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A former New York executive facing lawsuits over the collapse of real estate empire HFZ Capital Group has been arrested in Miami, charged with grand larceny and tax fraud, Bloomberg News reported. Nir Meir was arrested Monday, a spokesperson for the Miami-Dade Police Department confirmed. Meir was detained on an out-of-state warrant, suggesting his arrest may be the result of an investigation by law enforcement in New York. Meir, the former managing principal of HFZ Capital Group, has been battling multiple lawsuits in New York over his involvement in the once-prominent real estate firm. He’s denied wrongdoing. HFZ, headed by Chairman Ziel Feldman, was one of Manhattan’s highest-flying condo developers, known for paying premium prices for coveted land and bringing numerous large projects to the market simultaneously. But in 2018, while still selling its earlier developments, HFZ unleashed more than $3 billion of new luxury units, essentially competing against itself. By then, demand for lavish condos had cooled from the days when investors would plunk down record-shattering sums for homes before construction even began. In early 2021, lender CIM Group took control of four HFZ developments in Manhattan: the Astor on the Upper West Side, 301 W. 53rd St. in Hell’s Kitchen and 88 and 90 Lexington Ave. in NoMad.

The founder of an online crypto trading course called the American Bitcoin Academy scammed students out of more than $1 million by persuading them to invest in a fake hedge fund, the Securities and Exchange Commission claimed Friday, Bloomberg News reported. From December 2017 through April 2018, Brian Sewell allegedly solicited investments for the Rockwell Fund, which would invest in digital assets using unique strategies and tools such as artificial intelligence. Instead of launching the fund, Sewell converted the investments into Bitcoin, which he lost when the wallet he was using was hacked, the SEC said in a news release announcing the settled case. He also deceived investors about the fund’s existence by sending them fake monthly account statements. Sewell’s alleged fraud scheme ultimately cost 15 students about $1.2 million, according to the regulator. “Whether it’s AI, crypto, DeFi or some other buzzword, the SEC will continue to hold accountable those who claim to use attention-grabbing technologies to attract and defraud investors,” Gurbir Grewal, the director of the SEC’s enforcement division, said in the news release. Sewell and his company, Rockwell Capital Management, agreed to settle with the regulator, without admitting or denying the allegations. As part of the deal, Rockwell Capital agreed to pay $1.6 million and Sewell, more than $200,000.

Robert Martin of Beckley, W.Va., pleaded guilty yesterday to fraudulent receipt of property from a debtor, according to a DOJ press release. Martin admitted to paying himself without authorization while serving as the chief executive officer of the entity that operated the West Virginia Courtesy Patrol. According to court documents and statements made in court, Martin was CEO of Citizens Conservation Corp (CCC), which he formed in 1993 and which dissolved in or about 2019. CCC’s primary source of income from in or around 1998 until in or around the summer of 2018 was a multimillion-dollar contract with the State of West Virginia to operate the Courtesy Patrol roadside assistance service. On April 3, 2019, CCC filed for bankruptcy after the loss of the state contract in 2018 left it financially unstable. During a May 2, 2019, bankruptcy creditors meeting, Martin testified that CCC was not generating income, that he was not receiving a salary because of the lack of income, and that he expected CCC to be paid on some receivables owed to it. The United States Trustee, who oversees the administration of bankruptcy cases in the Southern District of West Virginia, told Martin that he was not allowed to take a salary as a controlling officer without U.S. Bankruptcy Court approval.

An Iowa woman has been sentenced to prison after pleading guilty to bankruptcy concealment following an investigation by the FBI, the Des Moines Register reported. According to a news release from the U.S. Department of Justice, Debra Leisinger, 58, of Sumner in Bremer County admitted as part of a plea agreement in U.S. District Court for the Northern District of Iowa that after filing for Chapter 7 bankruptcy protection in December 2022 she concealed from creditors an inheritance check for $147,969.28. "As a part of her scheme, Leisinger attempted to discharge over $65,000 in debts that she owed to her creditors but keep her entire inheritance,” the release states. “Ultimately, the United States Trustee discovered Leisinger’s scheme, she waived her chapter 7 discharge, her bankruptcy was dismissed, her inheritance was applied to repay her creditors, and she was prosecuted federally.” Leisinger was sentenced on Dec. 21, 2023, to two months in prison and a two-year term of supervised release. She was also ordered to pay $5,000 in court fees.

