Small-town Bernie Madoff

[Rick0]

And a 13 year debarment. Why not lifetime?

Up to 20 years. I'd bet it will be less than 5.

Hmm, If you look him up on Brokercheck, it looks to me like he's
permanently barred?

https://brokercheck.finra.org/individual/summary/2788055

 

[JoeWras]

Hmm, If you look him up on Brokercheck, it looks to me like he's
permanently barred?

https://brokercheck.finra.org/individual/summary/2788055

Good! I guess the "quality writing" of the article was wrong. Imagine that!

 

[ExFlyBoy5]

This guy from Atlanta has been on the run since the end of October. The scary thing about this is that he had a show on the #1 radio station in the Atlanta metropolitan area...which I would guess meant he had a LOT of listeners.

An Atlanta-area advisor who went missing after allegedly scamming about 100 investors as part of a Ponzi scheme involving the sale of illegal promissory notes is now facing a class-action lawsuit.

The suit was filed Wednesday against Christopher W. Burns, 37, of Berkeley Lake, Georgia, and his various business entities in U.S. District Court for the Northern District of Georgia in Atlanta.
Matson Money, an Arizona RIA that Burns allegedly referred his clients to, was also named as a defendant in the complaint for its alleged role as a financial co-advisor with Burns. However, the firm “had absolutely no knowledge of, nor did we profit from Mr. Burns’ outrageous scam,” Mark Matson, its CEO and founder, said in a statement provided to ThinkAdvisor on Friday.

The firm was “shocked and deeply saddened” to hear that Burns had “stolen money from his clients through a fraudulent and deceitful investment scheme,” and was “outraged on behalf of the individuals and families who trusted him to act in their best interests,” Matson said.
Burns “invested a portion of his client capital into our equity and fixed income funds from 2016 to 2020 [and] we were not aware that at the same time, Mr. Burns was apparently luring his clients to invest their free cash in fraudulent promissory notes in a local peer-to-peer lending scheme,” Matson added.

The FBI and U.S. Attorney’s Office for the Northern District of Georgia announced Monday that Burns was charged with mail fraud and there was a warrant for his arrest because his whereabouts were unknown.

https://www.wsbtv.com/news/local/gw...financial-advisor/LXCG2UDTIREX5J2JEVQXCGVMF4/

https://www.thinkadvisor.com/2020/10/30/advisor-fleeing-fbi-now-faces-class-action-suit/

https://dynamicmoney.com/chris-burns-show

 

[brett]

We have had a number of Ponzi runners with radio shows. One had show on local Christian radio station. It was a disaster for those who swallowed the bait- hook, line, and sinker.

In all cases it was the same. These people actually purchased time and hour or two each week from the radio station in order to run their show. . They operated their own financial advice/discussion show and of course endorsed the ads that ran during their purchased air time.

Many of the victims appeared to think that these crooks were endorsed by the radio station. Why that would be such a great endorsement is beyond me...even if they were legit. There was always a disclaimer but who pays attention to that?

Some amateur sports organization in our area are having a challenge raising money from parents. There have been too many cases of treasures stealing funds. These groups run with volunteers and the is often very little financial oversight or proper oversight on expenditures.

 

[JoeWras]

In all cases it was the same. These people actually purchased time and hour or two each week from the radio station in order to run their show. . They operated their own financial advice/discussion show and of course endorsed the ads that ran during their purchased air time.

Yep. People miss the whispered disclaimer at the beginning: "The following program is a paid advertisement and does not reflect an endorsement by WDUM, its owners or affiliates."

We have them too. They fill up Saturday and Sunday. Each respective show argues that the other guys' shows are wrong.

I listened one time and now just turn on music while shredding the offers of free steak that come in the mail from the same outfits.

 

[kcowan]

- CEO says he'd love to promote departee to VP status but his wife would be an embarrasment.

- Scene switch: 'Stripper' removes wig and flashy attire, and husband says "That was close, I can't afford to be moved from this job until I've embezzled enough money so that we can make a run for it".

You should never underestimate the street smarts of executive scammers.

 

[Sunset]

Yep. People miss the whispered disclaimer at the beginning: "The following program is a paid advertisement and does not reflect an endorsement by WDUM, its owners or affiliates."

