Lucchese Family

Feds: Mafia Affiliates Took Over, Looted $12 Million From Texas Mortgage Company

Ryan J. Reilly | November 1, 2011, 2:55PM

Federal authorities charged Tuesday that affiliates of the La Cosa Nostra and Lucchese organized crime families gave a "new meaning" to the term "corporate takeover" when they looted a publicly traded mortgage company, with one member threatening that if someone were to "rat," their "wives will be f**ked... and your kids will be sold off as prostitutes."

Law enforcement officials charged 13 people -- including an alleged member and another associate of the Lucchese family -- on racketeering and related offenses in an alleged scheme to take over and loot the Texas-based FirstPlus Financial Group Inc. (FPFG) through extortion. Ten defendants are already in custody, one is expected to surrender and two are still at large.

Federal officials allege that Nicodemo S. Scarfo Jr. -- also known as "Nick Promo," "Mr. Apple" and Mr. Macintosh" -- became a "made" member of the Lucchese family after an attempt on his life in 1989. They say Lucchese family boss Vittorio Amuso, while in federal prison in Atlanta, arranged for Scarfo to become a member of the Lucchese family as a favor to former Philadelphia La Cosa Nostra boss Nicodemo D. Scarfo Sr. Both Amuso and Scarfo are named as unindicted co-conspirators in the case.

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Goldman Sachs

Buffett Continues Defense Of Goldman: I Want Lloyd Blankfein To Stay Put (VIDEO)

Ben Frumin | May 3, 2010, 10:55AM

Warren Buffett

Warren Buffett is continuing his rather full-throated defense of Goldman Sachs, saying in a Good Morning America interview broadcast this morning that CEO Lloyd Blankfein shouldn't step down -- and that Goldman has done nothing wrong.

The SEC has filed a civil lawsuit against Goldman Sachs over a shoddy mortgage product that Goldman allegedly knew was shoddy, and a Senate subcommittee hearing that put many of the firm's top executives on the spot last week has brought the firm under even more fire.

But Buffett -- whose company invested $5 billion in Goldman during the height of the financial crisis -- is standing by Blankfein's company.

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Spencer Barasch

Ex-SEC Official's Pitch To Prospective Client: I Promoted The Guys Who Filed Complaint Against You

Justin Elliott | April 26, 2010, 2:22PM

Spencer Barasch

"I am friends with and helped promote two of the guys who signed the Complaint against Mark. Someone should tell Mark to look at my profile on my firm website, my SEC press releases, and advise Mark to add me to his defense team."

Those are the words of former SEC Fort Worth enforcement chief Spencer Barasch, in a 2008 email pitching his services to a person close to Mark Cuban, the billionaire Texas businessman then facing an SEC insider trading complaint, the Dallas Morning News reports.

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Securities and Exchange Commission

SEC IG To Probe Potential Coordination With White House On Goldman Suit

Zachary Roth | April 23, 2010, 5:28PM

Rep. Darrell Issa (R-CA)

We told you earlier about the tireless -- and often fruitless -- efforts of Rep. Darrell Issa (R-CA) to find a scandal to stick to the Obama administration. Well, today he had some luck.

It's not the Pentagon Papers, but SEC inspector general David Kotz just announced on Fox News that he will launch an internal investigation into whether there was improper coordination with the White House over the recent decision to file a lawsuit against Goldman Sachs. "We need to understand what led to the decision to announce or bring the case on that day," Kotz told Neil Cavuto. "See if there was any undue influence involved and so we'll look very carefully to investigate that and see what we determine."

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Darrell Issa

No Let Up: Darrell Issa's Tireless Quest For Scandal

Zachary Roth | April 23, 2010, 8:35AM

Rep. Darrell Issa (R-CA)

Remember the 1990s, when Newt Gingrich, Dan Burton and co. managed to create a steady stream of outrage by playing up every Clinton administration "scandal," no matter how minor? Or how about the last years of the Bush administration, when Rep. Henry Waxman (D-CA) seemed to function as a one-man investigative machine, making sure that no Bush administration wrong-doing went unexamined?

Today that role is being played by Rep. Darrell Issa (R-CA), the ranking Republican on the House Oversight committee. But despite the steady stream of made-to-order conspiracy theories coming from Fox News and the Tea Party crowd, it's a much harder job. That's largely because Issa's party is in the minority, so he doesn't have the power to compel testimony or subpoena documents. And it's perhaps also because, though the Obama administration is far from squeaky clean, Issa just hasn't had the kind of material to work with that his predecessors did.

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Allen Stanford

Private Regulator -- Where Current SEC Chair Was Top Official -- Also Fell Down On Stanford Job

Zachary Roth | April 20, 2010, 5:46PM

Allen Stanford

A good catch by the government watchdog group POGO...

We told you yesterday about that internal SEC report on the Allen Stanford matter, which slammed the agency for failing to act on credible allegations that the banker was a fraud. But it wasn't just the SEC that appears to have fallen down on the job.

