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Published on: January 29 2023 by pipiads

USAO-MN Announces Charges Against 47 Defendants in $250 Million Feeding Our Future Fraud Scheme

In March 2020,, early in the pandemic, a small group of people in Minnesota had an idea and saw an opportunity. These individuals believed they could steal 10s of millions of dollars from a federal child nutrition program by claiming to serve food to needy children when they were not. Their goal was to make as much money for themselves as they could While falsely claiming to feed children during the pandemic. As their plan met with initial success, they were joined by many others who also wanted to make money by falsely claiming To feed needy children. Before long, the scheme that began with a simple idea in March of 2020, grew to become the largest pandemic fraud In the United States. Good morning, My name is Andy Luger and I am the United States Attorney for the District of Minnesota. With me today are FBI Special Agent in Charge, Michael Paul, IRS Special Agent in Charge, Justin Campbell, Inspector in charge of the Postal Inspection Service, Ruth Mendonza and Kevin Chambers, associate deputy attorney general And director of Covid 19 fraud enforcement For the Department of Justike. We are here to describe charges in what has become known in Minnesota as the feeding- our future fraud. Today, We are announcing charges against 47 defendants In six indictments and three informations. The defendants are charged with federal crimes, including conspiracy, Wire fraud, money laundering and paying and receiving illegal kickbacks. In a moment I will explain. explain the fraud in detail, But is the chief federal law enforcement officer for the state of Minnesota. Let me say this upfront: As alleged in these indictments, over a short period of time, these 47 defendants Engaged in a brazen scheme A staggering proportions, As set forth in the indictments. Yeah, This is a scheme that begins with Amy Bach and feeding our future. Feeding our future is at the core of this fraud Engineering a scheme that included many different groups of defendants, as set forth in the six indictments That I will describe. The different groups on this chart- Safari, Haji's kitchen, Brava, Empire, Jake Jigger And S and s catering, And the defendant's listed under each group represent the six indictments. Each indictment charges a group of defendants who worked together to defraud the federal child Nutrition program, with feeding our future as their sponsor. Each of the groups of defendants created entities, Typically LLCs, contracted with feeding our future as a sponsor and then set up their own food sites. there were enrolled in the child Nutrition program under Amy Bach. Some of the groups, such as the Safari And the Empire Group, Had many food sites claiming to be feeding needy Children. Others, such as the Bravo Group in Rochester, only claimed one food site. While some of the details About how these defendants carried out the scheme Differed, The basics of the sea scheme were the same. In addition to the 44 defendants listed on this chart in the six indictments, We have charged three individuals by information, which means that they are expected to waive their right to a grand jury and are expected to plead guilty and admit their roles in this massive screen scheme. We have packets of indictments And informations for the press And they will be posted on our website today. Before I walked through the federal child Nutrition program and the details Alleged in these indictments, I want to provide An overview of some of the striking facts that we have uncovered in our investigation. First, The defendants Obtained over $250 million from the feeding the child Nutrition program through feeding our future. This money was to be used to feed needy Children in Minnesota. Instead, it was used primarily for the benefit of the defendants, And this $250 million is the floor. Our investigation continues. They use this money that was supposed to be used for feeding Children To buy houses in Minnesota, Resort property and real estate In Kenya and Turkey, Luxury cars, commercial property, jewelry and much more. We have seized property that was purchased with funds from the fraud wherever possible and we continue to find and seize property these defendants purchased with money from the scheme. The work of locating the property is ongoing And before I go on, I want to emphasize an additional point that can otherwise get lost in this massive scheme. The money that the defendants took Comes from a child nutrition program designed to provide meals to needy Children. The funds are to be used to reimburse partikipants for the food they purchase and the cost of providing meals. The reimbursement rates are modest. No one partikipating in this scheme legitimately, in this program legitimately, would ever imagine that they could hire staff, Purchase food, store the food Candle, the logistiks involved in this process, make meals, Serve them to Children and still make millions of dollars. It's not possible. Even if you are feeding thousands of Children, as these defendants claimed, You simply cannot make much money working on this program legitimately. When this program works as it's supposed to, it takes a lot of effort To run an official efficiently so that the food gets to Children. Here. The defendant's primarily pocketed the money for themselves, Spending little on food, staff and logistiks As alleged in the indictment. They didn't have to. They were running a scheme, Not a child Nutrition program, For a $250 million fraud. The allegations