Latest news with #Ponzi
Miami Herald
2 hours ago
- Business
- Miami Herald
Warren Buffett's blunt Social Security warning is becoming reality
For many retirees, Social Security benefits are a primary income source, or even their only income source. Unfortunately for those retirees, their financial security is facing a very real and substantial threat. While Social Security is an entitlement program, and the benefits that workers collect from it are earned benefits they are entitled to as a result of paying into the system, there is a strong chance that the program will not continue working as intended. Don't miss the move: Subscribe to TheStreet's free daily newsletter The issue is one that famed investor Warren Buffett has warned about for a very long time. In fact, his warnings about Social Security date all the way back to 2005, when he responded to a question about whether Social Security was a Ponzi scheme and said, "I basically believe that anything that would take Social Security payments below their present guaranteed level is a mistake." Unfortunately, new evidence suggests that Buffett's warnings are about to become reality, and sooner rather than later. Unfortunately, there is a very real and imminent danger that the cuts Buffett warned about will happen. The Committee for a Responsible Federal Budget has released a very troubling new report demonstrating that the Oracle of Omaha knew exactly what he was talking about. Related: Warren Buffett sends blunt message on Social Security According to the Committee for a Responsible Federal Budget, the Social Security Trust Fund is just over seven years away from being insolvent. This is based on both the Social Security Trustee's report data, as well as the Committee's projections of how the One Big Beautiful Bill Act are likely going to impact Social Security. If the reserves in the trust fund are depleted, that means Social Security is only going to be able to pay out benefits from current revenue. The CRFB estimates that this is going to happen late in 2032 and that when it does, a 24% cut to benefits will be necessary. This is different from the most recent projections by the Social Security Trustees, which anticipated that benefits could be paid in full through 2035. It is based on the CRFB's analysis of the impact of the One Big Beautiful Bill. For a dual-earning couple, the cut to benefits that could happen in as little as seven years would result in an $18,100 reduction in annual income from Social Security, according to the CRFB's analysis. This is not just a small cut, it is a huge cut – and it seems to be exactly what Buffett was warning about when he said that it would be a mistake to take benefits below their current level. This would be well below that level. Related: AARP CEO sounds the alarm on Social Security Buffett made clear that while he is worried a benefit cut would be a mistake, he also thinks the situation is salvageable if Congress were to act. He has commented that "our country can easily handle the Social Security issue," and has made several suggestions for fixes, including: Increasing the maximum amount of income that is subject to Social Security tax as currently high earners pay taxes only on part of their income up to the wage base limitRaising full retirement age (although he made this suggestion in 2006 and said that 65 might not make sense, and full retirement age has already been moved later and is now 67 for anyone born in 1960 or beyond) The big question is whether Congress has the political will to make these changes, both of which have the potential to be very unpopular. More on retirement: Dave Ramsey offers urgent thoughts about MedicareJean Chatzky shares major statement on Social SecurityTony Robbins has blunt words on IRAs,401(k)s Of course, the changes wouldn't be as unpopular as hitting retirees with a huge cut to benefits that Buffett warned would be such a grave mistake. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Hindustan Times
3 hours ago
- Politics
- Hindustan Times
ED restitutes ₹380-cr worth assets in cooperative bank 'fraud' involving ex MLA
