Boston Accident Injury Lawyer Blog

September 9, 2009 - Philip G. Barry and his business entities Leverage Group, Leverage Option Management Co., Inc., and North American Financial Services were sued yesterday by the Securities and Exchange Commission. The SEC has charged Barry with securities fraud alleging that he operated a Ponzi scheme, which commenced in 1978, involved approximately 800 investors with over $40 million in losses.

The fraudulent investment scam operated out of Barry's Brooklyn, New York offices. The alleged victims include many residents and friends from his own Bay Ridge neighborhood, where he grew up and still resides.

According to the SEC's complaint, Barry lured investors with promises of returns as high as 21% on investments in options and other securities. However, Barry apparently used investor funds for other investments including real estate, a mail order pornography business, and other personal uses. Allegedly, Barry ceased making investments in options and other securities as early as 1999.

Continue reading "SEC sues Philip G. Barry and Leverage Group Companies Alleging Illegal Investment Scam" »

September 8, 2009 - Sidney S. Hanson and Charlotte M. Hanson and twelve fraudulent business entities, including Queen Shoals, LLC, have been charged with securities fraud by the Securities & Exchange Commission. The couple had been running a scam promising high interest returns on "private" loans. The SEC announced today that the United States District Court for the Western District of North Carolina had entered a September 3, 2009 Order freezing the Hanson's assets as well as the assets of all twelve entities they controlled.

In May, 2009, over $2 million in gold and silver bullion and coins had been seized from the Charlotte, North Carolina office of Queen Shoals Investments. Also, on July 28th, 2009, Sidney Hanson pleaded guilty to securities fraud, mail fraud, and money laundering. He has not been sentenced, but faces up to 20 years of imprisonment for each charge in addition to millions of dollars in fines.

The Hansons, through a network of 45 salespeople, were able to convince approximately 500 people throughout the country to invest $32.5 million from 2006 to 2009. Characterized as "private loan agreements," the Hansons offered interest rates ranging from 8% to 30%, claiming that money was invested in low-risk treasury bills, precious metals, and foreign currency. However, a majority of clients' money was used for high-risk private investments. None of the money was actually invested in treasury bills.

Continue reading "SEC Sues Sidney & Charlotte Hanson: Perpetrators of Queen Shoals Investment Ponzi Scheme" »

Massachusetts Investment Fraud Lawyer, Keith L. Miller, reviews the latest court filings by the Receiver in the  SEC vs. Millennium Bank action now pending in the U.S. District Court for the Northern District of Texas:

It appears that the Millennium Bank Receiver has begun the process of liquidating assets seized as a part of the SEC action against Millennium Bank, its affiliates, and the individuals who helped perpetrate this multi-million dollar ponzi scheme. On May 22, 2009, a set of motions were filed in the Northern Texas U.S. District Court seeking specific authority to sell off a range of personal property items. The Court has yet to rule on the motions

For example, one motion has been filed, seeking court authority to sell off the infamous  Millennium jet airplane, which was seen and photographed in 2008 and 2009 in places as far and wide ranging as Caracas, Venezuela, Geneva, Switzerland, and Lyon, France. The plane flies no more and is presently stored and maintained in a hangar in Atlanta, Georgia.

The aircraft apparently has an appraisal of $5.6 million, but the Sovereign Bank has a secured lien of $4.3 million and the Receiver seeks the Court's authority to sell it for a price not less than $3.7 million, which would still leave a debt owed to the bank. Thus, the sale of this valuable asset will bring no money to the Receiver's estate, or end up reimbursing any monies to swindled investors.

Jewelry, cars and wine collections and a home owned by Jackie Hoegel are in the list of items, which the Receiver seeks to liquidate, some requested to be sold on Ebay. However, it seems unlikely that this collection of assets, and the hundreds of thousands, which might come in, will even put a small dent on the hundreds of millions taken as the result of this fraud.

Continue reading "Millennium Bank Receiver Seeks to Sell Assets of Perpetrators" »

A closer look at the Millennium Bank Ponzi Scheme: Boston trial lawyer, Keith L. Miller, takes a look at the facts involving Caribbean based Millenium Bank, which operated out of offices in Napa, California until closed by the SEC in March, 2009.

