

United States Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. U.S. Attorney Ortiz expressed appreciation for the significant assistance her office received from the U.S. Securities and Exchange Commission and also acknowledged the cooperation of the United States Commodity Futures Trading Commission. The case is being prosecuted by Assistant U.S. Attorney Ryan M. DiSantis of Ortiz’s Economic Crimes Unit.

The details contained in the information are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

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