The Ridgewood Blog Brings a Free Market Laissez-faire Point of View to Local, New Jersey State and National Issues.
photo of Charles Ponzi was an Italian swindler and con artist
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Hackensack NJ, Acting Attorney General Andrew J. Bruck and the New Jersey Bureau of Securities within the Division of Consumer Affairs today announced two enforcement actions taken by the Bureau against three individuals and their related entities that sold unregistered securities in national fraudulent schemes.
the staff of the Ridgewood blog
Midland Park NJ, A South Carolina man today admitted defrauding at least 20 individuals by soliciting investments in what he claimed were highly successful, algorithm-based trading pools in foreign currency derivatives (“forex”) and other financial instruments, and then using the bulk of the money for personal expenditures and to pay off other victims, Attorney for the United States Rachael Honig announced.
Continue reading Former Midland Park Man Admits Running $900,000 Foreign Currency Ponzi Scheme
photo by Boyd Loving
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June 25,2017
the staff of the Ridgewood blog
Lyndhurst NJ, A Lyndhurst, New Jersey, man was sentenced today to 46 months in prison for fraudulently obtaining over $1.5 million from approximately 100 victims prior to high-profile initial public offerings (IPOs), Acting U.S. Attorney William E. Fitzpatrick announced.
Omar Hafez, 25, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him one count of wire fraud. Judge Walls imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From July 2014 through December 2015, Hafez operated an investment fraud scheme in which he and others created a number of entities, including Lotus Global. Several of these entities had websites and social media pages listing Hafez as the CEO and advertising themselves as successful wealth management companies.
In order to deceive victim investors, Hafez represented that he had access to shares of various companies prior to their initial public offerings and could use that access to provide significant profits to investors. However, bank records for accounts controlled by Hafez and certain Lotus Global entities revealed that none of the money provided by victim investors was used to purchase shares or invest in any of the pre-IPO companies.
Instead, Hafez used the funds for his own benefit, including several large purchases at luxury car dealerships, including an approximately $87,000 purchase at Prestige Motors, an approximately $24,160 purchase at Signature Car Collections, and an approximately $8,690 purchase at Dream Cars National LLC. In addition, Hafez purchased numerous luxury goods, including an approximately $17,250 purchase at Tourneau Inc., an approximately $5,613 purchase at Louis Vuitton, and an approximately $3,000 purchase at Tiffany & Co., as well as airplane tickets and hotel stays for a single trip to Chicago totaling approximately $10,000.
Hafez employed numerous strategies to maintain the victims’ confidence and induce further investments. For example, bank records showed that Hafez occasionally used money from earlier victim investors in order to pay future victims “lulling” payments. In classic Ponzi scheme fashion, Hafez lied to investors and told them that these payments were returns on their investments.
As funds began to run out and investors demanded their money with increasing frequency, Hafez provided certain victim investors with checks for thousands of dollars, claiming that they represented investment returns or a refund of initial investments. When victim investors attempted to deposit or cash these checks, the checks were rejected due to insufficient funds because Hafez and others had already spent the victims’ money.
In addition to the prison term, Judge Walls sentenced Hafez to three years of supervised release. Hafez must also pay restitution of $1.5 million.
This Chart Shows Why Social Security Will Be Broke in 10 Years
Kelsey Harris / @KelsRenHar / December 01, 2014 / 0 comments
Social Security’s trustees projected in 1983 that the recently enacted Social Security reforms would keep the program active for at least the next 75 years, through 2058. However, according to research by James M. Roberts, a research fellow for economic freedom and growth at The Heritage Foundation, that approach date has accelerated.
“If the trend since 1983 continues, the program will become insolvent in 2024—34 years earlier than originally projected,” Roberts writes.
Charles Ponzi working with the social security administration
Ponzi: Treasury Issues $1T in New Debt in 8 Weeks—To Pay Old Debt
November 28, 2014 – 2:37 PM
The Daily Treasury Statement that was released Wednesday afternoon as Americans were preparing to celebrate Thanksgiving revealed that the U.S. Treasury has been forced to issue $1,040,965,000,000 in new debt since fiscal 2015 started just eight weeks ago in order to raise the money to pay off Treasury securities that were maturing and to cover new deficit spending by the government.
During those eight weeks, Treasury took in $341,591,000,000 in revenues. That was a record for the period between Oct. 1 and Nov. 25. But that record $341,591,000,000 in revenues was not enough to finance ongoing government spending let alone pay off old debt that matured.
September 5, 2012
By Lee Adler
For the past year or so I have espoused the opinion that chaos in Europe is good for the US because of capital flight from Europe to the US. That capital is funding the Last Ponzi Game Standing, the US Treasury market and US economy.
Here’s how that works. As Europe destabilizes, big money exits the problem markets of Greece, Portugal, Ireland, Italy, and particularly Spain. Ireland and Italy have stabilized somewhat in recent months, but money is still pouring out of Greece, Portugal, and Spain. Much of it is transferred to the US to purchase Treasuries and probably big cap stocks to some degree. These purchase funds flow into the US Treasury and US bank accounts. The Treasury subsequently spends the cash it borrowed from these sources, and it ends up in US bank accounts.
Of every dollar the US Government spends, on average over the course of the year approximately 35 cents comes from borrowing. Some of that borrowing comes from domestic sources. About 8% of it over the past year has come from foreign central banks. Of the rest, the US Treasury TIC report says that Europeans made net purchases of $76 billion of US Treasury Bonds in the second quarter. That was equivalent to 30% of the new Treasuries issued. In other words, it appears that European capital flight accounted for 30 cents of every dollar of debt the Treasury raised. That debt accounted for 35 cents of ever dollar the government spent. Therefore, roughly 10 cents of every dollar of US government spending driving the US economy came from European capital flight.
Given those cash flows, anyone who argues that what’s bad for Europe is bad for the US is simply wrong. If Europe somehow manages to ameliorate its problems, or even create the impression that it is doing something to solve them, then these flows would slow down or even stop. The obvious effect would be that long term US bond yields would be forced to rise in order to attract investors. Alternatively, the US government would need to spend less or tax more in order to reduce borrowing. Any of those outcomes would slow the economy. The other option would be for the Fed to step into the breach to monetize the debt. No doubt that would have an immediate response in the commodities pits, driving the cost of energy, materials, and food into the stratosphere, which in turn would crush the US economy.
So the last thing the US needs is for the European situation to improve. In fact, the worse things are over there, the greater the capital flows from there into the US.
It is true that some of the capital flooding out of Spain, Portugal, and Greece heads to Germany. As a result European bank deposits in total have remained relatively stable. But that doesn’t account for all of the capital flowing from those countries. Some of it heads for the UK and elsewhere, and it seems clear that some of it heads for the US where it funds the Last Ponzi Game Standing.
https://wallstreetexaminer.com/2012/09/05/europe-funds-the-last-ponzi-game-standing/