make clear that the defendants worked incredibly fast, Stealing money for themselves at a breakneck pace. The plan began when the pandemic started in late March 2020 and spread rapidly. It quickly became the ultimate get rich quick scheme, As the defendants capitalized on the pandemic and grew this operation within months, And the defendants would have kept going. Their scheme was only shut down When this investigation went public, with the unsealing of search warrants in January of 2022.. Now, perhaps the most staggering fact of all Is the number of fake meals. The defendants claimed to have served More than 125 million fake meals. Alright issue in this case, When multiple sites working with feeding our future Claimed 5000. Or up to 6000 meals per day, often seven days a week, The numbers add up Again. They did all of this in a little over 20 months. These defendants were executing their scheme fast and in as many locations as they could. Feeding our future in. these defendants Sponsored Over 200 sites around Minnesota. The indictments detail a number of these sites and I'll tok about one or two during these remarks. Different groups of defendants utilize the sights, including sites where they claim to be feeding Children, Thousands of them at mobile home parks, small towns And storefronts. As I said, we have charged today 47 defendants. These are the first set of charges. Three of these defendants are expected to plead guilty shortly, In addition to Amy Bach. Other feeding our future employees are charged in addition to the defendants who enrolled the false feeding sites, submitted false documentation And made hundreds of thousands and in some cases, millions of dollars from this scheme. Finally, As the indictments describe, This was a pay to play scheme. The money not only flowed to the defendant's operating the fake meal sites, it also flowed back Feeding our future in the form of kickbacks paid to employees In the form of millions of dollars Featuring our future employees, assistant on and received millions of dollars in kickbacks for sponsoring the fake feeding sites. Well, There are many details to the federal child nutrition programs, some of which are set forth in the indictments. It is an essence of fairly straightforward program when it works as it's supposed to. The federal funds for this program or provided by the Department of Agriculture and administered Mde in Minnesota, Approved sponsors work with feeding sites on the paperwork and monitor the sites.

Alleged Cop Impersonator Gets Arrested by Georgia Police

main street. hey, partner, hi, hey, i'm officer park with acquire police department. uh, only reason why i'm pulling you over. uh, i guess y'all were. well, that's my chief of police right there. he saw you all go around traffic. he was trying to figure out who, who you are with or what was going on, okay. so he called out on the radio and asked for martin, and that's why i got you pulled over. that's fine. so, um, out now, just let him come up if you want. you want to ask who you all work for? georgia metropolitan. you see all the lights on. why is the car registered to an individual? that's mine. so what are you doing with all these red lights? sorry, why all this emergency lights? and did i see you using emergency lights to pull out into traffic on lakewood? that's a stand still, so i thought you liked hoping to see me that i was trying to get in the line. who do you work for? this is my company. i'm an off-roading hero operator. this is my company. okay, yeah, i do, for no details. yeah, you look like me. you're impersonating a police officer. oh, no, sir, i'm not in first place. so we got any id on you. yes, sir, we look in the front. are you looking at them? i see red lights. i saw red lights when you pulled out. yeah, that's right, that's when it activated. to the back: yeah, where's your id? right yesterday. do you have a? do you have a lighting permit for the vehicle? yeah, right down the glass. okay, thank you, sir. good luck, be right back with you, okay, all right, yeah, it's got a light permit. i'm just looking at this, sir. the light permits, uh, good, through december of this year. hey, chief, what do you say? that cross was where you saw him activate the lights on lake hackworth. what's the name of the 70s awkward muffler out on the 92 in that spring of traffic there, anytime, okay, okay, so, near cherokee street, that is roughly about about 300 feet. he's got a windshield tent. are that's valid? if you have a lighting permit, that's valid for the vehicle, right, that's what he fears about. if he has a company that does escorts, i'd have to look back in the law. i don't. i would assume it's amber, amber or white, right? um, but at the very least, from what keeps saying, he's improperly using them. he's not on an escort, he's just trying to keep his traffic. so at the very least, i didn't want any proper use of uh west ocga. all right, mr becky, there's your id back. thank you, look, um, given with all the light and permanent stuff i'm seeing, i'm just gonna assume everything's properly permitted and stuff for the vehicle it is, sir, that said, with what my chiefs observation, you know the use of those are for strictly business purposes. you can't, you can't, be using it to pull in the traffic. okay, yes, sir, so i am gonna issue a citation for unlawful operation for emergency vehicle. okay, just just here. we just toked to the chief real quick before because i'm telling you how it's going to work, even though i doing this on my private side. once i get this tiket, g-dot, it's going to ground me again. i'm going to get grounded