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| July 19, 2018

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fraud Archives -

Defunct for-profit college firm ITT’s former executives settle fraud charges

July 11, 2018 |

Former top executives at ITT Educational Services, the parent company of defunct ITT Technical Institute, have settled fraud charges with the Securities and Exchange Commission, avoiding a trial that was slated to begin Monday.

A judgment order entered Friday puts to rest civil fraud charges filed…

L.A. Times – Business

Ripple, CEO Face Another Securities Fraud Lawsuit

July 5, 2018 |

Ripple, CEO Face Another Securities Fraud Lawsuit

A third lawsuit, alleging securities fraud, was filed last week against Ripple Labs Inc, XRPII LLC, and its CEO Bradley Glaringhouse. In 28 pages, the class action suit attempts to make the case XRP is a security: issued, maintained, and supported by Ripple in clear violation of US regulatory laws. Ripple has worked extremely hard to distance itself from its cryptocurrency, XRP, in hopes of avoiding just this scenario.   

Also read: Troll Slayer: Derek Magill Defends Peer-to-Peer Electronic Cash Against Defamation

Ripple Labs Faces Third Securities Fraud Lawsuit

Managing partner of Robbins Arroyo LLP, Brian J. Robbins, filed a class action lawsuit against Ripple Labs Inc, XRPII LLC, and CEO Bradley Glaringhouse on behalf of San Diego college senior David Oconer. Signed by fax late June of this year in the San Mateo, California Superior Court, its more than two dozen pages set about making the case Ripple is in clear violation of the Howey Test.

Mr. Oconer, through his legal team, stresses how Ripple fought to manipulate the XRP price, including placing tens of millions XRP tokens into a kind of escrow, creating an arbitrary scarcity. It was also a way to signal to worried longer term investors the company would not dump the lot all at once. Indeed, XRP mooned to many hundreds of percent, the suit alleges, as a result of such moves.

Ripple, CEO Face Another Securities Fraud Lawsuit

It’s the third such lawsuit filed against the company since early May of this year. A common theme between each suit is the claim XRP is a security as defined under US regulatory statute – which insist Ripple Labs is the token’s puppet master indistinguishable from XRP itself. The Oconer version leans heavy on making a case for a Howey Test violation. Ripple isn’t taking any of the suits lightly, hiring two former US Securities and Exchange Commission heavies, Andrew Ceresney and Mary Jo White, as lead counsel.

Ripple, CEO Face Another Securities Fraud Lawsuit

XRP has long been held in a controversial light due in part to its origin story. While leading cryptos were to be mined on chain, ripples appeared ex nihilo with more than 60 percent still held by its parent company. If deemed a security, the company would be most likely ordered to cease all trading, and it’s not unusual to presume holders would be given the chance at refunds. Violations of securities law, what’s more, can also be prosecuted criminally, though those in the know believe it will not get to that stage.

Will these lawsuits hurt Ripple? Let us know in the comments section below. 

Images via the Pixabay, Twitter.

Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi Pulse, another original and free service from

The post Ripple, CEO Face Another Securities Fraud Lawsuit appeared first on Bitcoin News.

Bitcoin News

Wife of Israel prime minister charged with fraud over misuse of public funds

June 21, 2018 |

Sara Netanyahu, the wife of Israeli Prime Minister Benjamin Netanyahu, has been charged with fraud over misuse of public funds on Thursday.
FOX News

Theranos Founder Indicted on Federal Wire Fraud Charges

June 16, 2018 |

Federal prosecutors have charged Theranos Inc. founder Elizabeth Holmes and former president and COO Ramesh Balwani with two counts of conspiracy to commit wire fraud and nine counts of wire fraud, reports the Wall Street Journal . They allege Holmes and Balwani defrauded investors, doctors, and patients out of millions of…


