An irreverent Wall Street Blog
by Bill Singer
 
Join BrokeAndBroker blog on Facebook  Follow the BrokeAndBroker blog on Twitter  Connect with BrokeAndBroker on LinkedIn  Join Bill Singer on Google+  Subscribe to RSS Feed

Another Trading Platform Scam Ends With Prison
Written: May 18, 2012


People wait for a train on a platform on March...

A train platform, which exists. Not to be confused with a trading platform, which doesn't.

On November 29, 2010, William Graulich IV, 54, Henryville, PA, purported managing partner of iVest International Holdings, Inc., was charged in a federal criminal Complaint for conspiring to perpetrate a multimillion-dollar investment fraud using interstate wires. Allegedly, Graulich and unnamed co-conspirators represented that they had an “exclusive” investment platform available by invitation only, and that had been previously open only to those able to invest at least $100 million.

Oh my, it’s exclusive. By invitation only. And it’s always been limited to high rollers but, hey, just for you, this one time, I’m gonna make an exception. I’m even gonna waive the $100 million fee but just this once. Ya gotta keep this quiet because these things are usually only open to institutions like Goldman Sachs, JP Morgan, Citigroup, Bank of America, and Wells Fargo. Ya hear what I’m sayin’?

As the feds tell it, Graulich and his co-conspirators pitched this  investment platform scam to a number of targets as involving no risk and all invested funds would be used as collateral to obtain a line of credit, which would be used to trade financial instruments, including “Medium Term Notes” and “Standby Letters of Credit.”  Even more importantly, investors were promised weekly returns of 22 percent.

As if that fabulous deal weren’t enough, investors were promised that all funds would be deposited into a super safe and secure  “non-depletion attorney account.”  What’s a non-depletion attorney account, you ask.  Great question. However, since that whole concept is nonsense to begin with, don’t expect the answer to be anything more than garbage piled on top of garbage.

Yup, here we go again. Absolutely  safe. Astronomical returns. In a non-depletion attorney account, which, I can tell, you’re a smart fellow and I don’t need to explain what that’s all about, right? All done as a favor to you. Lemme know quickly, okay, I can’t hold this open for you forever.

Based on Graulich’s false representations and willingness to waive the purported $100 million minimum investment requirement, in August 2008, one victim wired $2.8 million into the conspirators’  purported non-depletion attorneys account at J.P. Morgan Chase Bank. A second wire was sent for  $1.6 million in November 2008. From December 2008 through January 2009, the investor actually received back about $1 million in promised returns.

Wow!  Maybe this was for real and Bill Singer is just a nasty stick in the mud.

Of course, the investor did wire out some $4.4 million and only got back, so far, $1 million, so that leaves, what, lemme do the math here, carry the 1, add 3, multiply by something:  Oh, yeah, Graulich is still sittin’ pretty with about $3.2 million of the victim’s moolah.  Hmm . . . maybe that $1 million wasn’t from profits but just part of the sting?

When federal investigators reviewed  the J.P. Morgan “non-depletion account,” they determined that  immediately upon receiving the $2.8 million wire in August 2008, Graulich wired that money to his personal Chase Bank account. Graulich used that money to make  payments on such personal expesnse as to Bennett Jaguar, CVS, Bushkill Golf, Stone Bar Inn, Gulf Oil,Verizon, and DIRECTV. Much the same happened after the November 2008 $1.6 million wire.  From that second deposit, Graulich sent the investor the bogus $1 million “return on investment” but used the balance of funds to make $100,000 in tax payments, approximately $10,000 in mortgage payments, approximately $25,000 in legal bills, and approximately $100,000 for New York Yankees tickets.

If convicted, Graulich faced a maximum potential penalty of 30 years in jail and a $1 million fine. On May 17, 2012, Graulich, after previously pleading guilty to conspiracy to commit wire fraud,  was sentenced to 70 months in prison, three years of supervised release , and ordered to pay $3.6 million in restitution.

Bill Singer’s Comment

“Street Sweeper” readers know that I have often warned against investing in so-called “investment platform” or “trading platform” deals.  Frankly, I don’t think that I’ve ever seen an honest one.  For some further guidance, read this past articles:

FOREX Trading Platform Scam Ends In Guilty Plea (March 19, 2012) 

UPDATE:The Lawyer, Judge, Financial Wizard’s Tranche Trading Platform Deal (September 29, 2012)


 
[^top^]

