FOUR CANADIANS & FIVE AMERICANS WERE INDICTED BY THE UNITED STATES OF AMERICA IN LARGEST PENNY STOCK FRAUD IN HISTORY

FOUR CANADIANS & FIVE AMERICANS WERE INDICTED BY THE UNITED STATES OF AMERICA IN LARGEST PENNY STOCK FRAUD IN HISTORY

PAOLA LORIGGIO, ADRIAN HUMPHREYS, 13/08/13, National Post

Former Toronto resident Sandy Winick figured he was on to a good thing with his scam raking in millions of dollars from investors, U.S. authorities allege, telling a colleague his scheme was better than another: “That deal is obviously a pump-and-dump. We know enough to be subtle.”

His business partner, Kolt Curry, another Canadian, allegedly boasted: “The money is good, it’s easy. It’s easy money. Definitely easy money, and it’s good money.”

And for awhile, they were right.

On Tuesday, however, they were two of four Canadians indicted in the United States, alongside five Americans, charged with running the largest international penny stock and advance fee frauds in history.

Mr. Winick, 55, was named as the mastermind behind the two related schemes that U.S. prosecutors allege bilked victims in 35 countries out of more than $140-million.

Despite being named as the kingpin, Mr. Winick was not among those taken into custody. He is considered a fugitive and believed to be in Bangkok, Thailand, where he has been living after stints in China, Vietnam, and the United States.

Also missing when U.S. authorities moved against the men was Gregory Curry, 63, another Canadian also believed to be in Thailand. Gregory and Kolt Curry are father and son.

Shortly before 9 a.m. Tuesday, Canadians Kolt Curry, 38, was arrested by the FBI in Garden City, New York, and Gregory Ellis, 46, was arrested in Toronto on behalf of U.S. authorities. Mr. Ellis was expected to have been in New York at the time of the arrests but now faces a U.S. extradition request.

“Where others saw citizens of the world, the defendants saw a pool of potential marks,” said Loretta Lynch, United States Attorney for the Eastern District of New York, when announcing the arrests.

“They cheated, lied and swindled investors into buying billions of shares of worthless stock, then turned around and used a second scam to cheat those investors again. But today, the defendants were the marks, and it was law enforcement that ran the table.”

"They cheated, lied and swindled investors into buying billions of shares of worthless stock, then turned around and used a second scam to cheat those investors again. But today, the defendants were the marks, and it was law enforcement that ran the table."

According to prosecutors, Mr. Winick concocted schemes to hit a wide pool of victims — and then to hit them again by taking more money with promises of reimbursing their initial losses.

First came a pump-and-dump.

The men are accused of taking control of huge quantities of worthless stock in 11 publicly traded companies.

The companies had little or nothing of value but their investment potential was “pumped up” through illegal sales campaigns: false press releases, announcements of non-existent business ventures and mergers, bogus statements circulated in social media and stock promoters and brokers bribed to talk up the stocks, authorities allege.

Once the stock price was artificially inflated, the accused traded billions of shares that they owned or controlled, duping unsuspecting investors to buy them before they were found to be worthless. The scheme generated more than $120-million, authorities say.

The accused men used throw-away cell phones in a bid to avoid detection, although agents with the Federal Bureau of Investigation intercepted some of their calls, according to documents filed in court.

Orchestrated by Mr. Winick, the pump-and-dump was carried out by the five American defendants. The second phase of the fraud was the domain of the four Canadians, prosecutors allege.

The Canadians set up so-called boiler rooms, which are high-pressure call centres, in at least four countries, including Canada.

They contacted the pump-and-dump victims and talked them into turning over more money in a bid to recover some of the money they had lost. Some were told they had to pay money to remove restrictions placed on the sale of their stock; others were coaxed into paying money for a lawsuit to recover losses.

Another $20-million was swindled in the follow-up fraud, authorities say.

The men were in the midst of setting up another call centre in Brooklyn to target more American investors, authorities allege.

In an intercepted phone call during the investigation, prosecutors allege that Kolt Curry enthused: “I tell you what man… hitting the Americans would be like taking money from a baby.”

He then boasted: “I had a guy send me a million dollars over one phone call… I guess in the industry they coin it as a smash and grab.”

The global nature of the scheme was met by an international law enforcement effort to topple it, Ms. Lynch said.

U.S. authorities worked with the Royal Canadian Mounted Police and Toronto police as well agencies in Britain, Thailand and China.

“The criminals behind this scheme were shameless in heartlessly defrauding hundreds of victims out of their savings and retirement accounts for their own enrichment,” said James Spero, a spokesman for Immigration and Customs Enforcement Homeland Security Investigations.

