Red Flags, New Evidence May Help Convict Deaf Ponzi Schemer
Wednesday, March 4, 2009 : PermalinkNew York (HedgeCo.Net) – Marvin Cooper, who allegedly swindled deaf investors through his money management firm-turned Ponzi scheme, is maintaining his innocence despite new evidence uncovered Monday in federal court.
"Nobody’s been defrauded," Cooper’s attorney, Michael Glenn told the Honolulu Advisor. "We’re working on an amicable settlement in which the investors will get all their assets back."
According to papers filed by federal lawyers, Cooper, who ran Hawaii-based Billion Coupons Inc., may have been planning to hightail it to Panama after attempting to borrow $534,187 by putting his Kaimuki home up as collateral for a mortgage loan. Authorities believe the property was purchased with client funds.
Barry Fisher, the outside receiver appointed to take control of Cooper’s company by U.S. District Judge Michael Seabright, came to this conclusion after conducting a preliminary review of the business. Fisher also found an $80,000 check signed by Cooper which was to be used as a down payment for an $800,000 home in Panama, along with emails discussing his pending move.
Cooper, who is deaf, was charged last month by the Securities and Exchange Commission after allegedly raising $4.4 million by targeting investors in the U.S. and Japan Deaf communities. He then used about $1.4 million of those funds to purchase a new home and other personal expenses.
To gain the trust of investors, Cooper promised substantial returns from investments in Forex markets. Out of the millions, only $800,000 was actually used for Forex trading, with losses exceeding $750,000 from those trades. In typical Ponzi scheme fashion, new money coming in was then used to pay existing investors to keep up the appearance of steady returns. Cooper and BCI also have been hit with fraud charges brought on by the Commodity Futures Trading Commission.
"Being deaf and without the credentials required by the SEC and state regulators, Mr. Cooper focused on gaining access to deaf investors through feeder referrals, which were provided by other Deaf individuals with no investment background in exchange for a referral fee,” explains Joshua R. Beal, Managing Partner at investment advisor firm Schwarz Financial Services LLC. “He followed up with personal visits and calls over the video-phone where he promised returns of 15-25% a month based on automated computer trading programs."
Cooper approached Beal with a call over the videophone in 2007 when he was looking for advice regarding his investment firm. Beal suggested that he should register with the Securities and Exchange Commission; a piece of advice Cooper chose to ignore.
“In 2007 and 2008, several deaf clients of mine along with some community members started telling me that they were having success with Marvin,” Beal recalls. “I contacted the State of Hawaii and the SEC because he did not require a social security number, nor did he employ a custodian or provide a fee statement for his clients.”
Although in most Ponzi schemes, investors rarely receive their money back, authorities are confident that clients will receive some or all of their original investment back, after the assets are liquidated.
Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net
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Tags: amicable settlement, attorney michael, commodity futures trading, commodity-futures-trading-commission, deaf communities, federal lawyers, forex markets, fraud charges, futures-trading-commission, judge michael, michael seabright, money management firm, mr cooper, new-money, personal expenses, ponzi scheme, securities-and-exchange-commission, state regulators, substantial returns
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