Tag Archive: Ponzi Scheme


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SHAMED AT LAST: AIDS-drug gouger Martin Shkreli is marched to court by FBI after securities fraud arrest for running a Ponzi scheme to pay debts – and freed on $5 MILLION bond

  • Martin Shkreli, 32, has been arrested on charges of securities fraud and running a Ponzi scheme to pay off debts from an old company  
  • It is also alleged he illegally used stock from the biotechnology firm he owned, Retrophin Inc., to pay off debts related to MSMB 
  • Retrophin and its investors suffered a loss in excess of $11million because of Shkreli’s scheme according to United States Attorney Robert Capers 
  • He earned the moniker of ‘most hated man’ in September after raising the cost of an AIDS and cancer drug from $13.50 per tablet to $750 overnight 
  • MSMB Capital Management was founded by Shkreli in 2009 and shuttered in 2012, the same year Retrophin was founded and Shkreli became CEO
  • He was released on a $5million bond after bring arraigned in federal court on Friday

Martin Shkreli was released on a $5million bond after being arraigned on charges of securities fraud in federal court in Brooklyn Thursday afternoon.

Shkreli, the son of immigrants, was also forced to forfeit his passport.

The price-hiking pharmaceutical entrepreneur was picked up by the FBI in the early hours of Thursday following an investigation into a former hedge fund and drug company he previously headed.

It is alleged he illegally used stock from the biotechnology firm Retrophin Inc. to pay off debts related to his struggling hedge fund and to pay back angry investors.

He is being charged with seven counts of fraud for running what United States Attorney Robert L. Capers of the Eastern District of New York is calling a Ponzi scheme.

Shkreli, 32, pleaded not guilty to these allegations.

He faces a maximum sentence of 20 years in prison if convicted on all charges.

 

Free: Martin Shkreli was released on a $5million bond Thursday afternoon

Free: Martin Shkreli was released on a $5million bond Thursday afternoon

Art: A courtroom sketch shows defendants Shkreli (C) and Greebel (R) a former partner at law firm Katten Muchin Rosenman (R) during their arraignment

Art: A courtroom sketch shows defendants Shkreli (C) and Greebel (R) a former partner at law firm Katten Muchin Rosenman (R) during their arraignment

Russian lawmaker seeks to ban US dollar, predicts 2017 collapse

Published time: November 13, 2013 19:53
Edited time: November 15, 2013 11:39

RIA Novosti / Mikhail Mordasov

RIA Novosti / Mikhail Mordasov

To protect Russians against the “collapsing US debt pyramid”, a Russian legislator has filed a draft bill to ban circulation of the currency in Russia.

Once a Moscow mayoral hopeful, Mikhail Degtyarev, 32, likens the US dollar to a worldwide ponzi scheme which he says is scheduled to end in 2017.

“If US national debt continues to grow at its current rate, the dollar system will collapse in 2017,” the submitted draft legislation says.

“In light of this, the fact that confidence in the US dollar is growing among Russian citizens is extremely dangerous,”  Degtyarev wrote in his explanatory note attached to the bill.

The bill would impose a ban on dollars within a year of its passage, and any private citizen holding accounts in dollars would either need to spend the money or convert it to another currency. There is no proposed ban on the euro, British pound, yen, or yuan.

If one doesn’t exchange or transfer dollars within a year, the dollars will be seized by officials, and reimbursed in rubles within 30 calendar days.

Under the proposed legislation, Russians would still be able to use dollars abroad and have foreign bank accounts, as well as buy goods on the Internet in dollars.

The Russian government, Central Bank, Foreign Ministry, Federal Treasury, Federal Security Service, and other state branches would be exempt from the law.

To protect Russian nationals, Degtyarev proposes to end dollar transactions and deposits at Russian banks, which would give rise to the ruble, and end dependence on the world’s dominant currency.

Part of the bill aims to restore the prestige of the ruble, which has weakened as the Russian economy battles inflation and slow growth.