"The criminals behind this scheme were shameless in heartlessly defrauding hundreds of victims out of their savings and retirement accounts for their own enrichment."

The men face charges of securities fraud, wire fraud, conspiracy and false personation of a U.S. officer, and face more than 20 years in prison if convicted.

Three of the Canadians, Mr. Winick and Gregory and Kolt Curry, have run into investment regulation problems in the past. The trio has a hearing scheduled for next month before the Ontario Securities Commission.

They are accused in Ontario of misrepresentation to investors, illegal distribution and the unregistered trading of securities.

Mr. Winick also faced securities reprimands in China and Vietnam but remains undaunted, prosecutors said.

In a 2012 intercepted telephone call, he said he could keep operating under false names and shell corporations regardless of regulatory bans. And just two months ago, he bragged of bribing Thai officials to release him from jail when he was last arrested, prosecutors allege.

National Post

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CHINA'S RARE-EARTH PRODUCERS FACE A SERIES OF SETBACKS

CHINA'S RARE-EARTH PRODUCERS FACE A SERIES OF SETBACKS

13 AUGUST, 2013, drivesncontrols.com

It appears that Chinese attempts to restrict its exports of rare-earth materials and to raise their prices may have backfired. Exports last year were more than 40% down on their peak levels, prices have dropped, some producers have gone out of business, and illegal mines and smugglers are thriving.

In addition, a group of Chinese rare-earth companies are in a legal dispute with Hitachi Metals over patents covering neodymium-iron-boron magnets.

Rare-earth materials are a key ingredient of high-power permanent magnets used in high-efficiency motors and many other applications. In recent years, China has dominated the global production of these materials, accounting for around 95% of the world’s supply. In 2009, it raised prices of some of the materials nine-fold, cut back on production, and blocked supplies to Japan following a dispute between the two countries.

China’s output of rare earths has fallen from 129,405 tonnes in 2009, to 76,029 tonnes last year. At the same time, mining of rare earths has been revived in countries including Australia and the US, and recent reports suggest that there are substantial untapped reserves of the materials in other nations including Greenland, Vietnam, Brazil, Mongolia and Afghanistan. According to one report, Greenland alone could satisfy a quarter of global demand for rare earths for 50 years.

As these new sources of the materials come on stream over the next few years, China’s stranglehold on the market will loosen. According to one Chinese industry source, quoted in a recent article in China Daily, China’s share of the global market is expected fall from 95% to 73% by the end of 2015.

Rare-earth prices have been falling and, according to the article, profits in the Chinese rare-earth industry plummeted by 32.1% last year. Several producers have dropped out of the market. At the same time, users of rare-earth materials have been trying to reduce their dependency on the materials by, for example, turning to alternative motor technologies.

A further problem is the illegal production of rare-earths in China, which is estimated to have reached 40,000 tonnes of ore last year. In the past two years, the Chinese government has closed down 14 illegal rare-earth mines and uncovered a similar number of smuggling operations. The government has recently launched a crackdown to tackle the illegal exploration, production and distribution of rare-earth materials, and to regulate rare-earth recycling companies.

In a separate development, 12 Chinese rare-earth companies have formed an alliance to sue Japan’s Hitachi Metals in China and the US over rare-earth magnet patents that the Chinese regard as being invalid. They are also accusing Hitachi of infringing patents held by Chinese companies.

The dispute centres on magnets made from neodymium-iron-boron (NeFeB) compounds that represent more than half of the use of rare-earth materials. In August 2012, Hitachi asked the US to stop the sale of these magnets if they did not hold patent licences. Although three Chinese companies have subsequently agreed to buy licences from Hitachi, others say that Hitachi no longer has a right to the patents, one of which expired in 2003. Another is due to expire in 2014, but Hitachi has extended its expiration to 2029, which the Chinese companies regard as being invalid.

According to another report in China Daily, many Chinese manufacturers of products incorporating NeFeB magnets can not export them because they do not have licences from Hitachi Metals. Out of around 200 companies producing about 80,000 tonnes of NeFeB magnets in China each year, only eight have patent licences from Hitachi. The Chinese producers say that Hitachi will not sell its patent rights and accuse it of setting up trade barriers.

Meanwhile, there has been better news for China’s rare-earth materials producers in recent months, with exports growing each month since February. During April, exports were 600% higher than a year before.

