consumer-fraud-blog

At a hearing held by a House Financial Services subcommittee, lawmakers focused on how Bernard Madoff managed to evade detection, and whether gaps in regulation allowed him to carry out his alleged $50 billion Ponzi scheme.

A large part of the blame was with the Securities and Exchange Commission, who were alerted numerous times over the years about Madoff’s scheme. Investigations, at least eight times over the past 16 years, yielded no results.

Lawmakers are also debating whether the financial system warrants new legislation or whether existing regulations need to be used more effectively.

Prosecutors are currently seeking to revoke Madoff’s bail, arguing that he violated the terms of his release by mailing expensive jewelry to family members.

The U.S. Securities and Exchange Commission may come under fire from lawmakers for failing to quash Bernard Madoff’s alleged $50 billion Ponzi scheme after an investor alerted the agency to the suspected fraud.

The House Financial Services Committee is scheduled to hear from one of Madoff’s alleged victims, securities law experts and the SEC’s inspector general, David Kotz.

Harry Markopolos, the former money manager who says regulators didn’t act on his tips about Madoff, canceled his appearance, citing illness.

In November 2005, Markopolos had claimed Madoff was most likely running the world’s largest Ponzi scheme. Other allegations against Madoff go as far back as 1992.

The SEC is already facing criticism, before Madoff’s arrest, as failing in its vigilance in enforcing securities laws. Whether the agency should be beefed up or dismantled will be a likely topic at meetings this year about the SEC’s future.

Madoff was arrested on December 11, but is free on bail and hasn’t formally responded to the charges or entered a plea.

Bernard Madoff is complying with a court-ordered deadline to tell U.S. regulators how much money he has left.

Ira Lee Sorkin, Madoff’s lawyer, said a list of his client’s assets, liabilities and property would be sent by the Wednesday deadline to the U.S. Securities and Exchange Commission.

SEC Chairman Christopher Cox has asked the agency’s inspector general, David Kotz, to probe its conduct in the case. Kotz will testify at a U.S. House Financial Services committee hearing.

Also appearing at the hearing will be Harry Markopolos, the former chief investment officer at Rampart Investment Management, who said he repeatedly tried to get the SEC to investigate Madoff.

Madoff, a former chairman of the Nasdaq stock market, was criminally charged on December 11 by U.S. prosecutors in New York. He is under house arrest in his Manhattan apartment and subject to electronic monitoring.

A federal bankruptcy judge approved the release of more than $28 million in assets belonging to accused swindler Bernard Madoff to pay to costs related to his case.

Madoff is accused of bilking investors out of $50 billion through a Ponzi scheme that he allegedly ran through his investment advisory business.

$883,000 has already been transferred to trustees to pay employees’ salaries and health care benefits. They are also selling off assets to recover funds for the investors who lost money held by Madoff.

Madoff remains in his Manhattan apartment under 24-hour house arrest after paying his $10 million bail.

The owner of the allegedly corrupt foreclosure rescue business “Please Save My Home” has been sued by the Ohio Attorney General.

The lawsuit filed earlier this week seeks to refund defrauded customers of the Conneaut, Ohio-based, business, and put an end to its allegedly fraudulent operations.

James R. Van Putten is named in the lawsuit as owner of “Please Save My Home.”

According to court records obtained for a report in The (Akron) Suburbanite, Van Putten obtained names of homeowners in foreclosure through court records and contacted each by direct mail.

In his mailings, Van Putten claimed his firm “Please Save My Home” could rescue the homeowner from foreclosure. He charged an initial fee of $650 and received it from numerous recipients.

However, Van Putten became invisible after this mailing. The business did nothing to save homeowners and he was not reachable by telephone by any of his clients.

Van Putten is being charged in Ohio with unfair and deceptive practices in violation of the state’s Consumer Sales Practices Act, the Telephone Solicitation Sales Act and the Debt Adjuster’s Act.

Van Putten claimed he would provide homeowners in distress with legal representation, forbearance agreements and loan modifications to ensure homeowners would not be forced into the streets.

This case is just one of thousands across the country, showing both the distressed nature of the economy with so many people not able to afford to buy and keep homes, but the willingness of people to commit fraud at any costs.

The vultures who perpetrate these schemes prey on the weakness of the moment. No one wants to be forced from their home - not physically nor for pride’s sake - and many people are willing to accept any assistance in such desperate times.

