prison

  • News

    UBS Whistleblower’s $104 Million Award Poses Interesting Conundrum For Would-Be Snitches

    Remember Bradley Birkenfeld? He’s the guy who single-handedly made the U.S. government’s case against UBS and forced the Swiss bank to hand over the names of thousands of tax cheats, which resulted in the US scoring $780 million from UBS and may have inspired some 33,000 Americans to “voluntarily disclose offshore accounts to the IRS, generating more than $5 billion.” And yet, despite his assistance, Birkenfeld wasn’t immediately thanked for a job well done. Instead, he was sentenced to forty months in prison (fair-ish, considering he showed a few clients how to avoid paying taxes himself) and told to piss off by the Internal Revenue Service, from whom he sought an award, because he was “not forthcoming about his own role in the scheme,” even as a Justice Department attorney admitted that “…without Mr. Birkenfeld walking into the door of the Department of Justice in the summer of 2007, I doubt as of today that this massive fraud would have been discovered by the US government” (or as his lawyer put it, “They didn’t know how to spell UBS until he showed up. He didn’t just give them a piece of the puzzle. He gave them the entire puzzle”). Now, after doing 32 months at Schuylkill Federal Correctional Institution, getting let out early on account of “good-time credit,” and living in a halfway house in New Hampshire, Birkenfeld has finally been thrown a bone.

    Bradley Birkenfeld, the former UBS AG banker who told the Internal Revenue Service how the bank helped thousands of Americans evade taxes, secured an IRS award of $104 million, an amount his lawyers said may be the largest ever for a U.S. whistle-blower. Birkenfeld told authorities how UBS bankers came to the U.S. to woo rich Americans, managed $20 billion of their assets, and helped them cheat the IRS. He pleaded guilty to conspiracy in 2008, a year after reporting the bank’s conduct to the Justice Department, U.S. Senate, IRS and Securities and Exchange Commission. He was released from prison Aug. 1…Birkenfeld, 47, worked at Zurich-based UBS, the largest Swiss bank, for five years. He sought a reward from the IRS of as much as 30 percent of any taxes the agency recovered as a result of his whistle-blowing activities.

    Clearly this whole thing should stir up a few questions inside you all, chief among them: how much money would it take to get you to befriend or get yourself employed with some rogue people so you can blow the whistle on them? Would you do any time for it? If so, how much? And are we talking Club Fed or a place where your roommate spoons you every night?

    UBS Whistle-Blower Secures $104 Million Award From IRS [Bloomberg]

    / Sep 11, 2012 at 11:46 AM
  • News

    Former Barclays Employee Is Probably Going To Jail

    Before anyone takes to Twitter to give the UK a piece of her mind, though, breathe easy: the misconduct is related to funds used to pay for breast augmentations and other cosmetic enhancements and could even take some of the heat off of Bob Diamond et al, who’ve yet to be accused of using customer money to pay for lipo.

    A bank clerk stole £46,000 to fund a boob job, liposuction and hair extensions to help her achieve her dream of becoming a model. Rachael Claire Martin admitted taking the money over an eight-week period from Barclays Bank in Liskeard, Cornwall, where she worked. The 24-year-old, from St Austell, Cornwall, is thought to have spent £4,000 on breast enlargement and £1,700 on dental work, which included teeth whitening treatment. The mother of one also travelled to Bristol on wild shopping sprees – buying make up and other items before enjoying nights out on the town back at home. While working at the bank, she regularly stole relatively small sums of £2,000 and £1,000, which she siphoned into her own account. On one occasion she managed to take £6,000.
    She initially denied 25 separate counts of theft from the bank between September 1 and October 3 in 2010.
    But the prosecution charged her with just one count of stealing £46,000 over the same period at Truro Crown Court yesterday and she pleaded guilty…She will face a jail term when she returns to court in September. Police were called when the theft was realised – but she had apparently already spent most of the stolen cash on her appearance, in the hope of realising her modelling dream.

    Barclays bank clerk stole £46,000 and spent it on boob job, liposuction and wild shopping sprees to fulfill her dream of becoming a model [DM]

    / Jul 17, 2012 at 11:48 AM
  • News

    Former Citigroup VP Who Helped Himself To $23 Million Gets 8 Years

    Nobody fucks with Count Vikula!

