If your business involves making frequent high dollar financial transactions, you must be very careful to make sure your practices fall within both state and federal regulations. Your finances will always be the subject of scrutiny by government officials and any act deemed as illicit could be the basis for a variety of very serious charges.
Recently, seven hedge fund executives were indicted in New York for allegedly defrauding investors out of vast sums of money. The executives belonged to a company based in New York called Platinum Partners. The company's founder and chief investment officer was one of those charged.
Reportedly, the case involves a fatal oil rig explosion that occurred in 2012 in the Gulf of Mexico. The company that owned the rig, which is called Black Elk, was one of Platinum Partners' largest assets. According to the indictment, Platinum Partners lied to investors regarding the performance of a fund that apparently suffered due to the explosion.
But in spite of the fund's problems, authorities say that Platinum Partner reported sizable returns and in turn collected in excess of $100 million in fees. All told, it is said that investors were cheated out of $1 billion. When investors wanted their investment money returned, the company is said to have paid them with internal loans and new investment funds. At a news conference, a U.S. Attorney described the scheme as being "Ponzi-esque."
In federal court in Brooklyn, the chief investment officer offered a not guilty plea to securities fraud conspiracy and various other offenses. As of the writing of this post, he is free on $5 million bond.
Federal charges, such as the ones issued to the subjects of this story, require a decisive response in the form of a strong defense. As such, if you are ever arrested for allegedly committing a federal crime, it is a good idea to secure the services of an attorney who understands the federal court system and its prosecutorial guidelines.
Source: WABC-TV, "NEW YORK HEDGE FUND FOUNDER INDICTED IN $1 BILLION FRAUD CASE," Tom Hays, Dec. 19, 2016