and i trying to. that's why i try to don't interfere my personal business with gdot. anytime they run a driver's license number, i'm going to get grounded. i'm pleased. i asked the chief, please. i hear, but you have to understand that this whole, this whole scenario is a big issue for us too, because the uniform and lights and all that, this is one of those. the thing is, this is my company. i run my company respectfully. okay, because i deal with high clients. this is my uniform, not normally say officer nothing. this is my uniform. i got you, you understand. but please, i just want to tok to chief. i know you're going to still do your job. i mean no harm, you can check me. my bachelor's fault for everyone. express means just hear me out. i don't want to get it if. if the chief wants target, that's fine, but this is going to stand, all right. just let me explain this. what i need to do is sign here at the x. signing is not going to know. [Music] everything i point out to everyone else. auto generated court date right now is showing for the 18th of august at 9: 00 am at our court. the address is right there on the backyard copy. this phone number right here is to the court services. takes about three to five business days for the citation. give them a call and i'll explain everything to you. okay, do you have any further? i have to attend the court. i just compared because i already. once you contact that number, they'll tell you all your options. if, uh, if, you can just pay it out right and they'll explain your payment problem. have you got a business card? can i step out and you're all hot, but what about all these people in there? i know ain't. no, that's not the one that's for them. yeah, they're trying to crack the winner right now, chief, don't you open all the windows. no, the thing is, when i ride, when i ride the air, the compressor is going to kick in. yeah, chief, yeah, i'm not trying to be an opinion in your hip. the chief, please, man, i don't want to get grounded, please from g-dot. please. i get that. i live in, i live in the community. i live right there on uh 30-45. i'm not a bad person. please, chief, i beg of you, i don't think you're bad. let me have your business card. i don't think you're a bad person. no, i just don't want to get impersonating a police officer. i do not, i don't want to know, i don't impersonate police officers, sir. that's why i was careful. i i present myself on my uniform. also, i'm a former police in the bahamas. i don't have nothing that impersonate, paul. we need real cops. i know you could apply. i don't want to, honestly, i don't want to apply for awkward. i, yeah, i don't want to apply for awkward. if it's hard to find your business card, just what's good funding before you, sir? okay, anytime, all right, thank you very much, sir. all right, unless you have any other questions, you're free to leave. see, i want to verify your employment and i'm probably going to have cid looking for this. to be honest, i and also an author right here. yeah, that's why he was calling my supervisor just now. all right, that's. that's that's between you and your boss. okay, yeah, like i said, we'll do our follow-up book. [Music]. oh god. [Applause] you.

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What happened to Otto Warmbier in North Korea? | DW Documentary

An airfield near Atlanta, Emergency doctor Mike Flueckiger is embarking on a special mission Destination North Korea. “This is a medical evacuation - we need you to go in and bring him out”. A mission to retrieve US citizen Otto Warmbier, last seen in public 14 months earlier, A prisoner of the regime of North Korea. War-mongering between Kim Jong-un and Donald Trump is at its peak. “They will be met with fire and fury like the world has never seen”. A silent mission - on a difficult route. “We will not to use South Korea, China or Russia to help us plan the mission”. Days later, Otto Warmbier is back home, But he is fatally ill. Severe brain damage, says the coroner. Cause: unknown: Was it torture? Warmbier’s parents become pawns in a game played by President Trump, who announces that the North Korean leader knew nothing about Warmbier. “All I can do is shake my head right. Too many lies right”. When the State Department sends emergency doctor Mike Flueckiger to North Korea, his plane of choice is still in Africa. The carrier Phoenix Air often evacuates Ebola patients, But for this mission, Flueckiger insists on the best plane and the best team. He doesn’t even tell his family where he’s headed. “I didn’t tell them where I’ve been until the mission was over, because it has become more and more apparent that it was a special mission. I told them I was going to Korea to pick up a patient. I did not say North Korea”. At Phoenix Air’s headquarters, a second team led by Chief Operator Dent Thompson has to solve a logistikal problem. The plane will not be allowed to refuel in Pyongyang. “Currently, there are certain sanctions that are in place between the US- government and the North Korean government, and for us to pay for anything, we would have to get special permits, which we simply didn’t have time to do. ”. On the morning of June 10th 2017, a Saturday, the plane takes off on its mission. Flueckiger is joined by two male nurses and two US State Department representatives. With refueling stops in Montana and Alaska, their flight takes them halfway around the globe to northern Japan - and hopefully on to Pyongyang, The outskirts of Cincinnati, Ohio. Otto Warmbier grew up here, in the suburb of Wyoming At first. his parents don’t answer our inquiries. They aren’t seeking