    Former Citigroup Vice President Gary Foster was sentenced to 97 months in prison for embezzling almost $23 million from the bank, according to federal prosecutors in Brooklyn, New York. Foster pleaded guilty to bank fraud in September, admitting that he transferred money from various Citigroup accounts to his own at JPMorgan Chase. He concealed his activities by making false accounting entries, according to the government. He used the money to buy real estate and luxury sports cars, including a Ferrari and a Maserati, prosecutors said. The government has seized or restrained property from Foster valued at a total of $14 million. “I executed a scheme to defraud Citigroup,” Foster told U.S. District Judge Eric Vitaliano at his plea hearing last year in Brooklyn. “I directed funds to be wired into my personal account at JPMorgan.”

    Ex-Citigroup Executive Gets 8 Years For Embezzlement [Bloomberg]

    / Jun 29, 2012 at 5:41 PM
  • News

    Bernie Madoff Was Just Trying To “Change The Way Money Was Managed,” Not That Anyone Cares

    For about a year now, Bernie Madoff has been holding court with various members of the press about something that’s been plaguing him: the fact that few people if any are willing to give credit where credit is due. Yes, he may have pleaded guilty to a $50 billion crime that ruined countless people’s lives, including those of his wife and children, one of whom committed suicide as a result, but he did a lot of other stuff too, like run a “successful business” for which he won lots of “industry awards” during his “legitimate years.” And, yet, everyone seems to forget all that when his name comes up, much like they conveniently forgot about how Mussolini made the trains run or time, or how Hitler built those wonderful autobahns, or how Ted Bundy made women feel special. And since he’s serving a 150 year sentence, Berns has had lots of time to ponder why his years of legitimate achievements go unmentioned and the one thing he keeps coming back to? Irving Picard, who’s pulled a fast one on you all, by suggesting that Bernie’s crime started wayyyyy before it did, when, in fact, Madoff Securities was only running a Ponzi scheme for barely even 20 years. Examine the evidence Madoff shared with Forbes contributor Diana B. Henriques via email:

    Jan. 17, 2011 11:05 A.M. … Also remember that the U.S. Attorney admitted that they had no evidence that the crime started in the 80’s and could establish that Montauk and the N.Y. homes in Ruth’s name were not purchased with tainted funds …

    Mar. 10, 2011 7:35 A.M. … I would love to know what evidence [Picard] has to date my crime back to 1983 … THE FACT IS THAT THERE IS NONE.

    8:05 A.M. … I say once again the fraud started in the 90’s …

    Mar. 18, 2011 9:26 A.M. … I guess I’m obsessed with this START OF CRIME ISSUE.

    Don’t you see, idiots of the media?! That’s the real issue here. Not the crime itself but the start of the crime. Do the math.

    Oct. 11, 2011 7:20 A.M. … You can do a back of the envelope calculation as follows. From 1963 I made substantial arbitrage profits for the Picower, Shapiro and Chais families joined by the Levy family in 1970. [M]ost of these profits were re­invested and the amounts compounded. In 1970 Saul Alpern formed his partnerships later [run] by Avellino and Bienes. In 1980 I started trading for [French banker] Albert Igoin and his French and Swiss banking associates. All of these accounts averaged about 20% annually and were involved in various forms of convertible arb using bonds, pfds [preferreds], Rts. [rights] and units. [A]nd ALL WERE LEGITIMATE TRADING. THIS CONTINUED THRU THE EARLY 90’S.

    Nov. 24, 2011 6:51 P.M. … When you look at my RIDDLE [in the Nov. 23 letter], consider the fact that there was in fact no crime until I did not have enough capital in the firm to cover the losses. There is your real STORY

    The interesting thing here is not that there was an 11-figure fraud, okay? The interesting thing is how long the 11-figure fraud went on. And it stinks to high hell that that slippery fuck Picard and Co. are claiming it dates back to 1983 and that you’re all buying it, hook, line and sinker. Come on, people. They’re lawyers. Who are you gonna trust, them or a Ponzi schemer? But don’t feel sorry for Bernie. Feel sorry for yourselves, for what could have been and what never was.