New Delhi, Attached assets worth ₹380 crore have been restored to a designated Maharashtra government authority for distribution to the about 5 lakh "duped" depositors of a cooperative bank, controlled by a former MLA, as part of a money laundering proceeding, the Enforcement Directorate said on Wednesday. ED restitutes ₹ 380-cr worth assets in cooperative bank 'fraud' involving ex MLA The case pertains to the Karnala Nagari Sahakari Bank Ltd. in Panvel where it was alleged that its erstwhile chairman, Vivekanand Shankar Patil, in connivance with other officials of the bank, "cheated" the lender and "siphoned off" the funds for private investments. Patil, a four-time MLA of the Shetkari Kamgar Paksha Party, was arrested by the ED in June 2021. The money laundering case of the ED stems from a February 2020 FIR filed by the Pune Police Economic Offences Wing . The police alleged in its chargesheet that the then chairman Patil and other officials of the bank prepared 63 "bogus" loan accounts using "forged" documents without following the RBI guidelines and standard banking norms, and "siphoned off" ₹560 crore for personal gains, the federal probe agency said in a statement. The ED said its probe found that funds were "diverted" to various entities "controlled" by Patil and his relatives. "He purchased various properties and assets using the funds siphoned off from the bank and these proceeds of crime were utilised for the purchase of immovable properties at different locations in Raigad district of Maharashtra," it said. These assets, worth ₹386 crore, were attached by the ED under two provisional orders issued in 2021 and 2023. The ED also filed a chargesheet in August 2021 before a special PMLA court in Mumbai. The ED said the liquidator appointed by the RBI for the bank filed an application, under section 8 of the PMLA, before the court seeking restitution of assets. The ED gave its consent, the agency said. The court issued an order on July 22 directing the release of the property Karnala Sports Academy at Panvel to the liquidator and to put it up for auction, the ED said. The court also ordered the Competent Authority to "realise" the land at Posari, Raigad by auction for distribution amongst the depositors. "The bank had more than 5 lakh depositors having total deposits of ₹553 crore, and they lost their hard-earned money. "In the larger interest of depositors and currently ongoing restitution efforts, ED took steps to expedite the process resulting in the restitution," the agency said. The PMLA provides for the process of restitution even before completion of the court trial in order to provide succour to the victims of frauds like bank loans and Ponzi scheme cheating. The fraud came to light after an audit was done at the instance of the Reserve Bank of India during 2019-20, when it was found that Patil was siphoning off funds from the bank through 67 "fictitious" loan accounts. The funds were sent to the loan accounts of entities/firms/trusts owned or controlled by Patil including Karnala Charitable Trust, Karnala Sports Academy and Karnala Mahila Readymade Garments Cooperative Society Limited, the agency had claimed in a statement issued in October 2023. This article was generated from an automated news agency feed without modifications to text.
AsiaOne
13 hours ago
- Business
- AsiaOne
Liquidators score victory to recoup over $900m from alleged scammer Ng Yu Zhi's associates, Singapore News
SINGAPORE — The liquidators for three companies of Ng Yu Zhi, the alleged nickel-trading fraudster at the centre of a $1.5 billion nickel trading scam, scored a legal victory on July 29 to recover more than $900 million from nine former directors and employees for their role in Singapore's biggest Ponzi scheme. In 2021, the liquidators of Envy Asset Management (EAM), Envy Global Trading (EGT) and Envy Management Holdings (EMH) sued Ng, former directors Lee Si Ye and Ju Xiao, and former employee Cheong Ming Feng. Court documents state that Ng's three companies received about $1.09 billion, US$277.2 million (S$357 million) and €980,000 (S$1.4 million) in investor funds, supposedly for nickel trading. Of those sums, $593 million, US$192.2 million and €880,000 remain outstanding to investors. In a 180-page judgment issued on July 29, the liquidators, who are represented by lawyers David Chan, Daryl Fong and Lin Ruizi of Shook Lin & Bok, were awarded damages after Ms Lee, Mr Ju and Mr Cheong were found to have breached their duties. They also received damages for fraudulent