IRS Investigates Ponzi Scheme that Defrauded 725 People

Published On: 22nd January 2013

From the Internet

The IRS was involved in the investigation of a Ponzi scheme that involved the defrauding of 725 people.

On January 4in United States District Court, Judge Michael J. Davis sentenced three people in connection with a Ponzi scheme headed by Trevor Cook. Also helping Cook in the scheme was Jason Bo-Alan Beckman, who received a 30 year prison sentence based upon a conviction for 17 counts of mail and wire fraud, 2 counts of conspiracy to commit wire and mail fraud, 4 money laundering counts, 2 counts of filing a false tax return, and one count of evading taxes. There is no parole at the federal level, so Beckman will be spending a majority of his sentence in prison.

Beckman and the other defendants in the case are to collectively pay nearly $155.5 million in restitution to the 725 victims in the case.

Co-defendant Gerald Durand was ordered to serve 20 years in prison and Christopher Pettengill was sentenced to serve 7 ½ years in prison.

Special agent for the IRS, Kelly R. Jackson, said that the IRS Criminal Investigations Division based out of St. Paul is committed to getting to the bottom of money laundering and financial transactions that victimize investors and the public in general.

This investigation that the IRS was involved in uncovered evidence that the scheme took place between 2005 and 2009 and involved soliciting investors to invest money in a FOREX trading program that they said would net investors double-digit returns. The defendants promised individuals that they would see returns between 10.5 and 12% each year with hardly any risk at all. They told investors that their assets would be held in a segregated account that they could withdraw from at any time.

All of these promises were false.

The defendants gave false information about the liquidity, safety, and performance of the currency program. They also left out important information regarding their own qualifications and backgrounds, as well as the backgrounds of the individuals working for them.

Once the investors made their investments, statements would be sent that showed the program was performing as promised. Some individuals even received checks. It was found that the co-conspirators in the case were the ones producing these checks and statements so that investors would be encouraged to invest more of their money. But while some investors were receiving checks, others were receiving nothing.

It turned out that most of the trading was high risk and the losses were significant. The Switzerland-based trading firm was also in bad financial condition.

It was in 2007 on the heels of a trademark infringement lawsuit against the defendants that they started to operate under different names. It was under these names that they would continue approaching investors with false representations. By 2009, the defendants had secured nearly $195 million in investments. The currency trading firms received $109 million of the money, while $52 million was used to lull payments to investors and $30 million was diverted to the defendants.

While this was happening, Beckman had tried to purchase ownership interest in the Minnesota Wilds. He provided false information to the National Hockey League, saying that investments in specific trading accounts were his alone. He also claimed more assets under his management than what he really had.

It was also found that Beckman filed false income tax returns for 2007 and 2009 and did not file his 2008 return. It would be found that Beckman and his wife would owe over $1.3 million in federal income tax to the IRS. He also caused the selling of two insurance policies that belonged to an investor to then steal millions of dollars in proceeds so he could inflate the currency trading accounts that were listed under his name.

This investigation by the IRS and the FBI led to the revelation of the fraud scheme, which ultimately led to the convictions of the individuals involved.

Source: http://www.loansafe.org/three-individuals-sentenced-for-defrauding-more-than-725-people-in-trevor-cook-ponzi-scheme