Nebraska Securities Fraud Lawyers

The Nebraska Bureau of Securities regulates and enforces laws regarding the sale of securities and the securities industry in Nebraska. Given the continued prevalence of Ponzi schemes, the regulator issued a consumer alert to Nebraska investors to be on the lookout for affinity frauds, which it described as follows:

Affinity fraud occurs when an investment promoter plays upon the fact that they share something in common with a potential investor – such as attending the same place of worship, being a member of the same race or ethnic group, or working in the same profession. Investors are more likely to trust this type of salesperson. But after lowering their guard and giving their money to a promoter, they can end up losing their entire investment.

Affinity frauds are often what lures investors into a Ponzi scheme, which is when a scam artist promises high returns on an investment, and can usually deliver those returns with the money put in by new investors. Malecki Law is a securities fraud law firm that has extensive experience investigating and litigating against perpetrators and enablers of investment scams and financial frauds. Malecki Law has recovered tens of millions of dollars for seniors and other retail investors caught up in Ponzi schemes perpetrated across the U.S. and abroad.

Positive testimonials from early investors of a Ponzi scheme is what usually helps to bring in additional investors, and it is those later investors who often stand to lose everything they put in. Moreover, Ponzi scheme perpetrators are often trusted persons in the community, like financial advisors, employed with trusted financial firms — think Bernie Madoff. Malecki Law’s securities fraud attorneys know first-hand that such persons are often able to continue their Ponzi schemes undetected for years or decades because they continually have access to fertile ground of new customers bringing their accounts to the firm — investors whom the adviser will at some point solicit for new investment money to be invested away from the firm. It is not atypical for the scammer to then issue fake investment statements to the customer, where the “progress” of those fictitious investments will appear separate from one’s regular monthly statements that would normally be received directly from the firm.

In Nebraska’s biggest ever Ponzi scheme, Craig Harbaugh, a sheriff’s deputy — i.e., a trusted member of the community — pleaded guilty to fraud in order to have 12 other charges dropped against him. His scheme defrauded friends, neighbors, and banks out of $11 million. Going back to 2014, the scheme involved Mr. Harbaugh faking that he had contracts to provide state patrols with weapons. Mr. Harbaugh, in fact, had a legitimate business called Tactical Solutions Gear, which was a firearms store, and is what he used to suggest (falsely) as how he received these weapons contracts, including that he had contract for rifles with the U.S. Department of Defense. One couple who was saving for retirement gave Mr. Harbaugh $1.3 million. He also received $6 million from Great Western Bank after reporting fake contracts and showing up to his bank appointments in uniform. But this was a classic Ponzi scheme. There were no contracts and there were no real investments.

Malecki Law’s securities fraud lawyers have recovered tens of millions for investors in numerous Ponzi scheme cases, including recoveries and settlements involving:

• $7.2 million from a major brokerage firm that had a duty to supervise lost funds in a real estate-based Ponzi scheme in the Bronx;
• $3.8 million in the Biscayne Capital Ponzi and theft case on behalf of Latin American investors who had their money at a U.S. brokerage firm;
• Over $1.5 million in settlements for retired investors in Florida, Massachusetts, and New Jersey from a small brokerage firm that failed to supervise one of its financial advisers;
• Over $3.9 million in a settlement for upstate New Yorkers defrauded in a Ponzi scheme where they thought their funds were safe at a major U.S. brokerage firm; and
• More.

Malecki Law’s securities fraud lawyers work with investors and retirees to recover investment losses in fraud and Ponzi schemes, as well as lost funds due to other financial misconduct. Our team of skilled practitioners have handled numerous securities litigations, arbitrations, and mediation cases with record settlements and awards. We also have a keen eye for fraudulent practices designed to skirt compliance and supervisory controls of financial firms who have a duty to supervise customer accounts and advisers, as well as to be on the alert for unusual activity involving customer funds. As a group, Nebraska seniors are especially vulnerable to affinity fraud and other financial fraud schemes because of the prevalence of diminished capacity in this population. If you or anyone you know has been solicited with questionable schemes or have questions about possible suspicious activity in your accounts, you need to contact a securities fraud law firm, such as Malecki Law. You can schedule a free initial consultation with Malecki Law, by calling (212) 943-1233, or emailing jenice@maleckilaw.com.