Investors Buy Up Metaverse Real Estate in Virtual Land Boom - WSJ

Real-estate transactions in the metaverse are reaching record highs. The WSJ spoke with companies investing in digital real estate to understand the economic model, and why investors are spending millions on virtual property. 

So, is the metaverse real or just some great big scam? 

Below are just a few comments on the WSJ piece.

• People are out their minds, the reason actually land in the real world has had an increase of price over time is due to it being finite and on the other hand you’ve got a digital online space where you can create as much virtual space as imaginable.
• This is just a hype. Similar concepts had happened on virtual world of various games in gaming industry since 90s and is still on going. Sure, some addicts with the money would spend to acquire virtual land, goods, items, services, and etc. However, once the honeymoon period is passed, either the developer or users leave.
• This is basically a new iteration of the Pyramid Scheme...none of these videogame real estate assets would have any value if the scheme doesnt put on a show to recruit new investors to prop up and legitimize the values...
• What stops other “Metaverse” being made. Crypto Marvel Multiverses. Why would people be stuck in the one place if it can be replicated and people move to another. Like how people jumped in early social media. People moved from Friendster to MySpace then to Facebook and so on. The same happened with online gaming. Ultimate online, RuneScape, World of War Craft. People will get bored. It will stop being the cool place to be over time. What is the draw card to lock people in?
• I love how this screams the Investor class has absolutely zero perception of quality, as long as they can sell a tall tale that makes them a new type of money they'll lie in order to sell it.
• This is never going to work. Only for rich people with nothing else to spend their money on. No one is going to go to a plot of land to see an NFT. Concerts will always be better live. And shopping at Rodeo Drive is better than shopping in a virtual Rodeo Drive, lol I still prefer amazon for my online shopping experience. Don't need headset and an avatar to go buy my wife a louis vuitton. Playstation had this yearsssss ago and it sucked. Poeple will get bored of this. This is only temporary. Want to invest in a better risk, buy BTC or ETH.

 YOU be the judge...

Bernie Madoff and Jordan Belfort and their criminal financial schemes

Ike Sorkin, lawyer to both Bernie Madoff and Jordan Belfort (Wolf of Wall Street), discusses their criminal financial schemes and how regulatory safeguards failed. This is a repeat of the TRACE podcast episode that was originally published in June 2017.

With the recent death of Bernie Madoff, it is perhaps a timely opportunity to revisit the details. 

You can listen to this podcast
HERE.

Bernie Madoff - "It was inconceivable that he was a crook"

Bernie Madoff died on 14 April 2021 aged 82. He was in the 12th year of his 150 year prison sentence after committing the biggest Ponzi fraud in US financial history.

In this interview "Bernie Madoff: 'The Wizard of Lies' ", first published in September 2017, Diana Henriques drew on her years of financial journalism and extraordinary access to the title character to write the definitive book about Bernie Madoff. It was turned into an HBO movie in early 2017 starring Robert De Niro, Michelle Pfeiffer and Diana, playing herself. 

This is compelling listening. Hear it rebroadcast on the "Bribe, Swindle or Steal" podcast  HERE.

 

Why Ponzi Schemes Work: An In-Depth Look at the Allen Stanford Fraud

From FIN alternative –

“Texan Allen Stanford first appeared on the radars of financial regulators in 1997. Julie Preuitt, then a branch chief in the SEC’s Fort Worth Broker-Dealer Examination group, was becoming “very concerned” about the “extraordinary revenue” Stanford claimed to me making in his investment fund. It took authorities more than 12 years until Stanford was charged with a crime.

H. David Kotz, who served as the inspector general of the Securities and Exchange Commission for over four years, takes us inside the investigation—or lackthereof—and explains why Stanford got away with it for so long.”

Read more>> 

Five Due Diligence Must-Dos

From Market Minder

“Ascot Partners. Sound familiar? No? You’re not alone. Let’s try again. Familiar with Bernard Madoff? I’m betting you are. Yet the two are part of the same story. Ascot Partners was one of the funds that fed into Bernie’s hedge fund (feeder funds). The folks who did due diligence on behalf of Madoff’s eventual victims. And, depending on who you believe, they were either co-conspirators or flat-out didn’t do their job.

I think many shared my hope that a silver lining to the Madoff cloud would’ve been investors’ placing heightened importance on doing detailed due diligence on potential advisers. Sadly, the facts show otherwise. According to Ponzitracker.com, at least 67 Ponzi schemes were uncovered in 2013, the largest being Edward Fujinaga's estimated $800 million scam. Proper due diligence helps protect you from the crooks. But it can also help you identify honest, capable advisers.’

read more>>

UniCredit files a suit against Irving Picard

One of the defendants in Madoff case Italian bank UniCredit SpA has filed a lawsuit against Irving Picard, a trustee liquidating Bernard Madoff's assets. According to the papers Irving Picard has exceeded its authority vested by the US Congress.

