CHICAGO—A former Chicago man was charged with allegedly engaging in an investment
fraud scheme, swindling nearly $8 million from more than 50 victims who were led to believe they
were buying shares of stock in well-known companies. The defendant, Randy M. Cho, was
charged with one count of wire fraud and one count of filing a false federal income tax return in a
criminal information filed in U.S. District Court. Cho allegedly misused a significant portion of the
funds he raised from investors for his own personal benefit, while using other funds he fraudulently
obtained from new investors to make Ponzi-type payments to previous investors.
Cho, 39, of Newton, Mass., and formerly of Chicago, will be arraigned at a later date in U.S.
District Court, Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois,
Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of
Investigation; and Alvin Patton, Special Agent-in-Charge of the Internal Revenue Service Criminal
Investigation Division in Chicago, announced today.
According to the charges, Cho held himself out as a self-employed securities trader, who,
from approximately 2001 to 2009, lived and worked at various times in Chicago, Seattle, Boston and
Newton, Mass. Cho purportedly offered and sold more than $9,642,507 of shares of stock in wellknown
companies to more than 50 U.S. and foreign investors, including some in the Chicago area.
Cho claimed to have access to sell stock in these companies, which he offered as part of a “friends
and family” investment pool, often in anticipation of purported initial public offerings. Cho
allegedly misrepresented that he had a special relationship with Goldman Sachs and was able to
purchase discounted shares, and further misrepresented the timing or existence of public offerings,
the potential profitability and safety of investments, and the use of the funds raised from investors.
At various times during the alleged scheme, Cho falsely told investors that he could purchase
specially-discounted shares of companies, including AOL/Time warner, Inc., Google, Inc., Rosetta
Stone, Inc., and Facebook, Inc., prior to their initial public offerings, the charges allege. For
example, Cho induced one victim to invest approximately $20,000 by falsely representing that he
had Google stock available to sell for $1 per share, when, in fact, Cho knew that shares of Google
were publicly trading at $425 per share or more. Cho also knew that he had no Google shares at a
lower price and had no intent to purchase any Google stock on the victim’s behalf, the charges add.
Similarly, Cho allegedly falsely lulled another investor into believing that the victim had
made a $1 million profit by investing in shares of Google stock when no such investment or profit
existed. As part of the scheme, Cho used more than $1.5 million in new investor funds to make
Ponzi-type payments to previous investors, and Cho caused investors to lose approximately
$7,960,707, according to the charges.
The tax count alleges that Cho filed a false federal income tax return for 2005, reporting total
income of $118,475, when he knew he had received income totaling approximately $1,1,72,862.
The government is being represented by Assistant U.S. Attorney Felicia Manno Alesia. The
U.S. Securities and Exchange Commission assisted in the investigation.
Wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, and
restitution is mandatory. The Court may also impose a fine totaling twice the loss to any victim or
twice the gain to the defendant, whichever is greater. Filing a false tax return carries a maximum
penalty of three years in prison and a $250,000 fine. In addition, a defendant convicted of tax
offenses faces mandatory costs of prosecution and remains liable for any taxes owed, as well as a
civil fraud penalty up to 75 percent of any underpayment plus interest. If convicted, however, the
Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines.
The investigation falls under the umbrella of the Financial Fraud Enforcement Task Force,
which includes representatives from a broad range of federal agencies, regulatory authorities,
inspectors general, and state and local law enforcement who, working together, bring to bear a
powerful array of criminal and civil enforcement resources. The task force is working to improve
efforts across the federal executive branch, and with state and local partners, to investigate and
prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate
financial crimes, combat discrimination in the lending and financial markets, and recover proceeds
for victims of financial crimes. For more information on the task force, visit: www.StopFraud.gov.
An information contains only charges and is not evidence of guilt. The defendant is
presumed innocent and is entitled to a fair trial at which the government has the burden of proving
guilt beyond a reasonable doubt.
Former Chicago Man Allegedly Swindled Nearly $8 Million from More Than 50 Victims in Investment Fraud Scheme
Orange County Man Surrenders After Being Indicted in Investment Fraud Case that Caused $2.4 Million in Losses
SANTA ANA, CA—An Irvine man pleaded not guilty this afternoon after
surrendering this morning to special agents with the FBI in an investment scheme case
that allegedly involved losses totaling $2.4 million.
