[ Pobierz całość w formacie PDF ]
.He still has to get Jacob s shares over tohim, but he has a friendly broker he takes care of who will LOAstuff to third parties, meaning that the bribed broker will accept aletter of authorization to move shares already in street address fromone account holder to another, something most brokers refuse to do.Ken told each of four people they were the only guy he called.Healso plans to sell while encouraging others to buy and seems to planto goose up the price as much as possible, sell his shares short at thehigher price and then as soon as he gets free-trading shares deliveredhe will cover his short, locking in the profit.He knows that Eli is going to sell as much as he can into the volumethat Jacob will create, so he knows the price must fall.By short-ing up front, he will protect as much value as possible.He, himself,believes the company he is touting is overpriced garbage, but heis nonetheless touting it to innocent investors.Ken is also an insiderwho has tipped Amos, so Amos (as the tippee) may not trade on theinside information.Amos is also shorting illegally in Canada in collusionwith Ken.Jacob s concealment of his involvement is interesting.He is havingthe stock he received donated to the church by his cousin, potentiallyentitling the cousin (if he were an American) to a tax deduction for theappreciated value of the stock, and relieving him of the capital gainstax.But the church is now going to sell the stock.As a church, it canordinarily withdraw cash to distribute alms to the poor, but here thechurch and synagogue are being used by their clergy to illegally laun-der money.That will also jeopardize their status under Section 501(c)3of the tax code, which gives religious organizations tax-exempt status. Fictitious Volume 115Similar ChargesIn a recent case that received much publicity, including an article byAdam Wills on JewishJournal.com entitled Spinka Grand Rabbi, FourOthers Plead Guilty, Grand Rabbi Naftali Tzi Weisz (the SpinkaRabbi) and his assistant, Rabbi Moshe Zigelman, pleaded guilty in LosAngeles to similar charges for acts similar to those of the pastor in theprevious example, and each was sentenced to 24 months of imprison-ment; they are now in Otisville with David Schick (see Chapter 16).1If Ken s scam were to come out into the open, there could bemany charges against Ken, Jacob, Eli, and the others.These include(at a minimum): (1) securities fraud, (2) tax fraud, (3) money laun-dering, and (4) conspiracy.Amos, though he lives in Canada, couldalso face charges both for illegally shorting and for trading on insideinformation.Finally, the cousin who got the cheap stock was clearlyalso a part of the conspiracy.The fact that Eli made the deal with Kenon his behalf is evidence of them acting in concert, so Boris s shareswould be aggregated with Eli s and would lose their free-trading status(if they were ever truly free in the fi rst place).Thus everyone in thechain would have a problem either with selling unregistered securitiesor with a statutory underwriting, or both.Jacob s plan to trade the stock in a circle A to B, B to C, and Cto A is also fraudulent parking and market manipulation.In short,what may have started out as a way to build a market so the companymight be fi nanced ended up as an illegal scheme that violated a hostof laws.(While the foregoing tale is based on an actual story, it has beenaugmented a bit with details from other stories that also all really hap-pened.Eli has not yet been nailed, but Ken has.Stay tuned.)Building awareness to create interest in a company can begin withgood intentions.But as we have seen, in the execution a host of securitieslaws are often broken, and many unsavory characters are involved.If yousee evidence of hyping a stock, don t walk.Run.In the opposite direction. Chapter 15Parachute into PrisonU.S.V.SCHRENKERederal enforcement of securities laws often proceeds slowly.Evenwhen there are criminal charges, defendants can often remainFfree on bail for extended periods.Since, as we have seen, thepenalties, when ultimately meted out, can be draconian, the temptationto fl ee can be great.Indeed, a number of folks who were caught com-mitting financial fraud have sought to flee to avoid the consequences oftheir actions.Most are caught.Some have fascinating escapades alongthe way.Here are a few examples, starting with a parachute jump.Disappearing Pilot Charged with FinancialScheme Fakes Own DeathAn Indiana fi nancial adviser, Marcus J.Schrenker, who was wantedon fi nancial fraud charges, has been accused of trying to fake hisown death in a plane crash.He has pleaded not guilty and was toundergo a psychiatric examination to determine whether he was ableto