Co-Author of "The Madness of Michele Bachmann" Karl Bremer Sues The New Republic Over Purloined Photo of Fleeing Felon Frank Vennes

Mary Divine in the PiPress:

Stillwater Township writer and photographer Karl Bremer is suing the New Republic magazine for "unfair competition," claiming they used a photograph he took of Frank Vennes Jr. on their cover without his permission.

Bremer, who writes the Ripple in Stillwater blog, has sued the Washington, D.C.-based magazine in Washington County District Court. He is asking for $5,000 in damages.

Vennes was linked to the Tom Petters' Ponzi scheme, accused of using false documents to entice investors to invest money with Petters and his various companies.

Bremer, one of the authors of "The Madness of Michele Bachmann: A Broad-Minded Survey of a Small-Minded Candidate," claims the magazine stole his Vennes photograph from his website and "used it on the cover of their national magazine without my permission to unfairly compete against me in the literary marketplace," according to the lawsuit.

Read the whole thing.

Dump Bachmannn reported on this back in October - read "Attention National Reporters: Please Stop Plagiarizing Our Work".



(Cross-posted at Dump Bachmann)

Greg Vennes 2008 Lawsuit Complaint Alleged "Fraud" and "Misrepresentations"

One of the missing pieces remaining in the complex jigsaw puzzle of the Petters Ponzi scheme is Frank's brother Gregory. Greg and his wife's political donations are sprinkled along the trail of his brother's campaign to win a presidential pardon (see Lawyers Guns & Money, Pt. 2 at Ripple in Stillwater). Until now, Greg Vennes was as much a mystery man to me as his brother Frank.

In a complaint filed in the December 10th, 2008, lawyers for two plaintiffs alleged seven counts of fraud and misrepresentation. The counts included allegations of violations of securities laws. According to the complaint, Greg Vennes acted as a go-between for his brother's hedge fund Metro Gem and two wealthy investors.The complaint alleges Greg received a commission for the transaction. Greg Vennes was not a registered securities broker. The complaint sought damages in excess of $5,500,000.

In a separate document, Greg Vennes, through his attorney admitted he received payment from Metro Gem, but denied having an arrangement. Vennes also admitted not having a license to sell securities.

In a January 7, 2009 affidavit seeking a protective order and a stay of discovery, Greg Vennes told his side of the story beginning in 2000 when he moved back to Minnesota with his family. Greg had worked in the U.S. Postal Service for 19 years prior to his arrival on the swanky shores of Lake Minnetonka. Greg befriended two elderly neighbors and they swapped investment tips. Greg told the old gents that he had a company called Grace Consulting Services Inc. (remember that name). Greg also said his company invested in notes from a company owned by brother Frank, Metro Gem Inc. Frank said his investment in Metro Gem was "proving successful", however Greg claimed he did not speak for his brother and had no idea how Metro Gem operated. The Grace Consulting investments were reinvested at a higher rate in Metro Gem.

According to Greg's affidavit, in 2003, the first distinguished representative of the Minnetonka gentry Greg had befriended invested in Metro Gem and saw his investment grow (on paper) to $3.5 million, earning 12% annually. In 2003, the other old gent plopped down $2 million for Grace Consulting Inc. notes. Later in 2007, the second fellow transferred his investment from Grace Consulting to Metro Gem. According to Greg, he had a quarrel with his brother in February, 2008 over the care of their elderly parents and Greg took Grace Consulting's money out of Metro Gem. About six months later, the FBI raided brother Frank's homes along with Tom Petters' homes and business. The two elderly gents saw their investments swirling down the Petters Ponzi crapper along with billions of other investors' dollars.

One of the old gents died in May, 2009 (according to his Strib obituary, he " suffered from dementia for the past few years") and The lawsuit was settled by the end of 2009. The other fellow was listed among the creditors seeking relief in Frank's Work-Out Plan. No trial, no verdict, end of story.

But… here's something interesting - remember that company Grace Consulting Services Inc.? There's another company called Grace Consulting of Southeast Inc. registered in Florida. Incidentally, Greg's wife Stephanie donated $4,200 to Michele Bachmann in 2005 and she was just a secretary - how freaking' successful does a company have to be to have its secretaries throwing thousands of dollars at politicians!

Anyways, back in 2008, before Grace Consulting of Southeast Inc. changed its address, the company's registered address was 752 S.W. Squire Johns Lane Palm City, FL 34990.

Google that address and you get all kinds of links to stuff having to do with a guy called Jason Bo-Alan Beckman. Who he?

Strib:

Jason Bo-Alan Beckman, a brash Wayzata money manager who has claimed to be among the top financial advisers in the nation, was civilly charged Monday with participating in an elaborate $194 million investment fraud.

Beckman, 41, was an associate of Trevor Cook, an Apple Valley man who pleaded guilty last year to bilking about 1,000 investors in the $194 million Ponzi scheme. Cook, 38, was sentenced in August to 25 years in prison.

Lawyers for the Securities and Exchange Commission said Beckman raised at least $47.3 million from 143 individuals, of which only $8.2 million was returned to investors.