    Near the end of that e-mail the clouds of self-deception close in again, and Madoff turns himself into a pitiful martyr: “I made the tragic mistake of trying to change the way money was managed and was successful at the start, but lost my way after a while and refused to admit that I failed at one point.”

    HE WAS TRYING TO THE WAY MONEY WAS MANAGED! A legitimate way to make Ponzi scheme payments, before it was tragically snuffed out.

    Oct. 11, 2011 7:36 A.M. … I will never get over the distortions being presented by everyone as to the poor and now homeless when in fact they all signed documents when opening their accounts that they were sophisticated and had enough wealth to withstand the possible losses of short term trading. I wish I had saved the hundreds of letters I received thanking me for how I was responsible for their happiness over the years and their pleading with me to keep their accounts open when I tried to close them … when I worried about the wreckage I might cause if I couldn’t recover.

    Is the REAL STORY that the investor agreements specifically authorized BLMIS to make Ponzi scheme payments (a totally legitimate type of securities transaction, a short term trade if you will)? Unless someone pulls their head out of their ass, the world will never know.

    Exclusive: The Secret Madoff Prison Letters [Forbes]

    / Mar 20, 2012 at 1:48 PM
  • News

    Allen Stanford Puts On Unusually Brave Face While Hearing Verdict Of Guilt

    April 7, 2009: The then Sir Allen Stanford chokes back tears over being deprived of being named Forbes’ 405th richest person in the world as a result of the Ponzi charges (which he described as “baloney” and informed a reporter using the dirty word, “If you say Ponzi to my face again, I will punch you in the mouth”).
    March 6, 2012: “A federal jury convicted international financier R. Allen Stanford on 13 of 14 charges of money laundering and fraud in a Ponzi scheme that lost billions of dollars for investors…As the verdict was read Mr. Stanford, wearing a dark suit, turned to where his family members were sitting and appeared to mouth the words, ‘It’s OK.'”

    / Mar 6, 2012 at 3:15 PM
  • News

    It’s Going To Be Quite Some Time Before Legendary Investor Lenny Dykstra’s Lips Taste Sweet Freedom, Twizzlers Purchased Outside The Confines Of A Prison Canteen

    Former New York Mets star and financial guru Lenny Dykstra was sentenced to three years in state prison on Monday, after a judge rejected a last-ditch effort to change his no contest plea and fight the charges. He had pleaded no contest to grand theft auto and filing a false financial statement in connection with […]

    / Mar 5, 2012 at 5:39 PM
  • News

    Former UBS Director Sentenced To 33 Months In Jail Has Plans To Get Into The Culinary Industry Post-Prison

    Remember, back in April, when a bunch of UBS employees, were escorted out of the building and told not to come back, “pending an internal review into their conduct”? At the time we knew all four worked in operations and that they “were responsible for securities movements and payments,” and speculated that perhaps this was […]

    / Nov 29, 2011 at 7:02 PM
  • News

    Pump And Dump King Seeks Queen

    Are you a lady looking for love? Have you found relationships with men who haven’t done time in federal prison to be lacking a certain je ne sais quoi? Does the idea of being with a guy who has an elastic view of securities laws do anything for you? Then girlfriends, you are in for […]

    / Nov 28, 2011 at 12:02 PM
  • News

    Judge Graciously Allows Raj Rajaratnam To Enjoy One Last Black Friday

    The convicted insider trader, who was previously scheduled to report to prison for an 11 year sentence at the end of the month, was granted a few extra days of freedom. He’ll now have ’til December 5 to dance like nobody’s watching. [WSJ]

    / Oct 31, 2011 at 7:08 PM
  • News

    Bernie Madoff Couldn’t Be Happier Behind Bars

    Maybe, you thought, Bernie Madoff wouldn’t like prison. Maybe, you thought, after a life of luxury, living in an 8X10 would cramp his style. Maybe, you thought, that he’d have trouble earning 14 cents an hour sweeping the floors, after spending several decades ‘earning’ millions making fake trades. Maybe, you thought, he wouldn’t take to […]