Previous Entries
October 1, 2014
Ah yes, another fraud, another fraud coming out of Florida, another fraud involving inflated promises about a start-up company, and, for extra oomph, ... Read On
September 30, 2014
Stockbroker, Compliance, Legal, and Regulatory JobsEmployment Page BrokeAndBroker.com Jobs#wallstreetjobs @brokeandbrokerNOTICE TO EMPLOYERS... Read On
September 29, 2014
There's something about the movie biz that attracts a lot of people. Hollywood. Box Office Stars. The whole glitz and glamour thing of the red carpet.... Read On
September 27, 2014
IRS Telephone Scam AlertSeptember 26, 2014It seems like every day brings us yet another warning about some telephone scam involving impersonations of ... Read On
September 26, 2014
It seems like every day brings us yet another warning about some telephone scam involving impersonations of government employees.  In the past, f... Read On
September 26, 2014
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority (“FINRA”), without admitting or de... Read On
September 25, 2014
In recent years, the BrokeAndBroker.com Blog has published Federal Bureau of Investigation and the Internet Crime Complaint Center ("IC3") warnings ab... Read On
September 25, 2014
Ah yes, the old "loss of confidence" explanation for terminating a Wall Street employee. Now there's a reason for termination that garners more than a... Read On
BrokeAndBroker.com Job Search
Related Topics
Tag Cloud
Internet FINRA Bear Stearns Bloomberg SEC NASD NYSE Money Laundering Due Diligence Waiver Forbes China Chepucavage Broy Woody Allen Madoff NAC NPR Marketplace Stanford UBS Ketchum Antitrust NASDAQ RRBDLAW Schapiro Bill Singer BrokerAndBroker USERRA Brokeandbroker.com Morgan Keegan Arbitration Counterclaim BrokeAndBroker.com Khuzami BrokeAndBroker Aleynikov Goldman Sachs brokeandbroker Promissory Note U4 Bill SInger EFL CFTC Huffington Post Flash Crash arbitration RBC RRBDLAW.com Ponzi Affinity Fraud Wachovia Raymond James BrokeandBroker.com Expungement Fraud Securities Fraud Outside Business Activity Registered Rep Magazine FOREX BrokerAndBroker.com FBI Banc of America Pro Se Supreme Court Morgan Stanley Smith Barney E*Trade Margin email Galleon Penson U5 Defamation Protocol Wells Fargo Punitive Damages Citigroup Merrill Lynch ARS Employee Forgivable Loan Street Legal Morgan Stanley AWC Fidelity Bankruptcy Broke And Broker HFT David Sobel Day Trading Ameriprise Commissions Spouse Schwab Commission CRD Kenneth Starr IRS CNBC Complaint ATM Skimming Hacking Phishing Malware Naskovets Poteroba Koval Lincoln Financial Selling Away Outside Business Activities Rakoff 2nd Circuit Second Circuit IRA 401k Forgery Tax RRBDlaw.com Email Netschi Moore Whistleblower Street Sweeper Tran Bharara Facebook Online Severance Bonus Eligibility Rule TD Ameritrade Hedge Fund SAC 1099 Smith Barney Lehman Brothers IC3 Scottrade Lehman JPMorgan Chase Hertz Insider Trading Bank of America Department of Justice Elles Bribe Auction Rate Securities Raiding Spam Edward Jones Medicare Diabetes Dow Schumer Walter Bid Rigging Real Estate Discrimination Wall Street Statutory Disqualification Form U4 Form U5 Indictment Boyland DOJ Corruption bill singer FTC Do Not Call FINRA Arbitration Costa Rica Settlement LIBOR Varney Plea Rule 8210 RRBDlaw Appeal Fowler LPL Johnson US Airways Reg D MSSB Vault Loan SunTrust Discovery Employment Rosenthal Recruiting Lawyer Trading Platform JP Morgan Employment Tuesday Wrongful Termination Bank Guarantee WaMu Solicitation REIT Martin Credit Cards Away Account Credit Repair PN Advisor Placement Group Forex Mortgage Private Placement Moon Merrill Anderson Exam Lee Borrowing Tax Lien Conversion Oppenheimer Wedbush Felony Misdemeanor Expenses ING Lien OTR Estate Jobs Florida Credit Card Elderly Flash Drive Annuity Reimbursement FNMA BrokeAndBroke TIC DWI Promissory Notes Suitability Will POA Power of Attorney Casino NSF MF Global Counterfeit Preet Bharara Corzine Hacker RIA Prison Disclosure NASAA Aguilar FCPA Subway Identity Theft Gold Dell Bar Injunction Bank Deutsche Bank Hospital God HSBC Private Placements Eric Stein Wire Fraud CCO Joshua Brown Backstage Wall Street Obstruction of Justice Reuters Retaliation Variable Annuity Arbitraiton Outside Account Options Telephone Wine Social Media ADA Pacifico Non-Prosecution Agreement Confirm Tax Fraud Retirement OBA Equity Indexed Annuities EIA MetLife Continuing Education OIP Tax Liens Willful CE Unregistered Impersonation Annuities BBVA Business Expenses ETF JOBS Act Mail Fraud Parking Variable Annuities Signatures BitTorrent Impersonator Wire Transfer Wire Crowdfunding Nasdaq Away Accounts WSP Laptop Dodd Frank Checks RMBS AML PST Solicited Unsolicited Congress SRO Wife Discretion Non-Solicitation Restaurant Commodities Private Securities Transaction Offer of Settlement Money Market employment jobs Great Recession Chase Investment Services Arrest Barclays Liens Failure To Supervise Apple Time And Price T&P Willfully Husband Letter of Authorization LOA Sexism Debit Card Knight Test Practice Sale Unfair Competition Signature Judgments Undisclosed Settlement Trainee Fee Trust Laser Side Bar Mattera Female Sales Assistant Kennedy Charge Sexist NML Argentina Embezzlement Silver Judgment Bank Fraud Deceased TSSB Mary Jo White Trustee Frumento Conspiracy 6th Circuit Proctor Rule 3040 Class Action Beneficiary NYAG Schneiderman Gallagher White Self Regulation Short Sale Compromise Website TRO Supervision Vacatur SDNY BrokeAndBroker Bill Singer Piwowar Rule 1122 Article V signature VA Regulation SP Rule 3270 OWB Stockbrokers
 
Email Bill Singer Connect with Bill Singer on Facebook Follow Bill Singer on Twitter Link up with Bill Singer on LinkedIn Join Bill Singer on Google+