The government complaint says Beckman and his wife personally received $7.8 million from the illegal operation and used the funds to pay for "million dollar homes, luxury cars, foreign travel, country club expenses, a suite at professional hockey games and other trappings of a high-end lifestyle."

Holy cow, what an awesome coincidence! The house had two owners… BOTH linked to Ponzi schemes in Minnesota!

For more fun, read Patrick Pretty's 3/26/11 article on the property where the following pic of the Ponzi palazzo is from:

(more pics on this PDF doc)


Here's the docs - click to make them bigger:

SEC Takes Action Against Petters Ponzi Fund Feeders Fry and Palm

Michelle Palm pled guilty in April. James Fry was indicted and facing trial along with Frank Vennes. The following is from a press release from the SEC (the complaint is here)

The SEC alleges that James N. Fry of Long Lake, Minn., Michelle W. Palm of Edina, Minn., and Fry’s firm Arrowhead Capital Management LLC invested more than $600 million in hedge fund assets with Petters while collecting more than $42 million in fees. Fry, Palm, and Arrowhead falsely assured investors and potential investors that the flow of their money would be safeguarded by the operation of certain collateral accounts when, in fact, the process did not exist as described. When Petters was unable to make payments on investments held by the funds they managed, Fry, Palm, and Arrowhead concealed Petters’s inability to pay by entering into secret note extensions with Petters.

This is the fourth enforcement action that the SEC has brought against hedge fund managers that collectively fed billions of dollars into the Petters fraud. The SEC previously charged Petters and froze the assets of an Illinois-based hedge fund manager who was a $2 billion feeder to his scheme, charged two Florida-based fund managers who facilitated the scheme, and blocked an attempt by a Connecticut-based hedge fund manager to divert funds from victims of the scheme.

“Fry and Palm presented themselves as protectors of their hedge fund investors when in fact they were facilitators of the Petters Ponzi scheme,” said Merri Jo Gillette, Director of the SEC’s Chicago Regional Office. “Arrowhead’s promises were filled with lies and deceit, and as a result investors lost more than $600 million dollars while Fry pocketed millions in fees.”

According to the SEC’s complaint filed in the U.S. District Court for the District of Minnesota, Petters promised investors that their money would be used to finance the purchase of vast amounts of consumer electronics by vendors who then re-sold the merchandise to “Big Box” retailers including such well-known chains as Wal-Mart and Costco. In reality, Petters’s “purchase order inventory financing” business was a complete sham and amounted to nothing more than a Ponzi scheme.

The SEC alleges that Petters sold promissory notes to a number of hedge funds, including those managed by Fry, Palm, and Arrowhead. From as early as 1998 to June 2008, Fry, Palm, and Arrowhead funneled money into the Petters Ponzi Scheme by selling interests in the funds managed by Arrowhead to investors throughout the country. The funds, in turn, invested nearly all contributions into the Petters Ponzi Scheme and were holding more than $600 million worth of Petters’s notes when the Ponzi scheme collapsed.

The SEC’s complaint alleges that Fry, Palm, and Arrowhead falsely assured investors that the inventory financing transactions were structured in such a way that after the retailers received their merchandise from vendors, they would send their payments for the merchandise directly to the funds’ collateral accounts to pay off the notes held by the funds. In reality, money for the repayment of notes held by the funds always came directly from Petters and never came from any retailers. Fry and Palm did not disclose this material fact to investors in the funds, and instead continued to lie about the operation of the collateral accounts.

According to the SEC’s complaint, Fry, Palm, and Arrowhead hid the fact that Petters was on the verge of defaulting on certain of the notes held by the funds by engaging in a series of secret note extensions with Petters beginning around February 2008. While holding the Petters notes out as 90-day notes, the funds were holding a group of notes that were so far past due that they were on the verge of their 182-day default date. In order to hide that fact and help Petters avoid default, Fry, Palm, and Arrowhead secretly extended the due dates on these notes without ever informing investors in the funds.

The SEC alleges that Fry, Palm, and Arrowhead distributed pitch books to investors and potential investors that falsely represented that independent accountants were conducting quarterly examinations of the funds’ transaction procedures. In reality, no such examinations were conducted and Fry, Palm, and Arrowhead knew it.

The SEC’s complaint charges Fry, Palm, and Arrowhead, with violations of Section 17(a) of the Securities Act of 1933 and aiding and abetting violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint charges Fry with direct violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; charges Arrowhead LLC with violating Section 206(4) of the Investment Advisers Act of 1940 and Rule 206-4(8) thereunder. The complaint charges Fry and Palm with aiding and abetting violations of the Investment Advisers Act of 1940 and Rule 206-4(8) thereunder. The SEC seeks entry of a court order of permanent injunction against Fry, Palm, and Arrowhead, as well as an order of disgorgement, including prejudgment interest and penalties.

Both Fry and Palm have been charged criminally in connection with the same misconduct. Palm pleaded guilty to one count of securities fraud and one count of making false statements to SEC staff during investigative testimony. Fry pleaded not guilty to multiple counts of securities fraud, wire fraud, and making false statements to SEC staff during investigative testimony.

Read more at the Strib.

Click on comic to make it bigger: