To help fight corruption and fraud in the securities market, the U.S. Congress included a whistleblower program as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The program authorizes awards for informants who notify the Securities and Exchange Commission (SEC) concerning an imminent or ongoing fraudulent scam in the securities industry. Whistleblowers could receive from ten to thirty percent of the amount the government recoups, so long as the amount exceeds $1 million.
Fraudsters Describe Bonds In Unstable Company As Offering Low Risk And High Return
Offering fraud charges have been filed against a Maryland man who owns a real estate company that allegedly was billed as an opportunity for investors to earn annual returns of ten percent. The SEC has charged Wilfred T. Azar III, the business owner, and Joseph A. Giordano, a former stockbroker who took part in the scam.
Azar allegedly sold purported bonds in Empire Corporation, a company that Azar and Giordano described as wildly profitable when in fact it was practically insolvent. The pair allegedly lured investors in with false claims about the bonds’ low risk and high returns. With their false assurances, they reportedly raised more than $7 million. Though investors were told that their funds would be used for corporate purposes, Azar took the money to pay Giordano thousands of dollars in compensation. With what was left, Azar allegedly made his own personal mortgage payments, paid his country club dues and bought season tickets for Baltimore Ravens games.
The scam fell apart when Azar and Giordano failed to nab new investors and were thus unable to pay the promised returns to existing investors, who lost virtually everything on their investments.
Whistleblowers Notify SEC of Offering Fraud Violations
While Waters & Kraus was not working with the whistleblower on this SEC matter, we are representing tipsters in similar instances of SEC fraud. If you have comparable claims against your employer or anyone else engaged in securities fraud, email us or call our qui tam attorneys at 855.784.0268 to learn more about our practice and how we can work together to notify the government about SEC fraud and abuse. Our qui tam lawyers, George Tankard and Anne Izzo in our office in Maryland, where the company in this case was located, are committed to advancing and protecting informants’ interests in whistleblower lawsuits.