 

William J. Wise had a problem. In late 2003, his fledgling bank in tiny St. Vincent and Grenadines (SVG) was not generating sufficient income from investor deposits to support either the bank's overhead or his own extravagant personal lifestyle. The island's banking regulators had moved to suspend Millennium's license to operate, and Wise was scrambling.

After filing an appeal of the bank's suspension order, Wise appears to have struck a deal with the SVG banking authority, which gave the bank new life. The bank would re-capitalize and an outside controller would be put in place to oversee the Millennium's operations. Many believe that the SVG banking authority made the deal only after Mr. Wise had made donations, some of it cash, to select members of the ruling party on the island.

At this point Wise needed a new strategy. And indeed it appears he came up with a new "business plan". SVG would remain the titular base of the bank's operations, but banking activity, and in particular the movement of money would go elsewhere, avoiding the watchful eye of the controller and the SVG authorities. Wise would move operations to Napa, California, and create fictitious Limited Liability Companies (LLC's) in Las Vegas, Nevada, based loosely on Millennium's purported Swiss parent, United Trust of Switzerland, in order to open bank accounts there. 

To promote new business, he would combine an aggressive internet and print advertising campaign with an irresistible banking product, "safe" high interest Certificates of Deposit ("CDs"), which no American bank could match or even approach.

The Millennium line of CD products could easily be found on a newly created interactive website, whose sponsored links began to regularly and prominently appear on popular search engines such as Google and Yahoo. Potential customers would type in keywords seeking "high interest CDs", and Millennium's three line ad would appear with a link to the bank website.

 Toll free numbers were provided on the Website, which directed calls to the Napa offices, and apparently the calls started coming in. Reluctant callers were referred to several U.S. based Milllennium Bank representatives, whose job was to reassure these potential investors and close new business, earning commissions on the gross amount of the monies deposited. These "finders" were authorized and instructed to develop personal relationships with clients, often traveling to have face to face meetings. Customers were assured that their money was safe, as the representatives advertised that they too were investors.

Continue reading "Millennium Bank Ponzi Scheme: "Show me the Money, Willie"" »

Boston commercial and personal injury trial Lawyer, Keith L. Miller, takes a look at Caribbean based Millenium Bank, the latest banking Ponzi Scheme to have bilked U.S. and other investors seeking big returns on their investment monies.

On March 27, 2009, St. Vincent and the Grenadines (SVG), by its International Financial Service Authority (IFSA), appointed KPMG-International to assume control over the affairs of Millennium Bank ("Millennium") in order "to preserve records and assets". The IFSA was acting on information obtained from the U.S. Securities and Exchange Commission (SEC), after the SEC had issued a civil complaint against Millennium Bank, a number of affiliates and individual participants, including William J. Wise, Kristi Hoegel and Jackie Hoegel.

This, however, was not the first time that the IFSA had taken action gainst Millennium. In fact, in 2004, the IFSA had legally moved to revoke Millennium's license, a decision the SVG government later reversed, allegedly after the prime minister of SVA intervened on its behalf. Court documents indicate that William Wise, representing himself as a duly licensed Canadian legal counsel appealed the suspension, and ultimately prevailed.

This is when things ostensibly turned for the better for the once fledgling offshore bank. Undertaking an aggressive international marketing campaign led by Wise, deposits grew dramatically based on the promise of high interest CDs, rates which no U.S. bank could even come close to matching. It appears that the plan was successful as deposits grew in dramatic fashion.

Unfortunately for investors, who believed they were buying legitimate certificate of deposits in exchange for their cash, it appears that the bulk of the funds were being diverted to accounts held by Wise, principally at Washington Mutual Bank in Las Vegas, Nevada, and used for the personal needs and extravagances of these individuals.

Continue reading "Millennium Bank Scam: William Wise successfully reversed the St. Vincent and Grenadine Banking Authority's attempt to revoke its License in 2004" »

Boston commercial and personal injury trial Lawyer, Keith L. Miller, takes a look at Caribbean based Millenium Bank, the latest banking Ponzi Scheme to have bilked U.S. and other investors seeking big returns on their investment monies.

