Due Diligence: Fraud & Embezzlement

At FRCS, we are specialists in sophisticated fraud detection and due diligence

It is not unusual for us to have to “clean up” after a big name corporation encouraged their client to invest in what turned out to be a sophisticated fraud – because their due diligence gave them no warning whatsoever.

Some of these big name corporations care far more about their complex contracts and armies of lawyers than their own clients, who may be devastated by following their advice.
We are world experts at detecting sophisticated fraud and embezzlement, which can even be concealed and protected by rogue managers in some of the world’s biggest banks.

If you don’t understand your investment – contact FRCS or don’t invest.

Organised crime is a multi-billion dollar industry which has infiltrated some of the world’s largest banks.

Big name corporations who do due diligence typically trust the superficial statements of large financial institutions, but cover themselves with endless fine print to ensure they profit, regardless of their negligence. If that happens to you, run – and contact us. You may not need to pay the bill for such unreliable advice – discuss it with us.

Advanced Fee Fraud

There are thousands of varieties of sophisticated fraud, and it is getting worse.

As an example of the complex integration of the huge crime syndicates, advance fee fraud is discussed here. However, it is simply one example of thousands of sophisticated strategies which circulate across the gigantic criminal networks which have penetrated what used to be “trusted financial institutions”.

Boiler rooms and advanced fee fraud schemes are usually managed by very large international crime syndicates. When a boiler room closes, the victims’ contact and investment details are distributed to other members of the crime syndicate for further fraud attempts. They reason that if a victim lost money once, he is susceptible to losing more money again.

A single crime syndicate may only take a few years defraud 100,000 victims of several billion dollars. Total losses for the last 25 years are estimated at $300 billion. Some “reputable” banks and securities brokers secretly participate in the fraud, instead of reporting it to money laundering authorities as they are required. The closing of any particular boiler room, even by police, does not stop the crime syndicate – they can open 10 more if they wanted to. In this way, such crime continues on to the present time.

In advanced fee fraud, the fraudsters typically promise a high price for the worthless shares. When the victim appears interested, he is told he will have to pay an advanced fee for some invented reason, e.g. to remove non-existent restrictions or for some other fiction.

Advanced fee fraud flourishes because it is rarely prosecuted – the fraudsters feel safe! They take advantage of trusting people. The fraudsters may give fake addresses which have nothing there or perhaps only a secretary who redirects phone calls and letters, but knows little or nothing about the real business.

The fraudsters are rarely at the address they advertise, and they often usephone lines which are redirected to another address e.g. in another country. The fraudsters are completely ruthless and will take the last dollar of life savings from old people. Read this account for more details: Lifting the lid on ‘boiler room’ scams. London Police operate one of the few intelligence centres on Boiler Rooms.

Many official warning lists suffer from the weakness that it is generally too late by the time the warning is published, even if a potential victim knows where to check. The warning list published below is the most up-to-date that we are aware of regarding fraud attempts against our clients. We cannot guarantee or prove that all names on this list are fraudsters – generally that is only confirmed when it is too late and they have disappeared. Attempts to find these people at their advertised addresses generally fail. However, we strongly recommend you do not deal with any of these firms without consulting us first.

Advanced Fee Scammers Are Using Identity Theft: See the SEC’s List of Unregistered Soliciting Entities Impersonating Genuine and Former US Registered Securities Firms

The latest SEC Report regarding Hanley Securities Corporation shows that they falsely used the names of:

1. A genuine broker-dealer firm called Hanley Securities Corporation (CRD Number: 10667; SEC Number: 8-25741).
2. A genuine entity called Enforth Inc., a Regulation D exempt filer (SEC file no. 021-69832) located in Burlington, Vermont.
3. A genuine registered securities agent named Don A. Romero – they even supplied a copy of his passport!

They encouraged their “target” to check that these were genuine, but since they had no relation to the callers, such a check would be useless.

Here are some warnings on official websites. The first two (from the SEC) includes links to many other useful official websites.

How Fraudsters Try to Look

Legit Worthless Stock: How to Avoid Doubling Your Losses
FINRA warning about fake websites and stock brokers

Scamwatch Brochure

SEC FILES FRAUD CHARGES AGAINST SIX BOILER ROOM OPERATIONS FOR A SERIES OF “RECOVERYROOM” SCHEMES

ASIC has put upa fake website: to show how easy it is for fraudsters to make a fake story look believable. Click on Buy Silver or Buy Bronze at the“Invest Today” page tosee the warning.

