Looks like he started a new business scam. Yikes! https://www.facebook.com/alternativesolutionsmedia/likes_
By Francisco Alvarado
By Trevor Bach
By Chris Joseph
By Michael E. Miller
By Allie Conti
By Keegan Hamilton and Francisco Alvarado
By Jake Rossen
By Allie Conti
Paperwork points to JCC as the duo's common denominator. Both were involved in the firm -- Kahn as a principal and Needle as an associate -- in the early '80s. Over the years Kahn has been involved in a string of businesses either peddling futures, advertising for futures dealers, or selling lists of sales leads: Commodity International Inc., Commodities International Holding Corp., Media Response Inc., Investor List Inc., and Investment Advertising Inc.
With both their registrations pulled, Needle and Kahn were outcasts from the NFA and the futures-trading industry when they set up ICM. So they moved into the virtually unregulated arena of the Interbank and foreign currency where, thanks to a U.S. Supreme Court ruling, just about anyone can set up shop.
The CFTC regulates established futures exchanges and boards of trade. (Its sister agency, the Securities and Exchange Commission, oversees stocks and bond markets.) But in 1997 the U.S. Supreme Court ruled against the CFTC when the agency tried to shut down a foreign exchange shop allegedly defrauding customers. The court held that because the shop was trading currency on the Interbank and not on an established futures-exchange market where currency is also traded, it was not beholden to CFTC rules and regulations. With that, foreign exchange shops purportedly dealing with Interbank popped up in South Florida like dandelions in the spring.
Responding to the ruling in the only way it could, the CFTC in 1998 issued a warning to anyone doing business with foreign exchange shops to be on the lookout for fraud. Last month CFTC chairman William Rainer visited the issue again, testifying before the Senate on the need to expand his agency's power to protect consumers. "Abusive promoters have exploited regulatory gaps to sell foreign-currency contracts to financially unsophisticated individuals ," he testified. "Many of these enterprises simply pocket investor funds ."
Despite all their scrapes with the NFA and CFTC, neither Needle nor Kahn had ever been brought before a public forum to explain their business practices. That changed when Robert Christensen became a dissatisfied ICM customer.
When he returned to Boise from his impromptu visit to ICM's Hollywood offices, Christensen quickly cancelled the $75,000 check he'd written to stay in the Interbank market. "I started talking about it with the guys, and they said, 'You're crazy.' I decided not to throw good money after bad."
Then he got mad and took his case to the State of Idaho Securities Bureau. They quickly determined that ICM wasn't registered to solicit business in the state. The case went before an administrative law judge, who found: that ICM led Christensen to believe his investment would be segregated when in fact it was pooled with other investors' money; that they failed to produce account statements; that they also neglected to inform him of Needle's extensive history of trouble with the NFA and CFTC. The judge slapped Needle and ICM with a cease-and-desist order, fined him $35,000, and ordered him to pay Christensen back the $135,000 he lost. Needle has not responded to the judgment. (Kahn was not named in the case.)
More important, at least for the rest of the investing public, is the fact that the judge got Needle to give sworn testimony via a phone line from Needle's North Miami Beach apartment. That testimony paints Needle as inexperienced, inept, and in the dark as to what his business was doing.
Needle describes his educational background this way: "I have a high-school diploma. After high school I went on to industrial air conditioning and heating school to move into my father's business." Later he testifies to hiring an accounting firm to help him manage ICM because, " I do not have any business background. As you previously asked me about my education, I have a high-school diploma. I have no real business knowledge ."
He testifies that in 1997, shortly after being suspended from the NFA, he was introduced to the Interbank business by a lawyer in Chicago who hired him to bring in clients. Needle's job was to solicit accounts and send the money to Chicago, where the money was supposedly traded; he isn't quite sure if it really happened: "To the best of my knowledge it was traded in the Interbank market or through a counter party," he says.
He worked for that company for two weeks. Then he took a trip to California to meet with a man named Howard Friedman, who promised to teach him more about the Interbank. Friedman is a principal in a company called DFX, which would soon play an important role in ICM's business.
In August 1997 Needle established ICM in Hollywood, Florida. The company collected money from customers and put it in the Interbank market through DFX in California. At least that's what Needle thinks happened with the cash. His testimony again indicates he isn't quite sure.
"Would you describe what DFX was doing once you placed a customer with them?" an attorney representing the State of Idaho asked.
"I really don't know," Needle replied. "I believe they then put it into the Interbank market, whether it be with a bank, or through a financial institution, but I could not testify what institution, what bank, or what counter party."