SECURITIES AND INVESTMENT FRAUD ON THE EASTSIDE
Securities and Investment Fraud on the Eastside
As most locals already know, the Eastside is a collective term for eastern suburbs of Seattle. It is a great place to live with many amenities to offer local residents. However, like many other areas of the country, the Eastside has also been hit with securities and investment fraud. While these fraudsters are not as notorious as Bernie Madoff, they are nonetheless just as devastating to the victims of these fraudulent schemes.
The Eastside has seen some recent securities and investment fraud schemes, such as in Bellevue, Kirkland, Kenmore, Bothell, and Renton:
-Richard A. Finger, Jr. was a Bellevue resident, who ran a securities brokerage firm called Black Diamond Securities, LLC which was headquartered in Kirkland. The SEC, FBI, and Kirkland police brought investigations against Finger and Black Diamond Securities, alleging that he defrauded at least 10 victims out of at least $7 million. Finger misappropriated customer funds to live a lavish lifestyle, with a $2 million home, as well as driving an Escalade and Ducati motorcycle. According to the SEC, he was also alleged to have engaged in high risk trading that lost customers millions of dollars. According to the FBI website, in April 2012, Finger was sentenced to 54 months in prison, with three years supervised release. Finger’s brokerage firm, Black Diamond Securities, was also barred from the securities industry by FINRA (the Financial Industry Regulatory Authority).
-According to the Seattle PI, Beverlee Kamerling and her son Nicholas Alexander were indicted for securities fraud in December 2007. Both Kamerling and Alexander were residents of Bellevue at the time. They were alleged to have engaged in a classic pump-and-dump scheme – whereby they acquired a large block of shares in a company, promoted the company with misleading and hyperbolic news releases, and then sold the shares after the company’s stock price rose. This scheme allows the fraudsters to sell when the stock price is at its height, and then sends the stock price crashing when they unload their large block of shares, thereby causing serious harm other investors. Some of the companies that were part of Kamerling’s scam included America Asia Energy Corporation, Coattec Industries, Inc., Detex Security Systems, Inc, and Global Gaming Network, Inc. This scheme ultimately cost investors over $2.4 million in losses. According to the Bellevue Reporter, Kamerling was sentenced to 90 months in prison in August 2009.
-Tolan S. Furusho, a former attorney from Bellevue, was also implicated in the Kamerling scheme. According to the FBI, Furusho, also a former world-class weightlifter who worked out in Redmond, was charged with two counts of securities fraud when he issued opinion letters regarding the companies without performing any due diligence. This conduct gives an air of legitimacy to the general investing public, so it is unlawful to create these opinion letters without some reasonable basis behind them. Furusho was convicted and sentenced to 13 months in prison.
-In September 2014, Kenmore resident Edward H. Kahler was sentenced to five years in prison, according to the Bothell Reporter. Kahler operated a retirement consulting company, also in Kenmore, called Key Resources. He liquidated customers’ annuities and used that money for his own benefit. Kahler was ordered to pay over $1 million in restitution to at least 8 elderly investors.
-Zizhong (James) Fan, a former resident of Bothell, was indicted for securities fraud in 2011 for allegedly leaking insider information (according to the Bothell reporter). According to an SEC complaint against Fan, he was alleged to have leaked non-public information regarding Seattle Genetics, Inc. (or “SGEN”). Zizhong Fan committed suicide before his case was completed. According to the FBI, Zizhong’s brother, Zishen Fan of California, pled guilty to the charges.
In 2004, the King County Prosecutor and the Washington Department of Financial Institutions investigated former Renton insurance agent Dave H. Trinh. Trinh was charged with securities fraud, and it was alleged that he defrauded clients out of at least $275,000 by forging signatures on withdrawal forms and misappropriating the money for his own personal use. He was previously barred from the securities industry in Washington by the Washington Securities Division in 2003.
Israels & Neuman PLC is a national securities and investment fraud law firm with offices in Bellevue and Denver, Colorado. We represent investors in FINRA arbitration proceedings in all 50 states, and we also represent investors locally, including in Seattle, Bellevue, Kirkland, Bothell, Kenmore, Renton, Redmond, Sammamish, Issaquah, Mercer Island, Medina, Clyde Hill, Yarrow Point, Hunts Point, Beaux Arts Village, Woodinville, and many other local communities. Our attorneys have represented over one thousand investors against many brokerage firms in the past, including LPL Financial, Merrill Lynch, Morgan Stanley, Smith Barney, Stifel Nicolaus & Company, UBS Financial Services, Oppenheimer, Charles Schwab, Wells Fargo Advisors, Ameriprise Financial Services, Raymond James Financial Services, ProEquities, Securities America, National Securities Corp., and many others.
All of our investment loss cases are taken on a contingent basis, meaning that we do not get paid unless we recover money for you.
Visit our website at www.israelsneuman.com and go to our CONTACT page or call us for a free case evaluation at (720) 599-3505.