Many official websites (e.g. securities regulators)publish lists of “unlicensed firms offering financial services”. This mostlymeans that they suspect that they are fraudsters, but do not publish that becausethere is no criminal conviction against them. In general, you should not doany business with any firm advertised on an official website as an “unlicensedfirm offering financial services”. Here are links to some of the currently publishedlists:

Investor alerts from the Swedish Finansinspektionen (More recent alerts)
Investor alerts from the Swedish Finansinspektionen (Complete List)
Warnings: Isle of Man

Warnings: Spanish CNMV (Click on invester alerts on the right hand side)

Warnings: Netherlands Authority For the Financial Markets (Click on warning
lists on the left hand side)

Finansinspektionen have detailed accountsof Advanced fee fraudsters. We have 1500 companies which have been acknowledgedby Advanced Fee Fraudsters over the years. This link below contains a list of the Advanced fee fraud Boiler rooms: List of Warnings Warnings of Suspected Scams and Unknown “Investments”. Clients are strongly advised to email us or consult with FRCS if you have had dealings with or proposals from any of the following organizations:

Guardian Securities Limited
Phone: +356 2 778 0697
Fax: +356 2 778 0698
Email: contact@guardiansecurities.net 
Melita Street 60/62, Valletta, VLT 1122, Malta 
It claimed to be authorised by the Malta Financial Services Authority IS-40428

Paragon International Wealth Management
5000 Yonge Street Suite 1901 Toronto, Canada ON M2N 7E9
TEL: +1.416.548.5636
FAX: +1.647.477.7282
Toll Free: +1.855.366.5636
Email: info@paragoniwm.com
Web: www.paragoniwm.com

GOLD HORIZON MINING COMPANY CO. LTD.
Ticker GKW / GHMG
Email: info@goldhorizonmining.com
Investor Relations (Global): +1 940 604 6397
Peru Operations: +51 988 988 003
Fax: +1 702 920 7611

Shop-Eat-Live Inc.
Ticker Pending: 8257621Z
3350 East 7th Street #507
Long Beach, CA 90804
423 31st Street
Newport Beach, CA 92663
Phone:876-775-6074
www.shopeatlive.com

Mitchell Finch International
Gran Via de Las Cortes Catalanas 583-5th Floor
08011 Barcelona, Spain
Tel: +34-93 306 3417 / Fax: +34-93 306 3443
Email: info@mitchellfinch.com
Web: www.mitchellfinch.com

Morgan Finch International
Gran Via de Las Cortes Catalanas 583-5th floor
08011 Barcelona, Spain
Tel: +34-93 306 3417 / Fax: +34-93 306 3443
Email: info@morganfinch.net
Web: www.morganfinch.net

MacMillan Fine International
Gran Via de Las Cortes Catalanas 583-5th floor
08011 Barcelona, Spain
Tel: +34-93 306 3417 / Fax: +34-93 306 3443
Email: info@macmillanfine.net
Web: www.macmillanfine.net

Morgan Franklin International
Gran Via de Las Cortes Catalanas 583-5th floor
08011 Barcelona, Spain
Tel: +34-93 306 3417 / Fax: +34-93 306 3443
Email: info@morganfranklininternational.com
Web: www.morganfranklininternational.com

Turner & Associates 101 S. Capitol Boulevard,
Suite 806 Boise,
Idaho 83702

Phone: + 1 (208) 441-4399
Fax: + 1 (208) 977-4839
E-mail Address: info@turnerassociate.com

Web Address: www.turnerassociate.com

To view the SEC report on this attempted fraud, click here.

Global Quest Emerging Fund LP
One Whitehall Street
15th Floor
New York NY
10004 Telephone
No.: 1-646-6520720
Fax No.: 1-646-7864707
Email: info@gqemerging.com

To view the SEC report on this attempted fraud, click here. Fraud attempts have been
made claiming to come from: United States District Court ANDREW MCABE, Senior
Investigator Southern District of New York E-mail: usadistrictcourt@newyork.usa.com
To view the
SEC report on this attempted fraud, click here.

New Asia Business Consulting
New Asia Business Consulting Clients of ours have been contacted by this organisation wanting to buy some of the old shares at a ridiculous price, in what they have termed a “hostile takeover” operation. 32nd Floor, 
St. Luke’s Tower, 8-1 Akashi-Cho, Chuo-Ku, Tokyo 104-8518
Tel: +81 3 4520 6303
Fax: +81 3 4496 6049
Email: info@new-asia-consult.com
The following link shows how NABC operate: NABC_Securities_Purchase_Agreement_102
NABC_Non_Disclosure_Agreement_102_pdf

Jacoby & Associates, Plc
Jacoby & Associates, Plc has a website (www.jacobyassociatesplc.com)
and uses the following address:
One Liberty Place, 1650 Market Street,
Suite 1660, Philadelphia,
Pennsylvania 19103 USA.
Jacoby & Associates, Plc’s representatives contact investors by telephone
and offer to buy their shares in TNST and PR shares. However, the investor must
first pay a fee in advance, for “Legal Fee and Restrictions/Share”. This is
an advance fee fraud scheme. Warning by

Finansinspektionen
(the Swedish Financial Supervisory Authority).