    / Oct 21, 2011 at 4:08 PM
  • insider-trading, News

    Thirty Months From Now, Danielle Chiesi Could Be Working You For Stock Tips While She Works On Your Cuticles

    This afternoon, Danielle Chiesi will report to a West Virginia prison for a 30-month stay, for her role in the Galleon insider trading case, wherein she passed valuable tips on to Raj Rajaratnam after the tech execs she worked closely with passed her a few of their own. Chiesi will be bunking at Federal Prison […]

    / Oct 18, 2011 at 10:37 AM
  • insider-trading

    Raj Rajaratnam Gets 11 Years, Needs A Kidney

    The defense had asked for 6.5 to 8 years on account of 1) the fact that, they say, Raj only made $7.4 million off his trades and 2) the “unique constellation of ailments ravaging his body” that would result in him dying behind bars if given a sentence “anywhere near” the prosecution’s request for 19.5 […]

    / Oct 13, 2011 at 11:18 AM
  • insider-trading

    Reader Poll: How Long Will Raj Rajaratnam Suffer The Indignity Of Unflattering Jumpsuits?

    At some point tomorrow, Raj Rajaratnam will be sentenced for the 14 counts of securities fraud and conspiracy he was found guilty on in May. The prosecution, which claims the Galleon founder netted “at least” $50 million in ill-gotten gains, has requested he go away for anywhere between 19 years and seven months to 24 […]

    / Oct 12, 2011 at 1:52 PM
  • Pets

    Golden Retriever Latest Victim Of Insider Trading Crackdown

    Back in June, the lawyer for Winifred Jiau, expert network empress and accused insider trader, made a simple plea: “Put an end to this misguided prosecution,” Joanna Hendon said. “Send Ms. Jiau back to California, and to her dog.” While the request might’ve played well with golden retriever lovers, the presiding judge didn’t care. He […]

    / Sep 22, 2011 at 10:46 AM
  • News

    Raj Rajaratnam’s Health Far Too Delicate For Lengthy Prison Stay

    Back in May, Rengen Rajaratnam, little brother of Raj, made a simple request. For friends of the Galleon founder to send character letters to the judge in an effort to convince him to be lenient in sentencing. Rengen helpfully included some links on the proper formatting to use when drafting such missives and considering all […]

    / Aug 10, 2011 at 10:47 AM
  • News

    Bernie Madoff Feels Like A Piñata

    When one is serving a 150 year sentence for running a massive Ponzi scheme, he tends to find himself with time on his hands to think about things. Take Bernie Madoff, for example. He has a job in the joint (working in the commissary) and he gets in daily walks on the track but other […]

    / Jun 28, 2011 at 2:07 PM
  • News

    HSBC Banker Who Got Knife Pulled On Him By Ex-Girlfriend For Going On A Date One Day After Break-Up Headed To Jail

    Remeber Toby Carroll? To recap, he’s a New Zealand-born real estate analyst for HSBC who’s been stationed in Dubai for the last several years. In January, he was jailed after his ex-girlfriend, Priscilla Ferreira, found him and a new girl, Danielle Spencer, in his apartment and proceeded to start slashing curtains, furniture, etc, and go […]

    / Jun 27, 2011 at 1:16 PM
  • News

    Lobster-Loving Expert Network Empress Winifred Jiau Found Guilty

    Winifred Jiau, the Primary Global consultant who worked closing with, among others, ex-SAC portfolio manager Noah Freeman, was found guilty on insider trading charges this morning, after two days of jury deliberations. The 43 year-old Jiau now faces up to 20 years for securities fraud and an additional five years for conspiracy. For the math […]

    / Jun 20, 2011 at 12:21 PM
  • News

    HSBC Analyst Who Had Knife Pulled On Him By Ex-Girlfriend, Was Jailed For Going On A Date With Another Woman Is Freed, Still Faces Charges, Wrath

    Last week we met Toby Carroll, a New Zealand-born real estate analyst for HSBC currently stationed in Dubai, who’d spent the last two months in prison. Carroll had ended up there after his ex-girlfriend, Priscilla Ferreira, found him and a new girl, Danielle Spencer, in his apartment and proceeded to start slashing curtains, furniture, etc, […]

    / Jan 24, 2011 at 2:53 PM
  • News

    HSBC Analyst Gets Knife Pulled On Him For Going On A Date One Day After Breaking Up With His Girlfriend, Spends Two Months (And Counting) In Jail

    Toby Carroll is a New Zealand-born real estate analyst for HSBC currently stationed in Dubai. If you’re a colleague in the field currently trying to get in touch with him, you’ll have to wait a bit longer, because he currently in prison.

