#538 - January 17, 2008
#538 Updated: 1/17/08 7:34 p.m.

Four arrested in $100M scheme
the.honoluluadvertiser.com | 9/2/06 | Peter Boylan
A Hawai'i Kai couple and two others were arrested yesterday after being indicted Thursday for
allegedly trying to bilk $100 million from a wealthy investor.  The couple, Syed K. Qadri, 33,
and Patricia M. Roszkowski, were indicted on four counts of wire fraud along with Jeffrey
Greenhut and Ruben Carrillo Gonzalez.  Prior to their appearance in court yesterday, more
than a dozen federal agents with the FBI, Immigration and Customs Enforcement and the
Internal Revenue Service raided the couple's downtown offices and a Kahala home they rent.
According to the indictment, the couple used two companies — Amasse Capital LLC and
Solomon & Co. — along with a false prospectus filed with the Securities and Exchange
Commission to create the illusion they were at the helm of several high volume securities
trading firms in a high-yield investment scheme.  Qadri, Roszkowski and Greenhut claimed to
have more than a decade of experience in international finance, mergers and acquisitions,
securities trading venture capital and asset management. None of them had any of the
experience they claimed to have, according to the indictment. And none are
licensed to trade securities in Hawai'i, according to the state Department of Commerce and
Consumer Affairs.  As part of the alleged scheme, the couple told an investor they traded an
average of $500 million every two days and up to $10 billion in volume per month. The
investor was told his $100 million investment was guaranteed and risk-free, and that he
would receive annual returns of at least 60 percent with the possibility of 100 to 400 percent
monthly rates of return, according to the indictment. The companies made limited investments
and in fact incurred losses from bond trading, according to the indictment.  The investor was
told his millions would be part of a high-yield investment that would generate a high rate of
interest, and that he would have online access to an account that would allow him to track
the investment's progress.  The indictment alleges the couple planned on using the money for
personal gain.  Authorities have frozen Qadri's bank accounts, confiscated the couples'
automobiles and their passports.  Qadri and Roszkowski were arrested yesterday at their
office on the fifth floor of the Alakea Corporate Tower at the corner of Alakea and Hotel
streets. Greenhut, who has a Hawai'i Kai address, was arrested in San Diego, and Gonzalez,
who has a Madrid, Spain, address, was arrested in Arizona.  If convicted, they each face up to
20 years in prison on each count. A car was parked at 814 Keala'olu Ave.  in Kahala
yesterday. An indictment for a couple arrested yesterday said they claimed to own the home,
but real estate records say it is owned by a Belvedere, Calif., woman. Qadri and Roszkowski
pleaded not guilty yesterday before U.S. Magistrate Judge Leslie E. Kobayashi and are
scheduled for trial Oct. 31. Qadri will remain in custody until a detention hearing Thursday,
and Roszkowski was released on $100,000 bond.  Assistant U.S. attorney Chris A. Thomas,
who is prosecuting the case, declined comment, citing an ongoing criminal investigation.
Charles L. Goodwin, special agent in charge of the FBI's Honolulu division, also declined
comment. Loretta Faymonville, assistant federal public defender who represented Qadri at
yesterday's hearing, said she had no  immediate comment on the allegations. Richard
Kawana, an attorney representing Roszkowski, did not return a call seeking
comment. A group of federal agents was at the couple's office yesterday afternoon. One
agent wearing an FBI windbreaker said they would have no comment and directed calls to the
main FBI office.  According to the indictment, to influence the credit limit on a Platinum Plus
credit card from Bank of Hawaii, the couple made false statements to the Federal Deposit and
Insurance Corporation claiming Solomon & Co. LLC was receiving $10 million in gross revenue,
and that they owned the 814 Keala'olu Ave. home. The Kahala home is owned by a
Belvedere, Calif., woman, according to real estate records.  The investigation into the
company's actions is ongoing, and extends to the Amasse Capital LLC's board of directors.
According to an SEC filing, the board includes Qadri; Roszkowski; Greenhut; Gonzalez; Syed
Tahir Qadri of Haymarket, Va.; Syed Khurram Qadri of Haymarket, Va.; and Mustafa Abuelhija
of Astoria, N.Y.

