Parole Board 1:  ”That name is ‘recidivism.’”

Parole Board 2:  ”Repeat offender!”

Parole Board 1:  ”Not a very pretty name is it, HI?”

HI:  ”No sir, that’s one bonehead name, but that ain’t me no more.”

Parole Board 1:  ”You aren’t just telling us what we want to hear, are you?”

HI:  ”No sir. No way.”

Parole Board 2:  ”‘Cause we just want to hear the truth.”

HI:  ”Well, then I guess I am telling you what you want to hear.”

Parole Board 1:  ”Boy, didn’t we just tell you not to do that?”

HI:  ”Yessir.”

Parole Board 1:  ”Okay then.”

Please forgive my homage to the Coen Brothers’ classic, Raising Arizona. But, it fits perfectly with today’s post. This is the second post this week in which the topic has been the type of investment scamster that I describe in The Vigilant Investor as “The Career Criminal.” According to Courthousenews.com:

SALT LAKE CITY (CN) – A securities recidivist wasted no time between schemes and bilked a Utah company of more than $1.5 million, the company says, spending the money on a Porsche, private planes and courtside tickets for the Utah Jazz.

Q-6 Associates sued Dwight Shane Baldwin, Silverleaf Financial, Silverleaf Acquisition Holdings, and Baldwin’s alleged associate, Mark Staples.
Baldwin “was charged in 2010 by the State of Utah with two felony counts of securities fraud and two counts of felony theft,” according to the complaint in Salt Lake County Court.

“Mr. Baldwin plead[ed] guilty in 2010 to two counts of theft and entered into a plea in abeyance. Unfortunately for the plaintiff, Mr. Baldwin has not kept out of trouble, but instead is up to his securities fraud tricks again.

“The fruits of Mr. Baldwin’s fraud are evident in his lavish lifestyle. Mr. Baldwin flies around in two twin-engine private planes, drives a Porsche Panamera, has front-row tickets to the Utah Jazz, and gives away expensive gifts.”

To top it off, Q-6 says, other investors sued Baldwin in Nevada in June this year, claiming he had “swindled them out of one million two hundred thousand dollars.”

Q-6 says it invested $4 million in Silverleaf Acquisition Holdings, “an entity run by Mr. Baldwin and defendant Mark Staples.” For the $4 million, Q-6 says, it got 4 million shares of the company.

The money was supposed to be used to buy, manage and liquidate real estate and loans, including a golf club in Wisconsin, condos and an industrial building in Milwaukee, and residential developments in Flagstaff and Tubac, Ariz. The investment supposedly would be protected by titles to two properties: a mall in Oklahoma and a storage company in Florida.

But Baldwin made a slew of misrepresentations, including that he and his associates had invested $10 million or more in the projects, and had secured another $17.5 million in financing, Q-6 says.

Q-6 says Baldwin “redeemed” 2 million of its shares, but not the other 2 million. It says it foreclosed on Baldwin’s and Silverleaf Financial’s 18.75 percent interest in Silverleaf Acquisition Holdings, but Baldwin et al. still owe it $1,575,492.

Baldwin lives in Layton, Utah; Staples in Salt Lake City, where the defendant businesses are based.

Q-6 demands an accounting and $5 million in damages for fraud, unjust enrichment and breach of contract.

Now, if the person with designs on your nest egg looked like H.I. McDonough, it would be a lot easier to hang onto your life savings. But he won’t look like HI.  Depression era bank teller Homer Edgeworth said it best.  Asked to describe bank robber George “Machine Gun” Kelly, Edgeworth said, “He was the kind of guy that, if you looked at him, you never would have thought he was a bank robber.” The same is true of career investment criminals. Your first clue should be that he looks like someone who would never be involved in anything dishonest.

You’re tempted to think that, if you can’t recognize an investment criminal by his appearance, you will be able to recognize what he’s selling as an obvious scam. But that’s not so, either. Remember, there is no profit generating engine, so the scamster can make up anything. Given complete freedom, merely competent scamsters make up investments that look, to the untrained eye, identical to legitimate investments. “Now, wait a minute,” you say. “I’ve read about some pretty outlandish promises in these cases.” Of course, you have. But those scams were run by incompetents. In any line of work there are people who are slip shod and stupid, but still seem to make a living. The “easy-to-spot” scams run by these buffoons usually last only a few months. The legitimate looking scams can run for decades.

There are thousands of career investment criminals plying their trade today. If you live in a city, there are dozens of them within 30 miles of your house. They aren’t deterred by the law, and certainly not by civil lawsuits. They are willing to do a stretch in prison for the chance at some easy money. If they get caught, they’ll use their stay in the Gray Bar Motel productively, planning the investment scam that they’ll launch on their first day of freedom. Unless you learn more than you know now, you won’t recognize them until it’s too late.

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Tags: Name, Name People
Posted January 3, 2012 by John Wane under Financial Guru

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