But, can he can really enjoy that stuff?

I doubt it. Let's face it: his whole life is in ruin, and no amount of stuff is going to make it right. But, I agree that if he's been buying stuff like that lately, something is terribly wrong. And it shows that the man has no respect and no regard for his investors.

Ironically, I made my NIR investment in 2001, right when gold was starting to take off. If only.

Interesting fact about KPMG

They were hired by the US government in 2006 to audit the gold at Ft. Knox. Well actually, they didn't get to see any gold. They only got to see fiscal 2005 financial statements and work off that. The government will never let anybody in to count the gold, and that's because, with great likelihood, there is very little gold there. They probably blew through most of it and long ago. If government couldn't keep its hands off the Social Security Trust Fund (which it spent on wars, welfare, etc.) why assume they didn't cash in and spend the gold? To their mind, what's the difference between having gold sitting there or just pretending that you have gold sitting there? And that's the reason why there hasn't been a real audit of the gold at Ft. Knox since the Eisenhauer years. It's a farce.

But anyway, KPMG got that gig working for the big global gorilla. They're a big firm, a lot bigger than Corey ever was.

I voted to keep KPMG.

It may be a meaningless gesture, but I voted to keep KPMG as liquidators, and it was because of what they wrote in their letter to investors. They acknowledged that nobody trusts Corey any more. But, they are going to hold the power, not him. I spoke to one of the KPMG liquidators in the Cayman Islands, a British guy. I was impressed with him, and I'm convinced that they will act in the best interest of investors. They made a persuasive case for the practicality of keeping them in charge. And I do think they are independent. Corey will not be pulling their strings.

Still, an 8% gain in November 2010?

That's what they're saying, but I checked my records, and NIR reported to me a 1% loss.

NO, I don't think they tried to value the portfolio because it takes times and it costs money. Why should they? Who's paying them to do it? On the contrary, they made a blanket judgment based on the criminal investigations, the Dworkin confession, etc. You're reading too much into this.

Gained 8.66% in November, lost 100% in December?

Come on. That's ridiculous. You are just wantonly inflaming the situation now. They didn't make anything in November. And the losses have occurred over the whole timeframe and not all in December. What the heck happened in December? What was so special about that month? Please, don't publish something just because you see it in print and it tickles your fancy. Apply some discretion.

Did his investment strategy ever really work?

I have been told that it never worked, that whatever redemptions he honored between 1999 and 2007 were done by taking money from new investors coming in and passing it on the those leaving the fund. In other words, even though it wasn't a pure Ponzi scheme, since he was making investments, it was a defacto Ponzi scheme because the only way anyone got paid off was from fresh investor money, not from investment performance money. Do you think that's true?

And if it is true, if his ingenius method was never really successful, why did he keep doing it? He had to know what was going on. What was going through his mind?

You should contact me, returns 77.

My email is paison60@yahoo.com. So far, there are 3 of us investors on this board, and you make it 4. We should stay in touch in case some kind of class action becomes feasible. It's expected that the liquidation is going to generate little money for investors, but it would be a crime if Corey got a single cent of it.

How did he declare high valuations as recently as year-end 2010 if they all trade at that price and have next to nothing in market cap? That is, how did he get away with making such claims to his investors? I have it in black and white. If that isn't fraud, what is? Why haven't they arrested him?

Was he basing it all on the face value of the convertibles? That's like valuing a Confederate bond at face value in April 1865.

ECMH last traded for one-hundredths of one cent.

That was on April 20. Total market capitalization is now $990. How many millions of dollars did Corey give to that company?

Do the companies ever pay back in cash?

If not then I don't know why people are bellyaching about the poor companies. They received millions of dollars. Real money. Somehow it has to be paid back, and with interest. If they are not going to pay it back in cash, they have to pay it back in shares. And, the dilution of the stock value IS exactly how they're paying it back. Look, one way or another, the owners of the company (the shareholders) have to pay back the loan. It has to be taken out of their hides- somehow. So, diluting the value of the shares is exactly how it's being done in this case. You can call it "toxic" if you want to, but it's sparing the company from having to come up with cash.

So, forget about the morality of Corey's methods in relation to the vested companies. He didn't hold a gun to their heads. They knowingly entered the deal.

But, in your description, how exactly did it go wrong for Corey? I suspect it has to do with his ability to "sell immediately." You flew through the term twice, but that's where the rub is.

If he's not fraudulent, then why hasn't he released audited 2008 results? This is 2011, and there is absolutely NO excuse for that. Of course, the same goes for 2009 and 2010.