Court Rules Against Investors
ap.google.com | 1/16/08 | Pete Yost
WASHINGTON (AP) — The Supreme Court ruled Tuesday against investors who sue
businesses that help manipulate stock prices of publicly traded companies. In a 5-3 decision
that split along conservative-liberal lines, the court gave a measure of protection from
securities lawsuits to suppliers, banks, accountants and law firms that do business with
corporations engaging in securities fraud.  The ruling comes at a pivotal point for a similar
class-action lawsuit covering more than a million shareholders who invested in scandal-ridden
Enron Corp. Stockholders in Enron, once the nation's seventh-largest company, are seeking
more than $30 billion from Wall Street investment banks, alleging they schemed with Enron to
hide its financial problems.  "This is a very anti-investor opinion and it could severely impact
the ongoing Enron case,"  said Patrick Coughlin, lead attorney for Enron investors. Shortly
after the decision, the justices put the Enron investors' suit on their list of cases to consider
Friday at one of their regular private conferences. The case the justices decided Tuesday has
been watched closely by business and industry, which argued that an adverse ruling would
open the door to a flood of frivolous lawsuits.  The court's decision prevents a litigation "free-
for-all," said Robin Conrad, executive vice president of the National Chamber Litigation Center
of the U.S. Chamber of Commerce.  The outcome "is important relief for manufacturers," said
Quentin Riegel, vice president for litigation at the National Association of Manufacturers. He
said the ruling will halt "creeping  liability, attempts to expand primary responsibility from one
party to third parties who were not involved in making misleading statements."  The justices
ruled against investors who alleged that two suppliers colluded with Charter Communications
Inc. to deceive Charter's stockholders and inflate the price of the cable TV company's stock.
Charter investors do not have the right to sue because they did not rely on the deceptive acts
of Charter's suppliers, said the majority opinion by Justice Anthony Kennedy.  "No member of
the investing public had knowledge" of the suppliers' deceptive acts, Kennedy wrote.
In his opinion, Kennedy hit some of the same points business groups have been arguing,
writing that an adverse ruling for business would mean that "overseas firms with no other
exposure to our securities laws could be deterred from doing business here."  Dissenting in
the case against Charter's suppliers, Justice John Paul Stevens said the court is engaged in a
continuing campaign to undercut investor lawsuits.  Charter inflated its revenues by $17
million and "it could not have done so absent the knowingly fraudulent actions" of the two
suppliers, Scientific-Atlanta Inc. and Motorola Inc., Stevens wrote.  Senate Banking Committee
Chairman Christopher Dodd, D-Conn., said the decision "goes beyond that commonsense law.
Instead of protecting innocent businesses, it would protect wrongdoers from the
consequences of their actions."  Regarding the Enron case, the justices could refuse to hear
it, which could spell its end, or the justices could send it back to lower courts, where lawyers
for the investors could try to revive it, though a federal appeals court has already ruled
against them.  Coughlin, representing Enron investors, says the case has somewhat different
circumstances than the suit against Charter's suppliers.  In the Enron case, he said, "these
investment banks did speak to the market about Enron's operations in analysts' reports and
through underwriting, so we may be able to show that  investors relied on that information."

Former Peregrine executive pleads guilty to lying to FBI
signonsandiego.com | 1/16/08 | Bruce V. Bigelow
Former Peregrine Systems executive Gary Lenz pleaded guilty yesterday to a single count of
lying to the FBI more than two years after the San Diego software company imploded in a
corporate accounting scandal.  The single count in the plea agreement was slight in
comparison to the 32 counts of conspiracy and fraud that Lenz faced when he went to trial in
April in federal court in downtown San Diego.  U.S. District Judge Thomas J. Whelan declared a
mistrial in that case after jurors deadlocked following three months of trial and 11 days of
deliberations.  Lenz, 60, faced a retrial that was set to begin Jan. 29.  Instead of admitting
that he had participated in a fraud that resulted in billions of dollars in shareholder losses,
Lenz admitted only that he had lied during the subsequent investigation.  The plea reflects
Lenz's bid to put an end to a personal ordeal that began six years ago, after he was fired
from Peregrine, said his attorney, Thomas Bienert Jr.  “He wants to get these matters behind
him,” Bienert said. “The past four years have come with tremendous emotional and economic
expense.”  While Lenz faces a sentence that could be as long as five years and a $250,000
fine, Bienert said he intends to request a sentence of probation.  Assistant U.S. Attorney Eric
Beste declined to comment after the hearing.  Sentencing was set for April 8 before Whelan,
who also accepted Lenz's change of plea in a brief hearing yesterday.  In a plea agreement
filed by prosecutors, Lenz admitted that he lied to FBI agents in an interview conducted
July 23, 2004, more than two years after Peregrine first disclosed that it had uncovered
accounting irregularities.  Lenz had been fired roughly five months earlier.  Lenz admitted that
he deliberately misled FBI agents who were investigating Peregrine's financial fraud. For
example, he denied knowing that Peregrine made quarterly revenue projections when he in
fact had participated in many revenue projection meetings.  As part of the plea agreement,
the government agreed to dismiss all other charges against Lenz, including  allegations he
had conspired with others to falsely inflate Peregrine's sales during those revenue projection
meetings. Lenz maintained his innocence when he was indicted in 2004, and he pleaded not
guilty in April when he went to trial with three others on federal charges of fraud, conspiracy
and falsifying books and records.  Bienert argued that other executives at Peregrine withheld
information from Lenz about the company's bogus software sales deals and the accounting
tricks they used to cover them up. Although Lenz was recruited in 2000 to serve as president
and chief operating officer, Peregrine's No. 2  executive position, Bienert said Lenz was moved
out of that job after five months because other top executives viewed him as inept.  Lenz held
three other positions during the 19 months he worked for the company.