Raising the prestige of the ruble by nixing foreign currency isn’t a novel idea- it was practiced during the Soviet Union when holding foreign currencies was illegal. A similar ‘anti-dollar’ proposal was filed by Duma deputies in 2003, but completely flopped.

Read More Here

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Russian lawmaker wants to outlaw U.S. dollar, calls it a Ponzi scheme

MOSCOW — Predicting the imminent collapse of the U.S. dollar, a Russian lawmaker submitted a bill to his country’s parliament Wednesday that would ban the use or possession of the American currency.

Mikhail Degtyarev, the lawmaker who proposed the bill, compared the dollar to a Ponzi scheme. He warned that the government would have to bail out Russians holding the U.S. currency if it collapses.

“If the U.S. national debt continues to grow, the collapse of the dollar system will take place in 2017,” said Mr. Degtyarev, a member of the nationalist Liberal Democrat Party who lost in Moscow’s recent mayoral election.

“The countries that will suffer the most will be those that have failed to wean themselves off their dependence on the dollar in time. In light of this, the fact that confidence in the dollar is growing among Russian citizens is extremely dangerous.”

Read More Here

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  Russia Seeks To Ban U.S. Dollar & Predicts Scheduled Collapse in 2017!

DAHBOO77

Published on Nov 15, 2013

Russian lawmakers are making moves to ban the Dollar to protect Russians from what they are calling a SCHEDULED COLLAPSE IN 2017!

http://theextinctionprotocol.wordpres…

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Politics, Legislation and Economy News

 

 

Economic News  :  Mortgage Crisis

 

 

 

Fixing the Mortgage Mess in America

The Game-changing Implications of Bain v. MERS

by Ellen Brown
 

Two landmark developments on August 16th give momentum to the growing interest of cities and counties in addressing the mortgage crisis using eminent domain:

(1) The Washington State Supreme Court held in Bain v. MERS, et al., that an electronic database called Mortgage Electronic Registration Systems (MERS) is not a “beneficiary” entitled to foreclose under a deed of trust; and

(2) San Bernardino County, California, passed a resolution to consider plans to use eminent domain to address the glut of underwater borrowers by purchasing and refinancing their loans. 

MERS is the electronic smokescreen that allowed banks to build their securitization Ponzi scheme without worrying about details like ownership and chain of title.  According to trial attorney Neil Garfield, properties were sold to multiple investors or conveyed to empty trusts, subprime securities were endorsed as triple A, and banks earned up to 40 times what they could earn on a paying loan, using credit default swaps in which they bet the loan would go into default.

As the dust settles from collapse of the scheme, homeowners are left with underwater mortgages with no legitimate owners to negotiate with.  The solution now being considered is for municipalities to simply take ownership of the mortgages through eminent domain.  This would allow them to clear title and start fresh, along with some other lucrative dividends.

A major snag in these proposals has been that to make them economically feasible, the mortgages would have to be purchased at less than fair market value, in violation of eminent domain laws.  But for troubled properties with MERS in the title—which now seems to be the majority of them—this may no longer be a problem.  If MERS is not a beneficiary entitled to foreclose, as held in Bain, it is not entitled to assign that right or to assign title.  Title remains with the original note holder; and in the typical case, the note holder can no longer be located or established, since the property has been used as collateral for multiple investors.  In these cases, counties or cities may be able to obtain the mortgages free and clear.  The county or city would then be in a position to “do the fair thing,” settling with stakeholders in proportion to their legitimate claims, and refinancing or reselling the properties, with proceeds accruing to the city or county.

Bain v. MERS: No Rights Without the Original Note

Although Bain is binding precedent only in Washington State, it is well reasoned and is expected to be followed elsewhere.  The question, said the panel, was “whether MERS and its associated business partners and institutions can both replace the existing recording system established by Washington statutes and still take advantage of legal procedures established in those same statutes.”  The Court held that they could not have it both ways:

Simply put, if MERS does not hold the note, it is not a lawful beneficiary. . . .

MERS suggests that, if we find a violation of the act, “MERS should be required to assign its interest in any deed of trust to the holder of the promissory note, and have that assignment recorded in the land title records, before any non-judicial foreclosure could take place.” But if MERS is not the beneficiary as contemplated by Washington law, it is unclear what rights, if any, it has to convey. Other courts have rejected similar suggestions. [Citations omitted.]