It became known that UniCredit tries to get the case moved from the US Bankruptcy court and the bankruptcy judge must address many complex matters of non-bankruptcy federal law to resolve trustee's "unbounded claims,".

According to the Italian giant there was a serious risk of duplicative recoveries and inconsistent results and a "virtual certainty of judicial inefficiency."

Also it became known that New Jersey Rep. Scott Garrett addressed the Congress with the legislation protecting ex-investors of Madoff from claims of the victims suffered from Ponzi scheme.

According to him the ordinary investors were not aware of the scam scheme and nature of the profits they received. “I introduced this legislation because I am increasingly concerned that the trustee in the Madoff case is ignoring the law and failing to provide prompt assistance to those who have been thrust into financial chaos,” said Garrett.

Two former Madoff employees arrested

Two former employees of disgraced financier Bernard Madoff have been arrested by the FBI in relation to his massive Ponzi scheme, according to FBI spokesman Jim Margolin.

Joann Crupi was arrested last night in New Jersey and Annette Bongiorno was taken into custody in Florida. Charges against the two will be announced later Thursday.

Madoff pleaded guilty in 2009 to 11 counts related to running the largest Ponzi scheme in history and was sentenced to 150 years in prison.

The arrests are just the latest in a series since Madoff's fraud collapsed in 2008. To date, two former executives, two computer programmers, and an accountant of Madoff's have faced charges. Frank DiPascali, Madoff's former finance chief, pleaded guilty to fraud charges in 2009.

The government had previously filed civil complaints against Bongiorno and Crupi, both longtime Madoff employees who worked as supervisors of his "back office" staff, seeking the forfeiture of millions of dollars worth of assets, including homes and luxury cars, that they allegedly received while involved in Madoff's scheme.

SEC charges investment adviser with $11m fraud

Sandra Venetis, an investment adviser from New Jersey, has been accused of leading a Ponzi scheme which saw $11 million stolen from clients.

According to the Securities and Exchange Commission (SEC), the accused misled investors through fake promissory notes issued via three associated firms. She is also alleged to have promised investors that their capital would be used to fund loans to doctors.

Instead, the money was given to relatives of Ms Venetis as well as being used to pay off a range of debts gained from travelling and gambling.

Bruce Karpati, co-chief of the SEC's Asset Management Unit, said: “Venetis abused her position of trust to target older investors who were the most vulnerable to her egregious lies and misrepresentations.

“The SEC's enforcement action and the settlement reached ensure that she will never work in the securities industry again."

Ms Venetis agreed to settle by way of a court order from the SEC which will freeze her assets as well as ensuring fines are imposed at a later date.

The order also means the accused is banned from future interactions with brokers, dealers or investment advisers.

Bernie Madoff trustee to file suits against victims - Newspaper report

Irving Picard, court-appointed trustee for the victims of Bernard Madoff’s Ponzi scheme, is to take legal action against investors who benefited from the fraud, a newspaper report has claimed.

According to the Wall Street Journal, law suits will be filed against approximately 1,000 investors who have been dubbed “net winners” from the scam. Mr Picard told the news provider that the action will be taken against “the people who made money, who got more, have made money at the expense of the people who didn't”.

The trustee is expected to have filed the suits by December while he is also planning on targeting relatives of Mr Madoff and other funds which invested their money in Madoff’s business opportunities.

He recently expanded a law suit against the Fairfield Greenwich Group and a number of its affiliates for enabling Mr Madoff’s scam.

In an additional filing the trustee has demanded up to $3.6 billion in damages from the firm.

The fraud is thought to have amounted to almost $65 billion while Mr Madoff was sentenced to 150 years in jail in June 2009.

Madoff trustee starts gathering $3.6 billion - new facts are being revealed

It is reported that Irving Picard, the court-appointed trustee started to gather money from 43 new defendants to pay the victims of Bernard Madoff's Ponzi scheme. In total they demand $3.6 billion from entities tied to Fairfield Greenwich Group which is considered to enable Bernard Madoff to run the fraud for at least 20 years.

Among the most significant defendants are Walter Noel, Jeffrey Tucker and Andres Piedrahita, the Fairfield Greenwich Group co-founders.

The trustee Irving Picard has submitted papers to the US Bankruptcy Court in Manhattan last week insisting on the fact that the company, its founding partners and two dozen affiliates, among others, represented nearly half of Madoff's reported assets under management, and that they "cannot deny their knowledge of many 'red flags' indicating the likelihood of that fraud," reports the Washington Post.

Picard has provided a 228-page complaint describing in details the relationship of Noel with Bernard Madoff which started in 1989.