....

Similar to how AARP takes $$$ to rent out their "AARP" name.

I've been with REALLY old folks, and they gravitate towards the AARP designated sales pitch, because it says: "AARP".
They don't get that AARP does not evaluate the truth/honest/goodness of what is being shilled.

 

[brett]

A 'BBB" designation is not much better than an AARP or CARP endorsement.

A $1500 suit, a $200 bottle of wine, or shiny car only means that someone was able to obtain it on credit. Same for a nice smile and a firm handshake. All meaningless.

Not that they are a successful financial adviser.

'Trust but Verify"

 

[kingkarmann]

Anyone heard of General Development Corporation (GDC)?
I was a agent for them for a (thankfully) short time.

 

[socca]

We have a rule. NEVER invest with friends, business associates, and especially not with relatives.

I've mentioned before that I have a relative (now deceased) who was involved in the creation of a closed corp many years ago to take advantage of an investment opportunity. This wealthy relative supplied much of the initial financial capital but (not being too bright - family money) didn't supply any intellectual capital; acquaintances and friends supplied the rest. It turned into a disaster, with multiple lawsuits among participants .

I only know about this investment because another relative inherited this toxic asset and all of the headaches associated with it, including being sued (if I had known then what I know now, I would have recommended she disclaim this "asset"). After much effort we managed to disentangle her from this investment, but the anxiety associated with being sued, etc. lowered her quality of life for a couple of years. Some 30 years later, the now-elderly folks who originally invested in this toxic asset are still trying to wrap it up. What a mess!

The sad fact is that it's sometimes impossible to distinguish incompetence from evil, and it's not clear that the folks who created the closed corp intended from the beginning to defraud my now-deceased relative, although in retrospect it sure looks that way.

My participation in cleaning up this mess was educational. I don't circulate among the 1% like my relative, but I imagine that investment opportunities are plentiful for that crowd. In 99.9% of cases, the correct answer when offered an opportunity to invest is probably NO!

 

[jldavid47]

Affinity fraud is common. People let down their guard with someone who is perceived to be "one of us". There was a guy around here who stole $2 million from the local Greek Orthodox Church's endowment fund about 7 years ago. He got 25 years in federal prison for it. As the guy in charge of my own church's endowment fund for over 14 years, I followed the case with interest. The victimized church had poor financial controls in place. When one of my fellow congregants talked to me about the case, he said "we trust you." I said, "I'm honored, but you shouldn't trust any one person, which is why we have structural safeguards in place to prevent me from doing the same thing."

I have been the treasurer for three non-profits and an auditor of two others. I always recommended the simplest of financial controls such as requiring two signatures on a check and two levels of expense approval in addition to regular (at least annual) audits. My recommendations were usually ignored. It isn't a matter of trust. It's a matter of minimizing the risk of something bad happening. Honest people handling money in those organizations welcomed audits. If they don't, something is probably wrong.

 

[Nick12]

There is a sleaze bag that targets some in my previous company that retired with lump sum payments. The ones who were gullible were taken to the cleaners.

 

[Valid not Invalid]

Are they still in jail?

Bop.gov has an inmate locator tab for looking up any federal inmate. Bernie, though I think he’s listed as Bernard Madoff, Michael Vick, Martha Stewart, Louis Pearlman, they’re all listed, either as released, deceased, or still in custody with an estimated release date.

 

[JoeWras]

A 'BBB" designation is not much better than an AARP or CARP endorsement.

Yeah, you can ignore these endorsements.

However, you should check BBB for negative ratings. It takes a lot of bad service to get anything below A or A+, so go somewhere else if you see A- or below. That said, A+ or accreditation does not guarantee a good experience.

 

[VanWinkle]

There are many more "financial advisors" living under the cover of friendship, religion, and family. I know of one who is a preacher at a church, claims to be a fiduciary, but sells nothing but Variable annuities and churns accounts with over 35 mutual funds/etfs in a 100,000 dollar account. I have a close friend I am trying to educate on how this person is taking advantage of their friendship. These people seldom hit the news, but there are likely millions being advised by those with no other interest than their own pockets.

