Sie sind auf Seite 1von 2

Fraudulent securities dealings spiked in recession

MATT GOURAS, Associated Press Updated 09:22 a.m., Saturday, August 20, 2011

HELENA, Mont. (AP) Restitution the state ordered for fraudulent securities dealings spiked 50-fold during the recession when the operators of Ponzi and other schemes were unable to hold together their scams as investor money became scarce, according to Montana regulators. The number of failed schemes rose to new heights as hard times hit. The amount of restitution ordered repaid to victims spiked from $2 million in 2008 to $76 million in 2009 and to an astonishing $116 million in 2010. The huge increase is the result of some big-money rackets falling apart as new investment money needed to keep such operations going dried up, according to Commissioner of Securities and Insurance Monica Lindeen. "The recession was hard on everyone, and in that period of weakness, we saw a spike in the number of con-artists and criminals trying to take advantage of Montana investors," she said. Many of the scams started long before the recession. The typical Ponzi scheme requires new money to keep it going, and when investment money dried up during the recession the house of cards came tumbling down for many scam operators. In one of the biggest, Arthur Heffelfinger of East Helena took more than $2 million from investors to further a Ponzi scheme and stole money from the account he managed for a woman in her 90s who suffered declining health and lived in a Helena nursing home. The scheme that began in 2001 came apart in 2009. "The recession dealt the fatal blow to Heffelfinger's scheme, even if it took some time for all the money to run out," said Lucas Hamilton with the security commissioner's office. Heffelfinger was sentenced to 10 years in prison for the Ponzi scheme, and was ordered to repay $1 million in restitution. Like most of the cases, that restitution is repaid by the brokerage firm, KMS Financial Services in his case. But in some cases, people invest with unregistered securities or with unregistered individuals who aren't associated with a licensed securities firm, said Lindeen. In one such case from Polson dating back to 2005, the state alleges two men stole more than $14 million from investors through a business they started called Cornerstone Financial Corporation. According to the state, Keith Kovick and Robert Congdon ran a Ponzi scheme, promising to pay

high interest rates on real estate-backed investments while using investors' money to buy luxury cars, boats and property. The state says the scheme went unnoticed when the economy was booming and investors remained happy. But it collapsed in 2008 when things went south, and irate investors discovered they had been giving money to men who were not registered to sell securities. As the uptick in fraud became obvious, Lindeen's office asked the Legislature earlier this year for a new restitution account to help repay victims in such cases. The Montana Securities Restitution Fund, which is now up and running, is funded by voluntary and court-ordered contributions from violators of the securities act. Lindeen said even this summer's recent downturn in the market is leading to an uptick in new complaints to the office. She said schemes can unfold pretty quickly as scam operators are unable to find new money to send investors expecting their payments in a Ponzi-type operation. "''The typical Ponzi scheme requires new money to feed it," Lindeen said. "All of the sudden the victims say, 'where is my check?' That is when they call our office."

Das könnte Ihnen auch gefallen