Investment Fraud Lawyer

Seattle Securities Lawyer

John J Tollefsen

 

Have you been a victim of investment fraud?

John began practicing business law in 1974. He has represented numerous defrauded investors and has successfully helped many to recover at least part of the money taken. He constantly works on increasing his knowledge through experience and education. He takes more than 20 fraud related continuing education courses each year. He is a Certified Fraud Examiner and Certified Controls Specialist. He graduated from the University of Washington business school with an emphasis on accounting and finance. He has owned a broker-dealer and obtained the necessary licenses from the NASD (now FINRA).

His legal work has received high praise from clients. Reviews He writes frequently on securities law topics. MORE

John’s security law experience includes filings with the Securities and Exchange Commission, defense of SEC and state enforcement actions, plaintiff and defense litigation in complex cases, and building companies for entrepreneurs.

John has the knowledge and experience to represent you as you attempt to recover from investment fraud. If you are looking for an investment fraud lawyer, email us.

Investment fraud lawyer

Contact Us – No confidential information

More on financial fraud

More Detail on John J Tollefsen

Legal and Business Experience

Education and Affiliations

Work History

Speaking and Training

Curriculum Vitae – JJT-CV

Investment Fraud Lawyer

Local EB-5 VISA Fraud

Local EB-5 VISA Fraud SEC Complaint: 15-sec-v-dargey-complaint Recent Seattle newspaper headlines have informed us that Lobsang Dargey, a local real-estate developer, has agreed to plead guilty to EB-5 fraud allegedly involving at least $125 million from 250 Chinese investors. This type of fraud is a form of securities and immigration fraud and has become more common on both sides of the transaction: investors make fraudulent claims regarding their eligibility for the program and promoters misappropriate their investments. EB-5 was enacted by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Under a pilot program enacted in 1992, and regularly reauthorized since then, investors may also qualify for EB-5 visas by investing through regional centers designated by U.S. Citizenship and Immigration Services (USCIS) based on proposals for promoting economic growth. On September 29, 2016, President Obama signed Public Law 114-223 extending the regional center program through December 9, 2016. Ten thousand visas are allocated each year and processing times can be two years. Not only does the investor and family need to be vetted for the visa (e.g. where did the money come from?). There are two investment amounts $500,000 and $1,000,0000. Both require creation of ten full time (35 hours per week) permanent jobs. The $500,000 is by far the most popular and is only available in rural and high unemployment area. This is where the developers get involved. They package a deal, arrange for USCIS processing, and arrange permanent management. Teams of well-paid sales agents sell the package in China and elsewhere. Since the package involves an investment with an expectation...

One-year statute of limitations – Embezzlement

ONE-YEAR STATUE OF LIMITATIONS – EMBEZZLEMENT Copy of case: (Travelers Casualty & Surety Co., v. Washington Trust Bank, No 92483-0) 1611-travelers-casualty-surety-co-v-washington-trust-bank Often the only hope of financial recovery from an embezzlement, other than from insurance policies, is from a bank which paid on forged endorsements (also spelled “indorsements”). A recent case (November 3, 2016) held that the statute of limitations in such cases is only one year in Washington State.1Travelers Casualty & Surety Co., v. Washington Trust Bank, No 92483-0 An employee of a nonprofit serving disabled adult client~ used her position to embezzle more than half a million dollars held by the nonprofit for its clients. She did this by drawing checks from the nonprofit’s account payable to its clients, signing the back of those checks with her own signature, and cashing them at the nonprofit’s local bank. The embezzlement was discovered in an admission in the employee’s suicide note. The Bank sent monthly bank statements during the embezzlement period. These statements included copies of the fronts of the checks that had been cashed at the Bank. The statements did not include copies of the backs of the checks, which would have readily revealed the embezzler’s signature. During the relevant period of time, the victim could access its checking account online at any time to view both the front and backs of checks that cleared its account. The online process required clicking an account to view, clicking a link for the front of the check, clicking a link for the back of the check, closing the check, and repeating as necessary. RCW 62A.4-406(f) provides: “Without regard to care or lack...

WA Consumer Protection Law applies extraterritorially

Under the CPA an out-of-state plaintiff may bring a claim.against a Washington corporate defendant for allegedly deceptive acts. Similarly, an out:of-state plaintiff may bring a CPA claim against an out-of-state defendant for the allegedly deceptive acts of its in-state agent.