    / Jan 21, 2011 at 10:56 AM
  • News

    Great News For Anyone Caught Up In A Little Insider Trading

    As you may have heard, the Feds are currently hoping to nail a not insignificant number of people for insider trading. Whether you’ve merely dabbled in the hot tips game or traded on material non-public information so many times you’ve lost count, the question ‘Would I survive in the big house?’ may have crossed your […]

    / Jan 20, 2011 at 11:18 AM
  • News

    Merrill Lynch Banker And Colleagues May Serve Time For Playing Texas Hold ‘Em In Hong Kong

    Apparently that is wrong in HK, and they should not have done that. What they should have done was either a) take the ferry to Macau, “the Vegas of Asia,” or b) done some horse betting, which is cool with the authorities.

    / Jul 28, 2010 at 11:15 AM
  • News

    Budding White Collar Criminals: Unless You Want To Have Your Ass Thrown In Solitary Confinement, You Will Listen To Every Damn Word Jeff Skilling Has To Say

    Jeff Skilling was once president of a company that (claimed to) rake in over $100 billion annually. Now he’s had to kiss carbs good-bye (“You don’t want to get sick in here,” he said, as he talked about practicing yoga, walking four miles a day, and avoiding carbohydrate-heavy meals to stay fit) and beg reporters […]

    / Jun 14, 2010 at 12:00 PM
  • News

    Allen Stanford Wants Out Of Prison, Claims Constitutional Rights, Among Other Things, Are Being Violated

    Hey remember Allen Stanford? It’s been a while, hasn’t it? When we last checked in with the accused Ponzier, in December, a prison psychologist was arguing that if the guy wasn’t let out of jail ASAP, it was very likely he’d “a complete nervous breakdown.” Apparently that wasn’t a convincing argument for those who make […]

    / May 19, 2010 at 10:46 AM
  • News

    Bernie “The Don” Madoff Feels Betrayed By Former Employees, Has Portrait Drawn

    As previously mentioned, Bernie Madoff’s life in prison is prettay prettay prettay good. Fellow inmates make him delicious wrap sandwiches, he’s in with “the homosexual posse,” and every now and then he gets stoned. The Jouranal checked in with the big man, and reports today that things are still going quite nicely. He plays bocce, […]

    / Dec 11, 2009 at 11:19 AM
  • News

    How Many Points Can You Score?

    Sentencing for federal crimes is governed by federal sentencing guidelines and a “severity points” system developed by the Federal Sentencing Commission. There’s a very thick manual with lots of detail involved, but basically the process (omitting quite a bit) goes like this. 1. Determine the base offense level. 2. Make any changes due to “Special […]

    / Nov 4, 2008 at 10:35 AM
  • News

    No Word Yet On Treasury Purchases Of Illiquid Cigarette Portfolios

    Ethan Roberts knows about mackerel discipline first hand. Mr. Roberts, who was released in 2007 after serving eight years on a methamphetamine charge at prisons including the La Tuna Federal Correctional Institution in Texas, says he got busted for various piscine transactions. “I paid gambling debts” with mackerel, he says. “One time I bought cigarettes […]

    / Oct 2, 2008 at 2:21 PM
  • News

    Never Change!

    Honestly, we never cared much either way about massage enthusiast/Bear Stearns investor Jeff Epstein but we’re starting to love The Ladies Man who, according to Page Six, has been spending his incarcerated days “at the [prison] library e-mailing various models he befriended in New York, sending them boxes of chocolates and promising them career help.” […]

    / Jul 30, 2008 at 3:30 PM

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