Assignment 1, Deadline January 14, 2012, 11:59 p.m.

Case Study - Reed Goes Regging Reed E. Slatkin posed as an investor after leaning about investing from a wealthy fellow Scientologist. Slatkin claimed to investors that he was putting funds entrusted to him into accounts at an institution in Zurich, Switzerland called NAA Financial, including hundreds of millions of dollars of his own. NAA did not exist and Slatkins NAA documents were fake. (Rosoff, Pontell & Tillman, 2010 Fifth ed., pp. 9-11). Slatkin used money from the down-the-line investors to pay off previous investors and passed it off as investment returns, a Ponzi scheme. Slatkin obstructed the Securities Exchange Commissions (SEC) investigation by again providing false documents, fabricated account statements and correspondence to the SEC. Slatkin was sentenced to 14 years in prison after pleading guilty to15 felony charges, including mail and wire fraud, money laundering and conspiracy to obstruct justice, for fraudulently soliciting nearly $600 million from approximately 800 investors during a 15-year period. Retrieved from http://www.sec.gov/litigation/litreleases/lr18323.htm Case Study The $80 Million Kid Barry Minkow at the age of 16 opened a carpet cleaning business and deceived customers by entering into low cost contracts with customers and then talking them into costly extra services known as bait-and-switch after entering the home. Minkow became more creative by staging thefts in his business locations and filing false claims netting thousands of dollars; created bogus paperwork to secure loans for fictitious equipment; added extra zeroes to customers credit card; and by stealing insurance company stationary and awarding himself hundreds of thousands of dollars in fictitious fire and water damage restoration. Minkow turned his company into a Ponzi scheme by forming a public corporation and merging with an inactive mineral exploration firm acquiring its publicly owned shares in exchange for stock. (Rosoff, Pontell & Tillman, 2010 Fifth ed., pp. 14-15). Minkow was indicted by a Los Angeles federal grand jury on 54 counts of racketeering, securities fraud, money laundering, embezzlement, mail fraud, tax evasion and bank fraud. He was found guilty on all charges and sentenced to 25 years in prison. He was also placed on five years probation and ordered to pay $26 million in restitution. Retrieved from http://en.wikipedia.org/wiki/Barry_Minkow Case Study Family Values American Family Publishers targeted elderly consumers and defrauded them by enticing them into purchasing magazine subscriptions by using deceptive language indicating that that those purchases would enhance their chances to win sweepstakes worth thousands of dollars. (Rosoff, Pontell & Tillman, 2010 Fifth ed., pp. 41-43). American Family Publishers agreed to a $4 million settlement of civil charges by four states that the company deceived consumers. Under the agreement, the company agreed to stop telling recipients of its mailings that they are winners or members of a group of finalists or semifinalists unless true, agreeing also to send special notices to customers who buy large numbers of magazines in a year, reminding them that no purchase is necessary to enter... Retrieved from http://www.nytimes.com/keyword/american-family-publishers