the spotlight. The town has modest and affluent neighborhoods. Otto Warmbier’s father runs a medium-sized business. Otto, the oldest of three children, is the pride of both his family and his high school. At graduation, he holds the commencement address. His future is mapped out: College in Virginia, a scholarship, a planned semester abroad in Hong Kong. First, a New Year’s adventure: North Korea. He books through a Chinese travel agency. Its slogan: We take you to “destinations your mother would rather you stay away from”. He joins an international group. they have a great time. “He's left a mark on me. He was such a lovely lad, I spoke to a lot of people and they were devastated”. Every year the agency touts their dazzling highlight. in Pyongyang, The alcohol flows freely. the guides make sure everyone’s in a good mood. Nights are long at Pyonyang’s only hotel for foreigners. Otto’s group has fun too. It isn’t clear whether they also took on the challenge of the forbidden 5th floor, but many tourists have in the past. It is the staff’s floor, With hallways full of propaganda slogans. The hotel’s surveillance center is also located here. Tourists are usually just admonished. They act innocent and run off. This New Year’s Eve, however, the cameras capture someone taking a poster from the wall. It is 1:57 am And it is, according to the trial, Otto Warmbier. Instead of leaving North Korea on January 2nd, he is taken into custody. “He simply had a tap on the shoulder. Two guards took him away. I laughingly said to him: ‘That is the last we’ll ever see of you’ []. But of course there was a huge irony in my words. We didn’t know what would happen, but it was the last time anyone saw him”. Two months later, North Korea’s propaganda televises a staged confession: “I entirely beg you, people and government of the DPR Korea, for your forgiveness, Please. I've made the worst mistake of my life, but please [] I should never allow myself to be lured by the US administration to commit a crime in this country”. A show trial with obviously coerced statements, Perhaps in exchange for a pardon. 16 days later, Warmbier discovers that his hopes were in vain. He is sentenced to 15 years of hard labor for subversive activities. His condition from this point on remains uncertain. Shortly before takeoff, Dr Mike Flueckiger is given the few details known about Warmbier’s condition. “I had one small written note, one paragraph, about his condition, saying he was in a coma at a Pyongyang hospital. That is really all I knew, except that he’s been hospitalized for 15 months”. Was Flueckiger worried about the threat of war? ”Not really” he says. “I think I had felt that the relationship between North Korea and the US had been bad for a while And I thought if this door had opened to bring Warmbier back, then there'd been negotiations to ease things a bit”. In fact, North Korea’s sudden diplomatik effort surprises the US negotiators. Mickey Bergman is one of them. Since Warmbier’s arrest, he had been trying to gain access to him with the help of UN contacts. Bergman works together with Bill Richardson, former governor of New Mexico and former US ambassador to the UN. Hardly any other team is as experienced in dealing with Pyongyang as they are. “In general, the only available direct channel that we have are the people that represent North Korea here at the United Nations. The individuals are people that know the governor from before. they know me from before, So that’s a direct channel. But at the end of the day, they are not decision makers, And if you want to get to a deal, when you want to get to an understanding, you have to be there in person. So the first priority is: how do we get ourselves Invited to North Korea To make sure that we can tok to the people who can make decisions about this”. “It was different. you knew that Otto Warmbier by the North Koreans was considered something special Because he was from the Midwest. he was an attractive young men, he was an all-American boy. You knew this one was special because it got a lot of TV coverage from North Korea: The trial where the young man was in trauma. he was very upset and he was carried around And you knew that this was a very sensitive time in United States - North Korea-relations. So the North Koreans you knew early on would use him as a bargaining chip to get something back from the United States. They always use politikal prisoners as bargaining chips - They want something in return”. “Would that be typical that US inmates suffer physical torture or violence”. “The North Koreas are very tough on interrogations and their prisons are not ideal. Sometimes they make this politikal prisoners work in the fields, so labor is involved. Do they specifically torture? I don’t have any evidence they do. Do they treat the prisoners well? No, I think where the North Koreans fall short is an international standard of counselor visits. Sometimes they do, sometimes they don’t. It depends on the price of the prisoner that they hold. They want to dramatize as much as they can”. Insiders call these contacts between North Korea’s UN representatives and people like Richards the “New York channel“. For a long time it’s been the only connection between the two countries. Here at the Palm Restaurant it is kept alive with steak and lobster over meetings that take place every few weeks. Mickey Bergman believes he’s close to a breakthrough. He is told to come to Pyongyang. “We got an invitation. I went there - even on the plane on the way - I did have the fantasy in my mind that I’m coming back with Otto”. Swedish diplomats also pressure Pyongyang There.