Charles “Chuck” Davis, 53, was taken into custody without incident this morning
and was arraigned this afternoon in United States District Court. After pleading not
guilty, Davis was released on a $160,000 bond and was ordered to stand trial on
February 22.
Davis was named in a 10-count indictment returned last Wednesday by a federal
grand jury. The indictment alleges that Davis operated an investment scam involving
the Newport Beach-based LifeRight Holdings, Inc. According to promises made by
Davis, LifeRight was going to develop and use infomercials to market a product to
combat child obesity.
Davis signed agreements with investors—Private Placement Memoranda (PPM)—that provided for 15 percent interest on the investment over a 13-month period. The
PPMs also called for investors to receive royalties on products sold and an option to
convert the investment into shares of LifeRight stock when the company began selling
product.
The indictment alleges that investor funds were not used in the manner set forth
in the PPMs. Instead, Davis used investor funds for personal expenses, including
payments to himself, family members, and girlfriends; clothing, jewelry, and other
consumer items; rent, utilities and credit card payments; and legal fees to lawyers
representing Davis in lawsuits brought against him.
As a result of the scheme, the indictment alleges that Davis caused
approximately 40 investors to lose more than $2.4 million.
In addition to LifeRight Holdings, Davis owned, controlled or was affiliated with
LifeRight Holdings International, Inc.; LifeRight Worldwide, Inc.; American Membership
Systems, Inc.; Solomon Davis Financial Group, Inc.; Forward Area, Inc.; Arcane
Communications, Inc.; CJ Davis, Inc.; Arcane Communications; and Hawk
Management Group.
The indictment accuses Davis of two counts of mail fraud, five counts of wire
fraud and three counts of money laundering. If he is convicted of all 10 counts in the
indictment, Davis would face a statutory maximum sentence of 170 years in federal
prison.
An indictment contains allegations that a defendant has committed a crime.
Every defendant is presumed to be innocent until proven guilty in court.
The case against Davis was investigated by the Federal Bureau of Investigation.
Islamic extremist Boko Haram sect attacks churches in Borno, Plateau states.
Tensions High in Nigeria after Christians Killed in Bombings
Islamic extremist Boko Haram sect attacks churches in Borno, Plateau states.
Tensions continued to mount in the Christian community in Maiduguri, capital of Borno state in northern Nigeria, following the killing of a Baptist pastor and five other Christians on Christmas Eve.
The Rev. Bulus Marwa and the other Christians were killed in the Dec. 24 attacks on Victory Baptist Church in Alemderi and a Church of Christ in Nigeria (COCIN) congregation in Sinimari by the outlawed Islamic Boko Haram sect opposed to Western education.
Those killed at the Baptist church, which was set ablaze, included choir members Philip Luka, 22, and Paul Mathew, 21, as well as 50-year-old Christopher Balami and Yohana Adamu. Philip Sopso, a 60-year-old a security guard, was killed at the COCIN church while 25 other persons were said to have been injured during the serial attacks by the Islamic group.
“It is sad that when Christians were supposed to be celebrating the birth of Jesus Christ, some people, out of wickedness, would come to perpetrate such evil,” said Borno State Chairman of the Christian Association of Nigeria the Rev. Yuguda Ndirmva.
The Boko Haram members reportedly first stormed the COCIN church in two vehicles and detonated bombs that shattered the gate of the worship center and killed the security guard.
Many Christians have taken refuge to avoid further attacks as soldiers and police keep watch at churches and other strategic locations in the state.
Danjuma Akawu, who survived the attack on the Baptist church, said “they hacked the two choir members using knives and petrol bomb before heading to the pastor’s residence, where he was killed.”
Borno Gov. Ali Modu Sheriff said he had alerted police to the possibility of an attack on churches during Christmas.
“It is very unfortunate and sad for the Christian community to be attacked and people killed without any genuine cause,” Sheriff said.
