CrossFit Scam Artist Is Willing To Cut A Deal

Josh Newman has decided, in light of the whole possible prison thing, to be reasonable-ish.
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He was charming. Probably ripped under that suit. Went to Yale. And had a once-in-a-lifetime opportunity to cash in on the biggest fitness craze since the last one. That CrossFit thing. You know, the one where young, attractive people punish their bodies and eat away at their skeletal muscle tissue so that they can remain attractive? (Don’t worry: You won’t need it anymore once you are old, because then you will not be attractive.) Joshua Newman was going to bring CrossFit to the literally dozens of people in New York and New Jersey who do not already have ready access to a CrossFit center or a gym with an ersatz beat-the-hell-out-of-yourself program. All he needed was about $2 million from a dozen or so people, and he was golden. And this was for real: This wasn’t that B.S. film production company he set up, or those go-nowhere dot-coms he was all about for a little while. This was a legit thing—until it wasn’t, and about a dozen or so people were out about $2 million.

Now, the good news: For once in his life, Joshua Newman is going to do the stand-up thing. He’s not going to represent himself and charm you all over again once you’re under oath. No. He’s going to take his medicine. At least as long as prosecutors are willing to offer him a good deal. And don't worry about him. CrossFit means he'll do fine in prison.

Federal prosecutors and lawyers for Joshua B. Newman, a serial entrepreneur accused of defrauding more than a dozen investors out of at least $2 million, are engaged in plea negotiations, according to a June 10 court filing….The negotiations could lead to a disposition of the case before a grand jury is asked to indict Mr. Newman. United States Magistrate Judge Steven Mannion of the Federal District Court in Newark granted a request by prosecutors to postpone a decision on whether to seek an indictment until Aug. 18.

Joshua Newman’s Lawyers in Plea Talks in Fraud Case [DealBook]


Former Madoff Employee Pleads Guilty To *A* Madoff Securities Scam Just Not *The* Madoff Securities Scam

You know what has got to suck? When you decide to start charging stuff that doesn't fall under "business expenses" to your corporate card and engage in a few other amateur hours scams that probably wouldn't have been found out (or, if discovered, not taken to the authorities because your boss had high tolerance for fraud) but then they are because the CEO of your firm had to go and engage in the largest Ponzi scheme on record, which shone an uncomfortable light on company personnel and all of the cheese, popcorn, and salsa of the month clubs you joined (for example).  Craig Kugel knows what we're talking about. The son of a longtime trader for convicted Ponzi scheme operator Bernard Madoff pleaded guilty to conspiracy and other criminal charges Tuesday, but denied any involvement in the decades-long fraud. Craig Kugel, the son of David L. Kugel, a former supervisory trader in Madoff's proprietary-trading operation, admitted to filing false forms that claimed people were on the Madoff payroll when they didn't actually work for the firm and to not declaring as income personal expenses charged to the firm's corporate credit card. Those individuals were paid salary and benefits, but weren't actual employees, he said. "I am sorry for my lapses in judgment in committing these federal crimes, but I want to make clear I had nothing to do with the Madoff Ponzi scheme and I was never involved in the Madoff trading operation," Craig Kugel said at a hearing before U.S. District Judge Laura Taylor Swain in Manhattan. Ex-Madoff Employee Pleads Guilty to Conspiracy [WSJ]

Connection To A Company Called "Yeah Baby" Not Even The Best Part Of "High School Buddies" Insider Trading Scam

Over the past several years, much has been made about the supposed incompetence of the Securities and Exchange Commission. The regulator failed to realize Bernie Madoff had been running an illegitimate Ponzi scheme, despite more or less being told by Bernie Madoff himself, "I am running an illegitimate Ponzi scheme." It went after David Einhorn, when it should have been going after Allied Capital, the company the hedge fund manager told them was committing fraud. Its proposal for stepping up investigators' games was to start a Fraud College.* Until recently, it employed individuals in the office responsible for "ensuring exchanges follow guidelines audits, security, and capacity" who had "little or no experience with exchange technical matters." At this point, there have been so many stories about the SEC getting things wrong that the default is to assume it fucked up, even when that is not actually the case. What's more, even when Team Schapiro is on top of its game, resources are so strained that many scams that should be caught fall through the cracks. So you can maybe understand why a group of "high school buddies," along with a few other guys they picked up along the way, who were engaging in securities fraud, weren't too worried about getting caught.