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Bodycam Shows Woman Allegedly Assaulting, Threatening to Spit On Florida Police Officer

oh. [Music]. hey, stop the car. stop you, stay here. no, what are you doing here? turn the car off. turn the car off now. turn the car off now. turn the car off now. [Music]. [Music] on your back. [Music], [Music]. oh, oh, oh, sit down, stop touching me. that's why you're gonna wait. i'm mad. okay, this didn't have to be like touching me. it did because you were aggressive for no reason. all right, you know you're wrong and i take your whole job. what the fuck you got me? i kicked this whole. call my mama. listen, don't, bro, she can tok to me. you can't take it to me, check her. you can't say: hold me face, my fuck up. i will, if you were just a second, okay, um, [Music], [Music]. sir, take that inside and keep filling it up. i got you, okay, don't touch me. okay, i'm trying to put on new ones. so we're live. oh, don't push. oh, my god, oh, oh. [Music]. fix my wrist, okay, give, go back inside please.

Ponzi: The Financial Idiot Who Scammed the World

was a time when the financial World marveled at the genius of Charles Ponzi, the man who was in charge of one of the most successful business investments in America. he had millions of dollars at his disposal and crowds of people lining up literally begging him to take their money. little did everyone know the ponzi's business was built on nothing but lies. the whole thing was an outrageous scam, one which turned Ponzi into a very rich man that ruined the lives of thousands of innocent people. ponzi's deception was so shocking and Infamous that even now, a hundred years later, the scam still shares his name: the Ponzi scheme. this video is the Untold Truth of The Man Behind the scam and how to make millions of dollars of nothing but lies. foreign [Music]. [Music] was born in Italy on March 3rd 1882.. his father was a hard-working Postman and overall, his family was financially comfortable, but it used to be so much more than that. ponzi's grandparents and great-grandparents had all been successful businessmen, merchants and public officials. the demotion to the working class really affected Ponzi from a young age and made him bitter and resentful. he wondered why he had to suffer for his family's failing fortunes. why couldn't he have been born rich and enjoy a life of leisure without having to worry about a job or money. as a teenager, Ponzi inherited a modest sum of money following his father's death. he used it to enroll in college, as his mother had her heart set on him going to a prestigious college to get an education. but Ponzi had other plans. instead of studying and going to class, he decided to burn through his savings, addressing in the latest fashions and eating at the fanciest restaurants in town, then at night maybe the theater or the Opera, or some gambling at the casino with his wealthy friends. nothing was too extravagant or expensive for him. Ponzi liked to pretend that he was just like his rich friends and that he had endless money. but it was an illusion, and one day it all came crashing down around him. his inheritance money finally ran out and since his Studies have been completely neglected, he had no chance of graduating. his uncle offered him work as a clerk, but the idea of finding a nine-to-five job repulsed Fonzie, who considered himself too good for menial labor. he felt he had only one choice left: traveled to America and strike it rich there. [Music] thank you. in 1903, Ponzi arrived in Boston aboard the SS Vancouver. he felt a deep shame in his heart that he'd let his mother down and believed that the only way to redeem himself was to return to Italy as a rich man. the only problem was he had no idea how to do that. America proved to be a much-needed reality check for young Ponzi. there was no more inheritance money and no more relatives to bail him out of trouble. as distasteful as he found physical labor, he had no choice. if he wanted to eat, he needed to work. Ponzi spent the next few years up and down the East Coast, from New York to Florida. he worked as a sign painter, a waiter, a grocery clerk, a dishwasher, a factory hand, an insurance salesman and a sewing machine repairman. none of the gigs lasted long, though. Ponzi either quit because he hated the work or he was fired because he tried to cheat the customers. this often meant he resorted to stealing or begging for scraps of food and sleeping in Parks. it was a far cry from his Carefree days as a high roller back in Rome, and even when Ponzi did manage to scrape together a bit of cash, he would inevitably spend it all on a big night owl or a week weekend vacation. to remind himself of the good old days. in 1907, Ponzi traveled to Montreal, hoping that Canada would prove to be more welcoming and lucrative, and at first things were looking up for him. he found work as a clerk at a bank that