Marino Sentenced 20 Years for Defrauding Investors of Over $450 Million
Former Exec Sentenced for Defrauding Investors of Over $450 Million: "Defrauding"
DANIEL E. MARINO was sentenced today to 20 years in prison for defrauding investors in the now-collapsed Bayou hedge funds of more than $450 million.The sentence was imposed by United States District Court Judge COLLEEN MCMAHON in Manhattan federal court. MARINO pleaded guilty on September 29, 2005, to conspiracy, investment adviser fraud, mail fraud and wire fraud.
In imposing the sentence, Judge MCMAHON said that she was sending a message to the securities and other industries that people entrusted with other people’s money have an obligation to be truthful and forthright, at whatever cost to themselves.
She described MARINO as “the linchpin of the fraud.”
According to publicly filed documents, between 1996, when the first Bayou fund was opened, and August 2005, when a series of Bayou funds collapsed, the funds sustained consistent losses.
Investors, however, were regularly told that the funds were reaping substantial gains.
MARINO, who was the Chief Financial Officer and Chief Operating Officer of Bayou, admitted during his guilty plea that he and SAMUEL ISRAEL, III, the Chief Executive Officer of Bayou, along with JAMES G. MARQUEZ, who ran the first Bayou fund with ISRAEL, hatched a scheme in 1998, after the fund sustained a second year of losses.
At that time, the three agreed that MARINO, a Certified Public Accountant (“CPA”), would form a sham CPA firm called Richmond-Fairfield Associates to sign off on the fraudulent financial statements that were disseminated to future and current investors.
Thereafter, according to the Information to which MARINO pleaded guilty, beginning in 1999, they sent out, among other things, financial statements, in which Bayou falsely reported profits and falsely asserted that Richmond-Fairfield Associates was an independent auditor that had audited Bayou and certified its financial statements.
(Via FBI in the News.)
One of bizop's favourite fraudster now gets a 20 time out to "reflect".
Read More From BizOp News
July 26, 2007
International Fiduciary Corp Prime Bank Fraud
Here is how the the International Fiduciary scam ended
International Fiduciary Corp Prime Bank Fraud
The Securities and Exchange Commission ("Commission") announced today that the Honorable Gerald Bruce Lee, United States District Judge for the Eastern District of Virginia, has entered Final Judgments as to Defendants International Fiduciary Corporation, S.A. ("IFC"), and its chairman and CEO, Preston David Pinkett, II ("Pinkett"), restraining and enjoining them from future violations of Sections 5 and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. (The judgment against IFC was entered on July 20, 2007 and the judgment against Pinkett was entered on July 3, 2007.) Pinkett and IFC consented to the entry of the judgments without admitting or denying any of the allegations of the Commission's First Amended Complaint. The Court ordered disgorgement against Pinkett in the amount of $5,101,000, plus prejudgment interest of $153,061. Pinkett was also ordered to pay a civil penalty of $100,000. With respect to IFC, the Court ordered disgorgement against it in the amount of $24,037,362.95 plus prejudgment interest of $971,109.46. The Court, however, did not impose a payment obligation on IFC based on the fact that Roy M. Terry, Jr., the Court-Appointed Receiver for IFC, will instead prepare a plan (subject to the SEC's consent) to distribute all those funds — and all other funds paid by Defendants and Relief Defendants in this case — to investor victims in the United States, Canada, and any other locations.The Commission filed its complaint against IFC, Pinkett, and two other defendants — Daniel Eric Byer ("Byer") and Malcolm Cameron Boyd Stevenson ("Stevenson") — on December 4, 2006, alleging that they defrauded investors through a fraudulent "asset growth program" purportedly involving risk-free participation in the trading of "1st tier medium-term bank notes." On that same date, the Court issued an order that, among other things, temporarily restrained IFC, Pinkett, Byer, and Stevenson from violating the antifraud provisions of the federal securities laws, and freezing investor funds wherever located and all assets of the defendants. On December 11, 2006, the Court entered a preliminary injunction which extended the temporary restraining order and asset freeze. On January 19, 2007, on the Commission's motion, the Court appointed Roy M. Terry, Jr., Esq. as Receiver over IFC. On April 19, 2007, the Commission filed an amended complaint that alleged, among other things, that the defendants raised at least $40 million from at least 140 investors, and added two individuals and four Washington State-based companies as relief defendants. On June 19, 2007, the Court entered default judgments against Byer and Stevenson.
Again, what this fraud demonstrates is the effectiveness of using the word "guarantee".
It is striking that the last survey on investment fraud showed that the victims were more intelligent than the ordinary investor about investment terms, but were completely lacking in understanding the risk reward formula: more reward means more risk, no guarantees about it.