Speaking during a visit to the Baptist church on Saturday (Dec. 25), the governor noted that the attack on the Christian community was an attempt by Boko Haram to create conflict between Christians and Muslims in the state. Several Boko Haram bomb blasts in Christian areas of Jos on Dec. 24 that killed scores of people were said to be an attempt to create the same inter-religious conflict.
Borno state, in northeastern Nigeria, is largely populated by Muslims who have disowned some activities of Boko Haram as contrary to Islam.
Police Commissioner Mohammed Abubakar admitted a security lapse on the part of his divisional police officers, whom he said had been told to watch out for Boko Haram members.
The activities of the Islamic extremist Boko Haram, whose names means “Western education is sin,” were crushed by police in 2009 with the arrest of many of its members and the killing of its leader.
In retaliation, the group had killed policemen and was recently responsible for a prison break to set free its members in the Borno state capital.
Worried about the safety of Christians in Borno state, the president of the Christian Association of Nigeria, Pastor Ayo Oritsejafor, asked the federal government to curb the growing trend of terrorism in parts of the country.
“We can no longer allow this group of disgruntled elements to get away with these acts of terrorism in Nigeria,” he said.
The general superintendent of Deeper Life Bible Church, Pastor William Kumuyi, demanded the arrest and prosecution of the Boko Haram members and others to serve as a deterrent.
“A situation in which feuds easily lead to the burning of churches and the endless killings of church ministers and innocent citizens is an abhorrent trend which must not be allowed to continue,” Pastor Kumuyi said. “The initiative rests on the doorsteps of the security agencies to bring this unfortunate trend to an end.”
END
That snow outside is what global warming looks like
That snow outside is what global warming looks like
Unusually cold winters may make you think scientists have got it all wrong. But the data reveal a chilling truth
A zebra stands in its snow-covered pen at Whipsnade Zoo, north of London on December 20, 2010 Photograph: Max Nash/AFP/Getty Images
There were two silent calls, followed by a message left on my voicemail. She had a soft, gentle voice and a mid-Wales accent. "You are a liar, Mr Monbiot. You and James Hansen and all your lying colleagues. I'm going to make you pay back the money my son gave to your causes. It's minus 18C and my pipes have frozen. You liar. Is this your global warming?" She's not going to like the answer, and nor are you. It may be yes.
There is now strong evidence to suggest that the unusually cold winters of the last two years in the UK are the result of heating elsewhere. With the help of the severe weather analyst John Mason and the Climate Science Rapid Response Team, I've been through as much of the scientific literature as I can lay hands on (see my website for the references). Here's what seems to be happening.
The global temperature maps published by Nasa present a striking picture. Last month's shows a deep blue splodge over Iceland, Spitsbergen, Scandanavia and the UK, and another over the western US and eastern Pacific. Temperatures in these regions were between 0.5C and 4C colder than the November average from 1951 and 1980. But on either side of these cool blue pools are raging fires of orange, red and maroon: the temperatures in western Greenland, northern Canada and Siberia were between 2C and 10C higher than usual. Nasa's Arctic oscillations map for 3-10 December shows that parts of Baffin Island and central Greenland were 15C warmer than the average for 2002-9. There was a similar pattern last winter. These anomalies appear to be connected.
The weather we get in UK winters, for example, is strongly linked to the contrasting pressure between the Icelandic low and the Azores high. When there's a big pressure difference the winds come in from the south-west, bringing mild damp weather from the Atlantic. When there's a smaller gradient, air is often able to flow down from the Arctic. High pressure in the icy north last winter, according to the US National Oceanic and Atmospheric Administration, blocked the usual pattern and "allowed cold air from the Arctic to penetrate all the way into Europe, eastern China, and Washington DC". Nasa reports that the same thing is happening this winter.
Sea ice in the Arctic has two main effects on the weather. Because it's white, it bounces back heat from the sun, preventing it from entering the sea. It also creates a barrier between the water and the atmosphere, reducing the amount of heat that escapes from the sea into the air. In the autumns of 2009 and 2010 the coverage of Arctic sea ice was much lower than the long-term average: the second smallest, last month, of any recorded November. The open sea, being darker, absorbed more heat from the sun in the warmer, light months. As it remained clear for longer than usual it also bled more heat into the Arctic atmosphere. This caused higher air pressures, reducing the gradient between the Iceland low and the Azores high.
