Elder Financial Fraud

Joseph Francis Bartholomew is charged with 30 felony counts related to his alleged operation of an $11 million Ponzi scheme. The 75-year-old former licensed insurance agent has been called Orange County, Ca.’s Bernard Madoff, after the financier who ran a multibillion-dollar Ponzi scam for decades. Bartholomew allegedly bilked over 27 investors.

According to the California State Department of Insurance, he used his insurance business, MBP Insurance Services, to get people to trust him. Those involved reportedly included a number of family trusts, a church, an ex-baseball player, and senior citizens.

The Orange County Register said that Bartholomew made false promises to investors telling them that they could earn fast returns of up to 40%. For example, he is accused of offering one investor an unsecured investment while making the claim that the customer would get $10,000 a month if he invested $500,000. Bartholomew allegedly gave fraudulent assurances that the investment on third party life insurance policies was a legitimate one. He also made other misrepresentations, including claiming that over the last decade there had been no problems getting payments to investors.

The Commodity Futures Trading Commission has given its first whistleblower award in the wake of the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act and its bounty program. The regulator awarded $240,000 to a person who voluntarily gave information that allowed the CFTC to file an enforcement action resulting in sanctions and a judgment of more than $1 million.

Under the Dodd-Frank bounty program, whistleblowers of successful claims may be entitled to 10-30% of what is recovered. Prior to this whistleblower award, the CFTC had denied 25 award claims because: the persons provided the original data prior to Dodd-Frank’s passage; they failed to submit necessary paperwork, they gave over the information because the CFTC asked for it and not voluntarily; or the information they provided did not compel the regulator to open or widen a probe or contribute much to any successful Commission matter.

According to business writer William D. Cohan in his article on Wall Street whistleblowers in FT Magazine, whistleblowing—especially on Wall Street—requires great courage. Many find that traders, bankers and executives who raise questions about securities fraud end up losing their job or find themselves the victim of some other type of retaliation.

Articles Tagged with Elder Financial Fraud

Ex-California Insurer Charged with Running $11M Ponzi Scam

CTFC Issues Its First Whistleblower Award