New 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

New York (HedgeCo.Net) – Idaho Falls resident Daren L. Palmer has been charged with operating a $40 million Ponzi scheme through his unregistered company, Trigon Group, according to the Commodity Futures Trading Commission.

Palmer is being charged with solicitation fraud and misappropriation of pool funds after it was discovered he used client funds for personal expenses and failed to register with the CFTC as a commodity pool operator.

According to the complaint, Palmer allegedly bilked $40 million from investors since at least September 2000, by promising returns of 7 percent monthly and 20 percent annually.  From that $40 million, he only placed $4.5 million in his trading accounts.  

“This is another unfortunate example of the maxim, ‘If it appears too good to be true, it probably is,’ said Stephen J. Obie, Acting Director of the CFTC.

Palmer fraudulently claimed he was a successful futures trader and that his pool had a successful track record.  Palmer doctored false account statements as a means to keep up the appearance.  He later admitted to using new capital coming in to pay off older investors, in a typical Ponzi scheme fashion.  

Palmer withdrew about $25,000 to $35,000 per month and used the money to pay off credit card debt, build a new home, and purchase snowmobiles.  Palmer’s next hearing is scheduled for April 23rd.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com

Tags: account statements, accredited-investors, cftc, commodity pool operator, commodity-futures-trading-commission, credit card debt, daren, futures-trader, futures-trading-commission, hedgeco, misappropriation, obie, older investors, personal expenses, ponzi scheme, pool funds, sister-sites, unfortunate example

New York (HedgeCo.Net) – Two New York residents were charged yesterday by the Commodity Futures Trading Commission after allegedly misappropriating at least $553 million of client’s funds. 

Stephen Walsh of Sands Point, NY and Paul Greenwood of North Salem, NY are being hit with futures fraud in connection with their companies, which include Westridge Capital Management Inc., WG Trading Investors, LP, and WGIA, LLC.

“Defendants treated investor money– some of which came from a public pension fund– as their own piggy bank to lavish themselves with expensive gifts,” said Stephen J. Obie, Acting Director of Enforcement for the CFTC.

According to the complaint, Walsh and Greenwood took approximately $1.3 billion from investors in their entities since 1996.  The men allegedly told their clients that all of the funds would be employed in a single investment strategy of index arbitrage.  

They then doctored false promissory notes to keep up the appearance to investors.  In reality, the funds were transferred to another entity, where Walsh and Greenwood dipped into the cash for personal spending sprees which included horses, residences, and even an $80,000 teddy bear.  It is estimated that they withdrew $160 million total for personal expenses.

The CFTC is seeking a statutory restraining order that will freeze their assets while preserving records.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com

Tags: accredited-investors, capital-management-inc, cftc, commodity futures trading, commodity-futures-trading-commission, expensive gifts, false promissory notes, futures-trading-commission, index arbitrage, investor-money, north salem ny, paul greenwood, personal expenses, preserving records, public pension fund, sands point, sprees, stephen walsh, westridge capital, york residents