mainly served Italian immigrants, called Banco zarosi. it was the same type of job that ponzia turned down back in Rome because he considered himself too good for it, but it was surprising how a few years on the streets working for minimum wage could change his perspective. unfortunately for Ponzi, his new job did not last long, because his boss was a con man. so Rossi was using an age-old fraud known as robbing Peter to pay Paul. in other words, he was using the money from his newest clients in order to pay off his older ones. this allowed zarosi to offer six percent interest rates on all Bank deposits, which was double the average rate. however, his clients started getting suspicious when their relatives back home kept complaining they weren't receiving the money the bank was supposed to send. in mid-1908, the authorities began investigating the bank for embezzlement, at which point zarosi filled a suitcase with all the cash he could carry and fled to Mexico, leaving his employees in the family to deal with with the Fallout from the scam. not wanting to be the one who takes the fall, Ponzi intended to travel back to the United States so he didn't have to be involved in the investigation and Fallout from zarossi's scam. but before that he did something very stupid so that he wouldn't have to start from scratch again. he thought he would give himself a little going away present. by forging a check from one of his bank's clients, a shipping firm called the Canadian warehousing company, Ponzi stole a blank check from the manager's checkbook and filled it out for 423.58- a believable and unsuspicious amount, thought ponzie. but as soon as he tried to catch the fraudulent check, the bank teller easily spotted the fake signature and alerted the police. Ponzi got three years in prison at St Vincent de Paul Penitentiary. but of course this was just the start of ponzi's crimes. [Music] thank you. Ponzi was released on parole after two years and he immediately made plans to travel to the states again. but he didn't go alone. instead he took with him five Italian immigrants, all fresh off the boat, without any proper papers. as he'd been paid to smuggle these men into America, Fonzi figured this would set him up with a nice quick payday now that he was a free man again. however, he got caught and was arrested once again. still, Ponzi hoped that if he pled guilty, the judge would go easy on him and maybe just let him off with a small fine. but once the judge banged his gavel and passed the sentence, Fonzie's heart sank. he was given another two years in federal prison in Atlanta. after being released from jail for a second time, Ponzi was unsure of his next move. he'd come up with all these different plans to get rich whilst in prison, but they all required money and Ponzi was penniless. therefore, with little Choice, he wandered from state to state again, working whatever odd jobs came his way. ultimately, he found a decent position as a clerk with an import export business called the Jr Pool Company in Boston. so after a decade and a half in North America, he'd ended up in the same place where he began. life in Boston was decidedly better for Ponzi. the second time around the, though, he was good at his job for a change, and it was promoted for it. not just that, but Ponzi met 21 year old Rose geneko and instantly fell head over heels for her. the first time they spoke, Ponzi was so nervous that he could barely string two words together. fortunately for him, the feeling was mutual and the two got married in early 1918.. his new married life made Ponzi feel happy, but he also felt inadequate. even though Rose was content with a simple life, Ponte had much grander Ambitions. he wanted to be able to shower her with diamond rings, fancy clothes and expensive holidays. obviously, this was never going to happen on a Clerk's salary. so six months after the wedding, Ponte quit his steady job at JR pool and began looking for something new to do. he started off by joining his father-in-law's Wholesale Fruit selling business. the company was struggling and since Ponzi always bragged to his wife about being a financial genius, this was the time for him to show everyone what he could do. however, Ponzi was unable to save the failing business and

The FTX Collapse, Explained | What Went Wrong | WSJ

