Your weekly ScamWatch
Here’s a weekly roundup of alleged cons, frauds and schemes to watch out for.
Ethnic Indians targeted — A Tustin man has been sentenced to nearly six years in federal prison for running a Ponzi scheme that targeted ethnic Indians in Orange County and across the United States. Victims who invested with Tarakeswar Chaudhary lost about $9 million, the U.S. attorney’s office said. Chaudhary, 49, who operated Transpacific Intertrade Inc., told victims he could produce significant, risk-free returns because he had relationships with Wall Street firms that gave him access to stock offerings below market price. Neither the relationships nor the stock offerings existed, the U.S. attorney’s office alleged. Chaudhary, who operated the scheme in the second half of 2009, pleaded guilty in March to wire fraud. U.S. District Judge James V. Selna imposed the sentence Aug. 30.
Scam from a jail cell — Willoughby Farr went to Palm Beach County Jail in 2003 and came out a multimillionaire. He was sentenced Sept. 2 to 21 years in prison for running a $35-million telephone billing scam from behind bars from 2003 to 2005. According to federal prosecutors, Farr operated three Florida companies that billed telephone customers for nonexistent collect calls. Because he was in jail, Farr, 46, ran the operations “largely through instructions he gave to other people,” according to the indictment. Farr pleaded guilty in May to two counts of mail fraud.
Too risky for retirees —The Securities and Exchange Commission has accused a Colorado investment advisor of fraud and breach of fiduciary duty for recommending that older clients and retirees put their money in highly leveraged hedge funds that he operated. Neal R. Greenberg put some of his clients’ money in a fund that invested with Bernard L. Madoff, the SEC alleged in a lawsuit filed Sept. 7. The lawsuit accused Greenberg of misleading clients about the risky nature of his Agile investment funds, which he falsely described as diversified and low-risk. The SEC lawsuit also accused Greenberg of improperly collecting $2 million in management and performance fees that were not fully disclosed to investors. Greenberg's lawyer, Steven Feder, did not respond to a telephone message left at his Denver office.
Credit-repair fraud —The operators of a Florida credit-repair business accused of falsely claiming they could remove all negative information from clients’ credit reports have settled a lawsuit with the Federal Trade Commission by surrendering real estate in Florida and Bogota, Colombia. Clean Credit Report Services Inc. and its owners also agreed to stop charging upfront fees and to no longer make false representations about its services, the FTC said in a news release. Authorities caution consumers to avoid loan modification and credit-repair companies that charge upfront fees.
— Stuart Pfeifer