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Spencer Barasch

SEC Enforcement Lawyer Who Quashed Stanford Probes Later Did Legal Work For Stanford

Justin Elliott | April 19, 2010, 2:01PM

Spencer Barasch (inset) and Allen Stanford (center)

The new inspector general report on the SEC's handling of the Allen Stanford alleged Ponzi scheme case paints a devastating picture of the agency's repeated failures to pursue the billionaire banker, despite a widespread belief within the SEC's Fort Worth office that he was a fraud.

At the center of the story is Spencer Barasch, the chief of enforcement at the SEC's Fort Worth office, who declined to pursue Stanford multiple times, only to later jump ship to become a partner at a big private law firm where he proceeded to represent none other than 'Sir' Allen Stanford.

The inspector general has referred Barasch to the bars of Washington and Texas, where he is licensed, for potential violation of conflict of interest rules.

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Securities and Exchange Commission

Report Finds Catastrophic Failure By SEC In Stanford Ponzi Case

Justin Elliott | April 19, 2010, 10:19AM

Allen Stanford

In news buried by the Goldman fraud charges, the Inspector General for the SEC issued a blistering 159-page report Friday concluding that the agency's Fort Worth office knew that Texas businessman Allen Stanford was operating a Ponzi scheme in 1997 -- but didn't make a serious effort to pursue the matter for eight years, until 2005.

Stanford, a flamboyant Texas billionaire, is currently in jail facing charges of operating a $7 billion Ponzi scheme.

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Goldman Sachs

SEC Slaps Goldman With Civil Fraud Complaint

Justin Elliott | April 16, 2010, 11:10AM

The Securities and Exchange Commission today charged Goldman Sachs with defrauding investors by allegedly "misstating and omitting key facts" in the marketing of a financial product linked to the performance of subprime mortgages right as the housing crisis was beginning to unfold.

The complaint comes down just as the attention of Washington is turning fully to financial reform.

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Sean David Morton

SEC Charges 'America's Prophet' With Fraud; Investors Sent $6 Million To Psychic

Justin Elliott | March 5, 2010, 4:11PM

Sean David Morton

The SEC has charged Sean David Morton, a self-described "natural psychic, trained Remote Viewer, intuitive consultant, investigative reporter, and accomplished award winning director, screenwriter and film and TV producer," with securities fraud.

Morton, who is known as "America's Prophet" allegedly solicited investors through a newsletter in which he claimed, "I have called ALL the highs and lows of the market giving EXACT DATES for rises and crashes over the last 14 years."

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Bank of America

Cuomo Charges BofA, Lewis, With Securities Fraud

Zachary Roth | February 4, 2010, 12:18PM

Former Bank of America CEO Ken Lewis

New York Attorney General Andrew Cuomo has filed civil securities fraud charges against Bank of America and the firm's former CEO Ken Lewis, reports (sub. req.) the Wall Street Journal.

Cuomo alleges that Lewis, Chief Financial Officer Joe Price, and other BofA execs, chose not to disclose to shareholders the extent of the losses at Merrill Lynch before BofA bought the ailing Wall St. investment bank in late 2008.

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Securities and Exchange Commission

SEC Sued Over Failure To Disclose Post-Madoff Reforms

Nick Pinto | January 6, 2010, 3:52PM

The Securities and Exchange Commission is being sued over its failure to respond to Freedom of Information Act requests for information about what reforms, if any, it has undertaken since it failed to detect Bernard Madoff's multibillion fraud.

The government watchdog Citizens for Ethics and Responsibility in Washington announced the lawsuit today, saying that the SEC has yet to reply to CREW's October 2009 information request.

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Pete Sessions

Sessions: Email To Stanford Was Just Designed 'To Encourage Right Decisions'

Zachary Roth | December 28, 2009, 2:11PM

We told you earlier about the tender email sent in February by Rep. Pete Sessions (R-TX) to Allen Stanford, in which the lawmaker told the accused Ponzi schemer: "I love you and believe in you." We also told you about the lengthy ties between the two men.

Now Sessions's office has provided TPMmuckraker with a statement on the issue. We'll just let it speak for itself:

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Allen Stanford

Blame It On Antigua! The Forbidden 'Love' Of Pete Sessions And Allen Stanford

Zachary Roth | December 28, 2009, 12:06PM

Intrigue. Deceit. And forbidden love on a sun-kissed tropical island -- with billions of dollars on the line.

No, this isn't a Danielle Steel bodice-ripper. Or Mark Sanford's latest confession about crossing "the ultimate line". Instead, it's the story of the tangled, high-stakes relationship between Rep. Pete Sessions (R-TX) and accused Ponzi schemer Allen Stanford.

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Allen Stanford

Pete Sessions To Allen Stanford: 'I Love You And Believe In You'

Zachary Roth | December 28, 2009, 9:03AM

Allen Stanford

Now that's loyalty.

When a top supporter gets busted by the Feds for allegedly running a massive Ponzi scheme, most big-time pols are usually pretty quick to distance themselves. (See Crist, Charlie, for the locus classicus of the genre).

