Showing posts with label INVESTORS. Show all posts
Showing posts with label INVESTORS. Show all posts

Saturday, March 28, 2015

DOJ ANNOUNCES CONVICTION OF OXYWATER MAKERS WITH FRAUD, MONEY LAUNDERING, TAX CRIMES

 FROM:  U.S. JUSTICE DEPARTMENT
Wednesday, March 25, 2015
Jury Convicts Makers of OXYwater for Wire Fraud, Money Laundering and Tax Crimes

Today, a federal jury convicted a man from Lewis Center, Ohio, and his business partner of Powell, Ohio, of defrauding their company’s investors and diverting investors’ funds for their own personal use.  Preston Harrison and his wife, Lovena E. Harrison, 42, were also both convicted of conspiracy to defraud the United States and filing a false income tax return, and Lovena Harrison was convicted of structuring financial transactions to evade currency reporting requirements.

Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Special Agent in Charge Kathy Enstrom of Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Field Division announced the verdict reached today, which was returned following a trial that began on March 16 before U.S. District Judge Gregory L. Frost.

According to court testimony, Thomas E. Jackson, 40, of Powell, and Preston J. Harrison, 43, of Lewis Center, operated Westerville, Ohio, based Imperial Integrated Health Research and Development LLC and developed a product called OXYwater, a beverage that promoters claimed was an all-natural, vitamin-enhanced sports drink that contained added oxygen for improved physical performance.

The defendants engaged in a scheme to deceive the investors in their company about the structure, composition, finances, sales and profits of OXYwater in order to make the company appear to be a lucrative and profitable financial investment.  Jackson and Harrison produced and sent false and fraudulent documents intended to deceive investors, the ultimate purpose of such false statements being for Jackson and Preston Harrison to obtain money invested in the company.  They then misappropriated that money for their own personal use and household expenditures including the purchase of jewelry, a Cadillac Escalade, a BMW, weapons, clothing, home improvements and a swimming pool.

“This case was about the millions of dollars that the defendants stole from investors to fuel their lavish lifestyle,” said Assistant U.S. Attorney Jessica Kim in court.

Jackson and Harrison misappropriated approximately $2 million of the investors’ funds between August 2010 and spring 2013.  The defendants’ scheme caused investors to suffer substantial losses when the corporation was forced to declare bankruptcy with no assets.  As a result of the defendants’ conduct, investors lost approximately $9 million.

Jackson and Preston Harrison were each convicted of one count of conspiracy to commit wire fraud, for which they face a statutory maximum sentence of 20 years in prison, and one count of conspiracy to commit money laundering, for which they face a statutory maximum sentence of 10 years in prison.  Jackson was convicted of eight counts of wire fraud, which carries a statutory maximum sentence of 20 years in prison, and 12 counts of money laundering, which carries a statutory maximum sentence of 10 years in prison.  Harrison was convicted of 12 counts of money laundering, for which he faces a statutory maximum sentence of 10 years in prison.

Preston and Lovena Harrison were both convicted of conspiracy to defraud the United States and with filing a false tax return.  Preston Harrison misappropriated approximately $1.1 million in 2011 from his company, which he and his wife, Lovena Harrison, placed in an account in the name of her daycare business.  They used the money for personal expenses and did not report the money as income on their 2011 income tax return.  Lovena Harrison was also convicted of one count of structuring financial transactions to evade currency reporting requirements.  Conspiracy to defraud the United States and structuring financial transactions to evade currency reporting requirements are each crimes with a statutory maximum sentence of five years in prison, and filing a false tax return carries a statutory maximum sentence of three years in prison.

Preston Harrison and Jackson also face potential forfeiture of $1.1 million, including two vehicles, eight weapons, cash and the contents of a bank account.

The three defendants were indicted by a grand jury on May 20, 2014.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Stewart commended the cooperative investigation by the IRS-CI and FBI, as well as Assistant U.S. Attorney Jessica Kim and Trial Attorneys Andrew Young and Jason Scheff of the Tax Division, who prosecuted the case.

Thursday, August 7, 2014

REMARKS: SECRETARY KERRY WITH AFRICAN UNION COMMISSION CHAIRPERSON DR. DLAMINI-ZUMA

FROM:  U.S. STATE DEPARTMENT 

Remarks With African Union Commission Chairperson Dr. Dlamini-Zuma Before Their Meeting

Remarks
John Kerry
Secretary of State
Treaty Room
Washington, DC
August 5, 2014


SECRETARY KERRY: Let me just say to everybody that it’s a huge pleasure for me to welcome Dr. Dlamini-Zuma, who is the chairperson of the African Union. And it’s fair to say that the United States has a very special relationship with the African Union that we respect and appreciate enormously – in fact, so much so that we are the only – we are one of only two countries that have sent a U.S. mission to the African Union outside of Africa, African countries themselves. So we’re proud of that. We’re proud of the work we’re doing to develop democracy, to work on economic development, on human rights, on security. And this has just been an essential value added to our ability to be able to find cooperative channels to deal with crises, to bring people together, to convene, and to help chart a path forward.
So Dr. Dlamini-Zuma, I’m really pleased to see you. Thank you. And I was very appreciative of your comments a moment ago about the energy and the sense you feel from this conference that you see Africa being treated as an entity and here as Africa, which I gather makes a difference to you.