Recover SIPC Claims

Understanding the Role of SIPC in Protecting Investors from Fraud The Securities Investor Protection Corporation (SIPC) is not a Federal Deposit Insurance Corporation (FDIC) for the securities brokerage industry. The Madoff and Stanford cases have highlighted the differences. The purpose of this article is to examine when, why, and how SIPC funds are used to assist fraud victims. The FDIC was established in 1933 during the Great Depression to maintain stability and public confidence in the nation’s financial system by insuring deposits and supervising financial institutions for safety and soundness. After thousands of bank failures in the 1920s and early 1930s, Congress decided that restoring confidence in the banking system required government action. As an independent agency of the federal government, the FDIC now insures approximately $9 trillion of deposits in U.S. banks and thrifts – almost every bank and thrift in the country. Since the agency began its coverage on January 1, 1934, no depositor has lost any money in a FDIC insured institution. If a bank is failing, the FDIC takes over at the close of business on a Friday and quickly restores depositors’ funds. In contrast, SIPC is small, having slightly more than $1 billion in reserves. This is miniscule in comparison to stock fraud losses. Microcap stock fraud alone is estimated to range between $1 and $3 billion per year. It covers only eligible investments 1Among the investments that are ineligible for SIPC protection are commodity futures contracts (unless defined as customer property under the Securities Investor Protection Act) and currency, as well as investment contracts (such as limited partnerships) and fixed annuity contracts that are...

UK Bribery Act

The UK Bribery Act of 2011 How the Bribery Act Can Apply to US Businesses International bribery (payments to grease the wheels of business) is a major problem all over the world. The United States has limited its laws against bribery to primarily reach payments to public officials, allow facilitation payments, and rarely prohibits kickbacks and bribery in private industry. The federal Anti-Kickback Act of 1986 (41 U.S.C. § 8701 et seq) covers payments to government contractors. The Foreign Corrupt Practices Act of 1977 (FCPA) prohibits illicit payments to foreign officials. After the US led the way with the FCPA, the international community became involved through the 1997 Organization of Economic Co-operation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (“OECD Convention”). The Convention became effective in 1999 and had been ratified by 38 countries including the US and the UK. More I. Jurisdiction under the Bribery Act Individual countries are beginning to enact their own versions of the FCPA. The UK’s version, the Bribery Act, became effective on July 1, 2011 and is commonly referred to as the “FCPA on steroids”. There are a number of provisions that greatly expand the transactions covered by the FCPA and its jurisdiction. US companies with international sales are potentially covered by the Bribery Act. Unlike the FCPA which limits its reach to issuers of securities of securities registered with the SEC, the Bribery Act’s jurisdiction is more expansive. It is divided into two parts. Part I of the Bribery Act applies to all businesses that have a “close connection” to the UK. The mostly likely...

Fraudulent Transfers WA

Fraudulent Transfers in Washington State Transfers without adequate consideration or gifts can be overturned as fraudulent in certain circumstances. This article discusses breaking asset protection trusts and other devices to avoid creditors Briefly transferring house to wife to obtain loan is fraudulent transfer Most Asset Protection Schemes Do Not Work The Internet is replete with websites touting asset protection schemes. What they do not reveal is that they are unlikely to work. Most states have statutes that protect creditors from asset protection schemes through a variety of tools. Unless the trust does not benefit the debtor, it is unlikely to serve its purpose. This article discusses the various applicable statutes in Washington State. Understanding trusts An asset protection trust is an entity created by and recognized by court-made law (common law). “Asset protection” is a label applied to a common law trust specifying its purpose but not describing a unique entity. Some trusts, like Massachusetts Business Trusts, are entities chartered by Washington’s Secretary of State in a process similar to the creation of a corporation or limited liability company. Asset protection trusts generally rely on the non-chartered and therefore more secret trusts created under common law. Modern trust law is primarily the product of centuries of decisions starting from the 13th century in the courts of equity (Court of the Chancery) of England. Trusts are now internationally recognized by the Hague Convention on the Law Applicable to Trusts and on their Recognition effective January 1, 1992. An intentionally established trust (“express” trust) involves at least three persons: 1) the settlor(s) or trustor(s) who transfers property in trust to the...

Civil Actions under RICO

The Racketeer Influenced and Corrupt Organizations Act of 1970 (“RICO”, 18 U.S.C.A. §§ 1961 et seq.) created a civil law cause of action (§ 1964) for violations of its provisions. Exclusive venue is in federal District Courts which are empowered to award triple monetary awards, attorney fees, and to issue equitable orders preventing and restraining violations, including divestiture of an interest in any enterprise, restrictions on future activities or investments of any person, and the dissolution or reorganization of the enterprise. Civil Actions under RICO In order to obtain relief, the plaintiff must prove two “predicate offenses” (violations of § 1962) which prohibits persons who derive income from a pattern of racketeering activity or through the collection of an unlawful debt to invest the income in any enterprise which engages in interstate commerce. The statute does not mention “organized crime” or limit its application to criminal endeavors and can be applied to legitimate businesses. This article provides a general overview of how the civil law of RICO has developed in the courts. Connection to organized crime Because of the treble damages, courts have struggled to place some limitations on this broad and poorly drafted statute. Nevertheless, courts agree that the plaintiff does not have to prove a criminal conviction or indictment to seek civil damages.1In a suit brought under 18 U.S.C.A. § 1964(c) for damages involving the failure of an industrial device, the court in Waterman S.S. Corp. v Avondale Shipyards, Inc. (1981, ED La) 527 F Supp 256, 1982-1 CCH Trade Cases ¶64602(disapproved Bennett v Berg (CA8 Mo) 685 F2d 1053, on reh (CA8 Mo) 710 F2d 1361,...

