It looks as if a number of wealthy Aggies have had an Aggie joke played on them.
This Southern District of Texas U.S. Attorney’s office press release (newspaper report here) reports that a Bryan woman has been indicted on mail and wire fraud charges after the woman allegedly portrayed herself to investors as a postgraduate A&M student studying cattle reproduction at the university. Based on her supposed position as an A&M grad student, the woman promoted a number of Aggie investors to purchase bogus cattle as a part of an alleged grant-funded genetics research program at the university. The woman would raise $600 per head of cattle from the investors on the promise that she would use the invested funds to buy cattle from one of four Texas ranches, including the venerable King Ranch. Then, after nine months of “research” at A&M, the cattle would be sold back to the ranches for $1,000 per head, with $400 of that sales price coming from a research “grant” funded by A&M and the four participating ranches. After she pocketed a $100 fee for “tax purposes,” the woman would tell the investors that they would make a $300 per-head profit on each resale of the cattle. Remarkably, the woman was able to promote the dubious deal for almost three years.
As with all investments that violate the tried and true “too good to be true rule,” the research program was nonexistent, the cattle were bogus, the woman was not an A&M student and she is currently a defendant in civil lawsuits by investors seeking over $5 million. She faces 26 criminal counts, each of which carries a possible punishment of up to 20 years in prison and a $250,000 fine.
Meanwhile, there is no truth to the rumor that the A&M administration — as an accomodation to the defrauded investors — is attempting to schedule a special screening of the new movie, The Producers. Hat tip to Peter Henning for the link to the U.S. Attorney’s press release.
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Following on prior posts here, here, here and here, this NY Times article addresses the unhealthy economic effect of the favored tax treatment of employer-based health insurance. As opposed to individual health insurance policies, employer-based health insurance is a tax deductible expense of the employer and employees are not required to report the economic benefit of that policy as taxable income on their individual returns. The amount of the subsidy (in foregone tax collections) is about $150 billion and is expected to increase to $180 billion by 2010. As Harvard economist David Cutler notes: “If you had $150 billion to play with, you could come very close to universal coverage.”