If MERS has no rights that it can assign, the parties are back to square one: the original holder of the promissory note must be found.  The problem is that many of these mortgage companies are no longer in business; and even if they could be located, it is too late in most cases to assign the note to the trusts that are being tossed this hot potato. 

Mortgage-backed securities are sold to investors in packages representing interests in trusts called REMICs (Real Estate Mortgage Investment Conduits), which are designed as tax shelters.  To qualify for that status, however, they must be “static.” Mortgages can’t be transferred in and out once the closing date has occurred. The REMIC Pooling and Servicing Agreement typically states that any transfer after the closing date is invalid. Yet few, if any, properties in foreclosure seem to have been assigned to these REMICs before the closing date, in blatant disregard of legal requirements.

The whole business is quite complicated, but the bottom line is that title has been clouded not only by MERS but because the trusts purporting to foreclose do not own the properties by the terms of their own documents.  Legally, the latter defect may be even more fatal than filing in the name of MERS in establishing a break in the chain of title to securitized properties.

What This Means for Eminent Domain Plans:

Focus on San Bernardino

Under the plans that the San Bernardino County board of supervisors voted to explore, the county would take underwater mortgages by eminent domain and then help the borrowers into mortgages with significantly lower monthly payments. 

Objections voiced at the August 16th hearing included suspicions concerning the role of Mortgage Resolution Partners, the private venture capital firm bringing the proposal (would it make off with the profits and leave the county footing the bills?), and where the county would get the money for the purchases. 

A way around these objections might be to eliminate the private middleman and proceed through a county land bank of the sort set up in other states.  If the land bank focused on properties with MERS in the chain of title (underwater, foreclosed or abandoned), it might obtain a significant inventory of properties free and clear.    

The county would simply need to give notice in the local newspaper of intent to exercise its right of eminent domain. The burden of proof would then transfer to the claimant to establish title in a court proceeding.  If the court followed Bain, title typically could not be proved and would pass free and clear to the county land bank, which could sell or rent the property and work out a fair settlement with the parties.

That would resolve not only the funding question but whether using eminent domain to cure mortgage problems constitutes an unconstitutional taking of private property.  In these cases, there would be no one to take from, since no one would be able to prove title.  The investors would take their place in line as unsecured creditors with claims in equity for actual damages.  In most cases, they would be protected by credit default swaps and could recover from those arrangements. 

The investors, banks and servicers all profited from the smokescreen of MERS, which shielded them from liability.  As noted in Bain:

Critics of the MERS system point out that after bundling many loans together, it is difficult, if not impossible, to identify the current holder of any particular loan, or to negotiate with that holder. . . . Under the MERS system, questions of authority and accountability arise, and determining who has authority to negotiate loan modifications and who is accountable for misrepresentation and fraud becomes extraordinarily difficult.

Like MERS itself, the investors must deal with the consequences of an anonymity so remote that they removed themselves from the chain of title. 

On August 15th, the Federal Housing Finance Agency threatened to take action against municipalities condemning federal property.  But to establish its claim, the FHFA, too, would have to establish that the mortgages were federal property; and under the Bain ruling, this could be difficult. 

Setting Things Right

While banks and investors were busy counting their profits behind the curtain of MERS,  homeowners and counties have been made to bear the losses.  The city of San Bernardino is in such dire straits that on August 1, it filed for bankruptcy. 

San Bernardino and other counties are drowning in debt from a crisis created when Wall Street’s real estate securitization bubble burst.  By using eminent domain, they can clean up the destruction of their land title records and 400 years of real property law.  And by setting up their own banks, counties and other municipalities can use their own capital and revenues to generate credit for local purposes.  

Homeowners who paid much more for a home than it was worth as a result of the securitization bubble have little chance of challenging the legitimacy of their underwater mortgages on their own.  Insisting that their state and local governments follow the lead of Washington State and San Bernardino County may be their best shot at escaping debt peonage to their mortgage lenders.

