Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: StockDung who wrote (18767)	2/14/2007 3:42:51 PM
From: scion	Respond to of 19428

Polish Citizen Gets 13 Years for International Investment Fraud allamericanpatriots.com February 13, 2007 -- TALLAHASSEE, FL – Florida Attorney General Bill McCollum today announced that a Polish citizen was sentenced to 13 years in prison for his role in an investment fraud scam that victimized approximately 40 people. Zygmunt Zabolotny, who also has U.S. citizenship, must also make full restitution to his victims, an amount believed to be in excess of $1 million. He was prosecuted by the Attorney General’s Office of Statewide Prosecution. “This complicated scheme spread its deception across the nation and around the world,” said Attorney General McCollum. “Consumers should always remember that if something sounds too good to be true, it probably is.” Through a tax company and word-of-mouth in the Polish community, Zabolotny solicited customers to invest in what he claimed were highly secured investments in Poland. Customers were told that they could benefit greatly from a tax perspective and were guaranteed returns of 18 to 36 percent. Many investors received very little documentation about their investment, which varied from $10,000 to more than $900,000. Zabolotny claimed that his company, Vesta Financial Corporation, would accept and manage the investments in Polish business ventures. The ventures included coffee carts kiosks, fast food outlets, equipment leasing to restaurants and medical businesses and the renovation of older commercial real estate. Zabolotny provided little if any actual proof of the details, locations or specifics of these properties or investments. Zabolotny provided occasional progress reports, but declined to proved specifics on the investments. Many customers requested their money back, but Zabolotny refused to make full refunds, returning part of the investment only after great delay or if legal action was threatened. In 2000, Zabolotny advised via letter that Polish authorities had frozen his bank accounts. In 2002, Zabolotny advised via letter that Vesta had lost approximately $700,000 due to withdrawing investors. After the company’s loss in 2002, the company shut down. Zabolotny was arrested in October 2004 and extradited from Germany after an investigation by the Florida Department of Law Enforcement and the Florida Department of Financial Services. Authorities believe that from 1996 through 2002, the total known investments involved in the scam amounted to approximately $3.4 million. He was charged with one count of securities Fraud, a first-degree felony, 16 counts of the sale of unregistered securities and 16 counts of the sale of securities by an unregistered dealer, both third-degree felonies. The sentence was handed down by Sixth Judicial Circuit Judge Joseph Bulone. Source: Florida Attorney General's Office allamericanpatriots.com

To: StockDung who wrote (18767)	2/14/2007 3:44:56 PM
From: scion	Respond to of 19428

Cooks' tax fraud case goes to jury Penalty could be up to 45 years By DAN RICHMAN P-I REPORTER seattlepi.nwsource.com A federal jury is set to begin deliberations today in the tax fraud case of Wade and Laura Cook, a Fall City couple who made millions of dollars selling investment and tax advice before going bankrupt. The Cooks are each accused of evading income tax in 1998-2000 on $9.5 million in royalties from their publications and seminars, filing falsified tax returns those years and obstructing a later IRS investigation. If convicted on all counts, they face penalties of up to $2 million and 45 years in jail each, though such maximum penalties are rarely imposed. They have pleaded not guilty to all charges. Tuesday's closing arguments capped a 19-day trial at which the Cooks chose not to testify. The primary issue is whether Wade Cook, 57, and Laura Cook, 54, deliberately cheated the government by creating a complex network of interrelated trusts and limited partnerships and then shifting money among them, spending much of it on themselves. They contend they merely loaned themselves money, and because loans aren't taxable as income, they owed no taxes. The government contends the couple never intended to repay the money they gave themselves, so the payments weren't loans. At trial, the government offered as evidence that the Cooks repeatedly told a bank from which they sought a loan that they had no outstanding loans themselves. The government also said the couple suspiciously backdated a promissory note they offered to prove some major payments to themselves were loans. Before a packed courtroom, Assistant U.S. Attorney Bob Westinghouse said of the Cooks, "The government is not saying they did not dot the i's and cross the t's. The government is saying they knew what they were doing. They were cheating." During a courtroom break after Westinghouse's argument, Wade Cook commented, "If his lips are moving, he's lying." Attorney Angelo Calfo, representing Wade Cook, stressed that the case turns on Cook's intention and that only a willful failure to report income is criminal. "The crime is 'Did he lie?' not 'Could he have been more forthright?' " Calfo told the jury. "His belief about whether his actions were legal needn't even be reasonable. There are many plausible explanations for his actions, and you need to view the case through innocence-colored glasses." Amanda Lee, representing Laura Cook, stressed that the couple had received expert advice indicating their financial arrangements were lawful. She also challenged the government's emphasis of the Cooks' extravagant spending habits, including $487,000 to maintain their 40-acre horse ranch, $360,000 to buy 10 cars and $200,000 to buy at least nine Arabian show horses. "There is no question they've lived a privileged life, but that's not the point," she said. "If money is a loan, it's a loan, no matter how you spend it. Maybe the government has focused on their spending because it's easier to convict people who spend money that way." Wrapping up was Assistant U.S. Attorney Kurt Hermanns. He said the couple's backdating a promissory note to show that money they'd paid themselves was a loan -- and using as collateral their own company's stock, which by that time had only nominal value -- proved their guilt. "It represents a very conscious step onto the dark side," he said. P-I reporter Dan Richman can be reached at 206-448-8032 or danrichman@seattlepi.com. seattlepi.nwsource.com