CHAIRPERSON DLAMINI-ZUMA: Yes, I think it does, because I think to some extent Africa is sometimes seen from the – what catches the news. But I think this week, we are discussing more about the substance of Africa: what it can offer through the cooperation with the government, but more importantly, what it can offer to U.S. investors coming to Africa and what it can offer to business people who really want to get – do business in Africa; to financial markets who want the best return. I think the best return is in Africa.

SECRETARY KERRY: Well, it’s proving itself now.

CHAIRPERSON DLAMINI-ZUMA: Yes.

SECRETARY KERRY: Anyway – well, thank you for being with us. We appreciate it. Thank you all very much.

Wednesday, August 7, 2013

SEC OBTAINS COURT ORDER TO HALT ALLEGED HEDGE FUND FRAUD TARGETING MILITARY PERSONNEL

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION 
SEC Halts Ex-Marine’s Hedge Fund Fraud Targeting Fellow Military
 FOR IMMEDIATE RELEASE
2013-149
Washington D.C., Aug. 6, 2013 —

The Securities and Exchange Commission today obtained an emergency court order to halt a hedge fund investment scheme by a former Marine living in the Chicago area who has been masquerading as a successful trader to defraud fellow veterans, current military, and other investors.

The SEC alleges that Clayton A. Cohn and his hedge fund management firm Market Action Advisors raised nearly $1.8 million from investors through a hedge fund he managed.  Cohn lied to investors about his success as a trader, the performance of the hedge fund, his use of investor proceeds, and his personal stake in the hedge fund.  Cohn only invested less than half of the money raised from investors and instead used more than $400,000 for such personal expenses as a Hollywood mansion, luxury automobile, and extravagant tabs at high-end nightclubs.  He used his lavish lifestyle to carefully contrive the image of a successful trader and investor, when in reality he lost nearly all of the money invested through the hedge fund.  In order to cover up his fraud and continue raising money from investors, Cohn generated phony hedge fund account statements showing annual returns exceeding 200 percent.

“Cohn lured fellow military and other investors into his hedge fund by portraying himself as a successful trader who generated massive returns for his investors,” said Timothy L. Warren, Acting Director of the Chicago Regional Office.  “But Cohn’s hedge fund investors didn’t have a chance to make a profit since he never invested most of their money and promptly lost the portion he did invest.”

According to the SEC’s complaint filed in federal court in Chicago, Cohn targets mostly unsophisticated investors and has solicited friends, family members, and fellow veterans to invest in his hedge fund.  Cohn controls a so-called charity called the Veterans Financial Education Network (VFEN) that purports to teach veterans how to understand and manage their money.  Cohn has touted his Marine Corps pedigree in VFEN press releases and encourages veterans to find “a money-manager who is both trustworthy and knows what he is doing.” VFEN’s website identifies Cohn as a money manager who “manages millions of dollars.”

According to the SEC’s complaint, Cohn managed his hedge fund Market Action Capital Management through his investment advisory firm Market Action Advisors, which is registered with the state of Illinois.  Cohn solicited investments by falsely claiming that he had major success as a personal trader and invested $1.5 million of his own money in the hedge fund.  He also misrepresented that an accounting firm would audit the hedge fund’s financial statements.

The SEC alleges that Cohn had a record of trading losses, invested no more than $4,000 of his own money, and absconded with far more money for his personal expenses.  The audit firm named by Cohn never agreed to audit the fund’s financial statements.  Cohn continued to deceive investors after their initial investment by issuing account statements that showed annual returns of more than 200 percent for 2012 when the hedge fund actually lost money.

The SEC’s complaint charges Cohn and Market Action Advisors with violating the antifraud provisions of the federal securities laws.  The court granted the SEC’s request for emergency relief including a temporary restraining order and asset freeze.  The SEC further seeks permanent injunctions, disgorgement of ill-gotten gains, and financial penalties from Cohn and Market Action Advisors.

The SEC’s investigation was conducted by John J. Sikora, Jr. and Jason A. Howard, and the litigation will be led by Jonathan S. Polish.

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