Kathy Bazoian Phelps
Senior Counsel in Ponzi Scheme Litigation
and Bankruptcy Matters

Kathy is a senior business trial attorney with more than 28 years experience prosecuting and defending claims for high net worth clients involved in Ponzi scheme matters and in bankruptcy proceedings. Kathy’s practice includes recovering assets for clients in complex fraud cases under standard fee and alternative fee arrangements. Kathy also serves as a mediator in bankruptcy matters, in complex business disputes, and in matters requiring detailed knowledge about fraud or Ponzi schemes.

Kathy’s Clients in Ponzi Scheme Cases and Bankruptcy Matters
Equity Receivers
Bankruptcy Trustees
High Net Worth Investors
Debtors in Bankruptcy
Secured and Unsecured Creditors

Thursday, December 31, 2020

December 2020 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for December 2020. The reported stories reflect at least  3 new Ponzi schemes worldwide, 3 guilty pleas, over 30 years of prison sentences and one life sentence, and an average age of approximately 56 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.  

Sanjeev Acharya, of California, and his company SiliconSage Builders LLC aka Silicon Sage Builders, were charged by the SEC with running an alleged $119.2 million Ponzi scheme. The scheme promised returns to investors of 23% per year. Silicon Sage financed real estate projects in northern California by selling promissory notes and membership interests in entities that loaned money to the projects. The scheme targeted the South Asian community in northern California.

Gregory Altieri, 53, pleaded guilty to charges that he operated a $200 million Ponzi scheme. Altieri is a jewelry wholesaler who promised returns to investors from nonexistent wholesale jewelry deals. He solicited investments though his entity, LNA Associates.

Jose Angel Aman, 52, of Florida, was sentenced to 6 years in prison and ordered to pay $23 million in restitution in connection with a Ponzi scheme run through Eagle Financial Diamond Group and Argyle Coin LLC Ponzi scheme. Argyle was a cryptocurrency scheme supposedly backed by diamonds. Aman did not have the $25 million in diamond inventory that he represented would back the cryptocurrency scheme.

Roger E. Dobrovodsky, 65, Robert Todd Seth, 57, and Matthew L. Walker were charged by the SEC in connection with the alleged Ponzi scheme run through 1 Global Capital LLC. They were allegedly acting as unregistered brokers and sold more than $21 million in unregistered transactions.

Gutemberg Dos Santos, 45, was extradited from Panama to the U.S. and indicted along with six other operators of AirBit Club. AirBit is accused of being a Ponzi scheme that sold memberships and promised guaranteed returns from cryptocurrency mining. However, no bitcoin mining or trading was actually taking place on behalf of the victims. Dos Santos’ lawyer, Scott Hughes, is separately accused of “helping to remove negative information about Airbit Club and Vizinova from the internet.” Karina Chairez was charged by the SEC in connection with the scheme for her role in promoting the scheme as an unregistered broker. 

Dennis Jali, John Frimpong, and Arley Johnson of Maryland are being investigated in connection with an alleged $28 million Ponzi scheme. The three posed as pastors and persuaded investors to invest in cryptocurrency and foreign exchange markets. 

Andricson Jerez, 24, of New York, was arrested in connection with a $4.7 million alleged Ponzi scheme run by Chander Singh, 44, through SC Capital Investors LLC. The business was a distressed real estate renovation company, and about 30 investors were defrauded with promises of double-digit returns. The scheme was run by Singh and his parents, Sooruh “Paul” Singh, 74, and Savitree “Joyce” Singh, 71, brother Subhas “Brian” Singh, 50, and family friend, Chandrika “Basil” Singh, 71. Jerez allegedly created a front company, A Jerez Realty LLC, to hide illicit proceeds.

Michael W. Kwasnik, 51, of New Jersey, was sentenced to 18 years in prison and was ordered to pay $11.7 million in restitution for money laundering in connection with a Ponzi scheme that he ran for many years. Kwasnik was an attorney who provided estate and financial planning services to his clients. He persuaded his clients to open irrevocable trusts and then he would serve as trustee and having signing authority on their bank accounts. The clients turned over approximately $13.2 million to Kwasnik.

Todd Lahr, 60, of Pennsylvania was sentenced to 6½ years in prison and ordered to pay more than $2.1 million in restitution after pleading guilty to his role in a $2.7 million investment fraud run through THL Holdings LLC and Ferran Global Holdings Inc. Lahr is a lawyer who solicited investments to pursue business opportunities such as mining operations in Papua New Guinea and the acquisition of penny stocks.