Ex-NFLer T.J. Houshmandzadeh Sues Weed Dispensary Owners for Fraud

May 24, 2018 |

Former Cincinnati Bengals star T.J. Houshmandzadeh claims he got bamboozled into fronting hundreds of thousands of dollars for a bogus weed business. The retired WR filed suit against two men — Damien Marzett and John Wiegman — for…

South Korea’s Largest Crypto Exchange Upbit Under Investigation for Fraud

May 11, 2018 |

South Korea's Largest Crypto Exchange Upbit Under Investigation for Fraud

The largest cryptocurrency exchange in South Korea, Upbit, is suspected of fraud and is currently under investigation. The prosecutors have conducted searches at the exchange and confiscated computers and accounting records.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Upbit Under Investigation

South Korea’s largest cryptocurrency exchange, the Kakao-backed Upbit is suspected of fraud, according to local media. While maintaining that customers’ assets are still kept securely, the exchange posted the following statement on its website:

Upbit is currently under investigation by the prosecution, and we are working diligently. Upbit services such as all transactions and withdrawals are operating normally.

South Korea's Largest Crypto Exchange Upbit Under Investigation for FraudUpbit is currently the world’s fourth-largest cryptocurrency exchange and the largest in South Korea with a 24-hour trading volume of $ 1.812 billion at the time of this writing, according to Coinmarketcap. The exchange is affiliated with Kakao Corp which operates the country’s most popular chat app, Kakao Talk.

Suspected of Fraud

Crypto of Korea explained:

The company [Upbit] is suspected of transferring customer funds from their cryptocurrency exchange account to a representative or executive account…Korean prosecutors have conducted search and seizure against the nation’s largest cryptocurrency exchange, Upbit, on charges of fraud.

South Korea's Largest Crypto Exchange Upbit Under Investigation for FraudAccording to the publication, the financial investigation team of the Seoul Southern District public prosecutors’ office sent prosecutors and investigators to Upbit headquarters on May 10 and May 11 “to secure computer hard disks and accounting records.” More than 10 investigators were sent to Upbit, Money Today added.

“After the digital forensics investigation on the seizures [seized items] and confirming the illegal charges, we will decide whether and in what direction we will investigate further,” the prosecutors were quoted saying.

Accused of Deceiving Customers

Upbit allegedly “pretends to hold [virtual currencies] without holding virtual currencies,” the news outlet noted.

South Korea's Largest Crypto Exchange Upbit Under Investigation for Fraud“The prosecution believes that Upbit has entered [into] the computer system as if it had virtual currencies that it does not actually own, and deceived customers,” KBS elaborated. According to the prosecution, the Hankyoreh described, “Upbit has been suspected of carrying out ‘book-trading’ without holding virtual currencies in a wallet.”

The Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) have been investigating domestic crypto exchanges since March, according to Yonhap News. Their first target was Coinnest where the chairman, Kim Ik-hwan, was detained over embezzlement and fraud charges. According to Money Today, unlike Coinnest, there is no suspicion of embezzlement with Upbit.

Do you think Upbit is guilty? Let us know in the comments section below.

Images courtesy of Shutterstock and Upbit.

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The post South Korea’s Largest Crypto Exchange Upbit Under Investigation for Fraud appeared first on Bitcoin News.

Bitcoin News

The Amazing Hoax of a High School Fraud

May 2, 2018 |

It was, as the headline at GQ puts it, “one of the boldest hoaxes of our time.” Hard to argue: In 2016, police in Harrisburg, Pennsylvania, arrested a star high school student who went by the name of Asher Potts. As it turned out, however, Asher Potts was actually a…

SEC Charges Third Centra Co-Founder With Fraud

April 25, 2018 |

SEC Charges Third Centra Co-Founder With Fraud

The United States Securities and Exchange Commission (SEC) has announced that Centra Tech Inc. co-founder, Raymond Trapani, has been charged with fraud charges resulting from the SEC’s investigations into Centra’s controversial $ 32 million USD initial coin offering (ICO). Mr. Trapani is the third and final Centra co-founder to be charged for having a role in the ICO.

