John Montague Faces the Court of Public Opinion
Last June, I wrote on this blog (see below) about a double-standard when it comes to prosecuting fraudsters. In the post entitled, “Two Americas and the Prosecution of Securities Fraud,” I detailed a case we filed against a financial advisor in Southern New Jersey named John R. Montague of Questar Capital Corporation, which is a subsidiary of the insurance behemoth, Allianz.
Mr. Montague’s working class, retirement age clients allege that he stole millions and ran a Ponzi-like scheme to defraud them. Unfortunately, while law enforcement agencies have concentrated their efforts on criminals like Bernard Madoff and Kenneth Starr who bilked the rich and famous, while Mr. Montague has walked around a free man. Apparently, fraudsters who prey on working class investors are low on the priority list.
In light of today’s Philadelphia Inquirer story, it is clear that Mr. Montague needs to be brought to justice sooner rather than later.
Two Americas and the Prosecution of Securities Fraud
by Jacob Zamansky on June 14th, 2010 at 3:47 pm
Former presidential candidate Senator John Edwards is hardly someone to be cited in a blog post about morality and fairness, but he was spot on in his rallying cry about there being two Americas. This painful reality was driven home to me in recent weeks while pursuing a case in New Jersey’s Gloucester County, a predominantly working class area in the backyard of my hometown, Philadelphia.
The case involves a purported “financial advisor” named John Montague, who was a registered representative with Questar Capital Corporation. The FBI has been investigating Montague since at least last August and possibly longer, but there appears to be no movement in the case. I represent some elderly investors who Montague defrauded for over $1 million. Given that there are likely many other victims of Montague’s alleged wrongdoing, it’s quite possible that Montague’s misappropriation of funds is well in excess of what has already been documented.
My firm has long been a source of leads and other information for prosecutors and law enforcement agents, however, the Montague case doesn’t appear to be a priority for the FBI. For example, the US Attorney’s office is handling the investigation of Kenneth Starr, a money manager whose well heeled clients reportedly included a litany of bold-faced names such as Al Pacino, Uma Thurman, and Neil Simon. With miraculous speed, prosecutors managed to nearly double the $30 million originally thought to be allegedly swindled by Starr. “In the less than two weeks since Kenneth Starr’s arrest, this investigation has maintained its velocity,” Manhattan US Attorney Preet Bharara told reporters last week.
Furthermore, Bernie Madoff, who orchestrated the biggest Ponzi scheme of all time, was convicted and sentenced in less time that it has taken the FBI to complete its investigation of Montague. The receiver overseeing the liquidation of the fraudster’s enterprise is reportedly expected to recover more monies than originally anticipated - so much so that some vulture funds are already buying up the claims.
The Montague case isn’t the only example of the wheels of justice grinding to a near halt when working class investors are defrauded of their monies. I represent some working class investors in Long Island who were defrauded by a convicted felon named Peter Dawson more than three years ago. Although Dawson sits in prison, Bank of America, Washington Mutual and other financial institutions who enabled Dawson’s fraud have yet to be held accountable.
There is a disturbing lesson here: When it comes to prosecuting securities fraud and garnering restitution for investors, working-class people shouldn’t expect the same level of prosecution and recovery as their wealthy brethren.