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

Fanatical SciFi Army Beams Financial Firm Into Black Hole
Written: October 11, 2012

Sardaukar troops from the Dune miniseries

Sardaukar troops from the Dune miniseries (Photo credit: Wikipedia)

When I was a young science fiction fan in the late ‘50s and early ‘60s (yeah, put a “19” before those numbers, it was the last century), I scared the crap out of myself watching Dracula movies and far too many “Twilight Zone” episodes.  Also, instead of assigned schoolwork, I read anything that had aliens, rockets, and doom from the stars.   Sometime in the mid-‘60s I came upon Frank Herbert’s science fiction classic “Dune.”

As some fans of “Dune” may recall, there was a military force of really, really tough guys – as in the most powerful, feared army in the Universe – think of the Spartans on hypersteroids, like maybe Leonidas and a couple of buddies against the Persians rather than 300 soldiers.  Herbert’s super shock troops were called the Sardaukar.

And, finally, we arrive at today’s destination.

You’re travelling through another dimension, a dimension not only of sight and sound but of mind; a journey into a wondrous land whose boundaries are that of imagination. That’s the signpost up ahead – your next stop, Street Sweeper!

Bradley C. Stark, 37, formerly of RiversideCA set up a British Virgin Islands corporation for the purported purpose of investing and managing clients’ financial assets. From October 2004 thorough early July 2005, Stark operated this business from his residence in Riverside, California.

And the name of the international enterprise?  Sardaukar Holdings.

I mean, seriously?  This guy names his BVI financial firm (which he’s running out of his home) after a fictional army of fanatical warriors?

Oooooooooookay.  Now that’s something that’s gonna get my attention as a potential investor but not necessarily in a good way.  Unfortunately, a number of others didn’t quite share my concern.   Sadly, Stark’s investors went through some Sardaukar transporter and emerged transformed as victims of financial fraud.  Think of the movie “The Fly.”

According to federal prosecutors, Stark fraudulently solicited investors in Sardaukar. Whoa, I didn’t see that comin’.  Among the misstatements made by Stark and others to potential investors were that he:

  • had previous institutional trading experience;
  • was a registered securities broker or dealer;
  • had hundreds of millions of dollars in investments from private and institutional clients; and
  • would invest their funds in sophisticated financial transactions, including tri-party repurchase agreements, commodities futures and currency trading.

On top of the statements about Stark’s purported expertise, investors were allegedly told that Sardaukar's investments often yielded in excess of 20 to 30 percent per month. And for only $50,000, investors could purchase an insurance contract through Stark that would insure invested principal against any loss.

Underneath that scifi killer elite army, the exotic BVIcorporate  pedigree, the impressive credentials, and the jaw-dropping track record was a more stark reality about Mr. Stark. A background that he hid.

You see, in April 2003, Stark was convicted of a federal felony for uttering a false and counterfeit security; and in May 2003, he was convicted in the state of Colorado of fraud by check.  A two-time loser! Keep in mind that potential investors could have looked that criminal background up.  You know, the old “due diligence.”  But, hey, when you’re dazzled by the likes of the Sardaukar, reality often needs to be set aside, right?

HIDDEN SIDE BAR (I THINK):For all of Stark’s dalliance with science fiction, he lacked one essential asset: a Klingon Cloaking Device.  Rumor has it that such a device is presently in the possession of Goldman Sachs, JP Morgan, Knight Capital, UBS, and Citigroup, but I cannot verify those assertions and must discount that chatter as having arisen in a number of dubious scifi chatrooms; moreover, even if such a device does exist, recent events on Wall Street suggest that it is on the fritz. In the case of Stark, because he remained visible, the feds caught him and indicted him on seven counts of wire fraud and one count of securities fraud.

On January 19, 2012, following a five-day trial, a federal jury in the Northern District of Texas convicted Stark on all counts. At trial, prosecutors presented evidence that Stark had squandered the majority of investor funds on luxury cars, travel/entertainment, and jewelry — transferring over $1 million to his wife.  How droll!  As if that ending hasn’t been done to death in some many prior versions of this rip-off scheme.

SUBPLOT SIDE BAR: Then there’s the subplot involving the largest investor in Sardaukar Holdings:  the Dallas, TX area Megafund Corporation, which was run by Stanley Leitner. Lemme see if I got this: a “Megafund” was the top investor in Sardaukar Holdings.  Sort of sounds like a storyline from a “Transformers” movie – with Megafund as the head of the Decepticons trying to take over the world with the aid of the Sardaukar.

Oh, and speaking of out-of-this-world digressions, how about this one: Leitner is currently serving a 210-month federal prison sentence following his conviction involving wire fraud, securities fraud and money laundering in connection with his operation of Megafund.

Following his conviction, Stark faced a statutory maximum sentence of 20 years in prison and a $250,000 fine for each wire fraud count and a maximum statutory sentence of five years in prison and a $250,000 fine on the securities fraud count.

On October 10, 2012, Stark was sentenced to 23 years in prison, ordered ordered to pay approximately $13 million in restitution.

If you liked this story, you must READ the recent “Street Sweeper” column about the fraudster who named his hedge fund after the Ancient Egyptian God of the Dead.


Previous Entries
January 30, 2015
Good intentions seem to have exploded in a banker / broker's  face, when he came to the aid of an elderly customer, who fell under the sway of a ... Read On
January 29, 2015
There are lots of bad guys out there, and on Wall Street, brokerage firms need to protect not only their customers but also themselves from some of th... Read On
January 28, 2015
Another day and another email disaster at another major FINRA member firm. In the end, however, the customer is made a whole -- but the registered per... Read On
January 27, 2015
Seems to me that Wall Street is quite a bit like weather forecasts. Take today, for example -- in NYC, we were supposed to awake to Snowmageddon with ... Read On
January 26, 2015
Imagine that you're broke and can't afford a fabulous but high-priced regulatory lawyer like me and you need to submit a brief in response to some abs... Read On
January 24, 2015
Chinese Pharma Private Securities TransactionsAs the economy recovers from the Great Recession, a number of regulatory violations that had been some... Read On 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 Morgan Keegan Arbitration Counterclaim Khuzami BrokeAndBroker Aleynikov Goldman Sachs brokeandbroker Promissory Note U4 Bill SInger EFL CFTC Huffington Post Flash Crash arbitration RBC Ponzi Affinity Fraud Wachovia Raymond James Expungement Fraud Securities Fraud Outside Business Activity Registered Rep Magazine FOREX 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 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 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 Rule 3050 Away Account Credit Repair PN Advisor Placement Group Forex Mortgage Private Placement Moon CGMI 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 RIA Prison Disclosure NASAA Aguilar FCPA Subway Identity Theft Gold Dell Bar Injunction Bank Deutsche Bank Hospital Due Process God HSBC Private Placements Eric Stein Wire Fraud FINOP CCO 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 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 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 Judgment Bank Fraud Deceased Bill Singer BrokeAndBroker TSSB Mary Jo White Trustee Motion To Dismiss Frumento Conspiracy 6th Circuit Proctor Rule 3040 Class Action Beneficiary NYAG Schneiderman Gallagher White Self Regulation Short Sale Compromise Website TRO Supervision Vacatur SDNY Rule 12206 BrokeAndBroker Bill Singer Piwowar Stifel Rule 1122 Article V signature Confidential Inside Information VA Regulation SP Customer Rule 3270 Rule 3240 Annual Compliance Questionnaire OWB 2Cir Stockbrokers Cybercrime Loans 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+