Also Read:16 Regulated Crypto Exchanges Unveil Plans to Restore Public Trust in Japan 

“Mastermind” Centra Co-Founder Charged for Involvement With “Fraudulent” ICO

SEC Charges Third Centra Co-Founder With FraudRaymond Trapani, a co-founder of Centra Tech Inc., has been charged by the SEC for his involvement in “a fraudulent scheme related to Centra’s 2017 ICO.” Last year, Centra made headlines after enlisting celebrity endorsements from Floyd Mayweather and DJ Khaled. The other two co-founders of the company, Sohrab “Sam” Sharma and Robert Farkas, were charged by authorities earlier this month for their involvement in the distribution of “CTR Tokens” to investors.

An amended version of the SEC’s complaint claims that Trapani was the “mastermind of Centra’s fraudulent ICO,” with an SEC press release alleging that “Centra [was] marketed with claims about nonexistent business relationships with major credit card companies, fictional executive bios, and misrepresentations about the viability of the company’s core financial services products.”

The SEC also accuses Mr. Trapani and Mr. Sharma of “manipulat[ing] trading in the CTR Tokens to generate interest in the company and prop up the price of the tokens.”

SEC Charges Trapani Charged for Violating Securities Laws

SEC Charges Third Centra Co-Founder With FraudThe amended complaint charges Trapani with violating the anti-fraud and registration provisions of U.S. federal securities laws, with the SEC seeking “permanent injunctions, the return of allegedly ill-gotten gains plus interest and penalties, as well as bars against Trapani prohibiting him from serving as a public company officer or director and from participating in any offering of digital or other securities.”

Robert Cohen, the Chief of the SEC Enforcement Division’s Cyber Unit, stated “We allege that the Centra co-founders went to great lengths to create the false impression that they had developed a viable, cutting-edge technology,” adding that “Investors should exercise caution about investments in digital assets, especially when they are marketed with claims that seem too good to be true.”

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York has also sought criminal charges against Trapani.

Text Messages Evidence Fraudulent Intent

SEC Charges Third Centra Co-Founder With FraudThe SEC has indicated that text messages shared between Centra’s co-founders nakedly evidenced the fraudulent intent of the defendants.

The SEC has made public a text correspondence sent to Mr. Farkas and Mr. Trapani from Mr Sharma in response to a cease-and-desist letter from a bank demanding that Centra remove all references to the institution in their marketing materials, in which Mr. Sharma told his colleagues “[w]e gotta get that s[***] removed everywhere and blame freelancers lol.”

According to the SEC, Mr. Trapani also requested that Mr. Sharma “cook [him] up” a fraudulent document whilst the company was seeking to get CTR tokens listed on exchanges under misleading pretexts. Mr. Sharma replied to the request with “Don’t text me that s[***] lol. Delete.”

Do you think that the actions of projects like Centra indicates that the ICO sector is in need of regulation to protect investors, or should the onus be placed on the consumer to identify trustworthy companies and protect themselves? Share your thoughts in the comments section below!

Images courtesy of Shutterstock,

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The post SEC Charges Third Centra Co-Founder With Fraud appeared first on Bitcoin News.

Bitcoin News

Report: Cohen Suspected of Campaign Finance Fraud

April 10, 2018 |

The stunning FBI raid on the offices of President Trump’s personal lawyer Monday happened because Michael Cohen is suspected of crimes including bank fraud and campaign finance fraud, insiders say. Sources tell the Washington Post that agents seized documents including Cohen’s tax returns in raids on his offices, home, and…

Another downside to U.S. healthcare system: Way more opportunities for fraud

April 8, 2018 |

It’s no secret that Americans pay more for healthcare than people in all other developed countries. And a big reason for that is because our $ 3 trillion healthcare system is focused to a large extent on generating profits for businesses, rather than the well-being of patients.

Much of that profit-seeking…

L.A. Times – Business