Hanley Securities Corporation
The SEC Report regarding Hanley Securities Corporation shows that they falsely used the names of:
1. A genuine broker-dealer firm called Hanley Securities Corporation (CRD Number: 10667; SEC Number: 8-25741).
2. A genuine entity called Enforth Inc., a Regulation D exempt filer (SEC file no. 021-69832) located in Burlington, Vermont.
3. A genuine registered securities agent named Don A. Romero – they even supplied a copy of his passport!

They encouraged their “target” to check that these were genuine, but since they had no relation to the callers, such a check would be useless.

Hanley Securities Corporation documents can be downloaded here.
Zenith Research
Group LLC Zenith Research Group LLC has contacted clients regarding SICOR, Eurosoft and Roanoke shares. One client reported them to the SEC who have not heard of this company and warn that the offer appeared fraudulent. SEC also said the shares were worthless –
their response is shown here. Sample documents sent by Zenith Research Group are shown here.

Abacus Trading Corporation
Address: 8025 EXECLSIOR DR SUITE 200 MADISON
WI 53717 USA.
Phone:+1 866 978 6089
Fax: + 1 866 978 7740.
abacustrading@consultant.com

The SEC has advised that this firm is not the same as one registered with the SEC.(Read the full text of the SEC warning here):

The SEC’s EDGAR database (http://www.sec.gov/edgar.shtml) has registration information for a genuine entity called Abacus Trading Corp., a Regulation D exempt filer (SEC file no. 021-64737, received 04-19-04) located in Madison, Wisconsin.  But this genuine entity has NO connection with the pseudo-Abacus Trading Corp. that has contacted you.  The pseudo-Abacus Trading Corp. is an impersonator of the genuine entity.

Paterson & Co
6-3 Sumiyoshicho, Tokyo 194-0292, Japan.
Telephone:+813 5456 5289  Facsimile: +1 (831) 851 7234
www.patersoncoltd.com
info@patersoncoltd.com

Paterson & Co falsely claim to offer a scheme with no advanced fee. They require you to sign a contract which obliges you to pay a large (fake) fee to lift restrictions off your shares.

More details are available here
.

McKinley & Co., Ltd.
1-5-2 Higashi-Shimbashi Minato-ku,
Tokyo 105-7123,
Japan
Telephone:+813 4496 4250
Facsimile: +813 4496 4251
www.mckinleycoltd.com
information@mckinleycoltd.com

One client reported: “I received a phone call from an American speaking man called David Nielsen that was looking
to purchase my “very valuable” Callmate shares at a price somewhere between 10 and 20 dollars.”
Incredibly, McKinley & Co. uses the same phone number as was given by Yamato & Associates who defrauded some of our clients a few years ago.

Imperial Quest Ventures Ltd,
The Hancock Center 875 N Michigan Avenue
Suite 2600,
Chicago,
IL
60611
United States.
Imperial Quest Ventures requests Buyout Taxes and De-Restriction Fees as part of its offer.

Gold Medallion Trading
(http://goldenmedallion.us) claims to have following address:

14001 N. Dallas Parkway
Suite 1400, Dallas,
TX 75240

United States.

It pretends that a de-restriction fee is required for Otis-Winston shares. It typically introduces itself in the following way: “We have an institutional client who would like to acquire your outstanding shares of OWTNF you purchased through another broker house which has been restricted to do further business. De-restriction is a process of making your units saleable in the open market since all of these are considered Regulation-S shares, or shares which are only tradable outside the United States of America.” Walkers Corporate Law Firm (Tel : +1 852 2865 5779) pretends to be a legal firm which offers $11 for shares in Geo-Alert which are trading at $0.0001 each.  They don’t explain why they pretend to offer $11 for shares you can buy for $0.0001. It claims to have a website http://www.walkers.com which actually has no relation to its claimed business.

The European Consumer Protection Bureau (http://www.europeanconsumer.org/) claims to have following address:
8 Exchange Quay

6th Floor Manchester
M5 3EJ
United Kingdom.

It pretends to be an official organization. It typically introduces itself in the following way: “Your details have been passed on to us by the assigned auditing firm whom are acting on behalf of several law firms pertaining to a securities fraud class-action lawsuit that was pursued on behalf of purchasers of securities through non registered financial firms. Several shareholder class action lawsuits have been filed against The Brinton Group, The Madison Group and its’ associated officers and directors, for violations of the International Securities Act enforced by the European Consumer Protection Bureau. Specifically, the complaint alleges that throughout their period of trading, the said defendants violated the International Securities Act by using unorthodox and in many cases deceptive methods of trading, causing investors to suffer substantial financial losses. The Complaint also alleges The Brinton Group, The Madison Group and Affiliates of operating a non registered securities firm. The European Consumer Protection Bureau also oversees disbursal of seized funds to approved claimants.