stand trial.The 38-year-old took off alone in his Piper aircraft on January 11,2009, from Anderson, Indiana, heading for Destin, Florida.But over116 Parachute into Prison 117Alabama he issued a Mayday call to air traffic controllers telling themhis windshield had shattered and he was bleeding profusely.Policebelieve he then bailed out of the aircraft with his parachute.Two F-15 jets were scrambled to intercept the aircraft, and thejet pilots reported that the plane was empty and apparently flyingon autopilot.The fighters followed it until it crashed in East Milton,Florida, not far from a populated area.Reconstructing What HappenedHere is a time line of events in the Schrenker plane mystery, as reportedby the major news organizations.1Schrenker first came to the attention of the authorities in January2008.The Indiana Department of Insurance filed a complaint againsthim on behalf of seven investors who claimed he had cost them morethan $250,000 because he never disclosed that they would face high feesto switch annuities.A search warrant was obtained, and on December 31, 2008, officersexecuted the warrant and searched Schrenker s home for computers,notes, photos, and other documents related to his wealth managementcompanies, looking for possible securities violations.On January 9, 2009, a federal judge in Maryland issued a $533,500judgment against Schrenker s Heritage Wealth Management Inc.andin favor of OM Financial Life Insurance Company.That marked a turning point.The very next day, Schrenker stored a red Yamaha motorcycle ina storage facility in Harpersville, Alabama, telling the facility s ownerhe d be back on Monday to pick it up.Two days later, on January 11, 2009, Schrenker, a pilot, took off inhis single-engine Piper Malibu from Anderson, Indiana, with a flightplan supposed to take him to Destin, Florida.While fl ying near Huntsville, Alabama, he issued what turned outto be a fake distress call, reporting severe turbulence, and told flightcontrollers that one of his windshields had imploded and that he wasbleeding profusely.Unbeknownst to anyone, he let his plane continue to fl y on auto-pilot and parachuted out safely.It flew by itself for more than 200 miles 118 hi s t or y of gr e e dbefore crashing and landing in a swamp near a residential area in theFlorida Panhandle [ Pobierz całość w formacie PDF ]
zanotowane.pl doc.pisz.pl pdf.pisz.pl centka.pev.pl
.He still has to get Jacob s shares over tohim, but he has a friendly broker he takes care of who will LOAstuff to third parties, meaning that the bribed broker will accept aletter of authorization to move shares already in street address fromone account holder to another, something most brokers refuse to do.Ken told each of four people they were the only guy he called.Healso plans to sell while encouraging others to buy and seems to planto goose up the price as much as possible, sell his shares short at thehigher price and then as soon as he gets free-trading shares deliveredhe will cover his short, locking in the profit.He knows that Eli is going to sell as much as he can into the volumethat Jacob will create, so he knows the price must fall.By short-ing up front, he will protect as much value as possible.He, himself,believes the company he is touting is overpriced garbage, but heis nonetheless touting it to innocent investors.Ken is also an insiderwho has tipped Amos, so Amos (as the tippee) may not trade on theinside information.Amos is also shorting illegally in Canada in collusionwith Ken.Jacob s concealment of his involvement is interesting.He is havingthe stock he received donated to the church by his cousin, potentiallyentitling the cousin (if he were an American) to a tax deduction for theappreciated value of the stock, and relieving him of the capital gainstax.But the church is now going to sell the stock.As a church, it canordinarily withdraw cash to distribute alms to the poor, but here thechurch and synagogue are being used by their clergy to illegally laun-der money.That will also jeopardize their status under Section 501(c)3of the tax code, which gives religious organizations tax-exempt status. Fictitious Volume 115Similar ChargesIn a recent case that received much publicity, including an article byAdam Wills on JewishJournal.com entitled Spinka Grand Rabbi, FourOthers Plead Guilty, Grand Rabbi Naftali Tzi Weisz (the SpinkaRabbi) and his assistant, Rabbi Moshe Zigelman, pleaded guilty in LosAngeles to similar charges for acts similar to those of the pastor in theprevious example, and each was sentenced to 24 months of imprison-ment; they are now in Otisville with David Schick (see Chapter 16).1If Ken s scam were to come out into the open, there could bemany charges