Gregory D. Lone, 53, was charged on allegations that he defrauded 7 investors out of almost $500,000 in a Ponzi scheme. Lone, who manages Paramount Financial Advisors, allegedly convinced investors to invest in Paramount-managed funds, but the money was misappropriated and used on personal expenses. 

Earl Roberts Sr., 76, and his son Larry Roberts, 50, of Texas, were charged in connection with an alleged Ponzi scheme that defrauded investors out of $800,000. They operated FACTAC Inc., a company that was engaged in the business of factoring invoices and receivables from other companies. The company would supposedly purchase invoices and accounts receivable from other companies at a discount and then make a profit when the invoices and receivables were paid back at full value.

Craig Rumbaugh agreed to be barred from the securities industry and to pay $1 million to settle claims that he misled investors through his firm, Rumbaugh Financial, to invest in promissory notes offered by Susan Werth. Rumbaugh did not admit or deny the allegations in the SEC’s complaint against him.   

Brian Fredric Sauls, 48, was arrested in connection with a $1.1 million securities fraud scheme. Sauls persuaded 6 investors to invest over $1.1 million into Future Income Payments, LLC, and Sauls received over $148,000 in commissions on these transactions. Future Income Payments was determined to be a Ponzi scheme and its founder, Scott Kohn, is in custody awaiting trial. The total losses in Future Income Payments are estimated to be $310 million.

Lawrence Schmidt was extradited from the United Kingdom and will stand trial on charges relating to an alleged scheme run through Commercial Equity Partners, FutureGen Company and other investment companies. Schmidt allegedly defrauded approximately 200 investors out of $22 million. He only invested less than $11 million of the funds and paid himself $1.4 million in salary.

Rodrigo Teixeira, 47, has been sued both in the U.S. and abroad, on allegations that he was running a Hollywood Ponzi scheme. Teixeira is Brazilian and solicited wealthy Brazilians to invest in his company, RT Features. A total of about ten investors invested $16 million, but the majority of those funds are missing. Joseph Geus of JG Management was also named in the lawsuit for his role as the business manager who accepted the checks on Teixeira’s behalf.

Lewis Wallach, 64, pleaded guilty to charges relating to the scheme run through Professional Financial Investors that defrauded 1,300 investors. Wallach was the CEO of the company and was accused of embezzling $26.7 million. The scheme allegedly defrauded investors out of $330 million and was run with Kenneth Casey, who died of a heart attack earlier this year.  

Kenneth Winton, 67, pleaded guilty to charges relating to his role in the Ponzi scheme run through Family Wealth Legacy and Zolla Financial LLC by Matthew Piercey, 44. Piercey ran the alleged investment fraud scheme that defrauded investors out of $35 million, and Winton is accused of assisting with raising funds from investors. Piercey had tried to evade authorities by using an underwater scooter to try to escape arrest.

INTERNATIONAL PONZI SCHEME NEWS 

Argentina

Twelve people linked to the Onecoin scam were ordered to be arrested. Those arrested are Edgar Moreno, Gustavo Adolfo, Amuchástegui, Andrés Matías López, Mariana Noel López, Manuel Vicente Peralta Guevara, Mónica Gabriela Blasco, Daniel Cornaglia, and Ricardo Beretta. The scheme netted about $4 billion.

Australia

John Louis Anthony Bigatton was charged in connection with his role as the Australian national representative for BitConnect. Bitconnect was a cryptocurrency Ponzi scheme that defrauded investors out of $2.6 billion.

Chris Marco was ordered to wind up his company, AMS Holdings (WA) Pty Ltd., which was alleged to have defrauded 132 investors out of $250 million in a Ponzi scheme. Marco promised high returns from supposed international private investment programs.

China

Authorities sentenced the ringleaders of the Plustoken cryptocurrency Ponzi scheme to 11 years in prison. The scheme defrauded over two million people out of $2.25 billion. The Ponzi scheme collapsed in June 2019, and 109 people have been linked to the scheme. Of those, 15 have been convicted so far.

Zhang Ying, the former head of the Hangtianqiao branch of China Mingsheng Bank was found guilty and sentenced to life for stealing $412 million in a Ponzi scheme. Zhang offered high interest rates to the bank’s clients and tricked them into signing false wealth management agreements that allowed her to transfer money to friends and relatives.

England

Robin Forster was charged with running a Ponzi scheme through Qualia Care Developments and Qualia Care Properties. Proceedings were commenced against Forster, Fortem Global Limited, and Richard Tasker relating to investments in care homes where investors lost at least £30 million.

India

Authorities filed a complaint against Shree Sai Laxmi Cooperative Credit Society and its proprietor, Jackiesh Radhakrishna Poojari, for running a Ponzi scheme.