So why wasn't this predicted by climate scientists? Actually it was, and we missed it. Obsessed by possible changes to ocean circulation (the Gulf Stream grinding to a halt), we overlooked the effects on atmospheric circulation. A link between summer sea ice in the Arctic and winter temperatures in the northern hemisphere was first proposed in 1914. Close mapping of the relationship dates back to 1990, and has been strengthened by detailed modelling since 2006.
Will this become the pattern? It's not yet clear. Vladimir Petoukhov of the Potsdam Institute says that the effects of shrinking sea ice "could triple the probability of cold winter extremes in Europe and northern Asia". James Hansen of Nasa counters that seven of the last 10 European winters were warmer than average. There are plenty of other variables: we can't predict the depth of British winters solely by the extent of sea ice.
I can already hear the howls of execration: now you're claiming that this cooling is the result of warming! Well, yes, it could be. A global warming trend doesn't mean that every region becomes warmer every month. That's what averages are for: they put local events in context. The denial of man-made climate change mutated first into a denial of science in general and then into a denial of basic arithmetic. If it's snowing in Britain, a thousand websites and quite a few newspapers tell us, the planet can't be warming.
According to Nasa's datasets, the world has just experienced the warmest January to November period since the global record began, 131 years ago; 2010 looks likely to be either the hottest or the equal hottest year. This November was the warmest on record.
Sod all that, my correspondents insist: just look out of the window. No explanation of the numbers, no description of the North Atlantic oscillation or the Arctic dipole, no reminder of current temperatures in other parts of the world, can compete with the observation that there's a foot of snow outside. We are simple, earthy creatures, governed by our senses. What we see and taste and feel overrides analysis. The cold has reason in a deathly grip.
National Guard Lists Protecting U.S.-Mexico Border as No. 2 Top Mission in 2010
National Guard Lists Protecting U.S.-Mexico Border as No. 2 Top Mission in 2010
(CNSNews.com) – The National Guard's No. 1 mission in 2010 was responding to the oil spill in the Gulf of Mexico, and the No. 2 mission was providing support for the Department of Homeland Security in policing the U.S.-Mexico border, according to the National Guard Bureau.
In explaining the top 10 missions of the year, Jon Anderson, a spokesman at the National Guard Bureau, said, “We just look at the things that we got the most reader interaction from, the things that were most interesting. Also, it was what our leadership was interested in, too -- the kind of efforts that they would have to put into it and the attention that we would need to give to it.”
The National Guard published its top 10 missions for 2010 on its Web site, which described the operations as the “most memorable” ones for 2010.
“I think the majority of it was what was interesting,” Anderson told CNSNews.com. “What motivated us, what got people talking right here in and around the National Guard headquarters, but also at the state level, too, because we have 54 states and territories, each with its own army and air National Guard, and what they care about is really important, too.”
The number one top mission for the National Guard this year was “Operation Deepwater Horizon,” which involved the April 20 explosion at the BP-leased oil rig in the Gulf of Mexico that killed 11 workers and released millions of gallons of oil into the Gulf.
As a result of the spill -- which was the top news story of 2010, according to The Associated Press -- fishing and tourism industries in the area were devastated, an expensive clean up effort occurred, and a $20-billion fund to pay for damages was established.
“More than 1,600 Guardmembers were assigned to the Gulf coast states,” according to the National Guard. “Troops helped clean up and contain the almost five million barrels (200 million gallons) of crude oil that leaked into the Gulf of Mexico.”
The number two mission was listed as “supporting the Department of Homeland Security on the southwest border,” said the Guard Web site. The southwest border is 1,994 miles long, according to Cutoms and Border Protection data, and runs from the Gulf to the Pacific, across southern Texas, New Mexico, Arizona and California.
In May 2010, President Barack Obama announced his decision to deploy 1,200 National Guard troops to the southwest border. The move was criticized by border-state lawmakers from both parties as insufficient to improve border security challenges.
Some border-state members of Congress also expressed concern that the 1,200 Guardmembers would not be engaged in direct law enforcement.
