Recessions have a tendency to expose fraudsters -- when everyone wants their money back, that's when investors realize the fraudster has none! Nevertheless, it's difficult to get used to multiple reports on any given day.
But enough with the lamenting. Now, we bring you: Today in investment fraud!
First up (from the AP
via The New York Times): Bradley Ruderman, a Beverly Hills, Calif., fund manager, pleaded guilty Monday to two counts of wire fraud, two
counts of investment adviser fraud and a misdemeanor count of failing
to file income taxes in 2007.
Ruderman apparently cheated investors, many of them family members, out of $25 million, of which he spent upwards of $9 million on a summer rental in Malibu, Calif., two Porsches and poker games. He faces a maximum sentence of 51 years in federal prison; he'll be sentenced Dec. 7.
Bringing us to fraud number two (also
from the AP): Federal prosecutors charged Mary Wong, a woman who once advised Michael Vick and several other NFL players, with stealing $3 million from eight victims in a Ponzi scheme.
Wong, who lives in Omaha, Neb., told clients she invested in luxury properties in several states as well as in private jets, among other things. In reality, Wong used the money she raised to support her other businesses and a "lavish lifestyle for herself, her business partners and clients." Money was also spent paying past investors, hence the Ponzi scheme.
The instances will surely fuel Security and Exchange Commission Chairman Mary Schapiro's fire, as she has
pledged to squash securities and investment fraud better than her predecessors. Go Mary!
For more on fraud, see The Deal's
Ponzi schemes, fraud and other misdeeds Dealwatch, which tracks all of our coverage on the topic. -
Sara Behunek
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