against Ken, Jacob, Eli, and the others.These include(at a minimum): (1) securities fraud, (2) tax fraud, (3) money laun-dering, and (4) conspiracy.Amos, though he lives in Canada, couldalso face charges both for illegally shorting and for trading on insideinformation.Finally, the cousin who got the cheap stock was clearlyalso a part of the conspiracy.The fact that Eli made the deal with Kenon his behalf is evidence of them acting in concert, so Boris s shareswould be aggregated with Eli s and would lose their free-trading status(if they were ever truly free in the fi rst place).Thus everyone in thechain would have a problem either with selling unregistered securitiesor with a statutory underwriting, or both.Jacob s plan to trade the stock in a circle A to B, B to C, and Cto A is also fraudulent parking and market manipulation.In short,what may have started out as a way to build a market so the companymight be fi nanced ended up as an illegal scheme that violated a hostof laws.(While the foregoing tale is based on an actual story, it has beenaugmented a bit with details from other stories that also all really hap-pened.Eli has not yet been nailed, but Ken has.Stay tuned.)Building awareness to create interest in a company can begin withgood intentions.But as we have seen, in the execution a host of securitieslaws are often broken, and many unsavory characters are involved.If yousee evidence of hyping a stock, don t walk.Run.In the opposite direction. Chapter 15Parachute into PrisonU.S.V.SCHRENKERederal enforcement of securities laws often proceeds slowly.Evenwhen there are criminal charges, defendants can often remainFfree on bail for extended periods.Since, as we have seen, thepenalties, when ultimately meted out, can be draconian, the temptationto fl ee can be great.Indeed, a number of folks who were caught com-mitting financial fraud have sought to flee to avoid the consequences oftheir actions.Most are caught.Some have fascinating escapades alongthe way.Here are a few examples, starting with a parachute jump.Disappearing Pilot Charged with FinancialScheme Fakes Own DeathAn Indiana fi nancial adviser, Marcus J.Schrenker, who was wantedon fi nancial fraud charges, has been accused of trying to fake hisown death in a plane crash.He has pleaded not guilty and was toundergo a psychiatric examination to determine whether he was ableto stand trial.The 38-year-old took off alone in his Piper aircraft on January 11,2009, from Anderson, Indiana, heading for Destin, Florida.But over116 Parachute into Prison 117Alabama he issued a Mayday call to air traffic controllers telling themhis windshield had shattered and he was bleeding profusely.Policebelieve he then bailed out of the aircraft with his parachute.Two F-15 jets were scrambled to intercept the aircraft, and thejet pilots reported that the plane was empty and apparently flyingon autopilot.The fighters followed it until it crashed in East Milton,Florida, not far from a populated area.Reconstructing What HappenedHere is a time line of events in the Schrenker plane mystery, as reportedby the major news organizations.1Schrenker first came to the attention of the authorities in January2008.The Indiana Department of Insurance filed a complaint againsthim on behalf of seven investors who claimed he had cost them morethan $250,000 because he never disclosed that they would face high feesto switch annuities.A search warrant was obtained, and on December 31, 2008, officersexecuted the warrant and searched Schrenker s home for computers,notes, photos, and other documents related to his wealth managementcompanies, looking for possible securities violations.On January 9, 2009, a federal judge in Maryland issued a $533,500judgment against Schrenker s Heritage Wealth Management Inc.andin favor of OM Financial Life Insurance Company.That marked a turning point.The very next day, Schrenker stored a red Yamaha motorcycle ina storage facility in Harpersville, Alabama, telling the facility s ownerhe d be back on Monday to pick it up.Two days later, on January 11, 2009, Schrenker, a pilot, took off inhis single-engine Piper Malibu from Anderson, Indiana, with a flightplan supposed to take him to Destin, Florida.While fl ying near Huntsville, Alabama, he issued what turned outto be a fake distress call, reporting severe turbulence, and told flightcontrollers that one of his windshields had imploded and that he wasbleeding profusely.Unbeknownst to anyone, he let his plane continue to fl y on auto-pilot and parachuted out safely.It flew by itself for more than 200 miles 118 hi s t or y of gr e e dbefore crashing and landing in a swamp near a residential area in theFlorida Panhandle [ Pobierz całość w formacie PDF ]