trading by Mr Ju. The trio were also ordered to pay back about $27 million in commission payments, profit sharing, bonuses, CPF payments, directors' fees and dividends. The High Court, however, ruled that the July 29 judgment is "not binding" on Ng, who was made bankrupt in December 2022. Civil proceedings against the former managing director of EGT and EAM stopped as a result. Ng's criminal trial on 42 charges ended on July 7 after he opted not to take the stand. He had faced a total of 108 charges over offences including cheating, forgery, fraudulent trading, money laundering and criminal breach of trust. In awarding damages to the liquidators, High Court Judicial Commissioner Mohamed Faizal found that the nickel trading scheme did not exist and none of the investors' monies were used to buy nickel from Poseidon Nickel. This is the Australian firm that Ng claimed to have bought nickel from. Instead, the funds were transferred to Ng through Envy Asset Management Trading, paid as directors' fees to Ng and Ms Lee, and as commission payments, or profit sharing fees to the defendants and other employees. The funds were also used to pay referral fees or "profits" in excess of the invested principal to investors; and transferred or paid to other companies owned by Ng or his Envy companies, the judicial commissioner found. The High Court also found that the Envy companies were "hopelessly insolvent and unable to pay their debts. Neither EGT nor EMH had any legitimate, revenue-generating business, and there was no other meaningful business undertaken by the Envy companies". There was also "compelling evidence of the shocking level of ineptitude and nonchalance" on the part of Ms Lee, who allegedly helped Ng cover up details of fraudulent transfers of $416.5 million and US$17.7 million to his own bank accounts under false pretences, according to the ruling. She was found to be "grossly negligent" but "did not have actual knowledge" of the Ponzi scheme as she and her own family members and loved ones also invested in the scheme, the judicial commissioner pointed out. As for Mr Ju, the High Court found that he was in breach of his director's duties and liable for fraudulent trading, among other things. "That he was willing to forge documents, fraudulently change the paid-up capital sums for EGT and mislead investors... spoke to his entire approach to his role as a director and employee of the company. These actions also reflect his willingness to be complicit in whatever he was asked to do. This made a mockery of his duties as a director of EGT," the judge said. Mr Cheong, the former employee, knew that he was creating forgeries, and also became aware that these were being circulated to both internal employees and external investors, but the High Court found that he did not know that such actions were being done to prop up a sham scheme. For one thing, Mr Cheong was "not particularly sophisticated and possessed a rather rudimentary understanding of the business". His own investments "started even before he joined the Envy companies and he had assisted some of his friends to do the same, which suggests that he himself bought into the logic of the purported nickel trading", the judicial commissioner said. Regardless of whether Ms Lee, Mr Ju or Mr Cheong had knowledge of the Ponzi scheme, they were still ordered to return most of the monies they had received from the Envy companies. In a separate 62-page judgment released on July 29, the High Court ordered six other former employees of the Envy companies to cough up more than $42 million in fictitious profits, commission payments, profit sharing and referral fees paid to them. This award is subject to a deduction of income tax payments made by these six employees. Former employees Lau Lee Sheng, Benjamin Teo Wei Wen, Shen Xuhuai, Koh Hong Jie (Xu Hongjie), Guo Yujia and Jordan Chua Wei Jian were named defendants in this suit brought by the liquidators. The High Court allowed the liquidators to claw back monies paid to them after finding that the Envy companies "were never under any obligation to pay the commission payments and profit sharing payments to the defendants because the (companies) never made any actual profit". [[nid:720725]] This article was first published in The Straits Times . Permission required for reproduction.