Nelson Financial Group claims to have following addresses:
7322 Southwest Freeway,
Med Center, Houston,
TX 77027.
28 Maxwell Road
Red Dot Building 069120
Singapore.


The
Finansinspektionen warning states: “It has received information that Nelson Financial Group has approached investors in Sweden by telephone and offers the investor to sell his holdings of shares in an OTC company. But, the investor has to pay a fee in advance. A “legend removal fee”. It is a matter of advance fee fraud scheme.” The SEC investigated and reported: “Despite the alleged Houston, Texas address (among others) for Nelson Financial Group and the alleged Indianapolis, Indiana address for the so-called American Equities Agency (AEA), it is unlikely these entities are located in the USA. Given modern telecommunications technology, telephone call forwarding to offshore listings poses no obstacle to fraudsters.”


The
full SEC report on Nelson Financial Group is available here.

Morrison & Kohler Associates  (http://www.morrisonkohler.com/) claim to be a New York legal firm which notifies TNST victims of a supposed settlement approved by a US Federal court. No such entity as Morrison & Kohler Associates is registeredwith the SEC. Despite the alleged New York address for Morrison & Kohler Associates, it is unlikely this entity is located in the USA. Given modern telecommunications technology, telephone call forwarding to offshore listings poses no obstacle to fraudsters. The New York State Secretary of State had no information or any incorporation records for any law firm called Morrison & Kohler Associates.  In addition, the Securities Class Action Clearinghouse run by Stanford University (http://securities.stanford.edu/index.html)
had no record of any such class action suit re: Trans-National Securities & Trust, S.A. (This is an extract from
the response by the SEC to one client’s enquiry.)

Compass Asset Management, Steven Rodriguez (Swiss phone No: +41 445 801 354) recommends an investment in International Child Care, ICCR. Website:  http://www.compassassetmanagement.com/ .Orbit International, claiming to operate from Panama.  According to salesman Frank Thompson, a firm they represent wants to take over GeoAlert to obtain their patents, and wants to pay “around US$16-US$18 a share if the deal goes through” for these stocks.

Fax +507 264 800.

E-mail address:orbit_info@cwpanama.net.
Cathay Asset Management,
US Office 2530
Meridian Parkway
Durham,

NC 27713-5272
Phone: 1(919)741-4497
Toll Free:1(866)273-9877
Fax: 1(919) 287-2322
Email: contact@us.cathayam.com

Web:http://www.cathayam.com/

Bengoshi & Partners in Japan, www.bengoshipartners.com 

Tanaka & Tate of Japan,

Miller Walker in Milwaikee USA,

Balyor Byrnes Brackman Group Inc.www.bbbginc.com,

First Capital Securities,

Huntington Management (Steven Rodriguez),

Sheffield,
Silverman and Monroe,

9-20 Niskiki, 1 Chome, Naka-Ku,
Nagoya460-0008, Japan.

Telephone: 8152 2698475
Facsimile: 81 34 496 5400

Website:
http://www.lawssm.com

ParadigmResources, Ltd. has used the SEC logo and a false “International Shareholders Protection Department” to promote a scheme called: Wealth Protector 50. Select Capital Management Corporation is not licensed to provide financial services. The company has a website, (www.selectcapitalmanagement.com, created 2005-09-27, Tokyo, Japan), where it claims to have following addresses: 2-18-6 Nihonbashi Cyuo ku, Tokyo, Japan and 14F Jinjiang Xiangyang Building, 993 Nanjing Rd Shanghai, China. Select Capital Management Corporation pretends to offer investors the opportunity to buy shares listed on the London Stock Exchange at an 8 per cent discount on market price. Zenith Research Group LLC Zenith Research Group LLC has contacted clients in regards to the SICOR/ERST shares and wanted  information regarding them.

They stated that they had a way to get rid of the shares. The SEC in the US have not heard of this company. It is an Advanced Fee scam.


Yamato & Associates of Japan:

1-1-3 Marunouchi Chiyoda-ku,
Tokyo 100-0005, Japan.
Telephone:+81 3 5288 5249,
Facsimile: +81 3 4496 4250
E-mail:info@yamatoassociates.com

Web: www.yamatoassociates.com

Disclaimer: There may not be proof or even significant evidence that any of the above firms are attempting to commit illegal activities. All content of this website is information only and the reader must obtain his/her own independent advice before using or relying on any of the content published on this website