Daily fraud update: 17th January

Chris Lee

Receiver work comes to end in US fraud case

A judge in the US has ordered a receiver in the case of a forex Ponzi scheme to stop work.

On Thursday, US District Judge Michael Davis said that the work of the receiver – who was aiming to get back as many assets as possible which were lost in the fraud – could now come to a close.

The scheme the receiver had been working on was a complex $194m case which had operated out of a mansion in the city of Minneapolis several years ago.

The scheme was masterminded by a fraudster named Terry Cook, who is now serving a prison sentence of 25 years.

It is believed that around 700 people were scammed as a result of the scheme.

Various others involved in the scheme, including promoter Patrick Kiley – who spread the word of the scheme on Christian radio networks, attracting largely elderly investors – have also been sent to prison.

The receiver, Tara Norgard – who worked for a law firm called Carlson Caspers – was able to recover around $21.7m in assets.

Around $10m of this figure was taken in expenses, meaning that around 8% of the overall sum scammed was returned.

According to the judge, Norgard had done “an outstanding job”.

“What an outstanding job that you have done for the court and the 700 individuals who’ve lost close to $200 million”, he said.

“These were not individuals who had money to burn and could sustain the losses.”

“I wanted to collect as much money as we could for these individuals who were victims of this Ponzi scheme. Unfortunately, it’s not a lot of money”, he added.

He also claimed that the work carried out by Norgard was some of the best he had seen.

“There’s no doubt in my mind that the work the receiver has done is the best work that has ever been done in this district”, he said.

Norgard herself also hit out at those behind the scam.

“Even the cars that they drove were fakes — they were kit cars”, she said.

On the topic of recovery, she said she and her team had done all they could.

“We clawed back every cent allowed by law”, she said.

Former banker in Nigeria arrested over fraud claims

A man from Nigeria who worked as a banker has been accused of forex fraud.

Seye Onigbinde, an Economics graduate from the Obafemi Awolowo University, has been taken into custody over claims that he carried out fraud worth more than 500m Nigerian naira – or around £1m or $1.3m.

He is accused of leaving more than 200 people destitute after he claimed that he would be able to boost their returns twice over by helping them to invest in forex.

In a story which bears hallmarks of a Ponzi scheme, Onigbinde allegedly paid some of his earlier investors in order to create a sense of trust – although he has now been arrested.

“I was planning to clean up and go legitimate just before I was arrested”, he supposedly told journalists.


Chris Lee

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