The Securities and Exchange Commission has charged Shanchun Huang with allegedly inflating Future FinTech Group’s share price just before he took over as the company’s chief executive, the Wall Street Journal reported. The SEC alleged in a complaint Thursday that Huang used manipulative trading techniques in early 2020 to push the fintech firm’s share price up, with the goal of preventing it from being delisted from the Nasdaq exchange. According to the complaint filed in New York federal court, Future FinTech’s founder and former chief executive approached Huang in late 2019 or early 2020 about becoming the company’s next chief executive. Huang allegedly started using an account in Hong Kong to trade in Future FinTech’s stock in January 2020, when the shares were at risk of being delisted because they had fallen below the $1 minimum bid price. The SEC claims Huang bought more than 530,000 shares over a two-month period and traded at a volume large enough to represent a high percentage of the stock’s overall daily volume. Huang also placed multiple buy orders in short time frames and made other trades that “generally would not make economic sense for an investor who sought to buy the stock at the lowest available price,” the agency alleged. (Subscription required.)

Advances in artificial intelligence may facilitate hacking, scamming and money laundering by reducing the technical know-how required to carry out such crimes, top U.S. law enforcement and intelligence officials said yesterday, Reuters reported. Rob Joyce, director of cybersecurity at the National Security Agency, said at the International Conference on Cyber Security at Fordham University in Manhattan that less capable people are using AI to guide hacking operations they would not have otherwise been able to carry out themselves. "It's going to make those that use AI more effective and more dangerous," Joyce said, adding that on the flip side, AI advances were helping U.S. authorities find malicious activity. The FBI is already observing an increase in cyber intrusions due to AI lowering the technical barriers to carrying them out, James Smith, the assistant director in charge of the FBI's New York field office, said at the conference. Two top federal prosecutors said AI could also spur some financial crimes. Damian Williams, the U.S. Attorney in Manhattan, said AI could help people who do not speak English generate believable-sounding messages to try to scam potential victims out of money. Breon Peace, the U.S. Attorney in Brooklyn, said AI-generated "deepfake" images and videos could be used to trick banks' systems designed to verify their customers' identities to prevent money laundering.

A bankruptcy attorney appeared in U.S. District Court in St. Louis on Wednesday to answer charges accusing him of defrauding the state of Missouri and lending institutions, according to DOJ press release. Michael Toscano was indicted on Dec. 20, 2023, in U.S. District Court in St. Louis on three counts of mail fraud and one count of wire fraud. He turned himself in yesterday and pleaded not guilty to the charges. The indictment alleges that from roughly April 1, 2018, though Dec. 19, 2023, Toscano devised a scheme to defraud the state of Missouri and lending institutions by falsely claiming bankruptcy filers’ vehicles had been abandoned, and then selling some through his used car dealership. Toscano also obtained referrals from other bankruptcy attorneys whose clients sought to surrender their vehicles to creditors rather than to continue to pay their vehicle car loans, according to statements made in court on Wednesday. Toscano told debtors to deliver their vehicles to his office in Creve Coeur or to a St. Charles County storage facility, the indictment says. He also picked up some vehicles that were inoperable, it says. Toscano then mailed documents to the Missouri Department of Revenue and the holders of liens on the vehicles falsely claiming that they had been abandoned and that he’d incurred towing and storage fees, the indictment says. He demanded payment, writing that he would seek an abandoned motor vehicle title or mechanic’s lien if the fees were not paid within 30 days, the indictment says. In some cases, Toscano delayed notifying lienholders for as long as 45 days, causing storage fees to exceed $2,300, the indictment says. If payment was not made, Toscano submitted false and fraudulent documents to the contract license offices of the DOR seeking the issuance of abandoned vehicle titles or mechanic lien titles and then offered the vehicles for sale through his used car dealership, the indictment says.

U.S. prosecutors in Manhattan unveiled criminal charges against a Nigerian fintech businessman who recently bid unsuccessfully for an English Premier League soccer team, saying he lied to investors about his companies' finances, Reuters reported. Odogwu Banye Mmobuosi, the former co-chief executive officer of Tingo Group, was charged with securities fraud, making false U.S. Securities and Exchange Commission filings, and conspiracy in an indictment made public on Tuesday. Prosecutors said the defendant, known as Dozy Mmobuosi, falsely represented that his Tingo Mobile cellular business and Tingo Foods agriculture business were profitable, generating hundreds of millions of dollars of revenue. Mmobuosi sold both businesses to Tingo Group and Agri-Fintech Holdings, caused them to falsely portray the businesses as "cash-rich, revenue-generating companies," and looted millions of dollars by misappropriating cash and selling stock at inflated prices, the indictment said. The alleged scheme occurred from 2019 to 2023, prosecutors said. Mmobuosi is at large.