On March 25, 2009 the United States Securities Exchange Commission commenced a civil action in United States District Court in Northern Texas against the The Millennium Bank, and it principals, alleging violations of the securities laws of the U.S. According to most recent information from  the SEC, it appears that there are now over 1000 investors who placed at in excess of  $100 million dollars in the bank and its affiliates, hoping to secure high interest rate CDs, rates at two to three times that of the highest rates available in the U.S.

Information is now emerging that Millennium nurtured customers with an internet marketing plan targeted at individuals shopping for the best returns on term Certificates of Deposit. One was www.Bankrate.com, which is a website widely used by investors to determine the prevailing rates for investment and mortgage products in the U.S. Millennium regularly ran banner ads on this site. Victims also report that google "sponsored ads" regularly appeared when the Google seach engine was employed in searches for "high interest CDs"

According to the SEC complaint, Millennium Bank also ran advertisements of its high-yield no-risk CDs in print magazines and their Internet counterparts, including The Wealth Collection, Wealth Management Agenda and Haute Living. For instance, Millennium ran a promotional article in the March 2008 edition of The Wealth Collection, a bi-annual magazine that touts the latest in "luxury lifestyle trends, investment opportunities and wealth management".

Continue reading "Millennium Bank Fraud: Perpetrators Aggressively Used Internet and Print Media to Advertise High Interest CDs: Should publishers have known something was amiss?" »

Boston commercial and personal injury trial Lawyer, Keith L. Miller, takes a look at Caribbean based Millenium Bank, the latest banking Ponzi Scheme to have bilked U.S. and other investors seeking big returns on their investment monies.

The Millenium Bank and United Bank of Switzerland have been marketing and offering highly attractive CD rates for several years now, advertising in glossy high end magazines as well as online, and it now appears that those interest rates that seemed too good to be true indeed were.

On March 25, 2009 the Securities Exchange Commission commenced a an emergency action in the United States District Court for the Northern District of Texas seeking to enjoin Millenium and its affiliates from carrying on any future business and taking steps to recover assets of the companies and the principals who ran them, who were located in California and North Carolina.

The SEC Complaint alleges that Defendants William J. Wise, 58, of Raleigh, North Carolina and the Caribbean, and Kristi M. Hoegel, 34, of Napa, California, orchestrated the scheme through companies they control, including co-defendants Millennium Bank of St. Vincent and the Grenadines, its Geneva, Switzerland-based parent, United Trust of Switzerland S.A., and its U.S.-based affiliates, UT of S, LLC and Millennium Financial Group.

Continue reading "Millennium Bank Ponzi Scheme - Offshore High Interest CD's seemed too Good to be True and Were, Says SEC " »

Boston Accident Lawyer, Keith L. Miller, is investigating potential claims on behalf of individuals who were victims of the Bernard Madoff Ponzi scheme. Those who had direct investments in Bernard L. Madoff Securities, LLC are limited to the remedies offered in the bankruptcy proceeding now pending in New York. Claims for reimbursement of monies actually invested in the fund up to $500,000 can be recovered through the Securities Investment Protection Corporation ("SIPC"). However, there is an absolute filing deadline of July 2, 2009. 

For those who did not invest directly with Madoff, there may be other potential remedies and sources of recovery available. Civil actions have been commenced against so called "feeder funds", who filtered investment to Madoff in exchange for lucrative management fees. Such suits are now pending in state court in Connecticut, Florida, California and Arizona. The list of Defendants includes Tremont Capital Management, Inc., Fairfield Greenwich Group and Boston based Cohmad. Securities Corporation. The principals of these feeder funds have been sued as well and efforts are being made to tie up assets in the event of an eventual recovery.

 

In essence, the suits allege that these hedge funds failed to perform any meaningful investigation, due diligence or oversight of the Madoff fund, which reported consistent double digit gains year after year, notwithstanding questions about the trading strategies allegedly employed or the fact that Madoff enforced a veil of secrecy over his actual trading activity. In fact, it appears that there was no such strategy whatsoever.