The 1,200 troops started to gradually deploy to the four southwestern border states of California, Arizona, New Mexico, and Texas on Aug. 1. As of mid-November, according to a deployment count by the National Guard, almost all 1,200 troops had been deployed.
According to the National Guard top missions in 2010 news article, “National Guardmembers are assisting Customs and Border Protection [CBP] and Immigration and Customs Enforcement [ICE] agents on the nation’s Southwest border. Up to 1,200 Guardmembers are serving as criminal investigative analysts and Entry Identification Team members in the four border states of California, Arizona, New Mexico and Texas.”
The CBP and ICE agencies are components of the Department of Homeland Security.
The top 10 National Guard missions are listed in the following order: 1) Operation Deepwater Horizon; 2) Supporting the Department of Homeland Security on the Southwest border; 3) Haiti earthquake relief; 4) Pakistan flood relief; 5) Operation New Dawn; 6) First F-22 assigned to the Air National Guard; 7) State Partnership Program; 8) 2010 Winter Olympics; 9) Homeland Response Forces; and 10) Agribusiness Development Teams.
“Tens of thousands of Citizen-Soldiers and -Airmen are executing ongoing federal missions worldwide, and the National Guard responded to planned and unplanned domestic events in 2010,” stated the National Guard in its Web site article about the top 10 missions this year.
“Every day, governors call out their National Guard to help citizens in need,” it added. “Although 2010 lacked a major hurricane, wildfire or other natural disaster within the U.S., Guardmembers were as busy serving their governors in domestic operations as they were serving their commander-in-chief overseas.”
CNSNews.com previously reported that as of August 2010, there were approximately 55,000 National Guard members assigned to missions overseas, which is about 45 times more than the up to 1,200 Guard troops on the southwest border.
Is religious syncretism a good thing?
Most people don’t realize it, but their religion is a blend of paganism and Christianity.
Is religious syncretism a good thing?
Syncretism is “the combination of different forms of belief or practice” according to the Merriam-Webster Dictionary. In an article on syncretism in the 1911 edition of the Encyclopædia Britannica, it says: “Its (syncretism) most frequent use, however, is in connexion with the religious development of antiquity, when it denotes the tendency, especially prominent from the 2nd to the 4th centuries of the Christian era, to simplify and unify the various pagan religions … Syncretism even went so far as to blend the deities of paganism and Christianity … The triumph of Christianity itself represented a result of syncretism, the Church being a blending of the beliefs and practices of both the new and old religions.”
Do you know what happened in “the 2nd to the 4th centuries of the Christian era” as mentioned in the above encyclopedia article? Christianity was rapidly changing from what it had been during the first century under the 12 apostles. There were sharp disagreements between those who followed the doctrines and practice of the apostles and sought to maintain those first century beliefs and practices, and those who were going in an entirely new direction than had been previously taught.
A whole host of pagan practices and symbols were absorbed into Christianity. In an effort to convert those worshipping pagan religions, the old pagan ideas were simply given new names and assigned new meanings. One of the better-known examples of religious syncretism is Christmas. Christmas was invented as a substitute for the older, pagan Yule celebrations. Instead of worshipping a sun god on the 25th of December, the pagan was told he was now worshipping the Son of God. The symbols and rituals and practices all remained, only under new labels. Bible evidence shows that the birth of Christ was in the fall of the year, likely late September or early October at the latest, and not on December 25th. The Bible in no wise institutes the worship of the birth of Jesus, much less authorizes the absorption of pagan religious practices.
There are many examples of syncretism in the modern Christian religion. Another example is Easter, which is loaded with symbols, practices and rituals incorporated from ancient Greek and Roman pagan celebrations surrounding spring fertility. The pagan practices of the worship of Ishtar, the fertility goddess, were absorbed into Christianity. The new meaning given was to celebrate the resurrection of Jesus Christ. But the Bible does not institute the worship of the resurrection.
Some think the idea of syncretism is good and is a means of showing that Christianity is not “exclusive” of other religions and their “paths to God.” The idea of being “multi-cultural” has invaded public thought in the last few decades. While God created all peoples, His Word is quite clear that there is only one path, excluding all others: “Nor is there salvation in any other, for there is no other name under heaven given among men by which we must be saved” (Acts 4:12).