Daily Mail
14 hours ago
- Business
- Daily Mail
The big problem with rising immigration that hurts every Australian
Australia's high immigration has been likened to a Ponzi scheme as a new report reveals record international student numbers are worsening the housing crisis. Digital Finance Analytics boss Martin North says governments rely too much on bringing more people into Australia to make the economy look bigger, even though it means each person is actually worse off. 'When things are looking at bit shaky, what you try and do is pull the levers, the migration lever is an obvious lever at one level because you can do it relatively quickly and the number goes up even if the GDP per capita doesn't go up,' he said. 'To my mind, though, migration is a Ponzi scheme and migration is part of the quantitative growth.' Like a pyramid scheme, a Ponzi scheme benefits those at the top but leaves everyone else worse off. Mr North, a banking expert, said high immigration was like printing money during Covid - it makes things look better at first, but can cause bigger problems like inflation later. MacroBusiness economist Leith van Onselen said bringing in too many migrants was even worse than the financial bubbles created by the money-printing policies used during the pandemic. 'That blows financial bubbles but it doesn't affect your traffic congestion, it doesn't force you to live in a shoe box apartment because you can't afford a house,' he said. 'There's too many people competing with you for a house. It doesn't turn your cities into high-rise, shoebox metropolises.' A new Reserve Bank report has noted international student numbers were still at record highs, and putting pressure on the housing market during a time of high construction costs. In the year to April, 794,113 international students were enrolled in Australia. 'The number of international students onshore is still near record highs, and student visa arrivals have exceeded departures in recent months, suggesting the number of students onshore is growing,' it said. 'In theory, in the face of a relatively fixed supply of housing in the short term, we would expect an increase in international students to put upward pressure on rental demand and rents (all else equal), in the same way that any kind of increase in the renting population would impact demand. 'Capacity constraints, high costs in the construction sector and low levels of building approvals relative to the population may mean the housing supply response could be slower to materialise compared with in the past.' The RBA report, by economists Madeleine McCowage, Harry Stinson and Matthew Fink, also noted international students were more likely to work in the black economy. 'Temporary migrants are much more likely to be paid below-minimum wages, meaning cash-in-hand work may be prevalent,' it said. In the year to May, 447,620 migrants arrived in Australia on a net basis, which was higher than the 335,000 intake for 2024-25 forecast by Treasury in the pre-election March Budget but below the record-high intake of 548,800 in late 2023. With the permanent intake capped at 185,000 for 2024-25, international students make up the majority of permanent and long-term arrivals in Australia. 'International students were an important driver of net overseas migration during this period, accounting for around half of Australia's total net overseas migration,' the RBA report said. AMP chief economist Shane Oliver said high immigration levels were causing Australia's productivity crisis, with the economy suffering a per capita recession from early 2023 until the September quarter of 2024. 'We have partly made up for poor productivity growth by faster population growth, but this does not address living standards per person,' he said. 'Likewise, the slump in productivity has been masked by strong national commodity earnings but we cannot rely on this indefinitely. 'A surging population over the last 20 years with inadequate infrastructure and housing supply has led to urban congestion and poor housing affordability which contribute to poor productivity growth – notably via increased transport costs and speculative activity around housing diverting resources from more productive uses.' Mr van Onselen said international students were coming to Australia hoping for a pathway to permanent residency or citizenship, with universities benefiting from having overseas students willing to pay fees upfront. 'The whole idea is to encourage a bunch of students, primarily from south Asia, who tend to come to places like Australia and New Zealand, Canada etc for work rights and permanent residency instead of studying,' he said. 'That's their primary goal. They want to attract those people. 'So, they want to expand work rights for international students from 20 hours a week to 25 and effectively turn student visas into de facto low-skilled work visas and residency visas.' International students on a visa can work 48 hours a fortnight if they are studying a Masters degree, with no more than 30 hours of work allowed in the second and third weeks of a month.