Saroj Mahapatra, the director of SMP Impex Pvt Ltd., was arrested in connection with an alleged Ponzi scheme called “Hello Taxi.” The scheme allegedly defrauded 1,000 investors who thought they were investing in taxis and would receive 200% returns annually. 

Satinder Bhasin aka Montu Bhasin, the director of Bhasin Group, was arrested in connection with the bike bot scheme. Bhasin was allegedly working with Sanjay Bhati, the owner of Garvit Innovative Promoters Limited that had created the fictitious bike bot scheme.

Awdhesh Singh, former managing director of Sun Plant Agro Limited, and Dipankr De, former managing directors of New Land Agro Industries Limited, were arrested on charges that they were running a fraudulent Ponzi scheme that defrauded investors.

South Africa

A provisional liquidation was ordered against Mirror Trading International on allegations that it was running a Ponzi scheme.


Monday, November 30, 2020

November 2020 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for November 2020. The reported stories reflect at least 9 new Ponzi schemes worldwide, 1 guilty plea, over 34 years of prison sentences, and an average age of approximately 60 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.  

Joseph S. Anile II, 56, was sentenced to 10 years and prison and ordered to pay $3.2 million in restitution in connection with the Oasis International Group Ponzi scheme that defrauded investors out of $72 million. The scheme involved foreign exchange trading that defrauded at least 700 investors. 

Keith T. Ashley, 48, was indicted in connection with the death of James Seegan. Ashley is accused of staging Seegan’s death to look like a suicide. Ashley is believed to have been operating a Ponzi-type scheme and was Seegan’s financial advisor. Authorities believe he may have murdered Seegan in an attempt to gain control of Seegan’s finances.

Thomas Joseph Becker, 72, and John Frank Thomas III aka John Frank, Johnathan West, John Frank Rodgers, John Marshall, and John Edwards, 75, were arrested on charges that they defrauded more than 600 investors out of about $30 million. The pair from Las Vegas used the following entities to defraud investors: Sports Psychometrics, the Vegas Basketball Club, Vegas Football Club, Einstein Sports Advisory, Quantum Sports Advisory, Wellington Sports Club, and Welscorp Inc. They claimed that their “special insights” could generate up to 180% on $100 bets. The loss to investors is estimated to be at least $9 million. 

James T. Booth, 75, was sentenced to 42 months in prison in connection with a Ponzi scheme that defrauded about 40 investors out of nearly $5 million. Booth solicited clients from Booth Financial and promised to invest their money outside of their ordinary advisory and brokerage accounts. He directed them to send money to Insurance Trends, Inc., which was owned by Booth.

Terrence Chalk aka Dr. Terrence Cash was arrested on charges that he defrauded investors out of more than $4 million by inducing them to invest in his wealth management business under false pretenses. Chalk ran the scheme through Greenlight Advantage Group Inc. and Greenlight Investment Partners. The SEC also filed a complaint against Chalk alleging that he raised about $5 million and that he misappropriated a large portion of the funds raised. 

Breonna Clark aka Eliot Clark or Alexander Pak, of Colorado, and Venture Capital Investments LLC were charged by the CTFC with running a Ponzi scheme through foreign exchange and cryptocurrency commodity pools. The alleged scheme solicited over $450,000 from over 72 clients. The defendants were ordered to pay about $900,000 in restitution and penalties.

Patrick O. Howard, 49, pleaded guilty to charges relating to a Ponzi scheme run through Insured Liquidity Partners CGF I, Insured Partners CGF II, and Capital Ventures, LLC. The scheme defrauded investors by promising them 12% annual returns and “insured liquidities.” Howard falsely represented that he was a registered investment advisor and that his companies had 20% annual returns. The scheme solicited $13 million from over 100 investors.

Bob Morgan agreed to settle charges brought by the SEC without admitting or denying charges that he defrauded more than 200 investors in 17 states. Morgan liquidated more than $66 million in assets and delivered the funds to a court-appointed receiver who repaid investors.  

Ash Narayan, 55, of California was sentenced to more than 3 years in prison and was ordered to pay $18.8 million in restitution and penalties. Narayan stole more than $30 million in savings from pro athletes, and he pleaded guilty last year to the scheme. He was an investment advisor at RGT Capital Management Ltd. and persuaded his clients to invest in The Ticket Reserve, an Illinois company that sold customers an option to buy a ticket to future sporting events that would allow them to “cash in” on playoff games if the team made it to the postseason. 

Joseph Nemeth and Jeremy Arrington, of Wisconsin, were charged with running a $2.8 million Ponzi-like scheme. The scheme was run through their company, Wisconsin Homebuyer’s Network, and investors were told that their money would be used to buy, renovate and rent or sell properties. 