“Fraud victims plot legal strategies for recovery” – The Puget Sound Business Journal

Richard Finger Fraud – Victims plot strategy Fraud victims plot legal strategies for recovery Puget Sound Business Journal by Kelly Gilblom, Staff Writer Date: Friday, December 16, 2011, 3:00am PST In the wake of a $7 million financial fraud discovered in Kirkland this September, victims of securities broker Richard Finger have hired attorneys and are turning to arbitration and insurance to recover some of their lost investments. These defrauded investors include not just mom-and-pop outfits but a wealthy Kirkland family with numerous businesses — a family that has hired a prominent attorney. Their strategy to recover lost funds could lay out a possible path for other victims of financial crimes as they struggle to overcome major obstacles to recouping their losses. The majority of the $7 million in assets lost belonged to Finger’s mother-in-law and father-in-law, Brenda and Elling Halvorson, according to lawyers and information in Finger’s charging documents. Their investment with Finger represented only a fraction of their net worth. The Halvorsons own a number of businesses, according to information from the Washington Secretary of State. One of the most well-known of their entities is Papillon Helicopters, a company that offers helicopter, airplane and bus tours of the Grand Canyon and Las Vegas. Papillon, established in 1965, has more than 600 employees and a fleet of 48 helicopters and six airplanes, according to information on its website. The Finger story is familiar: At least 10 victims — family and friends — lost sums of money ranging from less than $100,000 to more than $1 million, according to a criminal indictment against Finger. He lost client money through risky...

“Regulators may have missed securities fraud by Kirkland firm” – The Puget Sound Business Journal

Smith v. Finger Stockbroker pleads guilty to taking millions from investors. FINRA arbitration filed. Regulators may have missed securities fraud by Kirkland firm Puget Sound Business Journal by Kelly Gilblom, Staff Writer Date: Friday, October 21, 2011, 3:00am PDT – Last Modified: Thursday, October 20, 2011, 6:51pm PDT On Aug. 18,Jon-Michael Smith called the Kirkland Police Department to report an unusual theft. Smith, a distraught investor, had been trying to reach his broker for several days because his July statement hadn’t arrived. Finally, Smith phoned a company that handles trading for his account. What he heard made him sick. Instead of the $1.56 million he was supposed to have, the clearing broker said Smith’s balance was just $27,000. The account statements Smith had received were false, part of a fraud allegedly conducted by Kirkland broker Richard Finger Jr. to conceal the fact that he had lost nearly $7 million that his 25 clients had trusted him to manage, according to police reports and court documents. By the end of that week, Smith had given statements to the FBI, the Justice Department and the Securities and Exchange Commission. On Sept. 8, the federal entities went to court to arrest Finger and freeze the assets of his firms, Black Diamond Securities and Black Diamond Capital. What makes the story unusual is that just three weeks before Smith called the police, regulators had audited Black Diamond Securities and did not report finding any fraud. Finger, 32, quickly admitted his misdeeds. In a statement issued two weeks after Smith went to the police, he “acknowledged deceiving some of his customers” and said he...

Unjust Enrichment

Unjust Enrichment – Washington State Law The terms “restitution” and “unjust enrichment” are the modern designations for the older “quasi contracts” terminology.127 WAPRAC § 5.51 The Washington court has adopted the unjust enrichment terminology, but continues to use the quasi contractual terminology interchangeably: “Quasi contracts” are not true contracts but are obligations created by the law when money or property has been placed in one person’s possession under such circumstances that in equity and good conscience, he ought not to retain it. [Citation omitted.] Thus, the substance of an action for unjust enrichment lies in a promise, implied by law, that one will render to the person entitled thereto that which in equity and good conscience, belongs to the latter. At common law, such actions are brought under the principles of assumpsit, and where the cause of action arises from a tortious wrong, it is the general rule, whether or not there be an express contract, that the injured party may waive the tort and sue in assumpsit, in which case the law will imply a contract on the part of the tort-feasor to pay the injured party a just remuneration for the damages suffered to his property.2Bill v. Gattavara, 34 Wash. 2d 645, 209 P.2d 457 (1949), (4-1 decision). In unjust enrichment terms, two basic elements must be established in quasi-contractual actions: the person receiving a benefit (such as money) must be unjustly enriched, and the party conferring the benefit must not be a volunteer.3Lynch v. Deaconess Medical Center, 113 Wash. 2d 162, 776 P.2d 681 (1989); Trane Co. v. Randolph Plumbing & Heating, 44 Wash. App. 438,...