Attorney sentenced in real estate fraud
indystar.com | 1/16/08 | Staff Writer
HAMMOND, Ind. -- Gary attorney Willie Harris has been sentenced to 55 months in prison
for his role in a real estate fraud scheme.  Harris was convicted in September on fraud and tax
evasion charges for skimming $50,000 from the profits of a 2000 real estate deal involving the
now-defunct Gary Urban Enterprise Association. The Indiana Supreme Court suspended
Harris' law license earlier this month.  Harris was ordered to report to prison March 10.
Attorney Tom Mullins said he intends to appeal. Two other men were convicted in the scheme.
Roosevelt Powell was sentenced to 37 months in prison last week and former Lake County
Councilman Will Smith Jr. is scheduled to be sentenced Friday.

Lawyer shamefully admits to embezzlement, gets 2 years
journalinquirer.com | 1/15/08 | Jenna Carlesso
HARTFORD - In his more than 20 years as a lawyer, James Higgins never set foot in a
courtroom the way he did Monday.  The Manchester man, regarded for work as a partner in a
prominent local firm, Penny, Botticello, O'Brien & Higgins P.C., faced a judge to confess to
embezzling more than $100,000 from his former firm and several of his clients.  With his
former partners watching from a bench behind him, Higgins, 52, pleaded guilty to one count of
first-degree larceny and was sentenced to two years behind bars.  "I'm embarrassed to be
here - totally ashamed to be here," Higgins told a judge during the Superior Court hearing.
Asking only for his wife and children to have visitation rights when he goes to prison, Higgins
apologized to his family and former colleagues in the courtroom.  "He's taken responsibility
from day one," his lawyer, Jefferson D. Jelly, said after the sentencing. "He wanted to send a
message to other lawyers without totally crippling himself."  Since his arrest in November
2006, Higgins has made full restitution of $112,000 to his clients and the Manchester firm,
resigned from the bar, and waived his ability to reapply for a law license in the state, Jelly
added.  "He has respect for the system, even though he broke that respect," Jelly said. "He
has no defenses and no excuses."  Superior Court Judge Elliot Solomon said the saddest part
of the hearing wasn't the prison sentence, rather, it was seeing Higgins lose out on the
chance to continue doing something he loved.  "Being a lawyer creates a special trust,"
Solomon said. "The clients look up to you; they think highly of you. You've violated that special
trust."  He continued: "When I look at the 28 years or so that you've practiced, you have
probably done a lot of good for people. I think lawyers in  general do wonderful things.
Unfortunately, a large segment of society doesn't hold the bar to the esteem it should be
held."  Police said Higgins had embezzled the money from clients between 1999 and 2006. He
was fired from the law firm on Sept. 8, 2006, and  the company dropped his last name from its
title.  Shortly before he was fired, the firm wrote to all its clients that Higgins was dismissed
after it was discovered he had misappropriated money from several probate accounts as well
as the firm itself.  Losing his license in Connecticut won't stop Higgins from applying for one in
another state, Solomon said, but he cautioned him: "This is going to follow you wherever you
go.  "I'm disappointed every time a member of the bar appears before me for this
circumstance," Solomon told him. "But you're still a young man. You still have the ability to do
good things for a lot of people."

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