Ellen Brown is an attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org.  In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://WebofDebt.com and http://EllenBrown.com.

Ellen Brown is a frequent contributor to Global Research.  Global Research Articles by Ellen Brown

Politics and  Legislation

The U.S. Strategy to Control Middle Eastern Oil: “One of the Greatest Material Prizes in World History”

…..”The following is a research sample from The People’s Book Project. It is unedited and in draft format, but is intended as an excerpt of some of the research that is going into the book. This research sample is drawn from a recently written chapter on the history of American imperialism in the Middle East and North Africa……”

http://thepeoplesbookproject.com/2012/03/02/the-u-s-strategy-to-control-middle-eastern-oil-one-of-the-greatest-material-prizes-in-world-history/

French leader holes up in cafe to escape protesters

http://www.usatoday.com/news/world/story/2012-03-01/france-sarkozy/53321848/1

The 28 Billion Dollar Man: Is Sen. Shelby the Most Fiscally Irresponsible Politician Ever?

By Richard (RJ) Eskow

http://www.nationofchange.org/28-billion-dollar-man-sen-shelby-most-fiscally-irresponsible-politician-ever-1330791762

Economy

Reckless: The Inside Story of How the Banks Beat Washington (Again)

http://www.theatlantic.com/business/archive/2012/03/reckless-the-inside-story-of-how-the-banks-beat-washington-again/253883/

Next Leg Of The Ponzi Revealed – Foreign Central Banks To Begin Buying US Stocks Outright Starting Today

Submitted by Tyler Durden on 03/01/2012 14:01 -0500

http://www.zerohedge.com/news/next-leg-ponzi-revealed-central-banks-begin-buying-us-stocks-outright-starting-today

Obama: Tell Congress to stop $4B ‘giveaway’ to oil companies

By Amie Parnes – 03/03/12 06:23 AM ET

GOP: Fight high gas prices with more oil drilling, Keystone

By Justin Sink – 03/03/12 06:36 AM ET

Fed Shrugged Off Warnings, Let Banks Pay Shareholders Billions

By Jesse Eisinger

http://www.nationofchange.org/fed-shrugged-warnings-let-banks-pay-shareholders-billions-1330783928

China’s defense budget to grow 11.2 pct in 2012: spokesman

http://news.xinhuanet.com/english/china/2012-03/04/c_131445012.htm

Moody’s Cuts Greek Sovereign Credit Rating to Lowest

http://en.rian.ru/business/20120303/171700068.html

China reduces holdings of US govt bonds

Wars  and  Rumors of  War

http://usa.chinadaily.com.cn/business/2012-03/03/content_14746532.htm

WikiLeaks: Russia gave Israel Iranian system’s codes

Document by intelligence company suggests Israel, Russia contracted deal several years ago under which Israel provided Russia with codes for UAVs it sold to Georgia in exchange for Iranian aerial defense system codes

http://www.ynetnews.com/articles/0,7340,L-4196367,00.html

Uploaded by on Mar 2, 2012

Video courtesy: http://www.liveleak.com

A shocking video has appeared on the Internet showing Libyan rebels torturing a group of black Africans. People with their hands bound are shown being locked in a zoo-like cage and forced to eat the old Libyan flag. ­”Eat the flag, you dog. Patience you dog, patience. God is Great,” screams a voice off-camera.

Pakistan Rejects US Sanctions Threat, Will Expand Energy Ties With Iran

Isolating Iran Proving Extremely Difficult

by Jason Ditz, March 01, 2012

Israeli officials: Starve Iranians to stop nukes

http://www.ynetnews.com/articles/0,7340,L-4196885,00.html

What Are Iran’s Intentions?

By Noam Chomsky

http://www.nationofchange.org/what-are-iran-s-intentions-1330791290

Misc

Business as Government: Capitalizing on Disaster in Post-Earthquake Haiti

By Beverly Bell and Deepa Panchang

http://www.nationofchange.org/business-government-capitalizing-disaster-post-earthquake-haiti-1330788481