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LAW SUMMARY

Alleged Ponzi scheme agrees to shut downThe operators of an ATM-investment business alleged to be a “Ponzi scheme” have agreed to shut it down, Attorney General J. Joseph Curran Jr. announced yesterday. Bankcard Group Inc. , its CEO Andrew H. Williams, officer Benjamin Nworgu and several affiliated companies agreed to a permanent injunction against the enterprise, under which BGI allegedly sold investors interests in ATMs, the fees generated by the machines, and shares in BGI itself. According to the attorney general, there was no business or investment to generate profits; rather, investments were used to pay off the previous investors in the chain. In addition to the permanent injunction, the order issued by Prince George’s County Circuit Court Judge Ronald D. Schiff maintains a freeze of the defendants’ assets and allows a receiver to continue gathering and accounting for investor funds. The order resolves an action brought late last month by the attorney general’s Securities Division, which alleged that BGI raised as much as $3 million from at least 200 investors and that it never registered with the division as required by state law. The defendants agreed to the order without admitting wrongdoing.Two indicted for attempted export to PakistanA federal grand jury in Baltimore has indicted two men on charges of conspiracy to violate the Arms Export Control Act and attempted illegal export, U.S. Attorney Stephen M. Schenning announced. According to indictment, Tauquir Khan, 36, a Pakistani citizen, and Tanzeem Khan, 34, attempted to export to Pakistan pan tilt-zoom cameras for unmanned aerial vehicles. Since the cameras can be used for military surveillance and reconnaissance, exporters must receive a license from the State Department’s Office of Defense Trade Controls. The two sought to purchase the cameras last year from Maryland-based BAI Aerosystems, but were denied the export license in September. They were arrested in January after attempting to buy the items from undercover agents of the U.S. Customs Service. Tauquir Khan, a student at Iowa State University, remains in federal custody in Maryland. Tanzeem Khan, a naturalized U.S. citizen originally from Pakistan, was released on bail in Kansas. If convicted, each faces up to 10 years imprisonment and a $1 million fine for the attempted illegal export as well as five years imprisonment and a $250,000 fine for each count of conspiracy and false statement charges.Ex-Best Buy employee settles insider trading case A former Best Buy Co. Inc. supervisor agreed to pay more than $88,000 to settle charges that he profited from advance knowledge of the company’s 1998 earnings estimates before they were made public, the Securities and Exchange Commission said yesterday. Daniel Lagermeier, of Eden Prairie, Minn., near Best Buy’s headquarters in Minneapolis, did not admit or deny the civil charges filed in U.S. District Court in Minnesota. His attorney, Roger Magnuson, did not immediately return a call seeking comment. Lagermeier supervised Best Buy’s planning and analysis group, which prepared financial statements for the company’s board meetings, according to the complaint. The SEC claimed that he bought 65 Best Buy option contracts for more than $46,000 on Feb. 23, 1998, several days after he saw the financial statements that showed that the retailer’s projected earnings for the fourth quarter and year-end were significantly higher than analysts’ estimates. Best Buy’s stock took off on March 4, 1998 when it publicly announced estimates, rising $3 per share to $64 and the value of Lagermeier’s options rose in value by more than $39,000, the SEC said. He has agreed to repay that amount as well as an identical fine plus interest for a total of more than $88,000.