"The defendants misled regulators, investors and potential investors, and generally looked the other way, focusing only on self-interest and profit," said Irving Picard.

Fairfield Greenwich has stated that Picard's filing was filled with "false, misleading and rehashed accusations."

British 'Ponzi scheme' defendants fined £115m

Three men accused of running the UK's largest-ever Ponzi scheme have been ordered to pay £115 million to the Financial Services Authority (FSA).

It is claimed that John Anderson, Kautilya Nandan Pruthi and Kenneth Peacock – who ran Business Consulting International – took up to £84 million from clients including celebrities and sports stars, using new investors' cash to pay returns out to older ones. hey were offering investors returns of up to 20 per cent a month, reports BBC News.

While the police investigation into their activities continues, a High Court hearing has ruled that they were unlawfully accepting deposits without FSA authorization.

As a result, Pruthi has been ordered to pay £89.7 million, Anderson £13.1 million and Peacock £11.6 million. The FSA said that despite the ruling, it would be unlikely investors will be repaid for their losses "in part or at all".

Margaret Cole, director of enforcement and financial crime at the FSA, said: "This case emphasizes the importance of taking care to ensure that any firm or individual consumers deal with are authorized or approved by the FSA."

TRAINING COURSE - Risk Management - Focus on Fraud

Join us in JOHANNESBURG, South Africa on 2 & 3 August 2010 for our 2-day training course “RISK MANAGEMENT - FOCUS ON FRAUD”

Fraud is on the increase. Recent studies have shown a surge in economic crimes. The statistics reveal that the three most common forms of crime are theft, accounting fraud and corruption.

Of these, fraud has shown a particularly sharp rise. The rise in fraud stems from a mixture of increased opportunities and growing incentives. Companies have been reducing the number of people employed to monitor workers at a time when employees are more tempted to break the rules because their living standards are eroding and their jobs are looking shakier. The proportion of frauds committed by middle managers has shown a particularly sharp rise, from 26% in 2007 to 42% today.

Just consider the following questions;

* Can your bank or organization cope with fraud?
* Can you identify a fraud in your working environment?
* Are you maximizing your staffs’ potential to reduce fraud and error in your systems?
* How aware are you or employees of fraud?
* Do they have a clear understanding of the role they play in detecting fraud?
* Do they understand you organization’s fraud policies and procedures?

The “Risk Management - Focus on Fraud” course in Johannesburg on 2 & 3 August 2010 is a 2-day intensive course on fraud and how it presents huge challenges for banks, requiring them to radically modify behavior and increase their vigilance in many of the traditional risks associated with banking activities.

Ensure that your staff are able to cope with the growing fraud threat. For more details including a fully descriptive course brochure e-mail us at courses@citadeladvantage.com today. Please indicate FRAUD-JHB in the subject line.

Computer Programmers Charged in Madoff Affair

The Securities and Exchange Commission has accused Jerome O’Hara and George Perez of provideing the technical support necessary to produce false documents and trading records, and took hush money to help keep Bernard Madoff’s massive Ponzi scheme going.

Last week the two computer programmers were charged for their role in helping Madoff cover up the fraud for more than 15 years. The SEC alleges that the two provided the technical support necessary to produce false documents and trading records, and took hush money to help keep the scheme going.

“Without the help of O’Hara and Perez, the Madoff fraud would not have been possible,” said George S. Canellos, Director of the SEC’s New York Regional Office. “They used their special computer skills to create sophisticated, credible and entirely phony trading records that were critical to the success of Madoff’s scheme for so many years.”

According to the SEC’s complaint, filed in U.S. District Court for the Southern District of New York, Madoff and his lieutenant Frank DiPascali, Jr., routinely asked O’Hara and Perez for their help in creating records that, among other things, combined actual positions and activity from BMIS’ market-making and proprietary trading businesses with the fictional balances maintained in investor accounts. O’Hara and Perez wrote programs that generated many thousands of pages of fake trade blotters, stock records, Depository Trust Corporation (DTC) reports and other phantom books and records to substantiate nonexistent trading. They assigned file names to many of these programs that began with “SPCL,” which is short for “special.”

A separate computer internally known as “House 17” was used to process BMIS investment advisory account data at the direction of Madoff, DiPascali and others. The SEC alleges that O’Hara and Perez knew that the House 17 computer was missing a host of functioning programs necessary for actual securities trading and reporting. According to the SEC’s complaint, they recognized that the trades being entered into House 17 and the account statements and trade confirmations being sent to investors did not reflect actual trades.

The SEC alleges that O’Hara and Perez had a crisis of conscience in 2006 and tried to cover their tracks by attempting to delete approximately 218 of the 225 special programs from the House 17 computer. But they did not delete the monthly backup tapes. O’Hara and Perez then cashed out hundreds of thousands of dollars each from their personal BMIS accounts before confronting Madoff and refusing to generate any more fabricated books and records.