 

The accounting firms who perform regular audits of these feeder funds have not been spared, having also been named as defendants in these civil actions. It appears that this is just the beginning and the dragnet will widen in an attempt to uncover insurance monies, which might be available to aid in the recovery of the millions in lost investments.

Several states have also joined in, filing administrative or other proceedings on behalf of defrauded citizens. In particular, the Massahusetts Secretary of State has filed administrative proceedings against Cohmad Securities and Fairfield Greenwich Group, its principals and affiliates. The attorney general of New York has also filed an action against J. Ezra Merkin and his Ascot Funds, alleging that he also clandestinely invested client funds with Madoff, while purporting to be trading on their behalf himself.

Continue reading "Boston Attorney Investigates Potential Actions on Behalf of Madoff Victims" »

This is Part Two of a two part Blogpost where Boston Personal Injury Lawyer, Keith L. Miller, reviews and analyzes a recent First Circuit U.S. Court of Appeals ruling, in which an insurer sought a declaration that there was no coverage for an personal injuries as the result of an accident involving a contract worker who severed his arm in a wool picking machine. The worker had sued the Massachusetts recycling company where he had been working for a number of months. (Click here to view Part One)

PART TWO :  THE COURT ANALYZES DISTINCTION BETWEEN "LEASED WORKER" AND "TEMPORARY WORKER" IN POLICY TO DETERMINE COVERAGE

Having reviewed the underlying facts of the case, the Court went on to analyze the express language of the insurance policy, attempting to discern whether the lower court had correctly determined that the the worker's contract was indefinite and therefore not temporary, which was its basis for ruling that there was no coverage for the accident.

In the policy a leased worker was defined as a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business. A temporary worker was defined as a person who is furnished to you to substitute for a permanent "employee" on leave or to meet seasonal or short-term workload conditions.

The question then for the Court of Appeals was whether Torres was a "leased worker," and thus excluded from coverage; or a "temporary worker," thus obligating Scottsdale to provide a defense and coverage in Torres's lawsuit. The district court had determined that Torres was not a temporary worker on the basis that the term "short term" worker, though not defined in the policy, suggested a brief and relatively finite period of time.

Based on deposition testimony of CTC's president that Torres was to stay at CTC "for as long as he was needed", and a Venturi manager's testimony that Torres was assigned to CTC "indefinitely," the lower court determined  that "indefinite" and "short-term" were mutually exclusive, that Torres' stay with CTC was indefinite and that he was therefore not a "temporary worker". Therefore his claim was not covered under the policy.

Continue reading "Personal Injuries Suffered by Contract Worker May be Recoverable from Manufacturing Company where he Worked" »

(This Boston Accident and Injury Lawyer Blogpost is the Last in a Three Part Analysis of a Recent U.S. Appeals Court Ruling involving defamation, public officials and the news media Click here to view Part One and Click Here to view Part Two)

PART THREE : THE COURT RULES ON THE DEFAMATORY BROADCAST

As stated previously, under Maine common law, a plaintiff alleging defamation must show a false and defamatory statement published without privilege to a third party resulting in harm to the plaintiff.

In the lower court proceeding, the defendants had contended that the various statements made on the show and attributed to Levesque either were not defamatory or, because Levesque had stipulated that he was a public official, it could not be shown that they were made with actual malice. The district court held that the statements were protected on multiple grounds. It found the "hate crime" comments substantially true and mention of the "anti-ham response plan" protected as "rhetorical hyperbole".

However, the lower court determined that the ham sandwich and the "ham is not a toy" comments were materially false, reasonably susceptible of a defamatory meaning, and highly offensive. Yet the court believed that Levesque had failed to demonstrate that the defendants had acted with constitutional malice when they made the defamatory comments.

The Court of Appeals agreed, finding that most, but not all of the statements attributed to the Plaintiff were largely true, although laced with "imaginative expression" or "rhetorical hyperbole", which it concluded were protected speech.