My understanding is (and correct me if I am wrong) that the value of NIR holdings is derived from the price of the stocks they hold. Selling the stocks on the open market is how they cash out. The names of their companies (at least most of them) are now known, and so are the prices for which they trade (although some, quite a few, are no longer trading). There is a link to all that on this webpage. Upteem million shares times zero is always going to be zero. So, how can you say he's not fraudulent? Is there something more to this that I don't realize? Believe me, no one will be happier than me if all the naysayers on this board are wrong. Is there any chance that a company whose stock is trading at or very near zero is going to be able to pay him back in cash?

Here's how I got taken.

I invested with them because of their track record (as one of the best-performing hedge funds), plus I liked the idea of investing in small emerging companies. Corey never named the companies, and I had no idea that they were all penny and sub-penny stocks. He always talked about them very positively: their ingenius inventions, their valuable patents, their glowing prospects, etc. It irked me a little, his not naming the companies, but I thought maybe he was under confidentiality restraints. And once those positive returns started coming in, I really didn't care any more. When you're seeing rising numbers on your statements, month after month, year after year, without fail, it's mesmerizing! Every month, he made either a little money or a lot of money, but it was always something no matter what the market was doing; he never reported a loss. And the idea that the results were phony never occurred to me. After all, there was an independent accounting firm involved, and we were getting audited tax statements, etc. I honestly never questioned it. Plus, Corey kept feeding us all that stuff about his mammoth charity work, and I'll admit: it got to me. Here was a guy with integrity. Here was a decent, upstanding, compassionate guy who gives his time and money to the children, the homeless, and the animals. Surely, a guy like that has got to be honest in business and especially with his own partners, right?

Did Corey know throughout that he was lying and stealing?

He did have so-called independent auditors through yearend 07. But, it's foolish to think that the fraud didn't start until 08. So, does that mean that WTAS and Malcolm were complicit in the fraud? Should we investors be looking into suing them?

When I call NIR, they often remind me how smart Corey is. Their favorite line is "Corey is the smartest guy in the room." Was he smart enough to know that he was shafting his investors? (What he did to the companies is not my concern because it started with him handing our money over to them.) Was this like Madoff who knew he was committing a monstrous fraud but decided to enjoy the ride until it ended? Is that what Corey did? Or were the workings of his mind quite different? Do you think that maybe he convinced himself that the values he was claiming were legitamate? But, as soon as investors started asking for redemptions, and he knew he couldn't oblige them, he had to know that something was terribly wrong with his assessments. And remember, there weren't that many investors trying to redeem. It was only a handful. He couldn't redeem a small handful of investors out of hundreds. But even after that and as recently as December 31, 2010, he issued valuations to account holders that are mathematically impossible to be true since they are based on a portfolio of penny stocks, many of which aren't even trading, and many of which have been declared worthless.

So, what is the nature of this psychopathology? That's what I am trying to find out. Are we talking about evil as in sociopathic, Madoff-type evil? Or is this more a matter of self-delusion on the grandest scale? As far as I know, he is still living in a dream-world concerning the valuations. Or is he just pretending?

Extensive due diligence is performed on each and every company before any investment is made. Once the investment is made, the due diligence process continues on a regular basis. The process entails detailed descriptions and analysis of all financial, legal, and accounting information, past and present, of each company. An entire history of the company's financial structure and history is compiled and reviewed, first by a team of analysts and then the whole investment committee including a complete credit and liquidity analysis.

I was just reviewing the promo I received from NIR when I started with them, and the above is what it says. It also says, "no leverage is ever employed, and the fund does not short stock against positions." But elsewhere it says, the fund "generally does not short common equity against our convertible positions." Generally?

By the way, what happened to Propis and Yellin? Are they still with NIR?

Their own accountants are doing the valuations.

I don't say it is Corey himself, but it's someone who works for Corey and takes his marching orders from Corey. So, for all practical purposes, it's Corey doing it.

If that's true, why don't the feds charge him?

If these NIR stocks have been worthless or nearly worthless for years, many years, then Corey has been committing securities fraud for many years. So why haven't the feds arrested him? It's not like they are averse to it. They revel in it; it's their whole reason for being. Look what they did to Martha Stewart. They charged her with insider trading when she was never an insider at ImClone. All she did was act on her broker's advice to sell. In the end, she wound up going to jail- not for insider trading but merely for "lying to the government." As if the government never lies to us.

But getting back to Corey, if the value of the fund is clearly zero or close to zero, then he has been lying to his investors about their holdings, and as recently as February of this year. So, why haven't the feds arrested him?