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CFTC CHARGES FLORIDA-BASED WORTH GROUP, INC. & ITS PRINCIPALS, ANDREW WILSHIRE & EUGENIA MILDNER, IN MULTI-MILLION DOLLAR FRAUDULANT PRECIOUS METALS SCHEME

CFTC CHARGES FLORIDA-BASED WORTH GROUP, INC. & ITS PRINCIPALS, ANDREW WILSHIRE & EUGENIA MILDNER, IN MULTI-MILLION DOLLAR FRAUDULANT PRECIOUS METALS SCHEME

August 13, 2013

CFTC alleges that Defendants, who took in more than $73 million, defrauded customers in connection with precious metals transactions and engaged in illegal off-exchange commodity transactions

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that on August 13, 2013, it filed a civil injunctive enforcement action in the U.S. District Court for the Southern District of Florida against Worth Group Inc. (Worth), as well as its owner, Andrew Wilshire, and its sole officer and director, Eugenia Mildner, all of Jupiter, Florida. The CFTC’s Complaint charges that Defendants defrauded retail precious metals customers and engaged in illegal, off-exchange retail commodity transactions from July 16, 2011, through the present.

According to the Complaint, Worth purported to sell physical metal, including gold, silver, platinum, and palladium, on afully-paid basis, as well as on a financed basis, to hundreds of retail customers located throughout the United States. The Complaint alleges that Worth falsely represented to customers that, within 28 days of a customer’s purchase, Worth would deliver metal either to the customers directly or to a depository that would hold the metal for the customer. The Complaint alleges that pursuant to the scheme, Worth took in over $73 million in customer funds between July 18, 2011, and December 31, 2012.

As alleged, in connection withfully-paid transactions, customers paid the full purchase price to Worth for metals, having been told that Worth would deliver metal in return. The Complaint alleges that from at least August 15, 2011, through November 8, 2012, however, Worth did not actually deliver metal to most customers. Instead, rather than deliver actual metal, Worth’s typical practice after receiving customer money was to purchase metals derivatives in accounts owned by Worth. These derivatives purportedly “covered”customer transactions, but, contrary to Worth’s representations to customers, did not involve the purchase, transfer, or physical delivery of precious metals to Worth, let alone to its retail customers.

Retail customers engaging in financed transactions with Worth were told that they were borrowing money to purchase precious metals. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), a financed transaction such as that conducted by Worth is an illegal off-exchange transaction unless it results in actual delivery of metal within 28 days. The Complaint alleges that Worth often failed to make such delivery on a timely basis. Worth thus defrauded its customers and subjected them to undisclosed exposure to Worth’s credit, as they were left with only Worth’s commitment to deliver metal rather than the promised metal itself.

The Complaint further alleges that as persons controlling Worth’s precious metals operations, Wilshire and Mildner are liable for Worth’s violations of the Commodity Exchange Act and a CFTC Regulation.

In its continuing litigation against Defendants, the CFTC seeks preliminary and permanent civil injunctions in addition to other remedial relief, including restitution, civil monetary penalties, and disgorgement of ill-gotten gains.

This is the third action the CFTC has brought against entities and individuals who purport to buy precious metals and transfer ownership of those metals to customers, when insufficient metal, or no metal at all, is in fact purchased and delivered (see CFTC Press Releases 6447-12 and 6655-13).

David Meister, the CFTC’s Enforcement Director, stated: “The rules of the new Dodd-Frank law are simple: Companies and individuals who purport to sell precious metals to the retail public, and who say they are supplying real metal, must actually deliver real metal. As today’s case shows, along with previously filed Complaints against Hunter Wise Commodities, LLC and AmeriFirst Management, LLC, we will not hesitate to pursue wrongdoers who say they are providing investments in real precious metals to the American public when in fact they are providing nothing of the sort.”

The CFTC thanks the U.K. Financial Conduct Authority for its assistance in this matter.

The CFTC Division of Enforcement staff members responsible for this matter are Theodore Z. Polley III, Melissa Glasbrenner, William P. Janulis, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.

CFTC’s Precious Metals Fraud Advisory

In January 2012, the CFTC issued a Precious Metals Consumer Fraud Advisory to alert customers to precious metals fraud. The Advisory states that the CFTC had seen an increase in the number of companies offering customers the opportunity to buy or invest in precious metals. The CFTC’s Advisory specifically warns that companies often fail to purchase any physical metals for their customers, instead simply keeping the customer’s funds. The Advisory further cautions customers that leveraged commodity transactions are unlawful unless executed on a regulated exchange.

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U.S.A. FEDERAL JUDGE ALLOWS OKLAHOMA STATE'S CHALLENGE TO OBAMA'S HEALTH-CARE LAW TO PROCEED

U.S.A. FEDERAL JUDGE ALLOWS OKLAHOMA STATE'S CHALLENGE TO OBAMA'S HEALTH-CARE LAW TO PROCEED

By Andrew Harris, August 13, 2013, Bloomberg

Oklahoma won court approval to proceed with a federal lawsuit challenging tax aspects of President Barack Obama ’s 2010 health-care legislation.