Continue reading "No Recovery for Personal Injuries where Court Sees Defamation but No Malice" »

(This BlogPost written by Boston Personal Injury Attorney, Keith L. Miller, is the Second in a Three Part Analysis of a Recent U.S. Appeals Court Ruling involving defamation, public officials and the news media Click here to view Part One)

PART TWO - FOX & FRIENDS READS AND REACTS

On April 24, a line producer for "Fox & Friends" discovered the Plagman article. The Fox News Research Department read the Plagman article and conducted further research, and discovered additional information, including the original Lewiston Sun Journal story. The Plagman articles and other research materials were delivered to the show's Doocy and Kilmeade. Doocy used Google News to conduct additional research, also found the Plagman article and Sun Journal stories, and decided to use the story as part of its show.

During the three-hour show, Doocy and Kilmeade repeatedly raised the April 11 incident, ridiculed Levesque, and blamed him for the handling of the incident. They reported as true several of the fabricated quotations that Plagman attributed to Levesque including the fact that the student had placed a ham sandwich on the table, the "ham is not a toy" statement and also attributed to Levesque a false statement comparing the incident to Mogadishu. Throughout the show, Doocy and Kilmeade repeated these falsified quotations.

After the April 11 incident, Levesque had received derogatory and threatening emails and phone calls from persons who learned about the incident and the student's suspension. Of seventy-five emails submitted to the district court, sixty-nine were written after the "Fox & Friends" cablecast. As the result of these incidents, he elected to bring an action for defamation.

Continue reading ""Negligent" vs. "Malicious" Reporting: When is the Line Crossed? Boston Injury Lawyer Discusses Issue" »

(This Blogpost is the First in a Three Part Series by Boston Injury Lawyer, Keith L. Miller, who analyzes an interesting recent U.S. First Circuit Court of Appeals Ruling involving defamation, public officials and the news media. Click Here to view Part Two)

PART ONE - THE SCHOOL HATE CRIME INCIDENT MAKES LOCAL NEWS  

The U.S. District Court of Massachusetts has affirmed a lower Court's summary judgment ruling that Fox News Network, LLC ("Fox"), and "Fox and Friends" television personalities, Steve Doocy and Brian Kilmeade, did not defame the Superintendent of the Lewiston, Maine public schools during a morning show, which ran in April, 2007.

The story involves an incident, which took place on April 11, 2007, when a student at the Lewiston Middle School placed a bag containing leftover ham on the cafeteria table where Somali Muslim students were sitting for lunch. The Somali students reported the incident, which resulted in an investigation and suspension of the offending students. The incident was classified as a "Hate Crime/Bias" in the school's computer system, and a police report was filed characterizing the incident as "Crime: Harassment/Hate Bias."

The Plaintiff, Leon Levesque, was the superintendent of the Lewiston School System. He was informed of the suspension and endorsed the decision. The following week, a reporter for the Lewiston Sun Journal, interviewed Levesque for an article she intended to write about the incident, which was published on April 19, 2007. The article included quotations from Levesque, describing the offending student's conduct as "a hate incident".
 

Continue reading "Boston Accident Attorney Discusses Case involving Alleged Defamation by "Fox & Friends" Hosts" »

This Blogpost by Boston Personal Injury and Accident Laywer, Keith L. Miller, anaylzes a battle between insurers over costs of construction accident.

Following a construction site accident where an insurer of a subcontractor refused to defend the general contractor, who then successfully filed a declaratory action to force the subcontractor's insurer to share in the defense and settlement costs of the action, the Massachusetts Supreme Judicial Court has refused to permit the general's insurer to recover the attorney's fees incurred in successfully bringing its declaratory judgment action.
 
In January of 2001 a worker fell and suffered injuries while employed on a project in Uxbridge, Massachusetts. A year later he brought a negligence action against the general contractor and another subcontractor on the project. The general contractor was insured under a general liability insurance policy with Zurich American Insurance Company (Zurich). The subcontractor also had a policy issued by Worcester Insurance Company (Worcester), and was required by contract to list the general as an additional insured.

Upon filing of the complaint, the general called upon the subcontractor and Worcester to defend. They refused and Zurich defended. Zurich also brought a declaratory judgment action in the general's name, seeking indemnification from the subcontractor and Worcester for their refusal to defend. Ultimately, the negligence case settled, with the general contributing $75,000 to the settlement.

