It’s a little depressing that there are so many Ponzi schemes to report. The bright spot I suppose is that the Securities and Exchange Commission is on the case. This week the SEC charged Moises Pacheco, Advanced Money Management, Inc. (AMM), and Business Development & Consulting Co. (BD&C) with fraudulently raising $14.7 million from more than 200 investors over a 3½-year period.
According to the SEC’s complaint, Pacheco told investors that he had developed a lucrative investment strategy involving the purchase and sale of covered call options, and that the hedge funds exclusively relied upon this strategy to generate trading profits …read more

You’ve been Ponzied. Now what? Taxpayers received good news from the IRS last week in the form of formal guidance on how to treat losses sustained from fraudulent investment schemes.
Fake Investments Qualify as Theft
The biggest change coming from the IRS is the idea that theft in the form of bogus investment schemes really is theft, and not regular capital losses.
In prepared testimony before the Senate Finance Committee on Tax Issues Related to Ponzi Schemes, IRS Commissioner Doug Shulman detailed the tax relief provisions for taxpayers who sustained losses in certain investment arrangements discovered to be criminally fraudulent.
The IRS issued two guidance …read more

I hope the AIG press this week has made it clear that we all need to do a better job at understanding what finances the world around us. This week’s links are highly educational. (Don’t be scared – one’s a video!)

Oxdown Gazette had a very interesting piece about Morgan Stanley and Goldman Sachs issuing FDIC insured debt, plus other tasty tidbits re: The Bailout.  FDIC = Federal DEPOSIT Insurance Corporation. So now debt insurance too? This piece is a great education for anyone who wants to understand why these two securities firms wanted to become ‘banks’ in the first place.
IRS Commissioner Doug …read more

The Securities and Exchnage Commission (SEC) is going after some really upstanding investment professionals who targetted deaf people in a $4.4 million Ponzi scam.
The SEC has charged Hawaiian Billion Coupons, Inc. (BCI) and its CEO Marvin R. Cooper with misleading 125 investors, including  pocketing over a million of the take to pay for Cooper’s new home and other personal expenses. Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement stated:
“This emergency action shows that the Commission will act quickly and decisively to help victims of affinity fraud.”
So what is affinity fraud? According to the SEC it’s any investment scam that prey …read more