Thursday, March 24, 2005

Plea in Ponzi Scheme

When a judge says, "NO," it may be wise the listen.  Going to another country and doing the same thing you were doing before, and the same thing a judge told you not to do, may make matters worse. It sounds simple, but sometimes is isn't.  At least not for  the individual who "pleaded guilty [yesterday] to conspiracy to commit securities fraud, two counts of securities fraud, obstruction of justice and one count of money laundering."  The case here involves a $250 million Ponzi scheme. (see LATimes for more)

A press release of the US Attorney's Office for the Central District of California reports that:

"In 2002, the United States Securities and Exchange Commission filed a civil lawsuit alleging that Wallenbrock was part of an illegal securities fraud. The SEC obtained a preliminary injunction that barred Osaki and others from running the companies. A federal judge in Los Angeles also appointed a receiver to oversee Wallenbrock. In 2003, the injunction became permanent. However, contrary to the injunction issued by the federal court, Osaki, with the help of co-conspirators, relocated operations to Canada, Belize and elsewhere. With the help of his co-conspirators, Osaki formed a new company off-shore, Village Capital Trust, that offered the same bogus accounts receivable investments as Wallenbrock, and it continued to operate as a Ponzi scheme."

So far three people have plead guilty in activities related to this Ponzi scheme and a 4th is awaiting extradition to the United States. 

(esp)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2005/03/_plea_in_ponzi_.html

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