 

[ncbill]

Here we had a well-known local businessman who got in trouble for issuing promissory notes...which requires state licensing he didn't have...and of course he never did pay them off.

 

[Sunset]

There are many more "financial advisors" living under the cover of friendship, religion, and family. I know of one who is a preacher at a church, claims to be a fiduciary, but sells nothing but Variable annuities and churns accounts with over 35 mutual funds/etfs in a 100,000 dollar account. I have a close friend I am trying to educate on how this person is taking advantage of their friendship. These people seldom hit the news, but there are likely millions being advised by those with no other interest than their own pockets.

A Chase Bank, had an "investment guy" in the bank, this person sold my then 80+ old relative on an investment account.
Years later, when I saw the account of around $100,000 it comprised of nearly 35 different funds/etfs/stocks , and they charged $2,000 per year on top of the mutual fund fees...

He let me move him to Vanguard to save the $2,000 /yr cost.

 

[bolt]

I'd submit theres more than one small-town-mad-off in every small town none of us ever hear of, hearing of so many nation wide.

My understanding of most data points is there are 2 additional data points for every confirmed one you hear about.
Thats quite a few scammers, take care and overlook no one. Not even ones spouse in some circumstance.
The spouse on spouse cases of financial mis-managment are the worst. imo.

Viking Financial, Steven Paladino, West Roxbury, Ma. promises 12%!
Its been made into a traditional Ameican Greed's episode.
I recall knowing folks involved. There are numerous others and my understanding has always suggested anything other than largely capitalized & established players like Fido, Vanguard, or Shawb, & T.Rowe price, etc. are well capitalized options, others not so much.

I'd even suggest avoiding smaller capitalized operations akin to
Janus, Bridgeway, etc. Consider the widely publicized Michael Burry's privately capitalized "Scion value" investment operation. It was a highly speculative operation that worked out well.
An equal, or larger amount do not. I also understand you can bet* on anything one wants in most markets, some with indexed sector speculation w/less volatility.

Unfortunately the elderly are often prime targets.


Good Luck & Best wishes....

 

[brett]

DW's small home town had one who was a well loved hockey coach cum financial advisor. He ripped off everyone he could, including family.

He went to prison for a few years, then came out early on parole...with restrictions. Two months or so on parole and he was up to his old tricks again. Back in jail for violating his parole, plus he faces some additional charges for his alleged actions while on parole. Go figure.

Where we live two former Pentecostal pastors teamed up to sell a land based investment scheme. Bilked many people with millions still missing. Amazing, despite having no investment or real estate expertise many people shoved money their way because they felt that these were 'honest' folk. Amazing really. They could have done it the easy way and become television evangelists touting for donations.

 

[Brat]

Speaking of television evangelists, I have seen a couple of well-known evangelists touting their spiel on TV recently. No stadium gatherings, no money.

 

[brett]

As it turns out, one of of former Pentecostal pastor crooks had been 'let go' from his church because of 'financial issues concerning expenses'.

Had the church board acted in a proper manner, called in the authorities, it would have damaged his reputation or worse, left him with a theft conviction.

This might of have been enough to warn people off. Instead...they brushed it under the carpet as usual in these matters. The inevitable result was that more people were negatively impacted. Some lost their entire retirement or life savings. Some went into debt to invest in this 'sure thing' that turned out to be not so sure.

 

[Mr._Graybeard]

As it turns out, one of of former Pentecostal pastor crooks had been 'let go' from his church because of 'financial issues concerning expenses'.

Had the church board acted in a proper manner, called in the authorities, it would have damaged his reputation or worse, left him with a theft conviction.

This might of have been enough to warn people off. Instead...they brushed it under the carpet as usual in these matters. The inevitable result was that more people were negatively impacted.

Kinda like the priests in Boston/Milwaukee, only their sin was lust instead of avarice. All are criminals, but the church finds the forbearance to forgive. /s

 

[brett]

They love to forgive but the desire to protect their collective reputations and that of their organization far exceeds their desire for criminal justice and future prevention. To the point where they are willing to place the public at risk.

In my experience law firms are the same when it comes to trust fund thefts. Hush hush, cover it up, let the employee go, move on, protect the firms reputation at all costs.

 

[MichaelB]

Thanks for an interesting discussion