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

Merchant Portfolio Scam Ends With Prison
Written: September 17, 2012

Magician's Hands, No. 11 - Showing the cards

Are you being offered a real business opportunity or is it all part of a card trick? (Photo credit: Fifth World Art)

In 2006, James E. Rotterman, 33, Orchard Park, NY began to advertise on www.BizBuySell.com  that he had business for sale – in order to get out the word, Rotterman had formed JRCG Holdings, LLC and Warlord Media, LLC. If you came upon one of Rotterman’s online ads, you would have learned that he supposedly had profitable merchant portfolio accounts for sale and that these money-making businesses would provide you with cash flow. 

SIDE BAR:Rotterman was likely one of thousands of BizBuySell.com users who advertise on that platform. To that extent, online enterprises such as BizBuySell are frequently collateral damage in schemes such as Rotterman's.  Notwithstanding efforts many such DotCom businesses take to preserve their organization's integrity and credibility, fraudsters typically go to even greater lengths to circumvent the platform's quality controls and consumer protection surveillance. Ultimately, not only are fraudsters like Rotterman trying to screw unwary buyers of their services but they also hope to evade setting off the alarms on sites such as BizBuySell -- ultimately creating two sets of victims.

Anyway, if you were intent on doing some due diligence and asked for information about these supposedly fabulous opportunities, Rotterman sent you emails and financial documents showing profit statements, banks statements, and tax returns.  Okay, maybe that did the trick and you were one of the hundreds of investors that Rotterman attracted between 2006 and 2010 to the tune of $6 million.

Okay, now, let’s slow yer roll.  Just a bit – ease back on the gas. Before you too plunge in to this exotic world of merchant portfolio accounts, you should know that there are a lot of dubious looking online offers to buy/sell these things and it’s all a bit too rah-rah for my tastes.  And puhlease, don’t start in with what you’ve seen on Facebook or found through a Google search or learned about on Craigslist. Really?  That’s your concept of adequate due diligence?

You know those profit statements disseminated by Rotterman to corroborate his claims about how much moolah investors could make? Bogus.

You know those bank statements? Bogus.

You know those tax returns? Bogus.

The whole business for sale thing? Bogus.

True, some investors got payments but, in fact, the source was either their own investments or a Ponzi like sleight of hand from the pockets of others who were duped.  As to the balance of investors’ funds, well, Rotterman used that to support his own lifestyle, replete with large gambling debts.  The gross total of investor losses is likely over $5.1 million.  And that’s not the least of Rotterman’s troubles – seems that for tax years 2008 and 2009 he didn’t declare the income from the funds he received from those he duped.

On September 14, 2012, after previously being convicted in federal court on wire fraud and tax charges, Rotterman was sentenced to six years in prison and ordered to pay restitution of over $4.5 million  — good luck with that.

For more fun and games, READ:

Make Millions Leasing A Line Of Credit Or Go To Jail

Business Opportunity Fraud From Sunny Costa Rica


 
[^top^]

Previous Entries
May 22, 2015
One, and only one, Securities and Exchange Commissioner got it right. To her ever-lasting credit and to the shame of her colleagues, Commissioner Kara... Read On
May 21, 2015
Yesterday, I tried to predict the future. A few hours before the United States Department of Justice announced its settlement with JPMorgan Chase, Cit... Read On
May 20, 2015
It is now 8:30 a.m. EDT on May 20, 2015 and I am posting this BrokeAndBroker.com Blog without much enthusiasm – I think the fancy French word for ho... Read On
May 19, 2015
Stockbroker, Compliance, Legal, and Regulatory JobsEmployment PageBrokeAndBroker.com Jobs#wallstreetjobs@brokeandbrokerNOTICE TO EMPLOYERS: BrokeAndBr... Read On
May 18, 2015
The United State Court of Appeals for the Ninth Circuit ("9Cir") affirmed the Central District of California's ("CDCA's") judgment in a clas... Read On
May 18, 2015
There comes a point in a registered representative's career when it may simply be time to move on. For many reps who decide to relocate, the questions... Read On
May 16, 2015
Polygraph Expert Says It Ain't Lying, It's NervousnessDouglas Williams, the owner of Polygraph.com and a former Oklahoma City law enfor... 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 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 Criminal Raymond James BrokeandBroker.com Expungement Fraud Securities Fraud Outside Business Activity Registered Rep Magazine FOREX BrokerAndBroker.com FBI Banc of America Pro Se PCAOB 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 Countrywide Tran Bharara Facebook Online Severance Bonus Eligibility Rule TD Ameritrade Hedge Fund SAC 1099 Smith Barney Lehman Brothers SIPC 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 Thain 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 Eligibility RRBDlaw 8210 Appeal Fowler LPL Johnson Cellphone US Airways JPM BrokeandBroker 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 Rule 3050 Away Account Credit Repair PN Advisor Placement Group Fifth Amendment Forex Mortgage Private Placement Moon CGMI Failure to Supervise 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 Expense Reimbursement FNMA BrokeAndBroke TIC DWI Promissory Notes Suitability Will POA Power of Attorney Casino NSF MF Global Counterfeit Preet Bharara Corzine Hacker Deferred Compensation RIA Prison Disclosure NASAA Aguilar FCPA Subway Testimony Identity Theft Gold Dell Bar Injunction Bank Deutsche Bank Hospital Due Process God HSBC Private Placements Eric Stein Wire Fraud FINOP CCO Compliance Audit Joshua Brown Backstage Wall Street Obstruction of Justice Reuters Retaliation Variable Annuity Arbitraiton Outside Account Options Telephone Wine Series 7 Social Media ADA Pacifico Non-Prosecution Agreement Confirm Tax Fraud Retirement OBA Equity Indexed Annuities EIA Disability MetLife Continuing Education Cheating 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 Password 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 Investor Alert Evidence Judgment Bank Fraud Deceased Bill Singer BrokeAndBroker TSSB OHO Leveraged ETF Mary Jo White Trustee Motion To Dismiss Frumento Conspiracy 6th Circuit Proctor Commissioner Stein Rule 3040 Customer Files Class Action Beneficiary NYAG Schneiderman 11th Circuit Insurance Gallagher White Self Regulation Short Sale Compromise Website Rule 2010 Check TRO Supervision Vacatur Remand SDNY Rule 12206 BrokeAndBroker Bill Singer Piwowar Stifel Rule 1122 Article V signature Confidential Inside Information Reg SP VA Regulation SP Fees Cease And Desist Customer Rule 3270 Rule 3240 Annual Compliance Questionnaire OWB 2Cir Red Flags Payroll Stockbrokers ALJ Cybercrime Loans BrokerCheck Altered Records
 
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+