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Investment Fraud: Madoff Ponzi Scam Victims Receive Another $695M, Ex-Royal Alliance Associates Investment Adviser Pleads Guilty To Stealing $3M From Customers, and MoneyGram Investor Proposes Lawsuit After $125M Settlement

DOJ Distributes Another $695M to Over 27,000 Madoff Ponzi Scam Victims
A decade on the heels of Bernard Madoff’s arrest for running a multi-billion dollar Ponzi scam, the US Justice Department has distributed another $695M to over 27,000 of his victims. This is the DOJ’s third payment to investors of the fraud, bringing the total amount issued to nearly $2B.
In a statement, the DOJ said that it plans to restore more than $4B in total to those who sustained losses in the scheme that went on for decades, harming investors from all walks of life, including:

  • Retail investors
  • Celebrities and other famous folk
  • Other high-net worth individual investors
  • Charitable organizations
  • Retirement funds
  • Pension funds
  • Other types of investors

The Madoff Ponzi Scam is believed to have defrauded investors of almost $65B in the largest ponzi fraud to date.
In 2009, Madoff, who had operated the Bernard L. Madoff Investment Securities LLC, pleaded guilty to multiple federal felonies and was later sentenced to 150 years in prison.
Victims in 136 countries have submitted over 65,000 claims for compensation to the Madoff Victim Fund.
Investment Adviser Pleads Guilty to Stealing Over $3M From Clients
Massachusetts-based investment adviser Kimberly Kitts has pleaded guilty to investment adviser fraud, aggravated identity theft, and wire fraud related to the over $3M that she stole from the retirement and investment accounts of clients. Meantime, the US Securities and Exchange Commission’s parallel enforcement action against Kitts is still pending.
According to the regulator’s complaint, the former Royal Alliance Associates investment adviser forged clients’ signatures and withdrew funds from their investment and variable annuity accounts, collectively making 82 unauthorized withdrawals over six years. She also allegedly falsely represented that she was a CPA and had a PhD in economics. The SEC contends that Kitts continued to commit fraud until last year.
According to her BrokerCheck record, the Financial Industry Regulatory Authority has barred Kitts from acting as a broker or associating with a brokerage firm. Also last year, Kitts settled a customer dispute alleging misappropriation of funds for almost $2M.
MoneyGram Investor Sues After $125M Settlement Dropped Stock’s Price
Khong Meng Chew, a MoneyGram International investor, is suing the Texas-based company after it reached a $125M settlement with the Federal Trade Commission that caused its stock price, which Chew contends was already overinflated, to drop significantly. He recently filed a proposed class action securities case in federal court in Illinois.
Chew contends that the money stock transfer company lied about anti-fraud compliance, which resulted in the share price’s inflation and subsequent 49% plunge to $2.20/share after the FTC announced the settlement. The deal included $125M in penalties for not just weak anti-money laundering and anti-fraud programs, but also a violation of a 2009 order to perform reviews of possibly suspect and fraudulent activities by its agents.
The settlement also resolves allegations by the DOJ that MoneyGram violated a deferred prosecution deal from 2012. That year, the money stock transfer company consented to pay $100M and promised to put into place anti-money laundering and anti-fraud programs in return for avoiding prosecution in a felony criminal probe. Tens of thousands of victims whom MoneyGram agents deceived in different fraudulent scams were compensated.
Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) represents investors nationwide in recouping their investor fraud losses. Contact SSEK Law Firm and ask for your free, no obligation case consultation so that we can help you explore your legal options.
Read the SEC Complaint in the Kitts Case (PDF)

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