Yahoo
a day ago
- Business
- Yahoo
Georgia firm that called itself part of the ‘patriot economy' abruptly closes — and investors worry their money is gone
A lending company in Georgia that marketed itself toward Republicans and faith-based groups has abruptly closed its doors. Don't miss Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 6 of the easiest ways you can catch up (and fast) You don't have to be a millionaire to gain access to this $1B private real estate fund. In fact, you can get started with as little as $10 — here's how The state has opened an investigation, the federal government has filed charges, and a recent report says investors are worried they won't see their money again. According to WSB-TV, founders Brant Frost IV and Brant Frost V promoted the company as being part of the 'patriot economy' and targeted investors on conservative media. They also shared videos on their YouTube channel. First Liberty Building and Loan posted a notice on its website recently that said it has ceased all business operations, and that interest payments on existing promissory notes, bridge loan participation interests, and other investment programs are indefinitely suspended. The company said it is 'cooperating with federal authorities as part of an effort to accomplish an orderly wind up of the business.' Charges filed by the SEC The Securities and Exchange Commission (SEC) filed charges against Edwin Brant Frost IV on July 10, accusing him of running a Ponzi scheme that cost approximately 300 investors at least $140 million. The SEC said that First Liberty 'offered returns of up to 18%.' 'The complaint also alleges that, while some investor funds were used to make bridge loans, those loans did not perform as represented, and most loans ultimately defaulted and ceased making interest payments,' says the press release. Frost is also accused of misappropriating investor funds for personal use, including $2.4 million in credit card payments, $335,000 to a rare coin dealer, and $230,000 on family vacations. 'The promise of a high rate of return on an investment is a red flag that should make all potential investors think twice or maybe even three times before investing their money,' said Justin C. Jeffries, associate director of enforcement for the SEC's Atlanta Regional Office. 'Unfortunately, we've seen this movie before — bad actors luring investors with promises of seemingly over-generous returns — and it does not end well.' Banks and credit unions are subject to regulations that protect Americans, but First Liberty was a lending firm, not a bank. Bank accounts are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) if a bank fails. If a brokerage firm is a Securities Investor Protection Corporation (SIPC) member, customers are protected in the event of a firm's failure, up to $500,000. Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says — and that 'anyone' can do it How to protect yourself First Liberty Building and Loan was engaged in some red-flag behaviours that investors should watch out for, such as promising unusually high returns. The SEC's 'Red Flags of Investment Fraud Checklist' includes these warning signs: offers that sound 'too good to be true,' promises of great wealth and guaranteed returns, 'risk-free' investment opportunities, unlicensed investment professionals, aggressive sellers who may provide exaggerated or false credentials, 'everyone is buying it' pitches, pressure to invest right now, over-the-top, sensational pitches that may have fake testimonials, unsolicited pitches seeking to obtain your personal information, asking you to pay for investments by credit card, gift card, or wiring money abroad or to a personal account. The best way to avoid fraud is to thoroughly research an investment and the investment professional you're working with. The SEC outlines important questions you should ask before investing. First, check if the seller is licensed. If you're working with a broker, you can check their background and qualifications on the Financial Industry Regulatory Authority's (FINRA) BrokerCheck website. Check the Investment Adviser Public Disclosure website if you are working with an investment adviser firm, and use the SEC Action Lookup website to check for actions against individuals. If you have questions, you can call the SEC's investor assistance line at (800) 732-0330. Second, research the investment and whether it is registered. Offers or sales of securities must either be registered with the SEC or exempt from registration. Check if an investment is registered using the SEC's EDGAR database, or call the SEC's investor assistance line. Third, the SEC advises that you ask yourself whether you understand the investment. Investors should carefully read an investment's prospectus or disclosure statement, and be sure they understand how the investment works and how it will make money. Will First Liberty investors get their money back? It remains unclear what will happen to the hundreds of investors in First Liberty Building and Loan. The court has appointed a receiver, who will conduct an investigation and recovery effort. He has created a website to update investors. In a letter to investors, the receiver, S. Gregory Hays, said that it is 'much too early for us to make any estimate about the amount that will be distributed.' He recently told Fox 5, "The records are pretty much in shambles … Some of the reports show loans being paid off even though the principal wasn't repaid." Around $1.2 million in cash assets have been frozen. At least one investment loss attorney is investigating whether registered sales agents sold investments for First Liberty. A post from Wolper Law Firm states that 'registered sales agents worked for FINRA member brokerage firms, which may be held financially responsible for the misconduct of their registered financial professionals.' What to read next Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now Accredited investors can now buy into this $22 trillion asset class once reserved for elites – and become the landlord of Walmart, Whole Foods or Kroger without lifting a finger. Here's how Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. 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