God means it when He says, “You shall have no other gods before Me” (Exodus 20:3). God warned Israel about worshipping foreign gods: “Thus says the Lord: ‘Do not learn the way of the Gentiles’” (Jeremiah 10:2). God forbids religious syncretism.
We have a number of booklets that will help you decide if your religion has incorporated non-biblical beliefs. Go online at www.tomorrowsworld.org, or write today for your free copy of Do You Believe the True Gospel?, God’s Church Through the Ages , Restoring Apostolic Christianity, What Is a True Christian? , and Where Is God’s True Church Today?
Mexican Border Town's Last Cop Kidnapped
So much for praying to 'Our Lady of Guadalupe'
A 28-year-old police officer in the Mexican border town of Guadalupe, Erika Gándara, has been missing since gunmen stormed her home last Thursday. She was the last remaining cop in the town after her colleagues had resigned or been killed.
Gándara, in an interview with the El Paso Times in November, said, "I see this as any other job." She has been the sole police officer in the town since June, the same month the town's mayor, Jesús Manuel Lara, was killed by gunmen. And about two years ago, the local police commander's severed head was found in an ice chest in the center of town. According to the paper, the area under Gándara's watch is known to be basically lawless, and residents hide in their homes after dark.
Send an email to Jeff Neumann, the author of this post, at jeff@gawker.com.
An Exploding Can of Hairspray Causes a Panic at Miami Airport
The bomb squad was called when a bag exploded today at Miami International Airport and pieces of metal flew out. But it wasn't a bomb, just an exploding can of hairspray. Now we have to worry about militant hairdressers?
Send an email to Brian Moylan, the author of this post, at brian@gawker.com.
Comment of the Day: Being Old Sucks
Today we laughed at roving bands of mean old people terrorizing retirement homes. Ohh, aren't mean elderly folks just so funny? Well, not that funny, said one commenter who brought us all down a bit.
From the fittingly named OldCrankyBroad:
There are lots of reasons why the Really Olds engage in this behavior, but mostly they are the same reasons that anyone engages in that kind of behavior: anger, frustration, fear, and a resultant need to control.
They are angry and frustrated because all opportunities in life are gone forever, and they know it. They are angry with themselves for mistakes they made in their life, and frustrated that those mistakes can never be corrected. They are angry because most of their friends and loved ones are already passed on, and frustrated that they are still here, either alone or mostly alone. They are angry and frustrated because they can no longer do what they want to do. The list goes on and on.
Furthermore, once you get to a certain age, and your health is gone, there really is nothing to look forward to but severe illness and death, which could come at literally any time. The Really Olds are therefore also very afraid, understandably so, and they many times deal with that fear of the unknown by taking strict control over what little in their life they still can control. The end result of that frustration and anger, combined with fear and a resultant need to control, is bullying. This is true whether they are bullying their caretaker, or other senior citizens.
However, in all truthfulness, some of them also act out even worse than they otherwise would, because they know they'll get away with it due to their age. I cared for my grandmother until she died earlier this year, and she was hell on wheels sometimes, because really, what was I going to do about it? She knew I could never bring myself to put her in a nursing home, and she knew that no one else in the family could care for her full-time as her health required. She therefore knew that I would tolerate her bad behavior, and she was right. I just learned through hard experience to not take it personally, because her bad behavior was never about me anyway.
I have therefore seen that nasty side of the elderly up close and personal many times in my own home, but understanding what causes it does not make it any more pleasant. I am just not sure what we can do about it, though certainly if they are regularly bullying other senior citizens, there should be severe consequences such as removal from the facility. Where do we put them then? Perhaps there need to be facilities which are designed specifically to care for the more problematic seniors, when the behavior is not explained by a medical condition, so the meaner ones can only bully the other bullies.
Other than that, or forcing families to care for their own vicious elders so as to protect the other senior citizens from them, I have no idea what we can do. It's a good question though, and one which definitely needs to be explored.
Well... fuck.
Happy Tuesday!
Send an email to Richard Lawson, the author of this post, at richardl@gawker.com.