US Attorney Charges Six With Stealing From Securities Class Action Settlement Funds

Acting US Attorney Laurie Magid

Six people were charged yesterday with an alleged scheme to use dummy corporations, fake brokerage accounts, and virtual offices to steal $41 million from securities class action settlement funds.

The Philadelphia Inquirer reports that Laurie Magid, Acting U.S. Attorney for the Eastern District of Pennsylvania, announced that “the ring, which also included a lawyer, went to great lengths to make the claims seem legitimate. Another member of the group, she said, even traveled to Singapore to mail documents to help make a fake company, KimCorp., appear real in its claim.”

Five people were indicted on charges of mail fraud, wire fraud and money laundering, and one was reportedly accused in a criminal information of the same charges, possibly a prelude to a guilty plea, the Philadelphia Inquirer reported.

The defendants were allegedly stealing from settlement funds set up to pay investors in three cases from the 1990s: the Nasdaq market-makers antitrust case; Cendant Corp.; and BankAmerica Corp.

Read the Philadelphia Inquirere article