FEDERAL COURT BARS FOUR MEN FROM PROMOTING 90% STOCK LOAN PROGRAM09 / 16 / 2009
United States v. Charles Cathcart, Scott Cathcart, Yurij Debevc, Robert Nagy, Derivium Capital, LLC, Derivium Capital (USA), Inc., Veridia Solutions, LLC
The Department of Justice has issued a press release confirming that a Federal court in California has issued a permanent injunction barring 4 individuals from promoting what the Government describes as complex tax-fraud scheme involving several entities around the world. The scheme, known as either the "90% Stock Loan" program or "Derivium" is reported by the DOJ to have been promoted as a means by which customers were told that they could avoid income tax because the transaction was a loan, rather than a sale. The United States was able to obtain these injunctions against these individuals without admission as to the Government's allegations, claiming that the customers' securities were actually sold, to then raise funds, to pay the customers. Apparently, approximately 1,700 customers nationwide, purchased this product, in transactions involving over $1 billion. The Government's request for injunctions, now made permanent by this Federal court in California, applies as against Mr. Debevc, Mr. Nagy, both of South Carolina, and Mr. Hsin, of New York, and a Franklin Thomason, of China, but the rest of the defendants at this time are contesting the matter and the matter is scheduled for trial in November, 2009.