There seems to be a spate of new offshore scam convictions lately, and there's often a few common themes; greed is used to entice investors into seemingly brilliant investments that promise to return incredible profits, in a short period of time. Most often these schemes are called "high yield investments", and more than often seem to involve FOREX (foreign currency) trading.
I've always wondered, and heard the same musing from many other people, that if you were such a brilliant investor, as to be able to make massive profits on a regular basis, why would you want, or need, other people's money?
Well, it would seem that the unfortunate answer to that question is, that there are people in this world, who spend more time thinking about how to take money from others, than how to make the money themselves. More often than not, these people end up in stories like this...
Eight arrested in alleged $80 million currency investment scheme
By: Associated Press
LOS ANGELES -- Eight people, including three Costa Rican residents, were arrested on suspicion of tax evasion and fraud after hundreds of people invested at least $80 million in a foreign-currency Ponzi scheme, authorities said.
The suspects were affiliated with the private and now defunct Genesis Fund, according to an 83-count indictment unsealed Friday. Police were searching for a ninth alleged co-conspirator.
All nine people were charged with conspiracy, obstruction, mail fraud, wire fraud, money laundering, tax evasion and failure to pay taxes.
The indictment states that the fund was set up in 1995, with backers promising money would be invested in foreign currency with a return of 3 to 4 percent a month.
In 1998, investors who had become frustrated over their inability to withdraw their money filed a lawsuit that led to a court order requiring Genesis to keep $5 million in reserve.
Fund managers then stopped investing in foreign currency and began using new money coming into the fund to benefit themselves and provide dividends to existing investors, according to the indictment.
Between May 1998 and June 2002, more than $80 million was deposited with the Genesis Fund, authorities said.
The defendants are also accused of telling investors Genesis did not have to report to the Internal Revenue Service and of creating offshore accounts to hide money and avoid paying U.S. taxes.
In April 2000, some of the defendants moved from Anaheim to Costa Rica, taking paper records with them and destroying electronic data, the indictment states.
The fund collapsed in June 2002, weeks after investors were allegedly told Genesis was worth $1.3 billion.
Fund managers John S. Lipton, 58, Richard Leonard, 71, and Victor Preston, 64, were arrested by Costa Rican and Interpol agents and were being held in San Jose, Costa Rica, according to the U.S. Attorney's Office in Los Angeles. The United States plans to seek their extradition.
Authorities were searching for Marlyn "Milt" Hinders, 65, an alleged manager for Genesis, who moved to Mexico from Colorado in 2004.
Others arrested and charged in the case were identified by authorities as:
David L. Johnson, 66, of Walnut Grove.
William H. Nurick, 69, of Camarillo.
William Taylor-Fraser, 57, and wife Denise, 51, of Riverside.
Teresa R. Vogt, 51, of Anaheim.
None of the suspects could be reached for comment.
Source: North County Times
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