In that interim, I refer our readers to the excellent latest work by Dan Browning of the Star Tribune. I personally think Dan deserves a Pulitzer, for his investigative reporting. He is fair, accurate, and he has been well ahead of the curve on this story.
Here are the first few paragraphs from Dan:
Feds target longtime associate of Cook's
It appears that the investigation into Trevor Cook's $194 million international Ponzi scheme is far from over.
A half-dozen federal search warrants unsealed Wednesday in St. Paul reveal that one of Cook's longtime associates has agreed to plead guilty in the case and is working with federal agents zeroing in on Gerald Durand, a Faribault entrepreneur.
Durand was deeply involved in the decision making at Cook's enterprise, court records indicate. The two had done business together since the 1990s, starting out in coins. In February 2008, Durand traveled to Switzerland to investigate a report that Crown Forex SA, which was handling Cook's currency trades, was teetering on the edge of bankruptcy and had just $1 million left in its accounts.My best guess so far is that Cook rolled over on his former colleagues, and that Kiley and Beckman who have been playing coy with cooperating with the authorities have let it go too late to make an equally favorable deal. There has been no mention recently about co-defendant Pettengill.
Durand abruptly vacated the offices where he and Cook worked in the Van Dusen mansion in Minneapolis in June 2008. Cook pleaded guilty in August and is serving a 25-year sentence in the fraud.
A sworn statement filed Monday by FBI special agent Eileen Rice identifies the associate who is working with authorities as "Cooperating Defendant #1" or "CD#1." It says the associate told law enforcement that Cook agreed to pay Durand $5,000 to $15,000 a month if he would not tell investors about the fraud and if he would not try to poach any of Cook's investors. Payments continued through June 2009.
Durand could not be reached for comment, but he has denied wrongdoing in earlier interviews.
Rice wrote that she's seen evidence that Durand has tried to conceal his assets or involvement with different companies. He transferred ownership of his home into his wife's name during a bankruptcy proceeding, admitting that he was trying to protect it from creditors, she said. He uses a bank account in her name as well.
Bank records cited in the affidavit indicate that Durand may have significantly under reported his income from Cook's currency program.
For those who haven't followed the series either here, or with Dan Browning's STrib coverage, Trevor Cook was convicted and sent to jail last year; and along with Gerald Durand, Chris Pettengill, 'Bo' Beckman, Pat Kiley and others are alleged co-conspirators who are accused of targeting a number of people, but most particularly conservative Christians, in an Affinity Scam. The Scam used radio shows which made claims that promised returns which were false, using in part the right wing anti-government fear mongering that we have so often decried here. The radio shows used both AM stations here in MN, including prominently the Salem Broadcasting network, and short wave radio broadcasts to reach their 'investors', and word of mouth.
As the documents I referred to above indicated, Gerald Durand is accused by the FBI agent in her affidavit of the original Affinity scam and of continuing to promote subsequent investment scams, including over the Salem AM radio stations. As recently as February 2011 Durand is alleged to still be trying to work with one of those local radio stations. It appears to be one of the Salem stations previously used to continue with new investment scams, the Patriot 1280 AM, as those were the files identified from Durand which were seized in the search warrant, and an unnamed radio employee met with Durand to do a new show similar to the Strom show.
Apparently, as we surmised, Gerald Durand allegedly was receiving payments from Trevor Cook while using the David Strom show on the Salem station 1280 AM 'the Patriot' to promote these continuing scams; not poaching potential 'investors' from each other was part of their alleged deal right up to when Dan Browning broke the story in June of 2009. From the documents I read, and from the Browning story, it appears the Scam funds were going directly from Cook to Durand to David Strom and the Patriot 1280 up until June 2009. We can only hope that for the sake of the investors, the court appointed Receiver will pursue clawbacks of the funds from both Strom and Salem broadcasting.
Our Affinity Scam series deals with how David Strom continued with Durand and Pettengill funding his show as the details of the Scam emerged, although promoting the show as being funded by a non-profit educational organization, until mid-September of 2009. Even as we brought the issues that seemed to us to be obvious about the source of the money that Strom was taking to his attention, Strom refused to us to look more closely at his associates Durand and Pettengill. He continued to take money directly from them while presenting his show as being sponsored by an educational non-profit organization to his listeners, both in a verbal announcement before every show, and on his Patriot station web site. In 2010, Strom left the radio show to be the Research Director of Tom Emmer's Republican campaign for Governor of Minnesota, despite Strom apparently not researching his own sponsors. I found that a tremendous irony, and I think it suggests just how little the right concerns itself with safety and integrity, so long as they profit. And profit they do, from their base, by exploiting and creating their fears and then making money from them..
We can only hope and pray that those who are found criminally responsible for the Scam will go to jail, for a very long long time. And pray as well that so far as is humanly possible that the investors who lost their money to this scam will be compensated by receiving more of their money back than the few cents on the dollar they've received so far.
Watch for more updates here. Another co-defendant, radio host Pat Kiley, is due in court on Monday.
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