Two executives of Bear Stearns, a global investment bank and brokerage firm, ran hedge funds that bet heavily on the shaky subprime mortgage market. When the company collapsed, the two were accused of criminal fraud in an alleged scheme that cost investors $1.6 billion.
On Tuesday, the executives were found not guilty. The verdict is expected to have repercussions for other criminal cases being pursued by the Justice Department relating to America’s financial meltdown.
Fraud is extremely difficult to prove. That’s a big reason why those of us who have been defrauded by sociopaths have such a small chance of getting law enforcement to take action. Prosecutors know that fraud is difficult to prove, so rather than take a chance at losing in court, and putting a ding in their won-lost record, they often just refuse to take on the case.
But sometimes justice prevails. A Lovefraud reader sent me an e-mail about a recent settlement that the Federal Trade Commission (FTC) extracted from the MoneyGram company.
MoneyGram is the second-largest money transfer service in the U.S. Between 2004 and 2008, the FTC charged, MoneyGram agents helped fraudulent telemarketers and other con artists trick U.S. consumers into wiring more than $84 million—money that was never seen again. The consumers were falsely told they won the lottery, were hired for a secret shopper program, or were guaranteed loans.
MoneyGram will pay $18 million in consumer redress to settle FTC charges that it allowed its money transfer system to be used for fraud.
The scams are described in detail on the FTC’s website. If you were swindled by one of them, you may be eligible for redress. For information, call 202-326-3755.
The FTC has posted a new consumer alert: Money Transfers Can Be Risky Business. Here are the highlights:
Don’t wire money to:
- someone you don’t know, in the U.S. or in a foreign country;
- someone claiming to be a relative in the midst of a crisis and who wants to keep the request for money a secret;
- someone who says a money transfer is the only form of payment that’s acceptable; or
- someone who asks you to deposit a check and send some of the money back.
It’s good to see at least some movement against fraud. I hope to see more.