The House Financial Services Committee will hold a hearing on January 5th to examine the $50 billion Ponzi scheme allegedly run by money manager Bernard Madoff.

Madoff, 70, was arrested December 11th, after telling his two sons and federal investigators that he had been using money from new investors to pay off old ones in what may be the biggest such swindle in history.

The Securities and Exchange Commission will also be conducting an internal probe to review revelations that it failed to act for nearly a decade on allegations of wrongdoing by Madoff.

The U.S. Senate is conducting an investigation into why wireless phone carriers charge what they do for text messages.

In the past five years the average cost of a text message has doubled while the industry has shrunk to about a handful of carriers.

The Senate antitrust committee has sent invitations to representatives with Verizon Wireless, AT&T, Sprint and T-Mobile to discuss their text message pricing policies.

According to a New York Times article, the four major carriers have all double the price of a regular text message from 10 cents to 20 per message.

At least 2.5 trillion messages have been sent, an incredible 32 percent increase from 2007. Experts believe that number could increase to 3.3 trillion worldwide by the end of next year.

The Senate committee would like to know what the actual costs of supplying text message service are for companies. In written responses to the Senate, each company artfully dodged the directed query.

At least two class-action lawsuits have been filed against AT&T and other carriers alleging price fixing on text messaging.

While that company defends its actions, T-Mobile goes farther by saying if a customer took advantage of a monthly fee for text messages, the cost would be about 1 penny per message. It said the company’s revenue from text messages has dropped by half since 2005.

And while the phone carriers continue to elude the question at hand, the basic knowledge of the technology will tell anyone familiar that the costs of each message to the consumer are greatly exaggerated over the actual costs.

Messages require only the wireless connection from the phone and aren’t stored in any physical location other than a recipient’s phone memory.

Since these messages are typically very small in file size, even the cost of transporting each message isn’t high.

Of course, all the science in the world will only need to serve as proof-positive if wireless carriers continue to avoid making public their costs of offering text message services.

Investigators probing the Madoff investment scandal are beginning to turn their attentions to the middlemen who attracted billions of investment dollars to Madoff’s funds.

There are no allegations that the middlemen knew anything about Madoff’s Ponzi scheme, but investigators are interested in what they told clients about how their money was going to be invested.

Robert Jaffe, Stanley Chais, Jeffrey Tucker, Andres Piedrahita, and Robert Schulman all lost personal fortunes as well as those of investors who had entrusted them with their money.

A sixth middleman, Rene-Thierry Magon de la Villehuchet, died in an apparent suicide on December 23. He had lost his life savings due to Madoff’s scheme.

At last count, wealthy individuals, foundations and banking giants have disclosed some $30 billion of losses. Madoff himself claimed potential losses of up to $50 billion.

The Securities and Exchange Commission is widening its probe into Bernard Madoff’s alleged $50 billion Ponzi scheme.

Madoff has two sons and each has publicly said they knew nothing of their father’s alleged wrongdoing. The same can be said for other members of Madoff’s family, all who can probably be expected to meet with countless federal investigators as prosecutors find what they can charge against the former chairman of Nasdaq.

The Wall Street Journal reports a person close to the investigation said the SEC is casting a wide net in its investigation as it sees just how much impact the alleged scheme had on how many people.

Madoff’s three-man accounting team has been subpoenaed as have other employees, yet the ringleader remains the only person charged.

Investigators also want to know what feeder funds told their investors about where their money was headed. Much of the money invested with Madoff came from feeder funds, which attracts money from around the world.

Of those claiming nearly complete or catastrophic losses because they invested their money with Madoff are New York University (about $24 million) and the foundation for Eli Weisel.

The Food & Drug Administration (FDA) has warned The Coca-Cola Company that claims associated with their Diet Coke Plus product violates U.S. policy against marketing soda and other snack foods as more nutritious, or “fortified.”

The FDA allows boosted nutrition claims when foods or beverages contain at least 10 percent of the recommended daily allowance of a vitamin or mineral. But the claims cannot apply to soda or certain foods, including candy.

The Coca-Cola Company has 15 days to outline plans to correct the issue, and they have stated that they would reply to the FDA letter in early January.

It is not clear if the FDA was seeking to remove the product from the U.S. market.