SEC Shutting Down Alleged Fake Investment Scheme That Lasted A Full 20 Years
- Created: Tuesday, 31 May 2011 06:33
A grand jury has indicted Edward Moskop of fraud and money laundering for what the SEC says is a long track record of taking his clients' money and not bothering to invest it as promised.
Instead, the SEC says, Moskop transferred at least $2.4 million in client funds to his own accounts.
He then reportedly faked statements for his clients showing how the illusory investments in real mutual funds and other products were performing.
The scheme unraveled last September when the clients at the center of the case -- elderly immigrants from Poland -- noticed that a CD had matured but they hadn't gotten any renewal paperwork.
When they called Allianz to find out what was going on, the company denied that they'd ever had an account.
Moskop then allegedly told them that what they really had was a "private offering extended to his premium clients."
When they tried to cash out, checks he sent them bounced.
The real point of telling this story is how long the scheme went on. It's not that the SEC knew about it for decades and took 20 years to prosecute.
It's just that a scheme like this can go on for ages before it finally unravels.