- [Narrator] Over $150 billion In three days: that's how much the world's 15 largest cryptokurrencies lost in market value. It's because of the Crypto Exchange platform, FTX, which is behind this token named FTT. On November 6th, the token's value began to fall, losing more than 80% of its worth in the span of 72 hours. Once seen as a survivor in a struggling market, the fall of FTX has sent shockwaves through the cryptokurrency industry. So what went wrong? FTX is the brainchild of Sam Bankman-Fried. He's commonly known as SBF on social media. He's been previously hailed as a savior of the crypto industry. - You were called the JP Morgan of crypto. - [Sam] Yep. - Does that bother you or not? - It doesn't bother me too much. - [Narrator] Bankman-Fried founded the quantitative trading firm Alameda Research in 2017.. Two years later, he started FTX, an exchange platform for buying or selling cryptokurrencies. Right now, he's the majority owner of both firms. - That kinda aroused some skeptikism among industry players and traders, investors, stakeholders- that there could be some sort of conflict of interest in terms of whether research was getting preferential treatment on FTX, vice versa, But the official narrative that SBF gave in the past is that the two companies are separate entities. - [Narrator]. After its launch, FTX attracted major investments from Silicon Valley and Wall Street. - Yeah, we'd raised a few billion dollars over the course of the last couple years and we're a profitable business. - [Narrator] It grew into the fourth largest cryptokurrency exchange for derivatives trading. Celebrities promoted the platform in ads. - I'm getting into crypto with FTX, You in? - It's FTX. It's a safe and easy way to get into crypto. - I don't think so. - [Narrator] FTX was gaining steam and, in the process, often tussled with Binance, the world's largest crypto exchange by volume. - When FTX was getting started, Binance invested in FTX and it was one of the crypto exchange's earliest investors. But FTX, as we know, grew really rapidly and became a very substantial rival to Binance. - [Narrator]. As FTX grew in the industry, Bankman-Fried furthered his reputation as a Crypto savior when digital asset prices collapsed earlier this year. - It's not fair to customers. - [Narrator] He bailed out firms spending about a billion dollars. - It's okay to do a deal that is moderately bad in bailing out a place. - [Narrator]. But that image didn't last. On November 2nd, CoinDesk published a report based on a leaked Alameda balance sheet. According to the leaked data, Alameda claimed it had over 14 billion in assets at the end of June, but most of that was FTX's tokens. Alameda CEO Caroline Ellison tweeted that the balance sheet wasn't complete - Caroline also said its financial situation is under control. the company is doing well. However, it seems like the market just didn't really buy that, and then traders continue to withdraw from FTX. - [Narrator]. FTX and Alameda did not respond to a request for comment. Things escalated on November 6th when Binance said it would offload hundreds of millions of dollars of FTT. Binance did not respond to a request for comment. The announcement sparked mass withdrawals. That day, FTX processed $4 billion of transactions, many times the normal amount for a day. Some got backlogged, which sparked demand for more. By November 7th, that number ballooned to $6 billion. On the 8th, a day later, FTX's finances were in crisis. Binance stepped in and said it would buy the company. It seemed like FTX might have solved its liquidity problem, But on the 9th, Binance backed out of the non-binding acquisition. The next day, The Journal reported that FTX used money from customers to fund risky bets made by Alameda. - It's a shocking revelation for a lot of people in the industry because, even though there has been a lot of speculation about FTX and Alameda research being joined at the hip. nobody could have foreseen that SBF was willing to transfer billions of customer funds at his crypto exchange to help his crypto trading firm. - [Narrator]. The Securities and Exchange Commission and Justike Department are investigating FTX. according to a person familiar with the matter, - This is not like the New York Stok Exchange or Nasdaq. They take people's money, they borrow against it- It's not much disclosure- And then they trade against their customers. - [Narrator]. A spokesperson for the Justike Department declined to comment. Bankman-Fried told investors that FTX couldn't cover withdrawals since its collateral was dropping in value and couldn't be liquidated. according to people familiar with the matter, On the 11th Bankman-Fried resigned as CEO and FTX and Alameda filed for bankruptcy. Afterwards, FTX said it was probing a potential hack. More than 370 million worth of crypto funds appeared to be missing, according to crypto analytiks firm Elliptik. On the 12th, The Journal reported that Alameda and FTX executives knew that FTX had lent its customers money to Alameda. - So a lot of retail traders and investors I've toked to are feeling desperate or frustrated. The majority of the people in the industry could not have seen this coming because FTX is such a dominant player. - [Narrator]. The fallout has led other companies to tout their reserves and call for more transparency in the industry. As of November 11th, according to the bankruptcy filing FTX is estimation of their liabilities would make it the largest crypto related bankruptcy ever filed.