and NBC News
Most notably recognized as the national coffee giant, Starbucks, and an explosion of Silicon Valley companies, Seattle has also been the home to some significant financial frauds.
It has been recently reported that Donald "Ski" Johnson has been charged with developing several schemes over the years to steal from charity fundraisers and events. In a widely reported and televised case, Frederick Darren Berg was sentenced to 18 years in prison for defrauding hundreds of investors of more than $100 million through the Meridian Mortgage investment funds he ran for roughly over a decade. This is the largest case of fraud in Washington State but not the only reported instance of securities fraud.
Digi Outdoor Media Inc., a Seattle based outdoor advertising services company, its former CEO Donald MacCord Jr. as well as its CFO Shannon Doyle was charged with scheming millions out of retail investors. MacCord Jr. as well as Doyle supposedly accumulated over $4.50 million in promissory notes through falsely convincing investors that the funds would be used for assembling signs in the Washington D.C area. Allegedly those funds were instead used for various personal expenses. According to the SEC, MacCord and Doyle reportedly concealed their scheme through fabricating loans and invoices to fake a paper trail for the invested capital. After being conned into reworking their alleged promissory notes for common stock, the investors specifically in retail were defrauded of millions on account of counterfeit leases to the auditors as well as invalid financial statements. The company is purportedly being charged with theft of $2.3 million from these investors. The complaint, according to the SEC, charges MacCord, Doyle, and Digi with breaching the anti-fraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. MacCord and Doyle are also reportedly charged with violations of Exchange Act Rule 13b2-2. The SEC is pursuing disgorgement for all tainted securities gains as well as injunctions and penalties. MacCord Jr., as well as Doyle, are also facing criminal charges for allegedly falsifying records, writings, and holding up federal procedures.
In 2015, a hedge fund based in Seattle was in hot water for pocketing fees and other financial profit fraudulently. Summit Asset Strategies Investment Management is an investment advisory firm that allegedly accrued unmerited fees by exaggerating the value of the investors' securities. The company reportedly inflated the investments under the guise of a private fund that the company oversaw so that they could accumulate management fees that were not justified. According to reports, the company raked in over $900,000 in groundless fees. The auditors of this Bellevue based company were also in hot water for purportedly conducting an inefficient audit which allowed the CEO of the firm as well as the company itself to illegally profit off of deceptive financial information. Chris Yoo, the CEO, dishonestly alleged that his company’s accounts have capital amounting to over $2,000,000 when reportedly it was actually below $200,000. Yoo and the company reportedly settled these charges that erupted from the Summit Stable Value Fund for over $1,000,000. Also, Yoo and Summit Asset Strategies Investment Management reportedly accepted settlement charges that involved not mentioning to various investors that their large sums in fees would be taken for advising them to finance in the funds which subsequently bilked them out of thousands.
The U.S District Court of Washington allegedly ordered Yoo and the company to restore all unearned profit from the fund that was decided by a proper and comprehensive audit, including a return of any tainted profits from miscalculated inflations to investment values as well as falsely added fees. Yoo nor Summit Asset Strategies Investment Management accepted or denied the charges but agreed to settlements that prohibited them from committing fraud again. Their fraud allegedly cost Yoo and Summit Asset Strategies over $1,000,000 and $200,000 respectively alongside Yoo being restricted from working within the securities industry again.
These cases show the various ways in which investors and everyday individuals can be victims of fraud. For over two decades, Malecki Law has been serving both Fortune 500 companies, whistleblowers, and everyday citizens through securities fraud. Through working effectively and efficiently bringing favorable results for a diverse clientele, Malecki Law has developed vast experience in commercial litigation, appeals, arbitration, unsuitability claims as well as regulatory proceedings, just to mention a few. Jenice Malecki is repeatedly cited in various prestigious publications The Wall Street Journal, The New York Times, Forbes and Newsweek and her dedication to the field reinforce her vigor to bring a lasting impact in securities law and its evolving regulations.
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