According to O’Hara’s handwritten notes from the encounter, one of them told Madoff, “I won’t lie any longer. Next time, I say ‘ask Frank,’” meaning that Madoff should rely on DiPascali alone to create the false data and reports.

The SEC’s complaint alleges that Madoff responded by telling DiPascali to offer O’Hara and Perez as much money as necessary to keep quiet and not expose the misrepresentations. O’Hara and Perez considered the offer and demanded a salary increase of nearly 25 percent along with one-time bonuses in late 2006 of more than $60,000 each. They stated to DiPascali at the time that they did not ask for more because a greater amount might appear too suspicious. DiPascali then managed to convince O’Hara and Perez to modify computer programs so that he and other 17th floor employees could create the necessary reports themselves.

This is the SEC’s latest enforcement action concerning the Madoff fraud since the scheme collapsed last December. The Commission previously charged Madoff and BMIS, DiPascali, and auditors David G. Friehling and Friehling & Horowitz CPAs, P.C. The SEC also charged certain feeders with committing securities fraud through a Ponzi scheme perpetrated on advisory and brokerage customers of BMIS. Madoff, DiPascali and Friehling have all pleaded guilty to criminal charges related to their conduct.

Among other things, the SEC’s complaint seeks financial penalties and a court order requiring O’Hara and Perez to disgorge their ill-gotten gains.

Sins of the Risk Managers

Have risk managers really been doing their jobs properly? According to many they certainly have not. I came across this interesting item on the sum2llc Blog. It is certainly worth a read.

Click on the post title or the link below.
http://sum2llc.wordpress.com/2009/09/28/day-of-atonement-al-chet-for-risk-managers/

New South African fraud exposed

A major area of operations risk is in the areas of fraud. From Johannesburg comes the news that South Africa is currently in the midst of what some are describing as a fraud pandemic. At its epicentre is the Companies and Intellectual Property Registration Office (CIPRO). Over the past two years corrupt officials at CIPRO, acting with seeming impunity, have facilitated hundreds if not thousands of scams which have hit the South African Revenue Service (SARS), a number of prominent companies, and hundreds of smaller private businesses. Just two weeks it was reported how in 2008 duplicates of Sun Microsystems South Africa Pty Ltd and SBC International Management Services were fraudulently registered as companies on CIPRO. Bank accounts were set up in these counterfeit companies' names. R51million (USD 6.4 million) in tax refunds from SARS, due to the legitimate companies, were then diverted into the counterfeit's accounts.

An investigation has revealed that this CIPRO based scam was just the tip the iceberg. Counterfeit companies are being fraudulently registered through CIPRO, on an ongoing daily basis, to facilitate cheque and other forms of fraud. No proper due diligence is being done. Over the past two years the directors of several prominent companies have also been fraudulently deregistered, and new directors inserted. Again, the intention is to facilitate fraud of one kind or another.

For more details visit: http://www.politicsweb.co.za/politicsweb/view/politicsweb/en/page71619?oid=138904&sn=Detail

For a transcript of a discussion or to listen to a recoding on South Africa’s MONEYWEB radio please go to: http://www.moneyweb.co.za/mw/view/mw/en/page295799?oid=309657&sn=2009%20Detail&pid=287226

Panelists in the discussion includes David Alexander (who is a guest expert in our “RISK MANAGEMENT - CASE STUDIES FROM THE 2008 CRISIS” course in Johannesburg).

David Alexander on Ponzi Fraud

South Africa has its own Ponzi scheme too. A 2 billion rand (USD 257 million) scam that has ensnared many investors, including some well known local businessmen. Please click on the Post Title to link to a transcript of a radio interview that local fraud expert David Alexander did yesterday on South Africa’s Moneyweb Radio.

David Alexander is the Guest Expert at the CIT-Advantage Seminar in Johannesburg on 25/26 & 27 August 2009 on “RISK MANAGEMENT - CASE STUDIES FROM THE 2008 CRISIS”. David Alexander’s unique combination of business experience and insights into scams, fraud and social engineering through personal exposure has equipped him to provide unique insights and cutting edge, innovative social engineering, scam, fraud and economic crime solutions.

Madoff – So what happens now?

An interesting insight from Alan Ellis, a lawyer specializing in federal sentencing and Bureau of Prison matters and the author of the “Federal Prison Guidebook”.

You need to clik the Post Title to go to the full Wall Street Journal article.

Did he act alone?

So sentence has finally been passed. 150 years is a pretty hefty stretch, not that it is going to really help Bernard Madoff's thousands of victims. But a key question to my mind is "who else was involved?" I simply cannot give credence to the fact that Mr. Madoff acted alone and that he was able to generate all those false transactions and client statements over all those years. To my mind it just wont wash! What do you think?