The general contractor prevailed in the declaratory judgment action and Worcester was ordered to pay one half of both the settlement amount and the costs of defending the negligence action. However, the general contractor also sought an award of the attorney's fees incurred to file and prevail in the declaratory judgment action, even though it was evident that it was Zurich who had paid the fees. The Superior Court judge denied the request and the general contractor appealed.

The SJC affirmed and discussed at length its reasoning. Massachusetts generally follows the customary approach to the award of attorney's fees in civil litigation, known as the "American Rule". In the absence of some statute or other rule, successful litigants must nonetheless pay their own attorney's fees and expenses.

Continue reading "Personal Injury Insurer for Construction Accident Victim Cannot Recover Attorney's Fees for Winning Declaratory Judgment Action" »

 

Internal documents prepared by a corporation, which analyze the potential success of IRS challenges to its tax returns, is protected work product and not discoverable by the IRS as part of a subsequent investigative subpoena, according to the U.S. First Circuit Court of Appeals.

In this case, Textron, Inc. and its various subsidiaries had prepared internal tax accrual workpapers, which listed positions the company was taking on its 2001 IRS returns, and which might require the company to set aside a reserve. These positions were then analyzed by Textron attorneys who estimated a percentage likelihood that the position would not prevail if challenged by the IRS. Textron had also produced these workpapers to its independent auditor, Ernst & Young.

The IRS had issued an administrative summons to obtain the documents, which Textron refused to produce, claiming various legal defenses. The IRS sued to enforce the subpoena. After an evidentiary hearing, the district court for the District of Rhode Island ruled that the documents were protected as work-product, and also found that Textron's disclosure to Ernst & Young did not constitute a waiver (although it did rule that the disclosure constituted a waiver of any attorney-client privilege claimed).

The IRS appealed. The First Circuit agreed with the District Court, finding that the documents were produced "because of" potential litigation. While not all dealings with the IRS during an audit could be construed as comercial litigation, "the resolution of disputes through adversary administrative processes, including proceedings before the IRS Appeals Board" fell under the definition of litigation.

The IRS had argued that preparation of tax returns was not meant to be an adversary process, but a self-reporting exercise, which relied on the good faith of taxpayers, and that it was entitled to verify such self-assessment by reviewing any relevant information.

Continue reading "Company's Internal Analysis of Potential IRS challenges is Protected Work Product says First Circuit Court of Appeals" »

The Massachusetts Appeals Court has determined that a bank, acting as a fiduciary under a family trust, was liable for ignoring the provisions in a lease, which gave the lessee of a Cape Cod property used as a tree stump dump a right of first refusal with respect to purchase of the property.

The Plaintiff in this case operated a stump dump on property in Chatham owned by the Defendant, Fleet Bank, as Trustee of a family trust. It had a series of leases with the owner, which contained renewal options as well as a right of first refusal in the event of a bona fide offer of purchase from an outside party. The plaintiff brought suit after the subject property was transferred to the beneficiaries and then sold to a third-party purchaser. At the time of sale, the plaintiff's leases on the property had not been renewed, but verbal extensions had been granted while negotiations were ongoing.

The plaintiff alleged in its complaints that both Fleet and the beneficiaries breached the implied covenant of good faith and fair dealing with regard to lease renewal option and the right of first refusal contained in the leases; and that both constituted unfair and deceptive acts or practices, in violation of G.L. c. 93A.
The Plaintiffs had been involved in extended negotiations for a lease renewal under the option granted in the expiring leases, and also made an offer to purchase the property, which was held up due to issues surrounding the title. During the negotiations, the oldest beneficiary under the trust died, which caused the trust assets to be distributed to the remaining beneficiaries.

During this extended period, the owners received another offer to purchase from a third party, and ultimately, title was transferred to the beneficiaries and then to the new offeror. The Plaintiffs were aware of the offer, and through counsel, sought to learn the terms so that they could exercise their right of first refusal. Their requests were ignored by Fleet and the beneficiaries.

Continue reading "Bank is Liable for for Conduct as Fiduciary in Sale of Cape Cod Property which Ignored Lessee's Right of First Refusal says Massachusetts Appeals Court" »