International Law

Fraud News for Tuesday

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I had observed in numerous posting that the 12Daily Pro scam was likely a money laundering scheme - $200 million from Indonesia ended up in the US via illegal money transmitters using the internet.  

The money transmitter in the 12Daily Pro was Stormpay.

12Daily Pro was prosecuted as mere pyramid scheme by the FBI.

Now, Ed Dickson, writing at his blog Fraud, Phishing and Financial Misdeeds reports about E-Gold:

"The three principal executives of E-Gold Limited have pleaded guilty in a case brought against them by the Department of Justice.

The three executives in question, Dr. Douglas Jackson, principal director of E-Gold and CEO of Gold & Silver Reserve Incorporated, and two of his senior directors (Barry Downey and Reid Jackson) pleaded guilty to conspiring to engage in money laundering and operating an unlicensed money transmitting business.

The corporations involved (E-Gold and Silver Reserve) face a fine of $3.7 million and have already agreed to pay a judgment of $1.75 million.

Jackson faces up to 20 years in prison and a fine of $500,000 and Downey and Reid face a maximum of 5 years in prison and a $25,000 fine."

"To anyone familiar with crime on the Internet, allegations of criminals using, or manipulating E-Gold (or other services like these) are nothing new. E-Gold gives their customers the ability to transfer the value of gold, electronically. To transfer E-Gold -- which has a cash value -- all anyone needs is an e-mail address, account number and password."

Read the Ed's article, he is an expert on illegal wire transfers.

Judge Roy Bean shoots back at the Obama crowd about Penny Pritzker

"The PR machines and political supporters are busy, scrounging the net and blogs for anything that might be detrimental to a political candidate or a powerful Squaliforme.

Take the first published comment to the previous post. Then take the blog the author points to for what it's worth - they're firing blanks.

Let's dissect this flimsy public-relations exercise:

Claim 1: "Penny Pritzker had no ownership in Superior. She did not profit or receive compensation, except minimal directors' fees. She and her extended family lost a great deal of money from this investment."

OK, let's see just how that works - "[she] and her extended family lost a great deal of money from this investment," yet Penny Pritzker allegedly had "no ownership inSuperior"??? Unfortunately, the author of this fluff piece misses the dichotomy, especially when claim 2 is made:

"She and her extended family agreed to pay the largest amount in the history of U.S.banking to the federal government: $460 million although they owned just 50% of the bank."

You can't have it both ways - the Pritzkers either did or didn't own 50% of the bank and Penny is, after all, part of that "extended family" that "lost a great deal of money from this investment." If we are supposed to be concerned that they, as half owner, paid while the other half didn't, that was their decision."

Hard to argue this with this logic.  Sounds like Pritzkers will be on Judge Roy Bean's target list for a while.

Full post as published by Misleading Advertising Law on July 22, 2008 (boomark / email).