Jonny Ngo, 34, of California, was sentenced to more than 6 years in prison and ordered to pay about $21 million in restitution in connection with a Ponzi scheme run through NL Technology, LLC. Ngo represented that NL Technology was supplying smartphone screens to buyers, and he prepared false financial and bank statements as part of his scheme.

Firoz Patel and his younger brother Ferhan Patel, of Montreal, were sentenced in connection with a Ponzi scheme run through their company, AlertPay. Firoz was sentenced to 52 months and Ferhan was sentenced to 2 years in prison. AlertPay was not licensed to operate in the U.S. but did so illegally, engaging in hundreds of millions of dollars of unlicensed transactions. The brothers are believed to have laundered about $250 million.

Matthew Piercey, 44, of California, was arrested after trying to escape underwater on a “sea scooter” for his role in an alleged $35 million Ponzi scheme. Piercey remained underwater for more than 25 minutes trying to evade FBI agents but was arrested when he came to the surface. Piercey is accused of running a Ponzi scheme with his business partner, Kenneth Winton, 67, through Family Wealth Legacy and Zolla. Winton was also separately charged. They promised investors guaranteed returns in cryptocurrency investments and are accused of lying about trading algorithms and the liquidity of investments.

Kenneth Murray Rossman, 62, and Phillip Roy Wasserman, 63, were indicted on charges that they defrauded mostly seniors out of at least $6.3 million in an alleged Ponzi scheme. Rossman is a certified public accountant and Wasserman is a former lawyer and licensed insurance agent, and they convinced elderly investors to invest in an insurance venture called FastLife. Victims were persuaded to liquidate previous investments and to borrow funds against existing life insurance policies to put into FastLife.

Craig Rumbaugh agreed to disgorge over $1 million to the SEC in connection with the SEC’s civil case against him. Rumbaugh is accused of running a Ponzi scheme through Rumbaugh Financial Inc. and Desert Strategic Equity LLC.

Chander Singh, 44, along with his parents Sooruh “Paul” Singh, 74, and Savitree “Joyce” Singh, 71, and brother Subhas “Brian” Singh, 50, were charged in connection with an alleged scheme run through SC Capitol Investors LLC. Family friend Chandrika “Basil” Singh, 71, was also charged. All of the defendants work as real estate agents and are accused of swindling as many as 30 investors out of $4.7 million by offering double digit returns on fake ventures.

INTERNATIONAL PONZI SCHEME NEWS 

Australia

John Louis Anthony Bigatton was charged in connection with a cryptocurrency scheme BitConnect that involved $2.5 billion. It is alleged that Bigatton operated an unlicensed management investment scheme as part of the broader BitConnect network.

Canada

Robin Forster was accused of running a Ponzi scheme through Qualia Care Developments and Qualia Care Properties. Investors were promised returns between 8% and 10%. Forster is a shareholder of Fortem Global whose only director is Richard Tasker. They are together believed to have been running the scheme.

Francesco Perre, 56, was charged on allegations that he was running a $1.3 million Ponzi scheme. Authorities alleged that Perre was running a stock market investment program and was using the victims’ funds for personal and financial gain.

China

Authorities seized more than $4.2 billion worth of crypto assets in connection with the Plustoken Ponzi scheme that defrauded over two million people. The Ponzi scheme collapsed in June 2019, and 109 people have been linked to the scheme. Of those, 15 have been convicted so far.

England

David Stevens, 67, was sentenced to five years and nine months in prison for his role in a $1.56 million Ponzi scheme. Stevens promised investors 12% returns through his financial firm, David Charles Financial Services.

India

Anand Tole, Pradip Maurya, Bhupendra Morada, Vinayak More, Raviprakash Gherade, Anand Sapkal, Anil Bhoir, and Milkeram Prajapati were arrested on allegations that they were running a Ponzi scheme through Smart Vision Products India Pvt. Ltd. The company’s directors, Pratiksha Mote and Rashmi Hirandandani are still at large.

R Roshan Baig was arrested in connection with the I-Monetary Advisory Ponzi scheme. The scheme was run by Mohammed Mansoor Khan who fled the country and accused Baig of cheating him. 

Zimbabwe

Mpumelelo Khaya Dube, 39, and Sithokozile Ndhlovu, 29, disappeared with about $2 million from an alleged scheme run through Kuwait Dinair Limited. The scheme allegedly involved $1.9 million. Their partner, Richard Boutros Samunda, was arrested and charged in connection with the alleged scheme. Samunda formed Bevern Capital for purposes of accepting deposits from investors.