These are usually scams against the fund investors.

Yes, you said it. Whatever he did to the companies he lent to was nothing compared to what he did to his investors.

The stocks were close to zero two months ago, yet Corey still issued high valuations. And they have NO independent auditor. That I'm sure of. Paul Schwartz told me so himself.

I don't know if Corey did anything illegal with the companies. They say he shorted the stocks, but he denies it, and I don't see how he could have gotten away with it. There's a paper trail for everything. They would have uncovered it by now.

But, if he lied about the value of his investors' accounts, that is definitely a crime. And if what you are saying is true, then he's still lying about it.

Regarding my knowledge of the companies he financed, I did not know that they were penny stocks. I recall him saying that they were small companies with capitalizations of $50 to $100 million. Who would assume that such companies were selling for less than a penny? And in his letters, without naming the companies (he never named them) he would talk about their growing businesses, their shining prospects, etc. It was quite a snowjob.

If the liquidators come up with nothing, he'll either say that the market collapsed very quickly (Who knew?) OR that the liquidators went about it the wrong way and destroyed the value of the fund. Or, he might say both. His investors won't buy it, but will the Feds? How likely is it that Corey will go to prison?

Amazing then that Corey issued such high valuations for account holders as recently as year-end 2010. He showed most of the value, from the high-flying days, still being there. Gutsy, when you consider that he's being investigated for phony valuations. Would he be brazen enough to issue flagrantly fictitious valuations at this late date? It seems to me that Corey's number one priority right now is to stay out of jail.

So, when the liquidation team comes up with stark nothing, what's Corey going to say? That the liquidation process itself destroyed the value of the fund? Well, I happen to know that the liquidators are not going to go about this wily nily. They're not going to just dump everything on the market. They're going to be coy and cagey about it, taking years to convert everything to cash. Investors will have to settle for getting their money in dribs and drabs. So, Corey is not going to be able to blame the liquidators for destroying the value of the fund. He's going to have some 'splaining to do.

Where did Corey get $100,000 to lend in September? There is also mention of a "$1 million line of credit."

According to Corey's website, last September, NIR lent another hundred thousand dollars to a company called Marathon. Below is the article.

Corey Ribotsky’s NIR Group Signs Deal with Marathon

In September the Marathon Group announced a deal-signing with the N.I.R. Group, LLC of Roslyn, New York. Corey Ribotsky is the Managing Partner at the N.I.R. Group, which, according to the newly signed deal, will be helping Marathon move in its new planned direction with an infusion of funding. With approximately $100,000 in funding from Corey Ribotsky’s N.I.R. Group Marathon hopes to invest in marketing and advertising campaigns in addition to working capital and minor acquisitions.

The new direction for Marathon, which was formerly called Pediatric Prosthetics, is in the wake of a ‘reverse merger’ and ‘going public’ in December of 2009, and is focused on growing the Company. Marathon was previously privately owned as a subsidiary of Marathon Health Care Corp. The N.I.R Group, in addition to providing the $100,000 in convertible debentures will also make available and additional $1 million line of credit for the company to further its goals of growth and expansion of Marathon.

$7 billion applied to everything, including Norma, which torpedoed. But that's separate from the pipe funds.

I just spoke to NIR.

I was told that KPMG is in charge of the liquidation, and I was given the name and contact information (on the Cayman Islands) of the man at KPMG who is in charge of the wind-down. I called that man and reached his answering machine and left a message. I told the guy at NIR what I have been hearing online, that there is no money left, that the companies are all broke, their stocks worthless, and that there will be little or nothing for investors. I asked him to respond, and he said that officially there is $780 million in the fund, and no one has said anything to him to the contrary.

Then why did the companies go along?

If it was such a crummy deal for them and certain to crush them, why did they do it? You can't say that they forgot to read the fine print.

Corey says fund is down less than 10%.

From the peak at the end of 08, it was a flat year in 09, and then 5% down in '10. Then another 2.69% loss in January. That's it so far. So, as per the last report, the fund is down only about 8% from the peak. Hey, I'll settle for that.

Yes, it was a hedge fund, and I knew there were risks- but not the risk of being given bogus performance results. That's not supposed to be part of the equation. If he engaged in that, then he is indeed a criminal. I have a dollar figure from Corey of what my account was worth as of December 31, 2010. It does seem strange that, with so many law enforcement agencies looking at him, that he would issue wild and wooly valuation numbers at this late date. I hope, for his sake and for my sake, that he didn't.