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Securities and Exchange Commission

SEC, Battered By Madoff, Yet To Implement Many Recommendations For Improvement

Zachary Roth | December 17, 2009, 12:53PM

A good government group is slamming the Securities and Exchange Commission for ignoring or delaying on hundreds of recommendations made by the agency's internal watchdog. Many of these recommendations were made in the wake of the SEC's failure to detect Bernie Madoff's massive Ponzi scheme, a misstep for which the agency was widely derided earlier this year.

Two documents obtained through a FOIA by the Project on Government Oversight show that hundreds of recommendations made since December 2007 by the SEC's Office of the Inspector General have gone unimplemented.

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Bernard Madoff

Madoff Accountant Pleads Guilty To Fraud

Zachary Roth | November 3, 2009, 5:25PM

David Friehling

Bernie Madoff's former accountant has pleaded guilty to fraud in connection with his auditing of Madoff's operation. But David Friehling denied that he knew anything about the underlying massive Ponzi scheme, which Madoff has pleaded guilty to orchestrating.

Friehling admitted that he didn't independently audit Madoff's financial statements, saying he took Madoff's claims at "face value." But he said (sub. req.) he put his own and his family's money with Madoff. In what was "the biggest mistake of my life, I placed my trust in Bernard Madoff," he said.

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Bernard Madoff

SEC-er To Madoff: "It's A Big Organization, We Don't Talk To Each Other"

Zachary Roth | October 30, 2009, 7:08PM

During a 2006 examination, an SEC staffer asked Bernie Madoff for information. Madoff replied that he had already provided it to a top agency official. To which the SEC-er responded: "It's a big organization, we don't talk to each other."

That's according to Madoff's testimony to SEC investigators. The agency's inspector general's office has just released documents that were part of its probe into its failures on the Madoff affair. And they further the picture of a regulator at which the right hand didn't know what the left was doing, and which depended on inexperienced and over-matched agents to sniff out complex financial frauds like Madoff's.

You can see all the documents here. And you can see Madoff's testimony here.

Let us know in comments about anything else that jumps out.

Bernard Madoff

Failing Upward: Many SECers Who Failed To Catch Madoff Haven't Paid A Price

Alex Amend | October 13, 2009, 9:49AM

Ever wonder what happened to the SEC staffers and supervisors who, for nearly two decades, managed to miss Bernie Madoff's multi-billion dollar Ponzi scheme, despite a persistent whistle-blower and multiple inquiries -- a monumental level of incompetence that "astonished" even Madoff himself?

Well, some saw their failures rewarded with high-paying private-sector jobs, while others are still at the agency, charged with catching the next Madoff.

Via CNN, here's a quick look at what happened to some of the major players.

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Bernard Madoff

Madoff Claimed He Was On "Short List" For SEC Chair

Zachary Roth | September 2, 2009, 3:36PM

When Franklin Roosevelt appointed Joseph P. Kennedy as SEC chair, the president responded to concerns about Kennedy's unsavory reputation by declaring: "It takes a thief to catch a thief."

Over 70 years later, Bernard Madoff may have been hoping that President Bush agreed.

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Bernard Madoff

Madoff: "I Thought It Was The End Game. Over" -- But SEC Never Followed Up!

Zachary Roth | September 2, 2009, 3:16PM

It's not really news that the SEC screwed up big-time on Bernard Madoff. But the just released executive summary (pdf) of the agency's inspector general report really brings home just how far that failure went.

The summary, produced by SEC inspector general David Kotz, paints a picture of a series of botched investigations going back to 1992, in which inexperienced, unsophisticated and incurious agency examiners repeatedly failed to take seemingly obvious steps that would have uncovered Madoff's massive scam. And it shows how Madoff used his air of authority to confuse and intimidate the over-matched Feds in order to keep them at bay.

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Bernard Madoff

SEC Lawyer Who Failed To Catch Madoff Got Highest Performance Rating

Zachary Roth | September 2, 2009, 2:26PM

The SEC attorney who failed, despite numerous red flags, to catch Bernie Madoff's colossal fraud received the highest possible performance rating from the agency -- citing her "ability to understand and analyze the complex issues of the Madoff investigation" -- soon after the probe closed in 2006.

That's according to an SEC inspector general report on the Madoff fiasco, whose executive summary (pdf) was released this afternoon. The full report will be made available in the coming days.

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Allen Stanford

Stanford Operation Was Ponzi Scheme From The Start, Says Number 2

Zachary Roth | August 28, 2009, 12:59PM

Allen Stanford

Yesterday, we got new details on Allen Stanford's alleged $8 billion fraud, with the release of the plea deal signed by the Texas banker's number 2 man.

Jim Davis, Stanford's college roommate and the CFO of the Stanford Financial Group, pleaded guilty to conspiracy, mail fraud and obstruction charges. He told prosecutors that the company was a sham from the start, using money from new investors to pay off old ones. Davis also described how for years he helped cover up the scheme, and helped bribe a top Antiguan regulator to keep the SEC off the scent.

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