U.S. District Judge Ronald A. White in Muskogee, Oklahoma, yesterday denied the federal government’s request for complete dismissal of a lawsuit first filed in 2011 over the Patient Protection and Affordable Care Act.

While White tossed claims that the act’s mandatory minimum-coverage provision exceeded Congress’ powers and that a related Internal Revenue Service rule is unconstitutional as applied to Oklahoma employees, he said the U.S. must defend three counts arising from that same IRS rule.

“Oklahoma challenged implementation of the Affordable Care Act after the IRS finalized a rule that would allow the federal government to punish ‘large employers’ including local government with millions of dollars of tax penalties in states without health care exchanges, which is not allowed under the health care law,” state Attorney General Scott Pruitt said in a statement yesterday.

Allison W. Price, a spokeswoman for the U.S. Justice Department, declined to comment immediately on the court’s ruling.

The U.S. Supreme Court upheld the legislation last year as a valid use of Congress’s tax powers.

Insurance Exchanges The Obama health-care law called for the states to create marketplace-type insurance exchanges, through which coverage could be obtained from a variety of insurers.

It also contained a provision penalizing large employers who don’t offer coverage to full-time workers and offering tax credits to people who enroll in a health-care plan through an exchange.

The federal government reserved the right to create an exchange if a state didn’t do so.

Oklahoma was one of those states. It also amended its own constitution in 2010 to bar rules or laws compelling people to participate in a health-care system.

IRS Regulation While the Obama health-care law treats states differently, depending on whether they establish an exchange or leave it up to the U.S., the accompanying IRS regulation eliminates that distinction. Oklahoma contends the regulation wasn’t authorized by Congress.

White ruled that the state, as a large employer itself, has standing to pursue two of the four IRS-related claims, and he allowed another federal constitutional claim to proceed.

Oklahoma didn’t have standing to press a claim based on the amendment to its own constitution as that right was granted to individuals, not the state, the judge said. He also rejected the state’s argument that the IRS rule didn’t apply to state workers.

“Congress provided a choice for Oklahoma and other states in implementation of the health care law and the IRS is attempting to take that away,” Pruitt, the state’s attorney general, said in his statement.

The case is State of Oklahoma v. Sebelius, 11-cv-00030, U.S. District Court, Eastern District of Oklahoma (Muskogee).

To contact the reporter on this story: Andrew Harris in the Chicago federal courthouse at

aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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GIANNA'S STORY: A BABY ABORTION SURVIVOR WAS TOLD SHE WOULD "NEVER BE ANYTHING" & NOW ASKS "IF ABORTION IS ABOUT WOMEN'S RIGHTS, WHAT WERE MINE?" - (VIDEO)

Gianna’s Story: Abortion Survivor Was Told She Would “Never Be Anything”

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UNIVERSITY OF TEXAS' NEW DELL MEDICAL SCHOOL IN AUSTIN PARTNERS WITH PRO-LIFE CATHOLIC GROUP

Abortion Activists Upset University of Texas Med School Partners With Catholic Group

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NEW YORK CITY MAYORAL CANDIDATE JOE LHOTA TALKS AT ST. JOHN'S UNIVERSITY'S ANNUAL STATEN ISLAND GOLF OUTING

NEW YORK CITY MAYORAL CANDIDATE JOE LHOTA TALKS AT ST. JOHN'S UNIVERSITY'S ANNUAL STATEN ISLAND GOLF OUTING

By Kiawana Rich/Staten Island Advance on August 13, 2013

STATEN ISLAND, N.Y. -- The St. John's University's 34th annual Staten Island golf outing honored three notable alumni and included a visit by Republican mayoral candidate Joe Lhota.

The event, held inside the Richmond County Country Club, recognized Joseph Borrino, Daniel Rubino and Richmond County District Attorney Daniel Donovan.

During his visit, Lhota briefly spoke to the Advance about his plans for the borough should be become mayor. Lhota, who noted that as a deputy mayor for Rudolph Guiliani he was instrumental in devising a plan to close the Fresh Kills Landfill, said there is plenty he would do here.

Lhota said he is in support of providing more service for Islanders on the Staten Island Ferry and is also in support of having the city take over all the MTA's bridges and tunnels and "stop abusing Staten Islanders with their fares and tolls and increases overall."

Additionally, Lhota said he would evaluate the property tax assessment process. He added he felt the New York Wheel and Empire Outlets "will create jobs more opportunities for more tourists to come across from Manhattan to Staten Island."

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