Through 2007, there were independent, 3rd party audits of AJW performance and valuations. Therefore, in addition to Corey, whatever accounting firm issued those audits needs to be held accountable. We NIR investors need to connect. I have connected with Meticulous. Any other NIR investors on this board can email me at paison60@yahoo.com.

The only information I gave out was that, as of the most recent reports from NIR, most of the investor value that was ever there is still there. So how does my saying that undermine the value of my holdings in the fund?

You don't think NIR investors will get anything?

Then why are they squabbling over the liquidation and who will be in charge of it if there is nothing there to liquidate?

Corey has posted account values through January 31, 2011

Actually, we received statements of account value, to the exact dollar, as of December 31, 2010. But, he then released January results, which came to a loss of 2.69% for the fund I'm in. So subtracting that percentage loss from my 2010 year-end figure, I have a dollar amount that represents what Corey says my account was worth as of January 31 of this year.

Of course, it says at the bottom: "This information is unaudited. These numbers are only estimates and are subject to change based on the auditors year-end audit."

Of course, there hasn't been a year-end audit since 07.

However, with so many law enforcement agencies looking at him, it would seem mighty reckless for Corey to posit wildly bogus numbers at this late date.

Anyway, I'd be interested to hear anyone's take on the likely discrepancy between Corey's numbers and the actual redemption checks that get sent to NIR investors at the end.

It doesn't matter; just look at the facts.

Claims of profit were made that were never substantiated. Yet, fees were charged and collected based on those claims. Now three years have passed. So, what does an honest person do? He returns the freakin' money.

Yes, but you have defended Corey.

I'm asking if you agree that since he can't produce an audit, he has no right to cling to the performance claims that were made or to the fees that were charged based on those claims.

I'm just looking at my personal statements from NIR.

And when I look at the value of my account as reported by NIR on December 31, 2007 and compare it to the value that they reported on December 31, 2008, it showed that my account grew by 11.5%, and I was charged fees accordingly. And actually, his claimed results were greater than 11.5% since that's what was left to me after I paid fees. He hasn't substantiated the gains, so I want the fees back.

A question for jnkman:

As an NIR investor, I hope that you are right that Corey isn't as bad as the others on here suggest. However, the 2008 audit was never completed, and there can only be one reason: no independent accounting firm would confirm the valuations that Corey claimed in 2008. This is 2011, and I dare say that time has run out.

No audit = bogus numbers.

Is Corey going to admit that the gains he claimed in 2008 were spurious, and is he going to adjust the management and incentive fees charged to investors in 2008 based on those phony numbers?

Announcement coming from NIR

I have been told that another letter will be sent to NIR investors this week, either tomorrow or on Friday, and that it will announce that they have to mark down the value of their paper because the companies aren't doing well, and it's partly because NIR can't supply them with more money. And since no bank will lend these companies any money, it may be kaputz for them. I'm guessing that the total devaluation will be at least 25%. But, that's just a wild guess.

If he's charged, what happens to NIR?

Would the SEC or the Justice Department take it over? Assign a trustee?

Of course, if he's charged, I imagine he'll get out right away on bail, and a trial would be set months down the road. Would he be allowed to run the company in the meantime?

Do you think Corey will be criminally charged?

And if so, within what timeframe? Weeks? Months? Surely not years. It's already been years.

Scheduled redemptions abruptly stopped without explanation

When NIR reorganized in 2008, they offered two options: a 3 year lock-in (which I unfortunately took) or an option to pay slightly higher management fees but retain limited withdrawal rights. The percentage they projected at the time was 12.5% redemption per quarter. They never met that projection or anything close to it. It was more like 1%, I'm told. But, some tiny redemptions did happen. However, it all ended recently. The February redemption, for those eligible, was not honored at all. And there was no letter, no explanation. And likewise, the performance results for January never came through in February. I don't know what happened in February, but things seemed to have taken a definite turn for the worse at NIR.

To clarify Mizel's situation:

He has two accounts with NIR: one is a Roth IRA and so exempt from K1s, and the other is a regular account, and therefore subject to K1s.

I've been paying taxes on their supposed earnings and gains since 2001. Imagine what it came to.

All NIR investors get K-1s every year.

They include interest and dividend income to NIR, plus capital gains. I have to pay federal income tax on all that. Yet, it's money I and the others will most likely never see. I spoke to a lawyer yesterday, a prominent one, and he said that it's unlikely NIR investors will ever see any money, and if they do, it will be pennies on the dollar. That's why, he added, the best thing for them would be if NIR got shut down so that at least the K1s would stop.